Wednesday, October 04, 2006

The Free-Rider Effect vs. the Hard-Driver Effect

A conversation with a colleague about classes with group assignments brought to mind a potential upside of the free-rider problem. The downside, obviously, is that the free riders don’t contribute as much effort as they would if they faced the full costs and benefits of their choices. But the potential upside is suggested by something I’ve observed in teaching classes with group work: the grades are generally higher.

This is not because I grade group work more leniently, because I don’t. And while it could be a result of division of labor, in practice I don’t think that’s the case. Observation, as well as my own group work experience, suggests a simpler explanation: the most competent and motivated members of the group – who presumably care most about their grade – do most of the work, while the incompetent and unmotivated do less. The unsurprisingly result is higher quality work.

To put it another way, division of labor generally operates by getting everyone (even the less competent) to work according to comparative advantage. But the effect I describe – call it the "hard-driver effect" – operates by squeezing more effort out of those with an absolute advantage in all tasks.

Of course, this is a problem for purposes of information-gathering. Group work obscures the real differences in quality among team members, in both education and business contexts. And the loss of effort from low-quality team members is indeed a loss, so long as they can produce work of positive (if low) value; exploiting comparative advantage matters. But these losses are at least partially offset by providing high-quality team members with stronger incentives to perform. Of course, as one of the harder-working members of my own groups in college, that’s what annoyed me most about group work.


Mike Linksvayer said...

Called "exploitation of the great by the small" by Mancur Olson, I think.

M J Lutz said...

One problem, of course, is that we don't graduate teams but individuals. The free riders receive grades in excess of what they actually contribute as individuals; however prospective graduate schools and employers assume the transcript reflects individual achievement.

Example: Assume the grading system is set up to be 50% teamwork and 50% individual effort (exams, homework, etc.). A lazy student who deserves a C- but who is on a good team might well receive C- for individual work and A- for team work, leading to an overall B- grade.

Glen Whitman said...

M J -- Agreed; that's what I was getting at when I said groups pose a problem for information-gathering.