WHY BUSINESS SCHOOLS DO SO MUCH RESEARCH:
A SIGNALING EXPLANATION

Damien Besancenot (1) , Joao Faria (2) , Radu Vranceanu (3)

1 CEPN - Centre d'Economie de l'Université Paris Nord (ancienne affiliation)
2 Department of Economics
3 ESSEC Business School

Criticism is mounting on business schools for their excessive focus on research and for neglecting teaching. We show that if students have imperfect information about a school's overall capabilities and if business schools differ in their research productivity, the least productive schools may do as much research as the top-tier ones only to manipulate students' expectations. In turn, the most productive schools might resort to excess research in order to signal their type in the eyes of future students. This signaling equilibrium is characterized by a relative neglect of teaching by the top-tier schools. Such a situation is socially inefficient as compared to the perfect information case.

Keywords: Business Schools; Research management; Research policy; Research vs. teaching; Signalling; Imperfect information

Domains: Economics and Finance

Damien Besancenot, Joao Faria, Radu Vranceanu. WHY BUSINESS SCHOOLS DO SO MUCH RESEARCH:
A SIGNALING EXPLANATION. 2008. ⟨halshs-00241259⟩