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Saturday, January 14, 2006

Clueless Cueball

Professor John P. Palmer, an economics professor at The University of Western Ontario, wrote about teaching an introductory economics class:
"Suppose each of you — what are there? 200 of you here today? — suppose each of you valued seeing me with my head and beard shaved at, say, 50 cents each. That would mean that as a whole, you, as a class, would value seeing me completely shaved at $100. But if you tried to collect that money from each and every one of you, you couldn't possibly do so because some of you would be free riders — some of you would say it didn't matter to you whether I shaved even though you would get some value from seeing it. You would try to get others to pay your share so you could take a free ride on their activity."
What happened next was interesting. One of the students raised his hand and said, "We've raised the hundred dollars!" Turns out that six students alone were willing to put up the hundred dollars. The Professor accepted the money and shaved his head and beard. The pictures are quite amusing. Have you ever seen someone with such big ears relative to his head before?

But, the free rider problem was still perfectly illustrated. The vast majority of the class got to be free riders. I think it would have been a far better lesson if the Professor insisted that everybody in the class put in 50 cents before he shaved. Instead, I'd bet some of the students think that the free rider problem was disproven, or at least weakened. If so, the Professor cueball is not such a good teacher.

2 comments:

Oroborous said...

Perhaps he was then able to constantly refer to the non-payers as "free riders", and thereby demonstrate the problem in a concrete and hands-on way.

However, the example also illustrates the problem of fixing who exactly is a "free rider" - those who valued the sight of the hairless Prof. at exactly zero weren't free-riders, they were merely bystanders.

Street performers who perform for tips in public spaces are a good example, IMO:

Some people pay, many enjoy the performance, but "free ride", others are bystanders, and some actually have a cost imposed on them, by being forced to view/hear something they consider to be unpleasant.

Proponents of given actions like to categorize everyone who would be affected, but who are unwilling to pay, as "free riders", but there are more than two groups.

Bret said...

Good point. After seeing his ears, I'd agree that a large cost, far beyond 50 cents, was imposed.