ECON 490 LA Prompt for Reflection #7
This week we want to focus on incentive schemes that you've experienced. Feel free to chose contexts other than school. That will make the posts more interesting. But here I will focus on school, because that experience is common to all members of the class. You've probably taken courses that have different grading schemes. Discuss how your performance varied based on differences in the grading scheme. You can do this on an assignment by assignment basis as well, or on a team by team basis. What we're after here, is how the reward scheme influenced your performance.
Then also write about about your sense of risk aversion. Do you try to reduce uncertainty by self-insuring or self-protecting with respect to your grades? If so, what do activities do you do to reduce the risk?
The grading schemes used by professors in my experience have been quite varied. As an example, some professors take daily attendance, assign homework, give midterms and a final. Other professors do not take attendance, but give scores based on 2 midterms and a final. These two cases affect my study habits greatly.
In the first case, I usually take a more structured approach. I would go to class, take notes, and do the homework up until exams. When exams arrive, I would attend review sessions, review homework and do past exams.
In the second case, I tend to be more "casual". Since there is no attendance, I feel less guilty about missing class. If there is another class that needs more urgent preparations, I may skip class to attend office hours or do other work. If it's a morning class, I may skip to get more sleep. Since there is no homework, I would leisurely review the textbook or lecture notes.
In order to maximize my utility and get an A, both class formats require a large amount of time. Overall, my performance is better in the first scenario. However, I've realized that in order for me to do well regardless of the class format, I need to use a more structured format outlined in the first case, modified to include extra office hours.
This factors into into my sense of risk aversion in the classroom. Part of the reason why I prefer the first method is to protect myself against unexpected questions or concepts on exams. Spending time in class and doing homework exposes me to more material, and through constant revisiting makes it easier to understand. If I have questions, I try to solve it myself first before going to office hours and asking. If there is homework and/or labs, I will do my utmost to get 100% on both to act as a buffer for potentially disappointing exam scores. For further insurance, I will cram for exams regardless of how my studies are progressing. On the surface, the first method seems like much more work compared to the relaxed pace in the second case but to me, the pressure and time spent cramming for exams at the last minute gives me less utility when compared to a relatively steady study process.
Outside of academia, the "easiest" incentive scheme for me to follow was in music, in this case playing piano. For me, the reward is self perpetuating. From a young age, my piano teacher would assign several pieces for me to learn. She would ask me to sight read them. Since I wasn't adept at playing music I had never seen before, my performance was pretty terrible. Then, the teacher would give some quick words of encouragement and play the piece for me to hear. The result was wonderful. From that moment, I was motivated to get my performance comparable to the teacher's. Every time I practiced I would remember my teacher's rendition. To help ensure good results, I would listen to performances by world-class pianists and apply their signatures to my playing. After practicing for some time, I could perform the pieces well (demonstrated through a recital), and my rewards of a good performance and self-confidence were obtained. However, a new reward would quickly appear whenever I heard a new piece that I liked and wanted to learn. Using my previous confidence and successful experience as motivation, I would start practicing something new -- and the cycle still continues today. Playing musical instruments helped me learn from a young age that "Practice makes perfect" which can apply to almost every setting, including school.
Monday, March 5, 2012
Tuesday, February 28, 2012
Reflection #6
ECON 490 LA Prompt for Reflection #6
We've used the term opportunism, taking advantage of the a situation, and a different term, being a good citizen, doing the right thing even when there is a opportunity to do otherwise, as to different sorts of possible behavior at work (or at school). In this post we want to talk about environments that promote one or the other. And we will do so taking a bit of an interdisciplinary approach. To get the requisite background, I'd like you to read these two recent pieces from the NY Times
How to Get the Rich to Share the Marbles
How Companies Learn Your Secrets
The first piece is about cooperative activity that subsequently promotes sharing. The second is actually mainly about habits and habit formation. I would like you to transfer the lessons from these pieces to your own work or school experience. Can you give an example where cooperation has led to sharing? Can you give a different example, where what might seem to some observers as opportunism was really the consequence of a bad habit? Might there then be a solution in modifying the habit as in the second piece?
"Sharing is Caring"
The experiment outlined in the sharing article has an excellent explanation for a "sharing button" along with a total of 3 types of sharing conditions, and I believe it is surprisingly accurate. I think the notions of sharing, finders keepers, or pullers keepers are experienced from a very young age. In kindergarten, kids are put into classes with others to learn, play, and make friends. There are surely many toys available for the kids, but multiples of the same toy may be nonexistent. We can consider kids playing in a sandbox, where the shovel and bucket pairing is the most coveted toy. If kid A gets to the sandbox first, he will play first (finders keepers) even if other kids arrive to the sandbox. If there are two sets of the shovel and bucket and two kids, each kid will build their own sandcastles (pullers keepers). If there are two sets of shovels and buckets, with two interested kids who cooperate and build one huge sandcastle, there's a eureka moment where the result (final sandcastle) is greater than the sum of its parts, which promotes sharing.
