Tuesday, September 29, 2015

Peter Diamond Econ 490: Illini Bucks

If the University of Illinois put into place an "IlliniBucks" system, I think it would be an awesome opportunity and learning experience for the students.  But I don't think it would work.

IlliniBucks could be used for moving to the front of the line in terms of registering for classes, moving to the front of the line at bars, or even moving to the front of the line at the bookstore at the beginning of the year when it's extremely crowded.  So many kids complain about these long lines, but as of now, there are only a few ways to beat the system.  At the bars, if you know the door guy then you can skip the line.  At the book store, if you're with a friend you can have them buy your book when they buy theirs and you can pay them back later.  And in terms of registering for classes, right now you can have older students or James Scholar students hold classes for you.  Those are the current ways to get out of long lines.

But with IlliniBucks that can all change.  I think most students would use the majority of their IlliniBucks to be the first ones to register for classes.  While skipping the line at the bar is fun, even if you don't you still end up in the bar at some point.  If you don't get the class you want, and get stuck in a bad class, there's no changing that if the good classes are full.  And most students will tell you, there is nothing like being in an awful class for a semester.  It's brutal.  I personally would use it to skip the lines at the bars if I were an upperclassmen, because we have first priority for class selection.  But if I was a freshman or sophomore, I would definitely use it to be the first one to register for classes.

Now clearly, there are many problems with this idea of IlliniBucks.  One, if they are priced too high, then nobody would use them..  If they are priced too low, then they will be overused and you might not even have them.  But the biggest problem is the idea in itself.  I don't think it would work.

If you tell kids that for five bucks you can skip the line at the bars, you would have a good number of students take that offer.  But then they just end up standing in a line with all the other kids who paid five bucks.  So they end up still having to stand in line, but now they've lost five dollars as well.  Same thing would happen at the book store.  Another long line would form of the kids who paid to skip the line.  Regarding registering for classes, if you tell the freshman and sophomores that you can pay five bucks to be the first ones the register, then you would lose all your James Scholars.  The one benefit of being a James Scholar is that you can register first.  But if that's not guaranteed anymore, then kids will stop doing the extra essay or whatever it takes to become a James Scholar.  Also, if freshman and sophomores end up paying more than juniors and seniors, then you end up having kids who can't get in to classes that they need to graduate, and they get screwed over, potentially having to stay another year.

The only benefit I see coming out of IlliniBucks is that it would create a black market, and that would be kind of interesting to see.  An IlliniBuck is worth something different to each student, so for the ones who want them more, and really want to get into that one class, they might pay a lot to buy an IlliniBuck off someone who hasn't used theirs yet.  It would be pretty cool to see how much money you could make.  It's similar to my high school.  My econ teacher gave Extra Credit Bucks to kids who received A's on their exams.  At the end of the semester, these Extra Credit Bucks would sell for $20-$50 each to the kids who were on the border of getting A's.  And they would be sold by the kids who got enough A's that they didn't need extra credit.  Very cool system.

Overall, I don't think this system would work.  There are too many kids on campus who would pay to skip the line, that the "Skip Line" would be just as long as the normal line.


2 comments:

  1. Just to be clear, the University can at best do things to regulate university activity. The Bars definitely don't fit that characterization, so I'm afraid no luck there.

    As far as price setting is concerned, why not have the price adjust as in a market. Alternatively, and something I've written on a few other posts that I've seen but that the students didn't consider is to have somebody already registered for a class to sell their space in the class, just they way people sell stuff on eBay, but to use Illinibucks for payment. Would that work?

    One further points I'd make here is that if the Illinibucks price were allowed to float in the way I suggested above, the those supplying the service (in the case of classes I'm talking about the academic department that offers the course) could observe the price and then they might base their supply decision the next time around in part by using that information. If there are some classes that lots of students really want to get into but can't, presumably those classes would have high Illinibucks prices. That would be useful information to have.

    ReplyDelete
    Replies
    1. I like the idea of having kids already registered for a class being able to sell their space in the class. If someone paid the right price I would definitely sell my seat to them and take the class a different semester. The problem with that is that kids can sign up for popular classes just to sell them, when they don't even have an interest in taking that class. I can see people getting cleared to take on an overload, sign up for a bunch of classes and then sell their seats and cash in.

      I think the better idea was your thought about the academic departments observing the price classes are going for, and adjusting their supply based on the price of IlliniBucks. This would be a good indicator of how many kids want to take a certain class, and then the department can decide if they need to move the course to a bigger classroom so more kids can take the class.

      Going back to the kids selling their space in the class, it would be very interesting to see how much kids would pay for the blow off classes like ice skating and basketball, because I know students are willing to pay a lot to get in a class where they are pretty much guaranteed an easy A.

      Delete