David has wanted me to post something and this is an odd choice perhaps, but bear with me. Today's New York Times (copy provided by Univ. of Houston) carries an article describing about a proposal at Princeton to stop grade inflation. The proposal would keep the proportion of A's given at 35% of all grades taken. (Yes,"taken" -- we professors don't give grades, students take them.) Currently the rate is between 44-55% at elite schools. Everyone is patting themselves on the back on this point. So why? Why has no one looked at this issue from the standpoint of academic freedom? I recall a dean here at St. Cloud State once sending a copy of a faculty member's final grades for a graduate class in which all the students received A's."Must be wonderful to have had such a great class," the dean clucked. The professor was indignant, and most people I knew thought the dean had overstepped his authority.

But -- and here's why I think it's an L&P kind of issue -- grade inflation may result from a prisoner's dilemma game. Suppose faculty promotions and even tenure depend in part on student satisfaction with their courses. And suppose that satisfaction depends in part on grades taken. It could be other things like beauty, but there's pretty good evidence of a relationship between ease and satisfaction. Merit pay is a zero-sum game -- the university puts $X in the pot, and professors compete to demonstrate their merits. Now let Professor Smith decide she wants to stop runaway grade inflation and tightens her standards. Student satisfaction wanes because others do not follow her lead, and thereafter Smith receives a smaller merit pay packet. Applied to larger issues of promotion and tenure, the incentives against individual actions to stop grade inflation strike me as rather large. There are similarities between this and the argument about union wage demands during disinflation that I learned as a grad student years ago. Thus, to stop this, it may indeed take a committee, a dean's office or an entire administration. Collective effort might be needed. My libertarian tendencies chafe at the thought, but is there another way?