The market for questions

What if we had a cap-and-trade system for asking questions in class?

In 1997 the Kyoto Protocol became the first major international treaty, (although not quite completely international) to feature a cap and trade scheme. Yet the idea to extend cap and trade schemes to individuals has not been taken up widely. Ed Miliband, Britain’s new leader of the opposition, proposed a radical idea to introduce individual credits to pollute when he was head of the Department of Energy and Climate Change, but his idea has largely been ignored. Now, more than ever, MIT needs to set an example of radical policy by introducing a permit to ask questions.

I first started thinking about this in light of people answering questions. MIT has some of the most brilliant students in the world (or at least the southern side of Cambridge in the United States). So when they answer questions they can deliver insight and clarity to the rest of the class, creating large positive externalities. Usually we would worry about under-provision of good answers, as the benefits I receive from answering questions doesn’t add up to the benefits for the rest of the class. But in this case the professor steps in and fixes our broken market. The professor values the benefits to the rest of the class and has an incentive to reward the good student with a UROP, a reference or perhaps more lenient grading (if the student is really lucky).

A second problem with people answering questions is that people’s extreme brilliance can bring even greater arrogance. This leads to answers that are roughly related to the topic of class, but more importantly are a showcase of external knowledge (or gut thought) and how much smarter the student is than the rest of the class, and perhaps the professor too. The professor has a really easy job fixing the market here. There is initially an information problem: who is a twerp, and who isn’t? The progression of the class over time removes this imperfect information rapidly. All the professor has to do is stop taking questions from the problem students with the excuse, “I want to hear form someone else in the class”.

Dismissing people from asking questions may be harder. People pay a large amount in tuition to come to MIT and it doesn’t seem right that their pressing questions can be easily turned down by the professor. This is where the Kyoto Protocol can serve as an example (or at least where it would have been able to if it had ever worked). Firstly, we will assume that the MIT professor has taken the class many times. They therefore know how many questions should be asked throughout the semester to create an “efficient class.” The credits are then divided equally amongst the students in the class so that each has the right to ask a certain number of questions throughout the class.

When asking questions people can derive benefits in two ways. One is by furthering their own knowledge, and the other is by furthering their own ego. The trading scheme has many benefits. It can price out those who are asking questions for non-academic purposes. The benefits of a high GPA are far greater than (or at least should be) letting the class know how clever you are. Therefore, in the after-class trading market twerps should be out bid by genuine students. Secondly, it deals with a subset of students asking academic questions: those who didn’t do the reading before class. The cost of asking too many questions means it becomes optimal for them to redistribute their time towards reading at home rather than interrupting class (which, I should add, has huge negative externalities). Finally in the rather small world of an MIT class, people can price discriminate. Those who ask the best questions can buy extra permits for cheaper amounts. Perhaps students pay them if they are really good questions.

I have made a small contradiction, however. In the scenario above people now have to pay money above their MIT fees to participate in class. This is already a principle that I said should not be violated. But perhaps its not being violated too much. The permit scheme doesn’t require additional resources for the entire class, it just redistributes resources more efficiently, even though some may see the scheme as inequitable. Instead, I propose that rather than buying permits with cash, students buy them with a donation to a party at the end of the year. This way, at least they derive some benefit from their “donation” and can at least unwind after a hard semester of many questions.

Right now I feel like there would be some good parties in my classes, however I fear I would also be out of pocket. That is for the market to decide.

William Damazer is a Cambridge student participating in the Cambridge-MIT Exchange.