What is the best way to get someone to do something they do not want to do? Pay them. A website called Ultrinsic takes wagers on grades from students at 37 colleges nationwide offering cash incentives if they reach their target grade.
The website, called Ultrinsic because it uses ulterior motives to intrinsically motivate you, bets that you cannot crank out your papers or study hard enough to land a straight-A semester. With the high price of tuition and all sorts of other college costs, students are more than likely to appreciate the chance to make some extra cash. The beta service lets students place wagers on making or exceeding certain grades in their courses. Essentially, Ultrinsic calculates the odds of you doing well and allows you the chance to win cash rewards.
However, the website does not exist solely to make money. In an interview with co-founder and president Jeremy Gelbart, Gelbart told MyBankTracker that, “Just because a student does not succeed in hitting his target grade, does not mean he lost. A C+ student who wagers he’ll get an A and gets an A- is still a successful student even though he didn’t receive a payout. There is good motivation.”
How it works
To begin, the company has non-freshmen input their GPA (first-year students are treated equally in terms of assumed skill). Next, Ultrinsic uses an algorithm they have developed that takes into account the student’s current work load and college history in addition to any information it can find about the difficulty of each class and topic to calculate the odds that the student will be able to earn his expected grade.
For each grade the student bets on he puts up a certain amount. Then, Ultrinsic will determine how much they will pay out if he makes it and by semester’s end, if he makes the grade, Ultrinsic pays him according to the calculated ratio, and if not, the student must pay the company (this information is checked against an official transcript before any payout).
In addition to betting on the grade, a student can purchase insurance for a premium which will pay out cash in case they fail a class.
How universities feel about Ultrinsic
This type of service falls under a large gray area in terms of whether or not it is considered gambling. CEO Steven Wolf insists it is not because these wagers involve skill and are entirely determined by the students since they have complete control over how they do. He further explains that since the grades are yours it is an investment, not a gamble, and the website exists merely to create incentives to do well.
Nevertheless, Ultrinsic feels no need to hide its ultimate intent on college campuses because it is confident in its argument that the betting system will improve student performance by creating incentives to do better. So far, it seems that if the program helps the students, the professors support it. Gelbart says the company is doing well and “plans to expand to about 250 big universities by next year.”
The real interesting part of this website from a monetary standpoint is that the owners are banking on more people doing poorly (not hitting their target grades) as in most gambling arrangements. While every student has the ability on a case-to-case basis to win, the formula is designed so that Ultrinsic wins more overall than the students do. Ironically, if the website is completely successful, it will fail.