Academic journal article Academic Exchange Quarterly

Students Perception on E-Learning: A Case-Study

Academic journal article Academic Exchange Quarterly

Students Perception on E-Learning: A Case-Study

Article excerpt

Abstract

The reflections presented in this work lead us to emphasize the existence of a problem in the new market of university online learning. The costly evaluation of the quality of new courses can in fact increase the risk for students in making the best choice. In the absence of enrollment fees, which can act as a signal of quality, market growth would seem to be severely hampered. On the basis of the answers to a question administered to 1,790 students at Italian universities, we are interested in analyzing the perception of quality of university courses available on line, in order to distinguish signals, a la Spence, which can reduce the problem of adverse selection.

Introduction

Studies concerning the way the markets work often assume that individuals are able to make a correct assessment of the quality and price of the goods which are exchanged. Unfortunately, these hypotheses are rarely borne out in the real world.

In a famous article published in 1970, "The market for Lemons: quality uncertainty and the market mechanism", George Akerlof introduces an idea, which is simple but also of deep and universal significance. Using the second hand car market as his example, Akerlof shows that when the buyers and sellers have different information about the quality of the goods (information asymmetry) this results in a problem of adverse selection on the market. In other words, the agents who have less information find themselves operating with those they would have preferred to avoid. In fact, if the quality is not apparent, goods of both good and poor quality converge in a single market and have a single price tag. The latter, determined on the basis of an expected average quality, provides ample profit for the worst sellers but not necessarily for the best who find themselves driven out of the market. Consequently the buyers are left to operate only with the worst sellers. So the term "lemons" is used to indicate poor quality goods which are found in the market in the absence of correct information. This conclusion leads Akerlof to explain the set up of many third-party institutions which offer guarantees for the real quality of the goods, so contributing to a reduction in the inefficiencies of the market.

The work we present here attempts to analyse the problem of adverse selection in an unexplored context, namely that of online university learning. In this market there is great information asymmetry which penalises the students (buyers of instruction) in their evaluation of the quality of the courses offered by the universities (producers of learning). However, unlike Akerlof's hypothesis, the mechanism of adverse selection in this case is not due to a reduction of the market price (strict, by definition) but rather to a reduction in the number of buyers. However, following the contribution of Michael Spence, the market itself can offer a way out of the problem. In 1973 in "Job Market Signaling", Spence showed that the best sellers are not necessarily forced out of the market if they 'signal' the true quality of their goods. But in order for the signals to reach their objective of contrasting the adverse selection, they need to have a production cost which is inversely correlated to the quality of the seller. In other words, the signal must be more expensive for the worst sellers.

Following the paths traced by Akerlof and Spence, there are numerous applications and empirical tests to be found in the latest literature. In the financial economy, for example, Myers and Majluf (1984) have shown how shareholders can become victims of adverse selection among firms, while John and Williams (1985) have highlighted how dividends can act as a credible signal of the profitability of the companies quoted. In the field of industrial organization, Nelson (1974), Milgrom and Roberts (1986) have shown how the highest prices and the use of advertising are generally considered by consumers to be signs of the high quality products. …

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