Game Theory 101: How Cooperation Creates More Winners

In my first post, we examined how the education game is rigged—designed as a competitive, zero-sum system where institutions fight over a shrinking pool of students, funding, and prestige. But what if we could change the game itself?? As a life long student of economics, I sought out how other situations, people and organizations have adjusted given the costs and benefits pursuing their own interests independently.

I learned about Game Theory through my discussions on the Eagles Superbowl win and how the NFL operates, specifically Nash Equilibrium, a concept that has revolutionized decision-making in business, sports, and global economies, which may apply to how institutions and education stakeholders could design and adopt a new model. By understanding how collaboration can increase total value, higher education can unlock a new way forward.

The Power of Nash Equilibrium

Nash Equilibrium occurs when no player can benefit by changing their strategy unilaterally, assuming all other players keep their strategies unchanged. In higher education, institutions currently operate in a competitive state—protecting enrollments, limiting credit transfers, and prioritizing rankings over student success. This behavior leads to inefficiencies and missed opportunities.

A Look at Other Industries

Institutions aren’t the only ones struggling with competition-versus-cooperation dilemmas. Consider these examples:

• The NFL Revenue-Sharing Model: Instead of each team hoarding profits, the league distributes revenue to ensure long-term stability and competitive balance. The result? A consistently popular and profitable league. (NFL Revenue Sharing)
• Business Consortia: Companies like Visa and Mastercard are competitors but share infrastructure to expand the market rather than fight over limited customers. (Visa and Mastercard Business Models)
• Global Trade Agreements: Nations that collaborate through trade deals grow their economies, benefiting all participants rather than engaging in protectionist battles. (World Trade Organization)
• Amazon & eBay (Multi-Sided Marketplaces): Sellers share a common marketplace rather than competing through independent storefronts, creating a larger, more efficient system. (Amazon Marketplace)
• OpenTable (Shared Infrastructure for Competitors): Restaurants use a common reservation system, increasing efficiency rather than forcing customers to navigate multiple disconnected systems. (OpenTable)
• Wikipedia (Crowdsourced Knowledge Collaboration): Institutions and experts contribute to a shared knowledge base instead of siloing information behind paywalls. (Wikipedia)
• Public Libraries & Interlibrary Loan (Shared Access vs. Ownership): Libraries collaborate to provide access to a broad selection of resources instead of duplicating collections in every location. (American Library Association)
• NPR (National Public Radio – Public Good Model): Local stations contribute content while also receiving syndicated national programming, creating a mutual value exchange. (NPR)

How State Governments Have Applied the Nash Principle

Recognizing the inefficiencies of purely competitive education models, state governments have attempted to create regional compacts and shared resource initiatives that align with Nash Equilibrium principles:

• Western Governors University (WGU): A competency-based model that pools resources across multiple states to create a flexible, student-centric degree pathway. (WGU)
• Regional Higher Education Compacts: Organizations like the Western Interstate Commission for Higher Education (WICHE), Midwestern Higher Education Compact (MHEC), New England Board of Higher Education (NEBHE), and the Southern Regional Education Board (SREB) help states coordinate policy, share resources, and improve student mobility. (WICHE, MHEC, NEBHE, SREB)
• State Systems of Higher Education: Many states have built centralized systems to streamline administration, resource-sharing, and cost efficiencies, though these sometimes create governance complexities.

However, some states, such as New York, Texas, and California, have multiple higher education systems serving different target markets. This introduces challenges:

• How do learners navigate these overlapping systems?
• What are the differences in boundaries and transfer policies?
• How do governance structures impact credit transfer and collaboration?

These complexities highlight the need for a unified, interoperable framework where students can move seamlessly between institutions and systems without unnecessary barriers.

AcademyOne’s Experience with a Shared Marketplace: CollegeTransfer.Net

AcademyOne launched CollegeTransfer.Net as a free platform for institutions to collaborate and share resources. Since its inception, it has grown to include over 2,000 institutions, each with a Transfer Profile that students use when searching for their next academic destination.

The platform demonstrates the power of collaboration in higher education, receiving over 1.6 million unique visitors annually. What we have learned is that there is no free lunch—institutions that actively participate and invest in their transfer strategies can differentiate themselves, attract students, and serve their markets with speed and responsiveness. On the other hand, institutions that rely solely on their own capacity and resources end up spending far more while losing prospective students due to inefficiencies and lack of visibility.

What Happens When Institutions Cooperate?

A cooperative higher education system wouldn’t just benefit students—it would create a positive-sum market where institutions grow together.

Before & After: Isolated Institutions vs. A Connected Network

Before (Competition-Based System):

• Institutions prioritize exclusivity over accessibility.
• Credit transfer is inconsistent, leading to lost time and money for students.
• Marketing and recruitment budgets are spent competing for the same students.

After (Collaboration-Based System):

• Institutions coordinate to ensure smoother credit transfer and degree pathways.
• Student success improves, leading to better retention and completion rates.
• Collective resource-sharing reduces inefficiencies, improving institutional sustainability.

What’s Next?

Education isn’t the only industry with this problem—so how have others solved it? In our next post, we break down how to shift from a zero-sum to a positive-sum model, demonstrating actionable steps institutions can take to move toward a cooperative future.

Stay tuned, and let’s rethink the future of education—together.

#HigherEducation, #GameTheory, #EducationReform, #CollegeTransfer, #InstitutionalCollaboration, #StudentSuccess, #HigherEdInnovation, #PositiveSumGame, #EdTech, #EducationLeadership

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