Applied to a more grown-up world, the same concept holds. This semester, one of my courses assigned a large group project over the semester with periodic deadlines for portions of the project. There are 5 random people per group. Having aced kindergarten, I'm happy to cooperate with group members since I know that the result should be better if all 5 members work together compared to only one or two. The first group meeting is arranged where our group works together and share our results using Google Docs. After this initial meeting, there was never another where all 5 people were present. This wouldn't be a problem if there was progress on the project, but there was none. To promote cooperation, I tried emailing group members and asked for phone numbers to schedule meetings and inquire about work being done. When the group members gave reasons for their unavailability such as watching a play, going to play basketball, going to the bars, and not responding to calls or texts, I discarded hope for cooperation. With deadlines looming and plenty of unanswered project questions, I took the responsibility of doing the project myself while giving email updates to the group. Eventually, one group member contacted me and wanted to cooperate on the project. The two of us made sure there were no questions or errors in our project before the submission date. After the deadline, our professor informed us there would be confidential peer evaluations within groups. Percentages could be subjectively assigned that were proportionate to the amount of work done by each group member. Since I had worked with one other group member towards the deadline, I split the credit evenly between the both of us, leaving none for the other 3 members. I found out later that my cooperative partner assigned his evaluation credit in the same manner. Such an experience shows how a "share-the-spoils" button was pressed since the credit was evenly shared between myself and one helpful group member, even though I had done a majority of the work by the time they offered to help. A pullers keepers concept was also demonstrated, because although there was inequality present amongst our group, there was no desire to give credit to those who did not do their fair share.
"Breakable Habits"
A personal example where my opportunism was a consequence of bad habits does not come to mind for me. However, it does remind me of my close friend when he first entered the job force. I had known my friend since high school, and he was always into computers. He was also very perfectionist, and would constantly switch from joy to rage as he lauded his next grand website design before complaining how the implementation wasn't optimized to his liking. He fittingly got a programming job at a tech company after college. At the company, work hours were very flexible and a work from home option was available. Being a night owl, he took the work from home option as an opportunity to continue his programming optimizations late into the night and work from home the following day. However, consistently working from home was frowned upon and he realized a habit of he was taking advantage of the work from home system. At the same time, he was making a habit of waking up late in the afternoon.
I don't know what my friend did to break his habit. However, if I analyze from an outsider's point of view I'd say there is a definite chance the methods explained in the NY Times article could be effective. I suppose the routine in this case is the act of programming throughout the night, and the reward would be obtaining a subjectively perfect result from the optimizations. The cue could be work related, if there are intensive projects during busy seasons or when time til deadlines are shortened. Another cue possibility could be during normal sleeping hours, where he will try to work through the sleepiness that occurs around 10-11 pm by programming. Potential modifications to the cue could be making sleep preparations around normal sleeping hours through medication, remedies like warm milk, or hot showers. That would cause a routine change from programming to sleeping. The reward could be shifted from a satisfactory programming result to perhaps a tantalizing breakfast, preferably with bacon.
We've used the term opportunism, taking advantage of the a situation, and a different term, being a good citizen, doing the right thing even when there is a opportunity to do otherwise, as to different sorts of possible behavior at work (or at school). In this post we want to talk about environments that promote one or the other. And we will do so taking a bit of an interdisciplinary approach. To get the requisite background, I'd like you to read these two recent pieces from the NY Times
How to Get the Rich to Share the Marbles
How Companies Learn Your Secrets
The first piece is about cooperative activity that subsequently promotes sharing. The second is actually mainly about habits and habit formation. I would like you to transfer the lessons from these pieces to your own work or school experience. Can you give an example where cooperation has led to sharing? Can you give a different example, where what might seem to some observers as opportunism was really the consequence of a bad habit? Might there then be a solution in modifying the habit as in the second piece?
"Sharing is Caring"
The experiment outlined in the sharing article has an excellent explanation for a "sharing button" along with a total of 3 types of sharing conditions, and I believe it is surprisingly accurate. I think the notions of sharing, finders keepers, or pullers keepers are experienced from a very young age. In kindergarten, kids are put into classes with others to learn, play, and make friends. There are surely many toys available for the kids, but multiples of the same toy may be nonexistent. We can consider kids playing in a sandbox, where the shovel and bucket pairing is the most coveted toy. If kid A gets to the sandbox first, he will play first (finders keepers) even if other kids arrive to the sandbox. If there are two sets of the shovel and bucket and two kids, each kid will build their own sandcastles (pullers keepers). If there are two sets of shovels and buckets, with two interested kids who cooperate and build one huge sandcastle, there's a eureka moment where the result (final sandcastle) is greater than the sum of its parts, which promotes sharing.
Applied to a more grown-up world, the same concept holds. This semester, one of my courses assigned a large group project over the semester with periodic deadlines for portions of the project. There are 5 random people per group. Having aced kindergarten, I'm happy to cooperate with group members since I know that the result should be better if all 5 members work together compared to only one or two. The first group meeting is arranged where our group works together and share our results using Google Docs. After this initial meeting, there was never another where all 5 people were present. This wouldn't be a problem if there was progress on the project, but there was none. To promote cooperation, I tried emailing group members and asked for phone numbers to schedule meetings and inquire about work being done. When the group members gave reasons for their unavailability such as watching a play, going to play basketball, going to the bars, and not responding to calls or texts, I discarded hope for cooperation. With deadlines looming and plenty of unanswered project questions, I took the responsibility of doing the project myself while giving email updates to the group. Eventually, one group member contacted me and wanted to cooperate on the project. The two of us made sure there were no questions or errors in our project before the submission date. After the deadline, our professor informed us there would be confidential peer evaluations within groups. Percentages could be subjectively assigned that were proportionate to the amount of work done by each group member. Since I had worked with one other group member towards the deadline, I split the credit evenly between the both of us, leaving none for the other 3 members. I found out later that my cooperative partner assigned his evaluation credit in the same manner. Such an experience shows how a "share-the-spoils" button was pressed since the credit was evenly shared between myself and one helpful group member, even though I had done a majority of the work by the time they offered to help. A pullers keepers concept was also demonstrated, because although there was inequality present amongst our group, there was no desire to give credit to those who did not do their fair share.
