On Tuesday, I handed out more than $150 to my “small group” of Contracts students. It was a strange moment — pulling out your wallet and passing out cash. But I did it because I assigned my contracts casebook and I’m trying to reduce the financial conflict of interest that professors have in assigning their own books. I wrote about doing this in a 2005 New York Times Op-Ed:
[A]t the moment, professors’ incentives in choosing textbooks are in some ways more distorted than doctors’ incentives in choosing drugs. You see, I earn a $10.30 royalty on every copy of my textbook that a student buys. Instead of just trying to get the best book for my class (and to do so I should weigh both quality and price), I might also consider assigning my own book and increasing my profit.
This is a self-dealing transaction, which would be presumptively illegal if professors owed a fiduciary duty to students. Some professors realize this and donate to charity the royalties they earn when they assign students their own books.
So this year, I am going to do something different. I will give $11 to each of my contracts students who buys my book. That way, we will all know that I assigned the book for the right reason.
Rebating the money this year was a great excuse to discuss whether any of the students had a valid promissory estoppel claim against me. In 2005, I said “this year, I am going to … .” Does that promise cover all future contracts and non-contracts Ayres classes? Do I need to pay students who bought used textbooks or bought before they heard of the offer?
In retrospect, I wish I had softened one claim from the Op-Ed: “That way, we will all know that I assigned the book for the right reason.” Disgorging the $11 reduces the conflict, but I still have plenty of self-serving reasons to favor my own work over others. Still, disgorgement is a simple way to reduce the appearance of impropriety.
I was surprised to learn that the Yale Daily News picked up the issue yesterday. One of my university colleagues, in defending his decision not to rebate royalty to his students, noted “that roughly 90 to 95 percent of his book royalties are from books that are not assigned in Yale courses.” This suggests that his books have passed a market test.
Then again, he would only be forfeiting 5 to 10 percent of his book royalties by rebating those paid by his own students. And the more relevant market test is what proportion of other professors choose his book. If only 5 percent of the professors without a financial incentive assign his textbook, then there is more of an appearance that the financial payoff played an inappropriate contributing role.
I’m delighted to report that one of my Yale colleagues emailed me yesterday to say that he was going to join me in rebating his royalty to his students. We are not alone.
When I originally published the Op-Ed, I received dozens of emails from professors around the country indicating that they disgorge their royalty. So students, if your professor has asked you to buy his or her book, ask for a rebate. A small way to make professors more sensitive about the price of the books they are assigning is to think about the royalties they are generating for themselves.
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How would you prevent a student from signing up for your course and getting the rebate, but then dropping and returning the book for a full-refund to the university bookstore, thereby pocketing $11?
ps- in the same vein of AaronS–however, I can see the potential for such a conflict of interest. How does a person come to terms with the decision to use a book that they wrote when they profit from its sale. Perhaps, giving students free access to the book by putting it on line for students to read through the university would be a good way to deal with this problem. In other words, it would be a way to communicate the fact that your interest is in students reading the book and not in your own personal gain. Then if anyone wishes to purchase the book, it’s because they want to (not have to).
You’re telling me this rebate/refund isn’t automatic? What if you made your own pens/paper or laptop computers that students had to take their exams on? Also, 2005 was the first time any Yale Law professor thought there might be a conflict of interest here? Then again, you’re only dealing with the financial and not ideological…
Why not rebate half the royalty at the beginning of the term and then give the students a choice at the end of the term: (a) request the other half of the royalty, (b) refund the royalty back to you, or (c) leave it alone. They can rank order choices. You can do this so that the students remain anonymous and that you don’t get the results until after grades are submitted (or whatever you submit at Yale Law).
This allows you to get feedback and find out how students feel about your decision to assign the textbook. Sure they have all kinds of incentives, but you should trust your students (in being fair and honest in making this decision) the same way they should trust you (in being fair and honest in assigning the textbook).
After a couple of years, you should have enough data to see whether the students trend one way or another consistently and then perhaps draw a conclusion that you can follow in subsequent years. In addition, this adds an additional incentive for you during the term to excel in teaching, which is a benefit to the students since you’ll have an additional dimension of accountability at the end of the term.
Good lord! I only get about a 20-cent royalty for each of my books!
What a shallow gesture. If your book is worth it and you deem it appropriate, what’s the problem?
If you’re really concerned, make it available on-line.
Even better than the professor requiring his own book, is the department chair requiring his books for multiple classes.
Calc I and II both required the chair’s books. They were TERRIBLE, even the teachers didn’t like them…finally my senior year he was replaced as chair, and new books were quickly approved.
Couldn’t you just sign the book the student bought? Generally a book signed by the author has a higher value.
I guess I read the post a different way. I have enjoyed classes when the text was written by the instructor. The instructor is generally very informed on the subject matter, and teaches with much greater passion.
I say keep the money. Let the whinners whine. And let your guilt and internal conflict drive you to provide a superior experinance for your students.
You are an educator, your ethics will be decided by your results.
Money is the root of all evil.
aside note: None of my law school professors taught from thier own text. Though many of my engineering professors did.