Comment on Madison, Frischmann & Strandburg, The University as a Constructed Commons Lee Fennell University of Chicago Law School

Design Principles of Robust Property-Rights Institutions (Ostrom 1990, 2005, 2009) Well-defined boundaries Proportional equivalence between benefits and costs Collective choice arrangements Monitoring Graduated Sanctions Conflict Resolution Mechanisms Minimal Recognition of Rights to Organize Nested Enterprises

If a University is a Commons, What Is the Common Resource? Madison, Frischmann, & Strandburg’s answer: Knowledge “The university (and any particular university) is defined by a population of faculty and students who take as their mission the simultaneous construction and perpetuation of knowledge itself ….” (draft at p. 12).

What Potential Tragedies Must Universities Design Around? Underprovision problem ? - Inputs are priced (faculty salaries) but underspecified (e.g., tenure protections) Overgrazing problem ? - “Knowledge itself” is nonrivalrous but “knowledge delivery systems” (professor contact hours, classroom seats, library books, computer terminals, laboratory equipment, etc.) are rivalrous and hence rationed

Beyond “Knowledge Itself,” What Do Universities Produce? Grades, degrees, credentials Faculty prestige, job security, job mobility Numerous club goods (gyms, tennis courts, libraries, dining halls, and so on) Friendship/dating/marriage/partner markets Liaisons with larger academic networks Marketable innovations Community/alumni engagement (e.g., sports teams, concerts, lectures, magazines)

Questions If there are different optimal scales for different activities undertaken by modern research universities, what drives the decision about where to place the boundaries? Knowledge transmission in the university is highly labor intensive and performance-based; need it be, or is it designed this way to facilitate a particular pricing model? Tenure reduces monitoring/sanctioning opportunities; countervailing benefits?