"Breakable Habits"
A personal example where my opportunism was a consequence of bad habits does not come to mind for me. However, it does remind me of my close friend when he first entered the job force. I had known my friend since high school, and he was always into computers. He was also very perfectionist, and would constantly switch from joy to rage as he lauded his next grand website design before complaining how the implementation wasn't optimized to his liking. He fittingly got a programming job at a tech company after college. At the company, work hours were very flexible and a work from home option was available. Being a night owl, he took the work from home option as an opportunity to continue his programming optimizations late into the night and work from home the following day. However, consistently working from home was frowned upon and he realized a habit of he was taking advantage of the work from home system. At the same time, he was making a habit of waking up late in the afternoon.
I don't know what my friend did to break his habit. However, if I analyze from an outsider's point of view I'd say there is a definite chance the methods explained in the NY Times article could be effective. I suppose the routine in this case is the act of programming throughout the night, and the reward would be obtaining a subjectively perfect result from the optimizations. The cue could be work related, if there are intensive projects during busy seasons or when time til deadlines are shortened. Another cue possibility could be during normal sleeping hours, where he will try to work through the sleepiness that occurs around 10-11 pm by programming. Potential modifications to the cue could be making sleep preparations around normal sleeping hours through medication, remedies like warm milk, or hot showers. That would cause a routine change from programming to sleeping. The reward could be shifted from a satisfactory programming result to perhaps a tantalizing breakfast, preferably with bacon.
Wednesday, February 22, 2012
Reflection #5
ECON 490 LA Prompt for Reflection #5
This is for material in M&R Chapter 5. It is said that actions speak louder than words. Please come up with two examples that illustrate the maxim. In the first example, the person taking the action does so with deliberation and intent. In your example address the question: what makes the action communicate? In the second example, focus on inadvertent communication, where a message is delivered though the sender had not intent in sending it. What makes the message come through nonetheless?
Actions speak louder than words is a maxim I find quite accurate. An example of actions carried out with deliberation are often found in a workplace environment. If an intern is just starting their first internship, they will usually take more pro-active actions to show they care greatly for their given opportunity, regardless of their job duties. Among these pro-active approaches includes arriving to work early, intently observing co-workers to expedite fitting in with the corporate culture, eagerly offering help to others, focusing intently on all assigned work, and staying late at the workplace when necessary. The subtleties that are attached to these actions signal a sense of responsibility, reliability, commitment, and in some cases passion. These all work favorably for the intern and may help in securing future employment at the company or obtaining better recommendation letters that aid in other future job hunts.
However, the unfavorable aspects of actions can be revealed during times of inconsistency. To illustrate, take the pro-active intern that has been performing well and say he arrives late to work twice in one week. If the intern calls ahead the first day he's late and explains the situation, there would be action with the intent to preserve the credibility gained through previous pro-active actions. If there is no call or email in advance on the second day of lateness, the "non-action" could be construed as having a deliberate negative impact on the intern's credibility. In that sense, perhaps actions can be seen as points on a scale. Positive, pro-active actions that help someone gain credibility or favor can be counted as "adding points." Conversely, actions that are detrimental to someone could be counted as "subtracting points." How the points balance out can, theoretically, determine the impact one's intended actions have on their surroundings.
For inadvertent communication through actions, I can relate to it through a classical musician's standpoint. Throughout high school, I had played the cello and was heavily involved in various orchestras. Among those, the one with the highest difficulty was the IMEA All-State orchestra, which auditioned string instrument players throughout the entire state of Illinois and selected the best. The repertoire required for the auditions are given around the beginning of the school term, and the All-State audition occurred toward the end of the semester. Thus, there is time to prepare for the auditions, but students are also busy with other tasks besides practicing constantly. Ultimately, months of preparation culminates into one 10 minute audition in front of 4 judges. In that moment, all musicians give inadvertent information through their auditions - it is unavoidable since there is no way to hide it. Some may reassure themselves mentally, but can indirectly give off a nervous vibe before auditions. When I was nervous, it showed when greeting the judges with handshakes through my shaky and clammy hands. During the brief audition, a musician's performance inadvertently shows many intangibles about the musician. An obvious point is how much time a musician has spent practicing and preparing for the audition. Someone who has practiced 10 hours a week is clearly different from someone who has practiced 40 hours a week - the difference in time spent cannot be made up and shows clearly in performances. Throughout my actual audition, there are indirect signs gleaned from my performance that result from an accumulation of factors. Depending on how I finish a musical phrase, accent certain notes, or use vibrato, the judges can determine my musical style, my interpretation, and my passion for the music.
