Gunnar Nelson, Chapter 2, Question #6

Like in Nicks post, a passage that struck me as interesting was Wheelans fact of adverse selection. Wheelan's example of adverse selection was with teachers. Teachers in America do not receive pay that correlates with their merit. Instead, pay is determined by experience and years of schooling. First of all this can surface issues regarding the qualilty of education that American students are receiving. But first, Wheelan describes the astounding data. His data states that the brightest individuals "shun the teaching profession at every juncture" subsequently the "brightest individuals" are least likely to choose a major in education. This seems contradictory, wouldn't we want the brightest individuals teaching are students? 

Tieing this into the overall theme of the chapter, incentives are important. As shown in the example above, those who deserve to have the role of a teacher are being paid the same amount as those who do not deserve the position. This absensce of incentive (perverse incentives) leads to those teachers who are qualified to either not consider teaching as an option, or do very poorly or "the minimum" amount of work. 

"Human beings are complex creatures who are going to do whatever it takes to make themselves as well off as possible." Most of us as humans are going to do what is best for us or our natural inclination, before caring for the consequences on others. regardless of the consequences upon others. With the teaching example, lower incentives lead to lower work requirement/ ethic, which can further lead to a lowering of work ethic by their students, and can allow for a lesser quality of education.