It was Monday morning when I was sitting in a huge lecture room, with around 450 fellow students who all stared at the same PowerPoint sheet. Two big yellow lemons. Yes, we all looked at a picture of two big yellow lemons with wheels underneath. ‘The subject of today is asymmetric information’, the lecturer screamed through the big hall. If it wasn’t for his screaming because he refused to use a microphone, the words wouldn’t have had such an impact on me. The term asymmetric information sounded quite familiar. I looked around but didn’t really see any recognition on the students’ faces. But when the words moral hazard and adverse selection were to be discussed, I knew it for sure; we already learned these concepts in the microeconomics course! The lazy student inside of me came out; knowing I already had some good notes about this subject, it was time to chill.
The next month I was sitting in the exact same big lecture room but following another course. This time the PowerPoint slide was only filled with the letters AS and MH. Now I actually heard some sounds of recognition by my fellow students. ‘Is this the lemons story again?’ Yes it was. Good news! Now I could use my notes from the microeconomics course plus the ones from the finance course! Another good grade was in the pocket.
After seeing various pictures of used cars, lemons and insurance companies in the following courses, I got a bit displeased when a picture of George Akerlof, the inventor of the lemons problem in the used car market, was displayed on the screen. A whole group of students, who stood up early, had to bike through the rain with a heavy backpack on their shoulders, sitting in a freezing church (yes, this time the lecture was in a church), to listen to a story we already knew by heart. It wasn’t a short clarification to remind everybody what the problem was about again. No, it was a tedious explanation of maybe half an hour, which discussed every little detail of the story. A sound of deep sighs and refresh-buttons of Facebook pages echoed trough the church, the relaxation time had started…
A sound of deep sighs and refresh-buttons of Facebook pages echoed trough the church
But why do we hear the story of asymmetric information with its accompanying concepts of adverse selection and moral hazard over and over again? Is the communication between lecturers of the different courses so bad that they don’t even know they are telling the same story? Or is there really just that little to say about economics? This last question reminded me of a quote from my macroeconomics teacher, who said: ‘there are very few concepts you learn during this study programme which are of essential relevance’. I was honestly shocked. Was he saying that a bachelor programme that has 800 new students each year had so little relevant content? Am I wasting my time learning subjects that do not really matter? And is the society wasting a lot of taxpayers’ money by teaching particular concepts repeatedly? Not only is it expensive to hire lots of teachers who tell the same story time and time again, but also if it means that researchers of different fields of economics are researching the same subjects.
My suggestion is that the different departments of the faculty get together for a weekend, invite my macroeconomics teacher and draw up a list of the concepts that really matter to an economist. In another weekend they could redesign the curriculum so that all subjects will only be tutored once. Then we can all get a bachelor’s degree in just a single year and have two additional years to enjoy our lives without having to listen to stories about lemons on wheels!