- at least half the added value of university for undergraduates is the other undergraduates. If you hang around with clever, interesting people, that expands your brain - and most 18 year olds pay more attention to other 18 year olds than their professors, for some reason - plus, if your friends go on to be important and influential, then you have a network.
- this means that for universities, nothing succeeds like success. (Economic term: multiple equilibria.) No matter how good a community college's teaching, it will be less attractive than Harvard because Harvard has Harvard students.
- This gives famous universities the chance to extract rents: they can charge a lot more than they actually provide by way of teaching etc. You are paying for the name and the networking.
- These rents go into research.
- The authors are damn right that a lot of research is useless. The problem is, research is like advertising: half of the money spent on it is wasted, but nobody knows which half.