Incentives and Demand

Stuart doesn't think the imposed discipline is a big reason for why people go to non-fancy universities. I don't think it is the primary reason, but I do think looking for ways to 'avoid disappointing other' or failing is a method people use to overcome inertia. There are cheaper ways. I have heard of a website, can't remember where or I would link, where they set up a market for incentive bets. So, basically, you bet say $100 that you will lose 10 kilos before the end of the year. If someone takes the bet, it gives you an incentive. Other ways may be to sign up for a course or an exam. You don't want the bad street cred of not passing or of not arriving. A way of keeping fit is to join a team, or find a jogging partner. If you don't pitch up you disappoint other people, that helps to overcome inertia. Guilt and pride can be used as powerful (if somewhat negative) motivating factors.

I agree that people should stop donating money to fancy universities. It would be better if there was a better spread. To a point. I would prefer to see a system that makes it easy for people to provide financing directly to deserving students of their choosing. I have heard of a website, again a poor memory prevents a link, that does a similar thing for entrepreneurs in developing countries. It allows people to post business plans, and people who want to donate money are able to give it directly to those who they think have the best business plans. Maybe a similar social network that allows people to give money to deserving students is a better way than giving money to fancy universities.

I am not okay with cynical class filters. I am just saying that maybe that is what exists. What I am against is using things like SATs, GMATs and other IQ tests to determine who gets in. I agree with Gladwell (Outliers: The Story of Success)who says that to do well you have to be smart enough, but you don't have to have the highest IQ. Beyond a certain point other skills matter more than IQ. If your IQ is higher than say 110 or 115, then there should just be a lottery for places. Finances should not be an issue in who gets a place. The most effective system would somehow select the people most like to contribute. Creating an effective system for that is the challenge.

Thinking about it more, I suspect the true value of actually going to university is the same as going to watch a sports match or music concert live. You are paying for the physical community of people. Yes, you can study by yourself and you can find some like minded/challenging/interesting people in other ways, but the concentration of lots of people who are excited about learning and intellectually curious is likely to be higher in a university. Plus the pressures of the professional world and concerns of a job on the side are somewhat removed.

I think the number of people who like learning for learning's sake is very small, and if only those people went to university there would be lots of echos in very empty lecture halls. So maybe the signals is just a way of getting people who don't mind learning if it has some financial benefit in the door slightly increases the demand for learning. And that is probably a good thing.