Why hide the records?

What happens in a market when one side of the exchange has better information than the other? For example, on eBay the sellers almost always know more about the quality of the items that they are selling than the potential buyers. You might think that buyers would be helpless in these situations, but economists have found that the forces of competition can solve or at least lessen this problem of asymmetric information.

If there are multiple sellers of similar goods, the one with the best product has an incentive to find a way to make its product stand out compared to the lesser-quality products. This "signaling" of product quality must be done in a way that is difficult to duplicate for those who do not have quality products. One widely-used method is a product warranty. Fixing a faulty product is expensive so a warranty is comparatively cheaper to offer for those who produce the best products. Hence, a warranty signals product quality.

Signaling also takes place in the labor market, and the resume is a key part of effective signaling. The employer wants to know if the applicant is reliable, responsible, creative, intelligent, etc. Past experiences are a way of demonstrating these qualities because those qualities you have greatly influence your past record. Because it is in the interest of the job seeker to provide information most helpful in obtaining a job, economists have argued that restriction on the questions that employers can ask have little effect. If, for example, it is in my interest that the interviewer know that I am married, I will volunteer that information, and my failure to volunteer it should be read as an admission that I am not married. Or if religious denomination matters, my failure to provide that information should be read as an admission that I do not have what they are looking for.

So it is interesting to see what records the presidential candidates have or have not made public. We know that both Joe Biden and John McCain had miserable college academic records. Obama attended some prestigious schools (Pepperdine and Columbia) and graduated magna cum laude from Harvard Law School. Many people assume that the magna cum laude must mean that he is very smart, but it may not. It depends on what percentage of the graduates of Harvard Law graduate with honors. It may be very high, as this post suggests:

This Boston Globe article from 2 years ago has some insightful information on grade inflation at Harvard. In June 2001, a record 91 percent of Harvard students graduated with some type of honors (summa, magna, or cum laude), which was far more than Yale (51 percent), Princeton (44 percent), and other elite universities the Globe study examined.

To get to the main point. Neither Obama nor Palin has released any college transcripts or test results. The obvious conclusion that one should draw is that those transcripts say things that are unfavorable to them. That probably does not matter much in the case of Palin because she has been tarred with the "stupid" brush, but it should give pause to those who keep insisting that Obama is some kind of near genius scholar.