Overall, I think the commonalities between deliberate actions and inadvertent actions boil down to the subtleties included in the actions. If we think of it in terms of layers, actions can have 2 layers. There is a surface layer, which is the actual action being performed and can be classified as a deliberate action. The second layer can be considered the inadvertent communications that are associated with the surface layer action. Both layers have subtlety so there is a balance in either case. For a deliberate action, there are indirect meanings that can go along with the action. Inadvertent communication can result from the indirect consequences of a direct action. In the end, it's easier to control direct and intended actions, but with some forethought, indirect actions can also be controlled.
This is for material in M&R Chapter 5. It is said that actions speak louder than words. Please come up with two examples that illustrate the maxim. In the first example, the person taking the action does so with deliberation and intent. In your example address the question: what makes the action communicate? In the second example, focus on inadvertent communication, where a message is delivered though the sender had not intent in sending it. What makes the message come through nonetheless?
Actions speak louder than words is a maxim I find quite accurate. An example of actions carried out with deliberation are often found in a workplace environment. If an intern is just starting their first internship, they will usually take more pro-active actions to show they care greatly for their given opportunity, regardless of their job duties. Among these pro-active approaches includes arriving to work early, intently observing co-workers to expedite fitting in with the corporate culture, eagerly offering help to others, focusing intently on all assigned work, and staying late at the workplace when necessary. The subtleties that are attached to these actions signal a sense of responsibility, reliability, commitment, and in some cases passion. These all work favorably for the intern and may help in securing future employment at the company or obtaining better recommendation letters that aid in other future job hunts.
However, the unfavorable aspects of actions can be revealed during times of inconsistency. To illustrate, take the pro-active intern that has been performing well and say he arrives late to work twice in one week. If the intern calls ahead the first day he's late and explains the situation, there would be action with the intent to preserve the credibility gained through previous pro-active actions. If there is no call or email in advance on the second day of lateness, the "non-action" could be construed as having a deliberate negative impact on the intern's credibility. In that sense, perhaps actions can be seen as points on a scale. Positive, pro-active actions that help someone gain credibility or favor can be counted as "adding points." Conversely, actions that are detrimental to someone could be counted as "subtracting points." How the points balance out can, theoretically, determine the impact one's intended actions have on their surroundings.
For inadvertent communication through actions, I can relate to it through a classical musician's standpoint. Throughout high school, I had played the cello and was heavily involved in various orchestras. Among those, the one with the highest difficulty was the IMEA All-State orchestra, which auditioned string instrument players throughout the entire state of Illinois and selected the best. The repertoire required for the auditions are given around the beginning of the school term, and the All-State audition occurred toward the end of the semester. Thus, there is time to prepare for the auditions, but students are also busy with other tasks besides practicing constantly. Ultimately, months of preparation culminates into one 10 minute audition in front of 4 judges. In that moment, all musicians give inadvertent information through their auditions - it is unavoidable since there is no way to hide it. Some may reassure themselves mentally, but can indirectly give off a nervous vibe before auditions. When I was nervous, it showed when greeting the judges with handshakes through my shaky and clammy hands. During the brief audition, a musician's performance inadvertently shows many intangibles about the musician. An obvious point is how much time a musician has spent practicing and preparing for the audition. Someone who has practiced 10 hours a week is clearly different from someone who has practiced 40 hours a week - the difference in time spent cannot be made up and shows clearly in performances. Throughout my actual audition, there are indirect signs gleaned from my performance that result from an accumulation of factors. Depending on how I finish a musical phrase, accent certain notes, or use vibrato, the judges can determine my musical style, my interpretation, and my passion for the music.
Overall, I think the commonalities between deliberate actions and inadvertent actions boil down to the subtleties included in the actions. If we think of it in terms of layers, actions can have 2 layers. There is a surface layer, which is the actual action being performed and can be classified as a deliberate action. The second layer can be considered the inadvertent communications that are associated with the surface layer action. Both layers have subtlety so there is a balance in either case. For a deliberate action, there are indirect meanings that can go along with the action. Inadvertent communication can result from the indirect consequences of a direct action. In the end, it's easier to control direct and intended actions, but with some forethought, indirect actions can also be controlled.
Monday, February 13, 2012
Reflection #4
ECON 490 LA Prompt for Reflection #4
This week we'll try a hypothetical. Many things on campus are allocated to students on a first come first serve basis. Other things are allocated on a priority basis, such as registering for class. Suppose the Campus gave each student an allocation of "Illinibucks" which could be used for the sole purpose of moving to the head of the line, at a pre-specified price set by the campus. What sort of thing would be a candidate for this? How would you spend your Illinibucks. What issues would arise if the administered price was too low? too high?
The use of exclusive currency in an academic setting is somewhat familiar to me. I had experience with this in middle school, where we were given "Study Bucks" that we could use to "buy" school supplies, snacks, and hall passes that could be used for 5 minute breaks during class. Initially, most students swarmed the snack shop and used their Study Bucks to buy all the candy they weren't allowed to have at home. Such methods quickly exhausted their money. Luckily, there was a way to earn more Study Bucks by actually studying (surprise surprise) during our daily study hall period! There was an abnormally quick transition when study hall transformed from "nap time" to "study time" after the introduction of these Study Bucks. As the semester wore on and more students were earnestly earning their Study Bucks, a supply shortage began occuring in the snack shop. Too many kids were feverishly buying candy and resupply wasn't quick enough. Enthusiasm for the Study Bucks immediately declined as word of the circumstances spread. Funny thing is, once the shortage in the snack shop abated, the amount of Study Bucks needed to buy the same snacks increased which caused another demand decline. When the high prices of snacks did not drop, study hall became "nap time" again.
