Question

Professor Jones has just been hired by the economics department at a major university. The president of the board of regents has stated that the university is committed to providing top-quality education for undergraduates. Two months into the semester, Jones fails to show up for his classes. It seems he is devoting all his time to research rather than to teaching. Jones argues that his research will bring prestige to the department and the university. Should he be allowed to continue exclusively with research? Discuss with reference to the principal-agent problem.

Short answer

The principle-agent problem arises when the agent's interests contradict the principal's. In this case, the University, as the principal, should negotiate a solution where Professor Jones can fulfill his teaching duties and also engage in his research. It helps in ensuring a high-quality education and potentially raising the university's prestige.

Step-by-step solution

Understanding the Principal-Agent Problem

In a principal-agent relationship, the principal hires the agent to perform a service on their behalf. However, conflicts can arise if the agent's interests do not align with the principal's. The principal here is the university and the agent is Professor Jones. The university wants to provide excellent education while Professor Jones is interested in his research.

Analyze the Competing Interests

The University clearly wishes to prioritize high-quality undergraduate education. This requires active and consistent professor involvement, which Professor Jones is not providing. On the other hand, Professor Jones argues that his research will bring prestige to the university. Both sides have valid points, and their interests must be thoroughly evaluated.

Evaluate the Short-term and Long-term Impacts

In the short-term, failing to teach classes could potentially harm the students' education quality. This contradicts the university's mission. However, in the long-term, if Jones's research brings prestige to the university, it could potentially attract more applications, improve university rankings, and correspond to better opportunities for students.

Propose a Possible Solution

A possible solution might be to require Professor Jones to meet the minimum teaching responsibilities while prioritizing his research. This way, he can contribute to the university's reputation by his research and also fulfill his teaching duties.