Game Theory Applied to Textbook Companies’ Implementation of Access Codes
In the world today, technology continues to improve, allowing more and more people to access information digitally. This is certainly a positive contribution to society. However, in a country where capitalism dictates the economy, textbook companies have learned to take advantage of this technological phenomenon to drive their sales up.
Textbook publishers are now implementing online learning programs that accompany the textbooks they sell. These online learning programs include materials that are often required by professors such as homework, quizzes, and/or exams. While these are extra resources that can help students improve academically, the online learning systems are not free. In fact, they come with a hefty cost in the form of access codes – an additional item that students need to purchase on top of other academic materials that may already represent a financial burden. Ultimately, students are forced to make a decision:
- Purchase textbooks along with digital access codes that are required by their professors and be able to complete assignments
or
- Don’t purchase and suffer losses in their grades as they are unable to complete assignments.
In a recent BuzzFeed News article titled “Some College Students Are Angry They Have To Pay To Do Their Homework”, Leticia Miranda reports that students essentially have no choice when it comes to access codes. One student at Virginia Tech, as Miranda describes, began her chemistry class with a failing grade because she did not have the money in time to purchase a $120 program and complete her first two assignments. Many other students face similar experiences. Miranda also announces that major textbook companies like Pearson and McGraw Hill have experienced increased sales for their digital content.
Game theory can be used to further explain what is going on.
Several assumptions in the 2×2 payoff matrix are made. First, students are required by professors to purchase the textbooks with access codes as they will give students the platform to complete assignments for grades. If there is no access code, then the professor will not require it and the student does not need the textbook. Second, other textbook companies have access codes. If this company decides to not implement access codes, they are losing business to the other companies. Values have been assigned in the payoff matrix and explanations for how the values were determined are provided in the matrix.
In this payoff matrix, the textbook company has a dominant strategy: implement the access code. By choosing to implement the access code, the textbook company will always receive the higher payoff regardless of what the student decides to do. In such a way, the textbook company essentially has an incentive to create an online learning system and offer the resource to the student at an extra cost. However, the textbook company and the student are in Nash equilibrium if the textbook company implements the access code (knowing that professors will require it) and the student purchases the access code (knowing that they will need it for their course assignments). If this occurs, there is no better option for each player to change their strategy.
There are many ways to approach this topic. Professors can offer alternative assignments if the student is unable to purchase the access code. On the other hand, textbook companies can make these access codes more affordable to students.
This is an extremely relevant topic to college students and it is quite interesting to see the different sides of the story. Of course, this is only one limited perspective of this issue and there are many other possibilities and factors that are not fully considered.
Source: https://www.buzzfeed.com/leticiamiranda/access-codes