Abstract
Examining the tuition elasticity of demand for online MBA programmes in the United States, we find new online MBA programmes to be Giffen goods with positive elasticities, likely setting prices below what is optimal to maximize profits. Over time, demand for online MBA programmes becomes elastic, suggesting that tuition is set within the optimal target zone in the long run. Programmes should be mindful of these differences in short- and long-run demand elasticity when setting tuition and question early indicators to raise tuition. Our results may also explain both why new online MBA programmes are entering the market, but also why many of these programmes struggle to remain profitable in the long run.