Wednesday, February 4, 2015

Grades and Public Goods

I do little experiments in class. Today's topic was "public goods" and I did the following exercise: 
Each may voluntarily 'contribute' any number of points from 0 to 10.
I will increase the amount collected by 20 percent
The resulting total will be divided equally among all class members who are present.
You may interact before contributions are declared but you will make your contributions anonymously and in private.
All contributions will remain anonymous. 
It's basically a version of a game lifted from Games Economists Play. Anyway, there were 17 people in class, and there were 107 points contributed so everyone got back about 7.6 points. But, a few people put in 10 points and ended up with negative points. Needless to say, it's not the most popular game we do in class, but the grumbling subsides when I tell them that on average, students win between 15 and 30 points playing these games. 
Anyway. One kid who thought he was particularly clever asked, "let's just make the 107 everybody's score on the exams." 
I took the bait, and asked, "well, is that good for everybody?" 
Naturally, the first response was overwhelmingly positive, until I asked "why do we have grades?" Eventually the answer settled somewhere in the vicinity of the fact that they provide information about what we know or what we learned or how smart we are. Of course, the signal grades send is noisy, but that's a topic for another day (two classes from now, in fact!). 
Getting back to the grades, I asked what would happen if I announced (or if everyone knew from their friends for example) that everyone's going to get an "A" in the class. Someone said "I wouldn't do shit." AAAAND (wait for it) .... If everyone gets an A (or if all of the teachers give A's), then an A becomes a public good, and no one (students especially) has any incentive to work hard and make sure their grades and degrees mean something. AAAND.... ..... BOOM! we're back on public goods! If we make A's public goods (instead of private goods that have to be earned individually) then the whole value of education is degraded.