1. If you have no real leverage over your opponent, then you are going to lose.
Ok, I think that is sufficient. McGill has been playing a game of chicken with the government of Quebec. The university has unilaterally increased the tuition for its MBA program by quite a lot (still cheaper than many programs elsewhere) in defiance of Quebec's position that only the government can set the tuition and that tuition should be really, really low. Quebec kept threatening McGill if it did not get in line. So, who has the power to hurt (Schelling)? Um, not McGill. But now Quebec has said that it will cut its support of McGill by $2 million. This is quite significant as McGill is already in the midst of a Quebec-induced budget crisis.
Sure, it made sense that McGill would want to charge the going rate for an MBA. The graduates mostly finish with jobs that make it relatively straightforward to pay off their debts, and it does not make sense for the rest of the university to subsidize a particularly expensive program. But this position not only cuts against basic views of what is appropriate in Quebec (all education should be dirt cheap even if that is unsustainable), but let me say it again: McGill has no leverage with Quebec. And the next government of Quebec is likely to be very hostile to McGill just on the basis of identity politics (Parti Quebecois is not going to fond of an English-speaking educational institution--just a guess on my part). So, McGill has picked a confrontation it cannot possibly win.
While I believe McGill is correct in its basic idea--that MBA students should cover much of the cost of their education, I also believe that McGill needs a new strategist. Whoever gamed this out forgot to include power in their calculations. They cannot blame the game theorists for that one, as Schelling and the rest always started with the basic situation of whether each side can hurt the other. Not to mention that Quebec has other audiences (the rest of the universities in the province) and incentives not to swerve, even if McGill had some potential to impose some harm onto Quebec.
All I can say is: oy.