Direct prestige hacking. If you say tuition costs $20k, that might tell otherwise-naive customers that your university has a certain level of prestige. If you say it costs $50k, that probably broadcasts that your university is actually more prestigious, attracting more/better applicants; and if you then tell all the individual prospective customers “But for you, it’s $20k!”, then you benefit from the improved applicant pool without doing any real work.
Price discrimination. Rich people would be willing to pay $50k, poorer people would only pay $20k. You can maximize your profit while admitting the same set of students by charging each group different prices.
Incidentally:
My economics teacher said this is:
Direct prestige hacking. If you say tuition costs $20k, that might tell otherwise-naive customers that your university has a certain level of prestige. If you say it costs $50k, that probably broadcasts that your university is actually more prestigious, attracting more/better applicants; and if you then tell all the individual prospective customers “But for you, it’s $20k!”, then you benefit from the improved applicant pool without doing any real work.
Price discrimination. Rich people would be willing to pay $50k, poorer people would only pay $20k. You can maximize your profit while admitting the same set of students by charging each group different prices.