#11946. Asymmetry by Design? Identity Obfuscation, Reputational Pressure, and Consumer Predation in U.S. For-Profit Higher Education

July 2026publication date
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Journal’s subject area:
Sociology and Political Science;
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Abstract:
This article develops and tests an identity-based account of malfeasance in consumer markets. The analysis utilizes comprehensive administrative data on all for-profit colleges, an industry characterized by widespread fraud and poor (although variable) educational outcomes. Consistent with the hypothesis that brand multiplicity facilitates malfeasance by reducing ex ante reputational risks, colleges that are part of multi-brand companies invest less in instruction, have worse student outcomes, and are more likely to face legal and regulatory sanctions (relative to single-brand firms). Maintaining multiple outward-facing brand identities also mitigates reputational penalties in the wake of law enforcement actions, as measured by news coverage of legal actions, and by subsequent enrollment growth. The results suggest identity multiplicity plays a key role in allowing firms to furnish substandard products, even amid frequent scandals and media scrutiny. Predatory practices are facilitated not only by the inherent informational asymmetries in a given product, but also by firms’ efforts to make themselves less legible to audiences.
Keywords:
Economic sociology; for-profit colleges; higher education; malfeasance; predatory markets

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