If UIUC were to implement Illinibucks, I could imagine a similar situation occuring. Instead of going crazy over candy, students would jump at early registration opportunities, skipping the line at major events (concerts, sports games), perhaps even using Illinibucks to reserve certain venues for RSO usage. If I had to guess, I'd say the majority of students with Illinibucks would use it for earlier class registration. However, if every student got the same initial amount of Illinibucks, there would be an immediate problem -- how do we separate registration after there is overwhelming demand of early registration (assuming that prices are reasonable)? Do we look at more detailed stats, such as splitting students into "registration blocks" by the time that they paid for the registration privelige? In this case it would seem similar to combining Illinibucks with a "first come first serve" rule, where the earlier you pay the earlier you register. Alternatively, would there be a scaling "bonus fee" applied where students can pay an "inital early registration fee" with Illinibucks, but there would be tiered "bonus fees" to keep help a student keep their "early registration" time?
Quick related note: I know that similar bonus fees are currently enacted on car sales in China. For luxury brands like Audi, Mercedes Benz, and BMW, demand for those cars far exceed supply. So if you go to the dealership to purchase one of these cars, they will tell you the MSRP of the vehicle. However, they'll also tell you that an additional $XX amount of money is needed to "guarantee" that a car is available for you. If this additional fee is not paid, a tentative 3-4 month waiting time can inexplicably turn into 1 year or longer.
Back to the Illinibucks case, it's easy to see how reasonable, or arguably low prices for high demand services such as registration can cause issues. To circumvent such issues, Illinibucks prices on early registration could be raised very high, and demand would decrease. In addition, Illinibucks prices for other services such as skipping lines at major events, or reserving venues for RSOs could become relatively cheaper to funnel demand into those areas. If demand for early registion still does not decline after these measures, a secondary market for Illinibucks could develop where students are trading Illinibucks for favors such as swapping class notes, weekly rides to the supermarket, or to borrow course textbooks from friends. Following such a trend, the Illinibucks system could spread over to retailers on campus, where students can redeem Illinibucks after a certain amount of purchases. This would surely stimulate the UIUC campus economy. However, if students think that Illinibucks prices for high demand services like early registration is STILL too high after a bartering/redemption market develops, then certain students may dabble in counterfeiting the Illinibucks.
Above, I've outlined certain situations that I think would occur if an Illinibucks system were implemented. If Illinibucks were introduced, I think the biggest challenge would be a balancing act primarily based on demand for services/priviledges and Illinibucks prices for those services. At the core, I think an Illinibucks system would be available to help save students time. In the real world, time is the most expensive commodity. To reduce such an expensive commodity to "Illinibucks" is appealing because it makes convenience easily accessible to all students as opposed to spending real money. The question becomes "How much am I willing to spend to save XX amount of time?" Ultimately, implementing Illinibucks to simplify this question is definitely challenging.
This week we'll try a hypothetical. Many things on campus are allocated to students on a first come first serve basis. Other things are allocated on a priority basis, such as registering for class. Suppose the Campus gave each student an allocation of "Illinibucks" which could be used for the sole purpose of moving to the head of the line, at a pre-specified price set by the campus. What sort of thing would be a candidate for this? How would you spend your Illinibucks. What issues would arise if the administered price was too low? too high?
The use of exclusive currency in an academic setting is somewhat familiar to me. I had experience with this in middle school, where we were given "Study Bucks" that we could use to "buy" school supplies, snacks, and hall passes that could be used for 5 minute breaks during class. Initially, most students swarmed the snack shop and used their Study Bucks to buy all the candy they weren't allowed to have at home. Such methods quickly exhausted their money. Luckily, there was a way to earn more Study Bucks by actually studying (surprise surprise) during our daily study hall period! There was an abnormally quick transition when study hall transformed from "nap time" to "study time" after the introduction of these Study Bucks. As the semester wore on and more students were earnestly earning their Study Bucks, a supply shortage began occuring in the snack shop. Too many kids were feverishly buying candy and resupply wasn't quick enough. Enthusiasm for the Study Bucks immediately declined as word of the circumstances spread. Funny thing is, once the shortage in the snack shop abated, the amount of Study Bucks needed to buy the same snacks increased which caused another demand decline. When the high prices of snacks did not drop, study hall became "nap time" again.
If UIUC were to implement Illinibucks, I could imagine a similar situation occuring. Instead of going crazy over candy, students would jump at early registration opportunities, skipping the line at major events (concerts, sports games), perhaps even using Illinibucks to reserve certain venues for RSO usage. If I had to guess, I'd say the majority of students with Illinibucks would use it for earlier class registration. However, if every student got the same initial amount of Illinibucks, there would be an immediate problem -- how do we separate registration after there is overwhelming demand of early registration (assuming that prices are reasonable)? Do we look at more detailed stats, such as splitting students into "registration blocks" by the time that they paid for the registration privelige? In this case it would seem similar to combining Illinibucks with a "first come first serve" rule, where the earlier you pay the earlier you register. Alternatively, would there be a scaling "bonus fee" applied where students can pay an "inital early registration fee" with Illinibucks, but there would be tiered "bonus fees" to keep help a student keep their "early registration" time?
