I would assume that schools are paid by students&#x2F;year and that someone other than the school gets to decide who goes there (in the real-world examples I&#x27;ve seen this is usually the parents and a lottery system to work out who picks first). The first criteria means the incentive is to get as many students enrolled as they can, but the second one means that no one will enroll if the school&#x27;s quality falls off.<p>Hospitals work for care when you have enough time to decide and can look up average costs and results. Certainly not appropriate for car accidents or gunshot victims, but it works if you&#x27;re getting a early-stage tumor removed and can afford to wait a week.<p>This does require enough extra space in the local system for people to be able to make a choice.