Thursday, October 08, 2009

Bet on your grades

Back when we were discussing intertemporal choice in micro, we talked about making commitment contracts. Here's a website that lets you tweak the incentives you face with respect to your grades:
While hanging out together one Sunday afternoon, I mentioned to my friend Steven Wolf that I had an exam the following day and that if I were to study I was sure to get an A. (At the time, I was a student at University of Pennsylvania.) But I was enjoying my Sunday afternoon, and I told Steven that I had no intention of studying. That's when, in order to provide me with motivation, we made the following agreement: If I got an A on the exam, he would give me $100, and if I didn't get an A, I would give him $20. Steven and I quickly realized that lots of other students might like this kind of motivation. To that end, we began developing what is now Ultrinsic Motivator Inc.
They'll also let you hedge your grade risk by buying grade insurance. I love that you can now but insurance against my grading practices.

Although money can perhaps ease the emotional pain of a bad test grade, I feel like it will only help so much. At some point a 3.8 GPA will help you get into grad school, get a job, etc, more than an extra $200 cash. Unfortunately, the site isn't currently working so it is difficult to find out exactly how it works or how they determine a student's 'risk'.
I think earning money isn't much of a motivator - as receiving good grades is enough. The true motivator is having to give up 20$ if you don't get an A.
Haha grade insurance, that's crazy
Although using monetary loss/benefit as motivation to get good grades may be all that works for some students, the point should be to further one's education. College is a time to become a well rounded individual, and yes, good grades get you that piece of paper at the end, but now is the only time most of us will be able to really educate ourselves on a variety of crucial subjects
Unfortunately the site has been inaccessible for a couple of days so I haven't been able to check it out. But it seems like a good application of microeconomic theory; people respond to incentives and money is a good motivator. In this case the utility of labor is preferred to that of leisure. I do wonder about the circumstances in which leisure (-$20, less than an A) would outweigh labor (+$100, A). If Bruce Springsteen and Scarlett Johansson had one more spot on their speedboat I would have an F and be out $20.
Scott and I thought this was similar to the incentives of being awarded a scholarship, except with better guarantees.
You can work really hard to get the right GPA and leadership and all the other stuff that big money scholarships require but there's no guarantee you'll get it, you still have to beat everyone else.
Personally, with distant, difficult to attain and uncertain rewards (like getting a big $20,000 scholarship), I lose motivation. The light at the end of the tunnel is too far away!
But instant, guaranteed rewards, even if they are much smaller ($100), are much better motivators for me.
Maybe I would have eaten the marshmallow too quickly.
This looks like an interesting microeconomic experiment. It seems like students who already earn A's would be able to really take advantage of this system. On the other hand, students who do well already have motivation to study and therefore may not bother with such wagers. If nothing else it probably makes students more eager to receive their grades, and their money.
I don't necessarily think its a good idea to encourage students to get good grades based on a monetary reward. But I personally think it could and or would be a good work and be an incentive to get better grades. I had friends in high school who for every A they got (in the trimester system) would get $20 from their parents. It seemed to work for the most part.
Haha Are there odds and a spread over the probability that you could get a certain grade? This would be an interesting gambling ploy in a college. What if you could bet on not just your own, but other people's grades as well. This could develop into a sort of group motivation bettering the college as a whole. I think it would be an interesting program to place on something like midterms or finals. Placing a wager on something like that could cause more people to collaborate in studying in order to win their bet, creating a stronger studying atmosphere on the entire campus as a whole.
It is an interesting idea. It's similar to someone asks you to bet against your favorite sports team. Then it's win-win because either your favorite team wins, or at least you make some money. However, this makes me uneasy as well.
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