Nash Equilibrium in Higher Education
By Bryan Caplan
In a Nash equilibrium, every actor maximizes his utility given the behavior of all the other actors. Arum and Roksa’s Academically Adrift contains one of the best (implicit) applications of the concept I’ve ever read. They name all the key actors involved in higher education – parents, students, professors, administrators, and government funding agencies – and explain why, given the behavior of all the other actors, no one wants to do anything about the problem of “limited learning“:
Parents – although somewhat disgruntled about increasing costs – want colleges to provide a safe environment where their children can mature, gain independence, and attain credentials that will help them be successful as adults. Students in general seek to enjoy the benefits of a full collegiate experience that is focused as much on social life as on academic pursuits, while earning high marks in their courses with relatively little investment of effort. Professors are eager to find time to concentrate on their scholarship and professional interests. Administrators have been asked to focus largely on external institutional rankings and the financial bottom line. Government funding agencies are primarily interested in the development of new scientific knowledge.
The next sentence is “In short, the system works.” You might be tempted to remind Arum and Roksa that Nash equilibrium and efficiency are totally different things. But their standard of “works” is roughly equivalent to durability:
Limited learning on college campuses is not a crisis because the institutional actors implicated in the system are receiving the organizational outcomes they seek, and therefore neither the institutions themselves nor the system as a whole is in any way challenged or threatened.
Arum and Roksa go on to argue that K-12 education is in some way challenged or threatened. But how hard could it be to extend their Nash analysis to all the key actors in the public school system?