Monday, July 21, 2008

Auction Approach v. No good Deed Approach

There is a story I tell to law and economics students to illustrate a difference between the economist's perspective and the law professor's perspective. It is about an experience I had at my first law teaching job. I visited the economics department and learned that the economists had decided who got which office in a new building by using an auction. Later that day, I passed this information on to my law colleagues and every one of them asked instinctively, "Who got the money?" To me, as I tell my students, it illustrates the difference between allocative and distributive concerns. (Now I understand from one of my well-read colleagues, some schools use auctions to allocate spots in courses to students. The currency is a set number of "points" which are assigned to the students.)

When I tell this story to students or even to colleagues a fair amount of eye rolling takes place -- "oh those crazy economists!" I admit to joining in and snickering. Now I think the economists were way ahead of the game and much more was going on than allocative efficiency.

For example, a the sticky issue at law schools is teaching schedule -- times, days, numbers of hours, capping courses. There are others like travel expenses but let's stay with teaching schedule.

At some point professors are asked what their preferences are for the next year. Let's consider possible responses at each end of a continuum of responses. At one end:
"I will teach Advanced Restitution from the Perspective of the Elderly at 1o, Wednesday. Cap 12 students."

On the other end: "I can teach any of the following 8 courses whenever they are needed the most."

Does the first statement reflect an actual need (like a standing appointment for an appendectomy at 8 AM or six days of physical therapy a week)? Not likely. Just a preference.

Does the second statement actually reflect no preference? Just as unlikely.

Another difference is the willingness of person one or those over on that end of the continuum to spend time badgering, slipping down to the dean's office and quietly closing the door, or expecting something in return for being flexible, etc. (Low opportunity costs, I know, but that is another post about the theory that one's value to a law school is inversely related to the amount of time spent with the dean or any administrator at the faculty member's request.) They exact a "price" for not getting what they want.

So, the differences in these statements do not reflect a difference in need or a difference in strength of preference. There are at least two other possibilities. One is a difference in sense of entitlement. The other is a difference in moral development with the first person, ironically, fitting the economist's definition of being narrowly self-interested and the second person having a sense of community.

At most schools my guess is that teaching loads are, in large part, allocated -- except with respect to the instances in which student needs are observed -- on the bases of sense of entitlement, level of moral development, and opportunity costs associated with time spent badgering.

Whatever the economists were achieving back in the office auction had to be superior to this. So how about a dean assigning to each faculty member 500 points and letting the bidding on schedules begin?

Two final points. Is this the fault of deans? A year ago I would have blazed away and said yes. Clearly, community minded professors make it possible for deans to "serve" those with a sense of entitlement and I still think too many do respond to squeaky gates but I have come to believe that they cannot be responsible for the moral development of their faculties. That was what mom and dad were supposed to have done.

Second. Would this ever happen? Of course not. That would require those with a sense of entitlement to see themselves as no different than the rest of the faculty. And, it would violate the important elitist rule of never revealing what you really want because then you have revealed a weakness.


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