| Summary: | Education and distribution of knowledge are public goods as long as the individuals exposed to them are limited in number. Crowding cost becomes a real problem if the number of those concurrently exposed to an educational experience increases over a given limit. Educational institutions seek to minimise their own unit cost of operation, taking into account that crowding can diminish the reputation of the institutuion. The approach that is open to educational institutions to signal their lack of crowding cost (i.e. quality) differs by school level. Lower level institutions can signal their quality by referring to the success of their graduates at higher level institutions. That route is closed for the highest level institutions. They can, and do, signal quality by referring to the success of graduates in different trades. Institutions that do not have patience or time to wait for former graduates to complete their working lives can, and do, use the success of their employees in field of academic competition as a signal of success. The University of Iceland has set itself the strategic goal of becoming an internationally recognised research university within a few years. This strategy can be understood as a programme aiming to create a distance between itself and the seven or eight other institutions in Iceland that have the word University in their name Uppfræðsla og þekkingarmiðlun eru almannagæði sé þeim ekki miðlað til fleiri en svo að kraðakskostnaður geri vart við sig. Útgjöld rekstraraðila á hvern nemanda vegna rekstrar skóla lækka eftir því sem fleiri nemendur eru viðstaddir hverja kennsluathöfn en sé farið yfir ákveðin mörk í þeim efnum getur kraðakskostnaður orðið ávinningi nemenda yfirsterkari. Skólastofnanir leitast við að lágmarka rekstrarkostnað en þurfa þó að koma í veg fyrir að kraðakskostnaður verði svo mikill að orðstír þeirra bíði hnekki. Í greininni er rakið hvernig skólastofnanir á mismunandi skólastigum geta leyst þennan vanda.
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