Quick related note: I know that similar bonus fees are currently enacted on car sales in China. For luxury brands like Audi, Mercedes Benz, and BMW, demand for those cars far exceed supply. So if you go to the dealership to purchase one of these cars, they will tell you the MSRP of the vehicle. However, they'll also tell you that an additional $XX amount of money is needed to "guarantee" that a car is available for you. If this additional fee is not paid, a tentative 3-4 month waiting time can inexplicably turn into 1 year or longer.
Back to the Illinibucks case, it's easy to see how reasonable, or arguably low prices for high demand services such as registration can cause issues. To circumvent such issues, Illinibucks prices on early registration could be raised very high, and demand would decrease. In addition, Illinibucks prices for other services such as skipping lines at major events, or reserving venues for RSOs could become relatively cheaper to funnel demand into those areas. If demand for early registion still does not decline after these measures, a secondary market for Illinibucks could develop where students are trading Illinibucks for favors such as swapping class notes, weekly rides to the supermarket, or to borrow course textbooks from friends. Following such a trend, the Illinibucks system could spread over to retailers on campus, where students can redeem Illinibucks after a certain amount of purchases. This would surely stimulate the UIUC campus economy. However, if students think that Illinibucks prices for high demand services like early registration is STILL too high after a bartering/redemption market develops, then certain students may dabble in counterfeiting the Illinibucks.
Above, I've outlined certain situations that I think would occur if an Illinibucks system were implemented. If Illinibucks were introduced, I think the biggest challenge would be a balancing act primarily based on demand for services/priviledges and Illinibucks prices for those services. At the core, I think an Illinibucks system would be available to help save students time. In the real world, time is the most expensive commodity. To reduce such an expensive commodity to "Illinibucks" is appealing because it makes convenience easily accessible to all students as opposed to spending real money. The question becomes "How much am I willing to spend to save XX amount of time?" Ultimately, implementing Illinibucks to simplify this question is definitely challenging.
Sunday, February 5, 2012
Reflection #3
ECON 490 LA Prompt for Reflection #3
Hold up is an example of "opportunism" - taking advantage of circumstances. Sometimes people don't act opportunistically, even when they have the chance. We talked about being a "good citizen"
and that might be one reason. Another is that opportunistic behavior can be unethical. Still another is that people are patient and "good things come out to those who wait." Give an example of where you or somebody you know didn't act opportunistically though they had the chance. Then speculate as to why. Also consider whether these various explanations amount to the same thing, or if they are different.
One afternoon I drove to pick up 2 friends I hadn't seen in a while so we could go to lunch. We went to a nice restaurant nearby and had a good meal. Afterwards, we were walking towards my car in the parking lot when I noticed something shiny on the ground. It turns out the shiny object was a money clip with a wad of dollar bills -- $210 in total. I looked around for a person who looked like they had lost something, but no one was around. I went back inside the restaurant to ask if anyone inquired about any missing money, and no one had. Finally, I waited in front of the restaurant for around 10 minutes, perodically checking inside the restaurant and parking lot for slightly panicked people. When no one showed up, my friends and I left the restaurant. In the end, we split the money evenly between the 3 of us.
In such a case, I believe there were two cases of opportunism. One is when I initially found the money. I could have quickly taken advantage of the situation by leaving immediately, completely disregarding the person who had lost their money. However, I spent effort in locating them, in the process ignoring my friends' complaints of the chilly weather. Another case of opportunism would be in the car. I could have chosen to keep all the money myself, since I was the one who found it (finders keepers). But I chose to split it evenly because to me, I didn't feel worse off if I had 1/3 of the money as opposed to all of it. In other words, when splitting the money I felt it was a Pareto efficient outcome.
In evaluating my actions, I would say they were more "good citizen" in nature. As a "good citizen," I felt I had a responsibility to find who the money belonged to, so I looked and asked around earnestly. I believe those actions were part "good citizen" and part ethical. Ideally, I would have found the owner of the money. However, I'm not a "perfect citizen," so I did end up keeping the money. Whether I should have left the money with the restaurant staff did cross my mind, but I thought the consequence from that would be the staff would not even try to find the owner, but instead instantly keep the money for themselves.
All in all, I'm still a bit unsure whether such a situation would be counted as not acting opportunistically. Is there an amount of "good citizenship" or good ethics you must demonstrate before you're allowed to take advantage of the situation, if it can be called that? I would be interested in hearing some input on this.
Hold up is an example of "opportunism" - taking advantage of circumstances. Sometimes people don't act opportunistically, even when they have the chance. We talked about being a "good citizen"
and that might be one reason. Another is that opportunistic behavior can be unethical. Still another is that people are patient and "good things come out to those who wait." Give an example of where you or somebody you know didn't act opportunistically though they had the chance. Then speculate as to why. Also consider whether these various explanations amount to the same thing, or if they are different.
