Wednesday, September 11, 2013

Great example of the power of competition!

College faculty members know better than anyone how fast textbook costs have rising over the last two decades.  Consider this chart:


Of course, textbook-writing professors don't have much of an incentive to try and slow the growth in prices.  But since students want lower prices, there's a money to be made by an innovative alternative.  Thus, the topic of a fantastic post by Mark Perry at his Carpe Diem blog.  Highlighting the amazing story of Boundless Learning, he shows how innovation can save the day and, in so doing, he draws three powerful conclusions:
The economic lessons here are: a) “competition breeds competence,” b) intense market competition is a very powerful discipline mechanism for incumbent firms, and c) rigorous, fierce competition is almost always the most effective form of regulation. Boundless Learning illustrates how intense market competition is the consumer’s best friend as it routinely delivers lower prices, greater choice, improved quality, and better service.