Abstract

This paper focuses on analysing the process of partnership formation and its effects on academic performance. We model the formation of studying partnerships as a Bayesian game. Students utility functions are in the spirit of firms' profit functions where the time they devote to study is the input to produce human capital. Academic skills are uniformly distributed, and every student is assumed to know her academic skills. We find that a student decides to study with a classmate because she believes that the classmate has better academics skills. We also find that, in equilibrium, the time a student is willing to spend studying with a classmate increases with the mean and the variance of the distribution of the academic skills. Therefore, under incomplete information, we expect students to devote more time studying with a classmate regardless whether they are studying in a high standard school.

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