For my intro to economics class I have been using a textbook from Flat World Knowledge. One of the main reasons I chose the text is that an online copy of the text is available completely free to students and now that has changed. The company's model was to make money by selling paper copies or study guides to students. Today I received an e-mail from Flat World knowledge.
"Starting January 1, 2013, we will no longer be providing students with free access to our textbooks. Yes, the free Web format is going away, but our mission to provide high quality course materials at affordable prices remains as strong as ever."
It appears that the texts will now costs $19.99. I really enjoyed telling my students the book was free. I thought the quality of the text approached but was not good as alternatives from other well known authors. Now given that students can purchase old paper version used copies of well known textbooks for less than $20 I don't feel the textbook saves any money.
I'm a little upset that I was not given more warning. Yes the announcement was delayed because of Sandy, but a 6 month warning would have been better. Its not quite too late for me to change textbooks for next semester, but I'm still not sure. I know if Flatworld charges $19.99 for online texts I would prefer to switch back to Mankiw's text or look at new textbooks.
That said I'm not upset at a company for raising prices, as an economist I believe any company in a competitive market should have the ability to set their prices. Lucky for my students the economics textbook market is very competitive and I can look elsewhere.
Finally, I would be very curious to see what behavioral economists would predict will happen. In development economics, research on bed nets showed people were 60% less likely to use bednets when the price dropped from free to $0.60 for what would cost $6 to purchase. In short charging people a little makes them buy a lot less.