\"It\'s Not Called Coase\'s List For Nothing\"

"It's not called Coase's List for nothing—if it were meant to be a barter-driven socialist collective, they would have named it Trotsky's List."

Adler, who was also Wilson's first-year contracts professor, would not cede the economic argument. He acknowledged that banning cash transactions might lead to inefficiencies—say, if Wilson had found a student holding a spot in Neuborne's evidence class who would have been happier with a less popular evidence class and a $200 dinner at Il Mulino, the old-world Italian restaurant down the street from N.Y.U. But the law school was also concerned with the distribution of wealth among its students. As Adler correctly observed, legal rules affect not only how resources are allocated, but who winds up spending how much. By barring the sale of classes, the law school aimed to avoid putting pressure on better-off students to buy the classes they wanted, and, even more importantly, pressure on poorer students to sell their valuable seats. "There's nothing inconsistent with Coase's Theorem there," Adler insisted.

I have a hard time taking this "distribution of wealth" argument seriously when it is being made at the most expensive law school in the country. When you're spending over $35,000 in tuition alone, and almost $200,000 total over three years, what's another couple hundred dollars between friends? I bet these shenanigans would have tolerated -- nay, encouraged -- at Chicago.

[via Timber]

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I tried this with an

I tried this with an undergraduate database class. My counselor was not impressed with my grasp of Pareto efficiency. I wish I'd thought of dragging Coase into it.

Reminds me of the time that

Reminds me of the time that one of my professors had a bidding war among the people trying to get into the class. Only got up to 35$, IIRC, largely because it was only among the people who bothered showing up in hopes of getting a spare spot. Wonder what that school would say about that?

Many of the students at NYU

Many of the students at NYU Law are entirely financed by student loans for their three years here. Are they anywhere near the bargainingposition of those who have other sources of funds? I found the arguments in the article opposing the marketability of class spots fairly persuasive. The other problem is that we don't have a functioning wait list.

So what if they are? If

So what if they are? If they'd rather have the money than the spot, why shouldn't they be able to sell it? These are adult graduate students, not kindergarteners, and they're perfectly capable of making rational choices regarding their education.

That said, the ex ante argument was the first thing that came to my mind, and I would expect allowing the sale of spots to lead to scalping (that is, students interested in a spot only for its resale value taking it as soon as it comes on the market). Perhaps a better system would be for the professors themselves to auction off spots.