Price collusion or competition in US higher education

Abstract

How geographical neighboring competitors influence the strategic price behaviors of universities is still unclear because previous studies assume spatial independence between universities. Using data from the National Center for Education Statistics college navigator dataset, this study shows that the price of one university is spatially autocorrelated to its neighboring competitors and such neighborhood structure induces cooperation Nash equilibrium in a spatial price game. In the spatial price game of universities the possibility of the cooperation solution is about 76%, while that of the defeat solution is about 24%. This study demonstrates that the relation between price difference and geographical distance of universities is an inverse U-shaped curve rather than a line.

Spatial Diffusion of Social Policy in China: Spatial Convergence and Neighborhood Interaction of Vocational Education

“…We are keeping the quintiles fixed, meaning the data are pooled over space and time and the quintiles calculated for the pooled data. We estimate conditioned transition probability 3 The relationship between convergence speed and spatial neighborhood structure has been verified by previous studies (Gu 2012a(Gu , 2013. 4 It is emphasized that the regional effect is positive by some policy scholars such as Berry and Berry (1990), Mooney and Lee (1995) and Ghosh(2010).…”

“…As a result, the more the proportion of rural residents are, the more 7 The question of what is the optimal neighborhood size is largely dependent on the relative strength of neighbors and is particularly important when one seeks to examine the dynamic equilibrium of a spatial game. As Gu (2013)'s research shows that the choice of the optimal neighborhood size typically is influenced not solely by the quality of the various competing strategies, but by the effect of the frequency with which those various competing strategies are found in the population. As a result, the optimal neighborhood size is not invariable when the competition pattern changes.…”

“…Recently we have seen the advent of neighbor-induced diffusion theory of policy diffusion as a way of looking afresh at the patterns and causes of policy diffusion at neighborhood level (Gu 2012b(Gu , 2013Rincke 2007;Brinks and Coppedge 2006). Traditionally, those problems have been a concern of regional-induced diffusion study at regional level as practised by researchers with traditional methods including correlation analysis, comparative analysis and classic regression models that assume that the individual observations on regions are independent of one another (Mooney 2001).…”

A better understanding of learner perception of peer assessment through game theory and novel constructs

“…Competition among players may not result in the best outcome for all players, yet if all players pursue a strategy of cooperation, then it is possible that the outcome could be mutually beneficial. Gu (2015) treated institutions of higher education (IHE) as players in a game whose objective was to maximize tuition. When the IHEs colluded on price, an optimum price result (for the IHEs) was achieved.…”

Spatial Interactions and the Commercialisation of Academic Patents: The Chinese Experience

“…However, these studies have neglected factors at the spatial level. Neighbouring universities interact with each other and thereby influence each other (Gu, 2012(Gu, , 2013. A few studies have found that the distance has an impact on the commercialisation of academic patents (Buenstorf & Schacht, 2011;Holm et al, 2020).…”