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Betting markets in everything
Bet on your own grades. Here is how it began:
One Sunday afternoon, Steven and I were sharing ideas, and I mentioned to him that I had an exam the following day and that if I were to study I was sure to get an A. But I was enjoying my Sunday afternoon, and I made it clear to him 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. We thought every student would like this type of motivation, therefore, we established Ultrinsic Motivator Inc.
I thank Max for the pointer.
Posted by Tyler Cowen on January 12, 2009 at 04:10 PM in Education | Permalink
Comments
Just what we need, more reasons to make learning competitive.
I can think of a few fun and creative ways to game that system, if you know who the participants in the pool are.
Posted by: brent at Jan 12, 2009 4:23:41 PM
Funny, I would have thought this would work in the opposite direction: take for granted that students *know* they already have a strong monetary advantage to get good grades, and allow them to hedge their exposure by betting *against* those grades.
Posted by: anon at Jan 12, 2009 4:28:13 PM
Yeah, the opportunities for gaming are there, but you've got to bet (hehe...) that they can take some measures to combat that, no?
Posted by: Max at Jan 12, 2009 4:32:17 PM
don't parents already do this
Posted by: regrwverg at Jan 12, 2009 5:51:58 PM
We did this in college all the time to create motivation, between peers, otherwise we couldn't be bothered to do our work. We bet each other money, drinks, cigarettes, dates, etc. basically, the bet was that loser paid--and loser was defined as receiving the lower score, or finished less correct proofs (we were math majors), or read less pages. eventually, though, it backfired, because the competition wasn't enough to create interest, and once you assumed you were the loser, you had even less reason to bother to study.
Posted by: allison at Jan 12, 2009 6:24:53 PM
My bet: hoax.
Posted by: AMH at Jan 12, 2009 6:49:44 PM
How can politicians profit from this? If they can not personally gain from this I would expect the feds to make this illegal (I predict using the interstate commerce clause).
Posted by: Jay at Jan 12, 2009 6:59:07 PM
You guys are all missing the point.
Gambling is an epidemic among college students. One downside to gambling is that a student's grades suffer. This happens because the student shifts from focusing on school to focusing on gambling. However, in this situation, the student enjoys gambling but inorder to win his bet, he must focus on school.
Therefore, this system will help improve student's performance.
Posted by: Sammy at Jan 12, 2009 8:24:13 PM
1)moral hazard can arise so easily if teacher and student share the prize.
2) The market could disappear if only best students decide to bet. Asymetrical info... I wonder how long the company will survive.
Posted by: alexko at Jan 12, 2009 8:44:27 PM
Of course better way to incentivize slacking college students is to provide sex for good grades. The one problem is that this would require a mechanism to withhold sex from academic underperformers.
Posted by: ogmb at Jan 12, 2009 8:54:38 PM
Sammy, gambling on March Madness and gambling on your grades are not direct substitutes. They are entirely different experiences, much in the same way that gambling in Vegas or Atlantic City is different from gambling on a river boat.
Posted by: Robert Olson at Jan 12, 2009 9:09:05 PM
"Your GPA must be less than a 3.5 to enter the Contest."
Posted by: Sameer Parekh at Jan 12, 2009 11:14:32 PM
Sameer, please elaborate.....
Posted by: jon at Jan 13, 2009 12:14:00 AM
How dose the marginal utility of income depend on your grades?
Posted by: Joen at Jan 13, 2009 12:21:50 PM
Sameer's right--it says on the website when you go to sign up. Which means I don't qualify. Darn!
Posted by: Jay at Jan 13, 2009 12:39:45 PM
Robert, how do you know to what degree of a substitute Ultrinsic is for other forms of gambling?
Posted by: Sammy at Jan 13, 2009 2:46:20 PM
