To improve education, look at game theory

Education policy in India is complex and not always productive. Education is considered a social good and for many, the government is an important stakeholder that should provide it. But it is also important that we look at incentives and how they align. Game theory can help here. 

There are two ideas that can help. First, in game theory stakeholders are players who are looking to maximise their gains. In the space for education larger players are teachers, students,  parents, school management, and the government. Second, in their interactions, not all scenarios lead to a win-win outcome. Some of them are negative-sum games. Where for one player to win, the other player must lose. Game theory makes this clear and this can be of advantage when rules are being framed. A helpful insight comes from signalling games. 

In signalling games, what player one signals affects the choices made by player two. Player two has to use the signal to identify if player one is a desirable player to engage with, or not. If player one sends out false signals, choices made by player two will be sub-optimal.

The case of teacher recruitment is a signalling game. The candidate hoping to become a teacher is player one. The school management is player two. The degree or qualification of player one is the signal that player two will use to identify them as a desirable player to engage with, once hired. Candidates obtain degrees to signal desirability. These degrees may not say anything about teaching aptitude and interest of the candidate. Selected candidates are unable to deliver tangible learning outcomes despite being considered competent since the signals do not correspond to their real type, which might be the undesirable one. 

The lesson here is that the hiring process must do better to remove the negative outcome from signalling games. This can be done through better hiring practices and asking teachers to take a sample lesson in a real classroom. 

Experts, Karthik Muralidharan and Venkatesh Sundararaman highlight that if teachers are provided with even marginal “amounts of performance-linked bonuses” student learning improves. Why this can work is easy to understand, using the game theory logic. Teachers are players too. And how their incentives get affected can improve outcomes. Teachers must be recognised for good performance and reprimanded for complacency or poor performance. 

Among reforms required in education, improving teacher performance is central. It is the main barrier to quality education. Game theory offers insights on how teacher incentives are not always aligned.  Karthik Muralidharan and Abhijeet Singh also point out that India needs to overcome challenges related to quality teachers. They find out if absenteeism, complacency and incompetency in public school teachers is resolved, it will generate spillover benefits to infrastructural improvements, and other input-based investments, as well.  

To its credit, The National Education Policy 2020 does address teacher incentives to some extent. NEP 2020 recommends “a robust merit-based structure of tenure, promotion, and salary structure” for teachers. Unfortunately, there are many more players and games that make this implementation tough. 

Sometimes regulations are a result of games among players with vested interests. Regulatory environments are also a strategic landscape that players like bureaucrats, school management and teacher unions navigate in pursuit of optimal outcomes. School owners too have to navigate the complex regulatory terrain where they struggle to reconcile their financial objectives with the demands of operational compliance. 

Regulations come together through multiple games taking place among different players, but it is the government-industry game that bears a cost. This cost comes through simpler regulations turning into over-regulation. This loss is also passed on to students through poor learning outcomes. This is true in particular, for low budget private schools that have even fewer resources compared to government schools to provide affordable education. They are stifled by unreasonable operational requirements and myopic guidelines. 

Individuals don’t always act rationally. Their choices are affected by many variables that are tough to identify. Despite these challenges, game theory offers critical new insights for policy-makers. Game theory examines how different stakeholders interact, multiple variables are at play, and why incentives matter. In doing so, it can empower policy makers to offer insights that can transform the Indian education system.