Wednesday, December 10, 2014

How Coase Theorem showed its ugly head in my classroom

Intimidation with a different face. Flickr/Nathan Siemers
I teach Mathematics, Basic Science and Basic Technology in a middle secondary school. On a daily basis, I encounter adolescents a lot much more often than the average reader of this blog. I have had several class episodes demonstrating Coase Theorem at work.

In class, there are two exceptionally intelligent students. During the class participation sessions, they tend to outshine other students. They raise their hands much more often than other students. They answer questions, even answering questions meant for other students, in assertive manners. This practice has been irksome to the rest of the students.

One day, while reading an article on Coase Theorem and an airline flight squabble due to reclined seats, I thought I also had a story.

Coase Theorem

The level of output and the corresponding external costs remain the same whether polluters are bribed to reduce pollution or whether they are charged for marginal damages. The “carrot” and the “stick” respectively yield the same result. The difference is in who bears the cost.

Principles of Economics by J. Henderson and W. Poole

In my classroom case, this pair are the polluters. Their irksome behavior prevents others the satisfaction of having a full share in the class participation sessions. Many of the students have complained about this polluting practice. The costs to the students have been low self-esteem, thinking they were not prepared, being asked to take the back seat when they wanted a front one, class discomfort, delays during sessions due to conflicts, distractions and irritability.

As the teacher in the class, I thought it would be wrong to ask them to stop raising up their hands for every question (it’d be against principle; they were entitled to that behavior), rather I’d have to ask them to use their initiative and give others the chance to shine. Maybe the rest of the class might have to bribe them to stop answering questions. Or maybe like in the flight example above, gang up on them.

Unfortunately, the two students decided to offer the bribe, interestingly, to the other students so they could continue polluting the participation sessions - by encouraging cheating. To continue polluting and outshining others during the participation sessions, they’d have to seat with one of the class leaders. They’d then have to show the answers to test questions to their classmates through clever ways as appeasement money.

I thought it was a case of Coase Theorem at work. The two intelligent students wanted to bear the cost of the pollution. The costs still remain the same - the opportunity to assertively outshine other students.

I decided to change seating arrangements and watch out for class intimidation.

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