Quantifying Educational Competition: A Game-Theoretic Model with Policy Implications

TL;DR

This paper presents a game-theoretic model of China's educational competition, revealing how strategic interactions among families lead to an irrational arms race, and discusses policy implications for improving social welfare and equity.

Contribution

It introduces a novel game-theoretic framework to analyze educational competition and extends it with signaling theory to evaluate policy effectiveness.

Findings

Educational arms race is socially irrational.

Trade-offs exist between equity and social welfare.

Current policies are ineffective due to social cognition biases.

Abstract

The competitive pressures in China's primary and secondary education system have persisted despite decades of policy interventions aimed at reducing academic burdens and alleviating parental anxiety. This paper develops a game-theoretic model to analyze the strategic interactions among families in this system, revealing how competition escalates into a socially irrational "education arms race." Through equilibrium analysis and simulations, the study demonstrates the inherent trade-offs between education equity and social welfare, alongside the policy failures arising from biased social cognition. The model is further extended using Spence's signaling framework to explore the inefficiencies of the current system and propose policy solutions that address these issues.