If our school is going to use Illinibucks to allocate scarce resources, this system would be very popular at the beginning and potentially useful in a short run. In the long run, this system will not be very effective. In addition, it is very hard to determine a proper price for Illinibucks to eliminate deadweight loss.
From my perspective, I think Illinibucks use to moving to the head of the line can be used in registering class, check out line in Illini union bookstore, and local restaurant, dining halls, and Mckinley health center. In the short run, this market mechanism would work because some innovators are willing to purchase Illinibucks as a tryout that how this new system operates. Most students would not accept cost more money on moving to the head of the line since most time it does not take very long time to waiting for a line and some people may regard Illinibucks as a discrimination among students which is unfair to students who are from low-income families. Hence, only students from middle-class or high-income families are more likely to use Illinibucks to get the fast pass into popular classes, bars and restaurants. Since only a few market participants exist in Illinibucks system, those users could always get the fast pass right away. In the long run, if more and more students joined this market, the fast pass line probably also long as a regular line. In this situation, students may only pay for Illinibucks if the fast line is not quite long. Otherwise, they would just stay in the regular line. In the long run, students who are junior or senior standings always have priorities in early-registration, so they do not need to pay extra money for registering a popular class. Students with freshman standing without early registration could also ask James Scholar students to help them reserve spots. Sometimes, if students really want to take a class, they could email either Professor or academic advisors for override permission. Hence, the needs for Illinibucks in class registration would be largely decreased due to above reasons. For purchasing books, there are multi-channels available for to get required books such as E-book, pre-order online, used books from other students instead of going to the bookstore in person. For restaurants, you can actually pre-order food online or just give a call in advance. In addition, there are some many alternatives restaurants available, students could always find the one with less waiting. Therefore, once there are more alternatives or substitutions available in the market, Illinibucks won’t be effective to get the head of a line.
At the beginning of each semester, it always takes a long time to waiting in the checkout line of the Illini bookstore, if the price of Illinibucks is too expensive for example five to ten dollars, those students are quite willing to pay it because it benefits overweight costs. Additionally, if the price of the Illinibucks is too low and demands are massive, the problem of black market would exist, some students may buy low and sell high which would also affect the functionalities of this system. In opposite, if the price of Illinibucks is too expensive such as twenty dollars, some students may consider that the costs are greater than the benefits. However, in some emergency situation, more students are willing to pay for Illinibucks for saving waiting time with fewer concerns on the price of Illinibucks. For example, when some serious accidents or injuries happened, students want to get medical service as soon as possible. The needs for emergent medical service are inelastic so students are willing to pay more on Illinibucks no matter how expensive the costs would be.
In conclusion, I believe that the effectiveness and efficiency of Illinibucks system significantly depend on the whether the demand for pre-selected items is elastic or inelastic. Also, it depends on the cost-benefit analysis and the number of substitutions in the current market. Lastly, the problem of black-market and fairness is also a huge concern determining the market efficiency.
Let's take the restaurants out of the equation. They operate outside the domain of the university and it doesn't make sense that the university can regulate their operation.
ReplyDeleteOn the other examples you use, I thought your point that only rich or middle class students would use Illinibucks quite interesting. So there is an element of fairness here that should be brought out. None of your classmates wrote about the matter from a fairness perspective. So it is something to explore, which I suppose would be done by contrasting Illinibucks to the current system, for example with respect to registration for courses.
The current system for priority in registration is based largely on seniority and that might be considered fair in that everyone gets their turn eventually. But there are other categories of students who get priority. Honors students are one example. Athletes are another. Is giving those students priority fair?
Another issue to consider here is whether there ultimately would be a supply response, and if the use of Illinibucks would on occasion encourage a course that is always over subscribed to add an additional lecture. As you said, the near term response would be on the demand side and some frustrated students might enjoy getting access to something that previously seem blocked to them. But if overall supply is unchanged, it of course means that access will be blocked to other students. So the long term about whether anything can be done probably needs to focus on supply, not demand.
Before reading your comments, I only know James Scholar students have first priorities to register classes. From my perspective, I think most students would accept this fact since James Scholar students do extra work and efforts to earn this honor, they are supposed to get rewards. Similarly, it is fair that athletes could also get priority since they have to spend a lot of hours in training and practice in order to represent the whole school competing in tournaments. Thus, I think they deserve to get some privilege since other students only need to study for their own good.
ReplyDeleteI agree that I overlooked the supply side problems. I know some classes are very popular and spots are limited, in this situation, demands would more likely exceed supply, which would drive up the Illinibucks usage. However, the overall supply for those popular are still fixed no matter with or without Illinibucks, there is always some students couldn't get into the class. Or some students who are willing to spend Illinibucks still could not get the spot.
Hence, I really think this system won't be effective in the long run. Again, if students need to spend extra money to get into any class, it is no longer like what an educational authority supposed to be rather like an auction which only available to highest bids.