Pricing and Diversification of Massive Online Open Course Platforms

Massive Open Online Courses (MOOCs) have recently received a great deal of attention in higher education. MOOCs demonstrate universities’ efforts in offering high-quality digital learning materials to everyone in the world, which should be encouraged. Nevertheless, as a MOOC platform must ensure its financial sustainability, it is questionable whether a platform’s profit-seeking pricing strategy will hurt the diversity of courses, such as eliminating courses with low certificate purchasing rates. To address this question, we adopt a game-theoretic framework to model the interaction and strategic choices of a MOOC platform, learners, and universities. Based on the certificate prices and revenue sharing ratios chosen by the platform for courses with various certificate purchasing rates, universities consider the competition intensity and decide their course quality levels, to attract learners. We conclude that all types of course will exists in equilibrium throughout the lifecycle of a MOOC platform, regardless of the technology maturity and competition intensity. We also find that course qualities may decrease when MOOCs become more accessible to learners. Finally, qualities of courses with different certificate purchasing rates are compared