Introduction of Online Degree Programs: A Competitive Framework

• 成果类型: Article
• 署名作者: Vakharia, Asoo J.; Yenipazarli, Arda; Ghosh, Vashkar; Karamemis, Gulver
• 署名单位: State University System of Florida; University of Florida; University System of Georgia; Georgia Southern University; University of North Carolina; University of North Carolina Greensboro
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1177/10591478251412944
• 发表日期: 2026
• 关键词: Learning outcomes; higher-education; services; QUALITY

摘要

Educational services contribute $315.65 billion to the U.S. GDP, with online education representing the fastest-growing segment. This paper examines how operational and market factors influence universities' decisions to introduce online degree programs. We study the strategic introduction of such programs in a vertically differentiated market, where universities differ in online program rankings (quality) and compete for a diverse student population with varying willingness to pay for perceived quality. Our analysis focuses on a simultaneous market entry scenario, yielding robust insights that also hold under alternative settings-such as when universities are equally ranked or differ in their variable costs of technology. We also examine two additional contexts: (1) A mixed competition setting in which one university operates independently while the other is guided by a social planner, and (2) an incumbent-entrant setting in which a university considers launching an online program when its competitor has already entered the market. Our findings reveal that symmetric market entry-where both universities introduce online programs-is more likely when technology integration costs exceed a certain threshold and student valuation heterogeneity is significant. In contrast, when these costs fall below the threshold, asymmetric equilibria arise in which only one university introduces an online program. When a social planner regulates tuition at the lower-ranked university, it faces tighter constraints on entering the market. However, when the higher-ranked university is subject to tuition regulation, broader market coverage and improved social welfare outcomes are achieved. Additionally, lower-ranked universities can strategically enter by targeting lower-end segments through moderate technology investments and competitive pricing. Yet, the entry of a higher-ranked rival can exert downward pressure on tuition fees for both institutions, promoting a more accessible educational environment. These insights offer strategic guidance for universities navigating quality-based competition and provide policy implications for balancing competitive dynamics with educational equity through regulatory interventions.