In order to show every recruiter who comes to our campus that we are extremely enthusiastic about their company, there is a certain attendance requirement for pre-placement talks (PPTs). Of course, everyone need not attend every PPT but there are methods to fill up the lecture halls when the company comes calling. The exact implementation of this, however, varies from B-school to B-school.
Now, some people cribbed last year that there is no point asking someone to attend a PPT which he/she is least interested in, while people who would be really interested in the company wouldn’t attend because they need not! For this purpose, our placement committee has introduced a system of “swaps”. In other words, proxy has been made official. One just needs to post on the message board and attend the PPT on behalf of someone, and sign for him/her. This, in effect, has created a market for PPT attendances!
The product in question here is the negative of attending the PPT (call it -PPT). Given that most companies don’t exercise brevity during the PPTs, most people hate attending PPTs. Thus, the product you would pay for is to “not attend a certain PPT”. Now, the valuation of a -PPT is a little tricky. How much would you pay someone so that he/she wears formals and sits in that classroom for an hour or two on your behalf?
One clever way of solving the problem is to indulge in swaps. Suppose I am more interested in company A than in company B. And you prefer B to A. Suppose the attendance roster says that I have to attend B and you A, we simply trade. I go to A and sign for you, and you return the favor at B. There is even a “swap folder” on our discussion boards for this, and it acts as a clearing house for -PPT swaps.
However, it is not always possible to find someone with opposite preferences so that you indulge in a straight swap. Of course, sometimes three-way or four-way swaps also take place. The best thing to do, however, when you don’t want to go for a PPT and can’t find a swap, is to pay someone to go for you. The data that follows is empirical.
It must be mentioned here that the fine for not attending a PPT is Rs. 400. Hence, logically the price for a PPT should settle down somewhere close to, but below 400 in case of a perfect market. However, B-school students are far from logical and the market far from perfect.
The “going rate” last year was Rs. 150 per PPT. A senior of ours was engaged and he simply put an open offer of Rs. 150 for anyone who could take his place. The market quickly converged at that rate and all was fine.
This year, however, the market has shown some strange dynamics. Our juniors seem to be desperate for money and in their attempts to attend more PPTs and thus make more money, they have started undercutting each other. Of course, there are these ignorant seniors who still pay the old rate of Rs. 150. And there are juniors who exploit these.
However, fact is that the price has gone down. Last week, when I was away at Madras, I was able to sell two -PPTs for Rs. 100 each. Rs. 100 seems to be the new ‘going rate’ for most deals. However, there are still a few interesting situations.
There are juniors who go for you for free because you live next door. Or because you had gone to the same undergrad college where you had ragged them. Then there are these meek juniors who feel that it is “not done” to ask a senior for money. And if you are a girl, it is even more peaceful. Just a promise of a chocolate or a coffee (just a promise, not necessarily delivery) is enough to get enough takers. Then, if you figure out which junior is going to intern in that company, you can get to go for you for free (since he’ll want to butter up his bosses before the internship so that it may increase chances of a PPO).
One thing, however, people seem to have missed out – that the length of PPTs are different, and people should be actually paid on basis of length. If I am a guy who hates PPTs, the amount of pain I go through a 2 hour PPT is twice that of in case of a 1 hour PPT; and hence should be charging (or willing to pay) double for it! This is one point that our oh-so-NOT-logical B-schoolers seem to have missed out on!
To conclude, this would be an interesting study for someone doing behavioral economics. And the study would be much harder because of the absence of the law of homogeneous expectations here. Here, two different people are likely to value the same product very differently – probably that is the main reason the market here is so imperfect!