One afternoon I drove to pick up 2 friends I hadn't seen in a while so we could go to lunch. We went to a nice restaurant nearby and had a good meal. Afterwards, we were walking towards my car in the parking lot when I noticed something shiny on the ground. It turns out the shiny object was a money clip with a wad of dollar bills -- $210 in total. I looked around for a person who looked like they had lost something, but no one was around. I went back inside the restaurant to ask if anyone inquired about any missing money, and no one had. Finally, I waited in front of the restaurant for around 10 minutes, perodically checking inside the restaurant and parking lot for slightly panicked people. When no one showed up, my friends and I left the restaurant. In the end, we split the money evenly between the 3 of us.
In such a case, I believe there were two cases of opportunism. One is when I initially found the money. I could have quickly taken advantage of the situation by leaving immediately, completely disregarding the person who had lost their money. However, I spent effort in locating them, in the process ignoring my friends' complaints of the chilly weather. Another case of opportunism would be in the car. I could have chosen to keep all the money myself, since I was the one who found it (finders keepers). But I chose to split it evenly because to me, I didn't feel worse off if I had 1/3 of the money as opposed to all of it. In other words, when splitting the money I felt it was a Pareto efficient outcome.
In evaluating my actions, I would say they were more "good citizen" in nature. As a "good citizen," I felt I had a responsibility to find who the money belonged to, so I looked and asked around earnestly. I believe those actions were part "good citizen" and part ethical. Ideally, I would have found the owner of the money. However, I'm not a "perfect citizen," so I did end up keeping the money. Whether I should have left the money with the restaurant staff did cross my mind, but I thought the consequence from that would be the staff would not even try to find the owner, but instead instantly keep the money for themselves.
All in all, I'm still a bit unsure whether such a situation would be counted as not acting opportunistically. Is there an amount of "good citizenship" or good ethics you must demonstrate before you're allowed to take advantage of the situation, if it can be called that? I would be interested in hearing some input on this.
Sunday, January 29, 2012
Reflection #2
ECON 490 LA Prompt for Reflection #2
First, for the new students, this is a reminder that you are free to choose your own topic as long as it is somehow related to what the class is working on. Second, this week you might write about your own experience with organizations, particularly ones that undergone some change. For example, have you been in an RSO that merged with another RSO and if so why? Finally, you might talk about "transaction costs" in some of your school or work (or social) relationships. How did the transaction costs matter? Again, the idea here is tie your own experience to the concepts we are studying to give those concepts more meaning for you.
Last week, there were a few topics that particularly interested me. First was the Hudson Bay example, where we concluded it was ultimately more profitable to have trading posts or stores closer to where the customers are. It immediately reminded me of Apple and the placement of their stores. They are always in centralized areas with high traffic such as large malls, city centers, and busy hubs. Such is the case with the stores I've visited in the US, Germany, and China. Even the newest Apple store that opened in New York's Grand Central Station follows the same principle. With the lines that form upon new product releases and the overwhelming success of Apple, it's easy to see why the North West Company prevailed over the Hudson Bay Company using a similar approach to store placement.
Next was the Liar's Poker overview. Although I haven't read Liar's Poker, it sounds quite similar to a book I have read, Monkey Business (by Rolfe & Troob). It focuses on the lives of 2 investment bankers working at Donaldson, Lufkin, and Jenrette on Wall Street before, during, and after the financial crisis. The details in Monkey Business touch upon huge bonuses, cost benefit consequences of working extremely long hours, and other facets of a grueling climb to the top of the investment banking industry. After hearing about Liar's Poker, it is now on my To-Read list.
Finally, I can relate to the quote "These transaction costs are killing me." When I was subleasing an apartment for this Spring semester, I inadvertently experienced the downsides of transaction costs. It was less than one week before the start of the term when I was finalizing my housing situation. I had incurred search and information costs in earlier weeks, which cost plenty of time contacting sub-lessors using the internet and phone. I had bargaining costs when negotiating with potential sub-lessors about the cost of rent for various apartments. This came in the form of me inching my rent price closer and closer to my maximum budget. The worst transaction costs of all hit me the weekend before school started. After I had come to an agreement with a sub-lessor on the rent price, I prepared to move in on Saturday. I drove down to campus with all my stuff at 6 AM and prepared to meet with my sub-lessor. However, the sub-lessor kept saying they were busy and kept postponing our meeting time. It ended up that the meeting time was pushed from 9 AM to 8 PM. To make matters worse, the sub-lessor told me in the evening I would not be able to move in until Monday morning. So I ended up staying in a hotel ($50/night) near campus for Saturday and Sunday night. For the weekend, my transaction costs included almost 48 hours of time, ~$100 hotel expenses, ~$90 fuel costs, and other miscellaneous expenses. It was terrible since all the money, time, and energy could have been put to better use, and it was an unexpected extra cost on top of the agreed upon rent. The whole ordeal made it much more complicated compared to a simple "sign contract, move in, pay monthly" situation.
First, for the new students, this is a reminder that you are free to choose your own topic as long as it is somehow related to what the class is working on. Second, this week you might write about your own experience with organizations, particularly ones that undergone some change. For example, have you been in an RSO that merged with another RSO and if so why? Finally, you might talk about "transaction costs" in some of your school or work (or social) relationships. How did the transaction costs matter? Again, the idea here is tie your own experience to the concepts we are studying to give those concepts more meaning for you.
