The cost of studying in a higher academic institution is currently very high, with the rate of student loans rising quickly. A significant amount of costs is linked to the price of textbooks, which are often very expensive since the prices often start at $200 and up (Larivière, Haustein, & Mongeon 2015). Although the problem of student loans is far more complicated than the specified issue alone, addressing the cost of textbooks will allow reducing the number of academic expenses for learners. Due to the oligopoly that publishing companies hold in the academic market, the price per textbook is very high, which can be addressed by increasing the number of publishing companies and introducing healthy competition and cheaper options for learners into the market.
The situation observed in the academic setting can be viewed as an economic problem. Applying the Counter-Nash Model to the described issue, one realizes that the lack of encouragement to change the current situation is the main obstacle in addressing the issue (Newbery & Greve 2017). According to the principles of the theory in question, the best outcome represents the situation in which none of the participants is encouraged to change their business model (Newbery & Greve 2017). The observed scenario presently occurs in the academic setting, where oligopoly of publishing companies allows the latter to set prices as high as they wish with no regard for the financial issues of their customers (Newbery & Greve 2017). As a result, the costs for textbooks rise fast, causing students to restrict other academic and professional opportunities.
The observed issue can be addressed by creating better conditions for new firms entering the academic publishing market. With the increase in the extent of market competition in the target area, the prices for textbooks are likely to become more flexible, and students will be provided with a greater range of options for investing in textbooks. Moreover, diversifying the product may also help to manage the current pricing issue (Newbery & Greve 2017). For example, the format of textbooks may vary from the traditional print one, including used books for lower prices, to various digital printable formats to audiobooks and other types of data carriers. As a result, some of the products are likely to be offered for a lower price, which will allow addressing the pricing concern and introduce the incentive for publishing organizations that represent oligopoly to reconsider their current position on the issue.
The redesign of the present relationships between companies and their potential buyers is essential since the latter have disturbingly low bargaining power at present. The specified characteristics of potential customers introduce inequality into the economic relationships within the specified setting. The consequences of the outlined problem include the inability of customers to affect the situation, which implies that buyers’ rights are significantly infringed upon in the academic environment. For this reason, lowering the barriers to the academic publishing market and creating healthy competition within it should be recognized as a crucial step in increasing the buyers’ influence.
By reducing the power that publishing companies presently hold in the academic market with the introduction of competition by including new organizations into the specified economic setting, the prices set for textbooks will drop. As a result, crucial knowledge and information will become more accessible to students, which will improve the quality of learning and allow them to gain a larger number of competencies. Consequently, the quality of education and the proficiency of graduates will rise.
Reference List
Larivière, V, Haustein, S & Mongeon, P 2015, ‘The oligopoly of academic publishers in the digital era,’ PloS One, vol. 10, no. 6, pp. 1-15. Web.
Newbery, DM & Greve, T 2017, ‘The strategic robustness of oligopoly electricity market models,’ Energy Economics, vol. 68, pp. 124-132. Web.