How to Reduce Educational Competition and Over-Investment: A Multidimensional Contest Experiment

Speaker：Jaimie W. Lien, Professor, Shandong University

Host：Dai Yun, Associate Professor, Lingnan College

Time and Date：16:00, April 14, 2026 (Tuesday)

Venue：Room 214, Lingnan Administrative Center

Language：English

Abstract：

Educational equality, as well as education as a channel for promoting economic equality, are among the most sought-after social welfare ideals in countries around the world. However, in practice, competitive environments are often thought to impede progress in realizing these goals. We game theoretically analyze and implement real-effort experiments to study the effect of competition and related policies on educational investments and outcomes. Students from different economic backgrounds engage in competition by exerting effort in learning various subjects and making educational investments, under varying allocation mechanisms, investment costs, examination difficulties and investment limits. Our theoretical model predicts that when everyone's investible funds exceed the equilibrium investment level, competitive behavior is primarily influenced by the cost of investment and the disutility of effort. Our experimental results show that altering investment costs has a limited impact on competitive behavior, whereas employing simpler learning tasks and imposing caps on high investments can more effectively curb over-investment. A policy implication is that to safeguard educational equity, governments may consider assisting low-income families through measures such as tax subsidies, simplifying examinations, and restricting excessive educational spending, although interventions aimed at adjusting educational costs directly show limited effectiveness.

Profile:

Jaimie W. Lien received her B.A. in Economics from Wellesley College (1997-2001), and M.A. and Ph.D. in Economics from University of California, San Diego (2003-2010), where she studied under the renowned scholar Vincent P. Crawford. She is currently Professor and Ph.D. Supervisor at the Center for Economic Research, Shandong University, University Distinguished Professor at Shandong University, and Co-Director of the Center for Research on Experimental and Theoretical Economics (CREATE), Shandong University. She is also one of the founding members of the Economic Science and Policy Laboratory (ESPEL) at Tsinghua University. Previously, she served as Assistant Professor at Tsinghua University School of Economics and Management, Assistant Professor at The Chinese University of Hong Kong, and Fernand Braudel Senior Fellow at the European University Institute. She serves on the editorial boards of North American Journal of Economics and Finance, Journal of Mechanism and Institution Design, Scientific Reports, and as Associate Editor for International Journal of Finance and Economics. She has also served as a reviewer for government research funding agencies in mainland China, Hong Kong, Taiwan, and Singapore, as an external reviewer for faculty promotions at multiple universities, and as an anonymous reviewer for 31 journals, having been awarded Outstanding Reviewer multiple times. Her research fields include behavioral economics, experimental economics, and applied microeconomics, covering topics such as decision-making under uncertainty, coordination and cooperation, trust and reciprocity, belief biases, and social preferences. She specializes in experimental design and data analysis. She received the 2024 NSFC Excellent Young Foreign Scholars Award and has led multiple research projects funded by NSFC, Ministry of Education, and Hong Kong Research Grants Council, all rated "Excellent" upon completion. She has delivered keynote speeches and presentations at numerous academic conferences. Her research has been published in Nature Communications, PNAS, American Economic Review (Papers and Proceedings), Games and Economic Behavior, Economic Journal, Experimental Economics, Journal of Economic Behavior and Organization, and other internationally renowned journals. She has been awarded the "China Information Economics Theory Contribution Award 2011-2015" and "China Information Economics Youth Innovation Award" in 2016 and 2018 by the China Information Economics Society, and has received multiple research excellence awards from her institutions, with her papers winning best paper awards at international academic conferences.