Last week, there were a few topics that particularly interested me. First was the Hudson Bay example, where we concluded it was ultimately more profitable to have trading posts or stores closer to where the customers are. It immediately reminded me of Apple and the placement of their stores. They are always in centralized areas with high traffic such as large malls, city centers, and busy hubs. Such is the case with the stores I've visited in the US, Germany, and China. Even the newest Apple store that opened in New York's Grand Central Station follows the same principle. With the lines that form upon new product releases and the overwhelming success of Apple, it's easy to see why the North West Company prevailed over the Hudson Bay Company using a similar approach to store placement.
Next was the Liar's Poker overview. Although I haven't read Liar's Poker, it sounds quite similar to a book I have read, Monkey Business (by Rolfe & Troob). It focuses on the lives of 2 investment bankers working at Donaldson, Lufkin, and Jenrette on Wall Street before, during, and after the financial crisis. The details in Monkey Business touch upon huge bonuses, cost benefit consequences of working extremely long hours, and other facets of a grueling climb to the top of the investment banking industry. After hearing about Liar's Poker, it is now on my To-Read list.
Finally, I can relate to the quote "These transaction costs are killing me." When I was subleasing an apartment for this Spring semester, I inadvertently experienced the downsides of transaction costs. It was less than one week before the start of the term when I was finalizing my housing situation. I had incurred search and information costs in earlier weeks, which cost plenty of time contacting sub-lessors using the internet and phone. I had bargaining costs when negotiating with potential sub-lessors about the cost of rent for various apartments. This came in the form of me inching my rent price closer and closer to my maximum budget. The worst transaction costs of all hit me the weekend before school started. After I had come to an agreement with a sub-lessor on the rent price, I prepared to move in on Saturday. I drove down to campus with all my stuff at 6 AM and prepared to meet with my sub-lessor. However, the sub-lessor kept saying they were busy and kept postponing our meeting time. It ended up that the meeting time was pushed from 9 AM to 8 PM. To make matters worse, the sub-lessor told me in the evening I would not be able to move in until Monday morning. So I ended up staying in a hotel ($50/night) near campus for Saturday and Sunday night. For the weekend, my transaction costs included almost 48 hours of time, ~$100 hotel expenses, ~$90 fuel costs, and other miscellaneous expenses. It was terrible since all the money, time, and energy could have been put to better use, and it was an unexpected extra cost on top of the agreed upon rent. The whole ordeal made it much more complicated compared to a simple "sign contract, move in, pay monthly" situation.
Sunday, January 22, 2012
Reflection #1
ECON 490 LA Prompt for Reflection
Spend some time talking about your circumstance as it pertains to the course. How might the course benefit you? What experiences do you have to bring to the table in organizations other than the U of I? Also comment a bit about your expectations for the course and how the first couple of class sessions either met your expectations or departed from them.
My interest in this course was brought about the “Organizations” portion in the title. When I see “organizations” I immediately link it to entrepreneurship. My inspirations for entrepreneurship come from my grandfather, who started various businesses in China before, during, and after the difficult times of the Cultural Revolution. Successful organizations require the input, initiative, and productivity of many people working toward the same goal, but in reality it is never that simple. I am particularly interested in analyzing such complexities, simplifying them to solvable states, and applying them in the real workplace. I want knowledge to be able to think: “If I am running a business, what decisions can be made in the best interests of my business and why?” Thus, I am more interested in a microeconomic perspective versus a macroeconomic one. The example given in the first week of whether teaching of U of I is better kept in-house as opposed to outsourced through contracting is one of the aspects I would need to consider from that point of view, and one I was delighted to consider. From the view of running a business, one would have to know when it’s best to keep production or services internally and when to outsource to other firms or individuals. Of course, a better understanding is achieved if I have greater knowledge of the actual behind-the-scenes workings of the industry, but I still believe that understanding the applicable concepts can be just as valuable. Learning about various forms of efficiency that can be applied to real-life firms is very worthwhile. If done correctly, such optimizations can be likened to art, and I think that’s where the beauty and fun lies.
Spend some time talking about your circumstance as it pertains to the course. How might the course benefit you? What experiences do you have to bring to the table in organizations other than the U of I? Also comment a bit about your expectations for the course and how the first couple of class sessions either met your expectations or departed from them.
My interest in this course was brought about the “Organizations” portion in the title. When I see “organizations” I immediately link it to entrepreneurship. My inspirations for entrepreneurship come from my grandfather, who started various businesses in China before, during, and after the difficult times of the Cultural Revolution. Successful organizations require the input, initiative, and productivity of many people working toward the same goal, but in reality it is never that simple. I am particularly interested in analyzing such complexities, simplifying them to solvable states, and applying them in the real workplace. I want knowledge to be able to think: “If I am running a business, what decisions can be made in the best interests of my business and why?” Thus, I am more interested in a microeconomic perspective versus a macroeconomic one. The example given in the first week of whether teaching of U of I is better kept in-house as opposed to outsourced through contracting is one of the aspects I would need to consider from that point of view, and one I was delighted to consider. From the view of running a business, one would have to know when it’s best to keep production or services internally and when to outsource to other firms or individuals. Of course, a better understanding is achieved if I have greater knowledge of the actual behind-the-scenes workings of the industry, but I still believe that understanding the applicable concepts can be just as valuable. Learning about various forms of efficiency that can be applied to real-life firms is very worthwhile. If done correctly, such optimizations can be likened to art, and I think that’s where the beauty and fun lies.
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