It's a racket. Universities must use the latest textbooks to remain accredited. This is why syllabi will always list the latest edition of a textbook as the required text (and mentioning that the last edition is sufficient is always done parenthetically). Publishers can fix a few typos, change some example problems, and call it a new edition. Every university will have to recommend the new edition to their students. The students who bought the last edition last year will have to sell their now obsolete textbook for a fraction of the purchasing price.

Markets in everything: University textbooks are always priced to be marginally outrageous. If they were to cost something ridiculous like $1,000 a piece, there would be protests and riots on campus. Instead they merely fleece the students for $100 or $200. Enough people pay up that the system is deemed imperfect rather than inherently flawed.

I think it was Freakanomics that had an episode about textbook cost. Their idea was it was a disparity between those choosing the textbooks (professors) to those bearing the costs (students). In other words, it is much easier to increase the cost of a product if those bearing the cost don’t have a say.

I definitely had a few classes in which the professor wrote the text-book which while impressive in some ways also yields a conflict of interest.

Oddly enough, one of my professors wrote textbooks for his classes that he gave to us for the cost of copying them. He was outraged by the price of textbooks.