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From the Comments: A Market for Skipping Class

We got tons of responses to our Bleg last week on how professors should incentivize classroom attendance. Thank you everyone for your suggestions, a few concerns kept coming up in the comments:

Most readers encouraged making the class interesting enough so that the professor is the sole incentive for students to show up. Others suggested an attendance incentive — ranging from points for showing up, to test questions handed out at the beginning of class — or a policy that puts students’ grades at risk for not showing up. A surprising number of readers also suggested that girls will help boys show up, which shouldn’t be a problem given the current gender gap in college enrollment.
If explicit rewards are devised for class attendance, readers warned of students gaming the system in resentment and scheming to avoid punishment. Determining explicit rewards seems to be the trickiest part of this question, as rewards that are too large eat into course work points; and rewards which are too small simply wouldn’t work. One reader claimed that small rewards incentivised him not t0 attend lectures once he had missed one.

The most creative solution has to go to scott cunningham:

When I was a grad student, I once (and only once) had a fairly weird attendance policy that went like this.
1. Attendance was worth 10% of the final grade.
2. On the first day, students could miss up to 3 classes without penalty and without excuse.
3. If they wanted to skip more, they either had to take the penalty (a full letter grade), or they had to buy the right to skip from one of their students during an open cry auction held each Friday in class.
In other words, I created a market for “skipping permits” where each permit was exclusive, enforceable and importantly, transferable. Students had to pay other students with “real money” (i.e., no barter), and they had to do it in class.
There was plenty I liked about that experiment, but to the professor’s question, it was also an interesting experiment with incentives. Ordinarily, if a professor has a policy where they can miss 3 but no more, the professor has a penalty that is zero for skips 1, 2 and 3, then positive marginal cost for the 4th absence, then back to zero again for all subsequent skips. That’s a strange incentive structure. At least with my policy, the marginal cost of skipping was positive for all absences – even those under the allocated 3. A student throughout the semester regularly earned between $5 and $20 per permit, depending on where we were in the semester, which meant that using one of their scarce skip permits necessarily required they incur foregone revenue from selling their permit on the market – the opportunity cost of skipping, in other words, is internalized when there is a market like this.