Saturday, December 31, 2016

One last post before the New Year

This is an interesting read about the philosophy of emotions.  It might aid some of your own inner reflection as well as to help you make new year's resolutions that have been to you.

Monday, December 26, 2016

Mindfulness Again

This piece appeared in the Sunday NY Times Week in Review, a reposting of something from four years earlier.  I thought you might find it interesting.  I hope your vacation has been relaxing.  I know that for me it has taken more than a week to unwind.

Friday, December 23, 2016

Compulsory Viewing When I Was A Kid

If you've never seen this before, you might be amused by it, even though the image quality is a bit shaky.  I saw that it was colorized and that version might be easier to view, but I didn't see a free version of that.   The March of the Wooden Soldiers, which happens right at the end is what people remember of this movie.

Friday, December 16, 2016

Course Grades Uploaded

Both in Moodle and in Banner.

Reminder - Discussion Group

There is definitely no obligation for you to do this, but if you are interested in participating in the discussion group please let me know.  The original message is here.  Thanks.

Take Aways

This is only a little bit related to the course.  Mainly it is just some suggestions of interesting reads, none of which are very recent, that you might peruse over the break or next semester for your own entertainment and edification.

  • Bolman and Deal Part 2 - the second half of the book, which we didn't cover at all, is worth a read in its own.   It takes the four frames developed in the first half and recasts them in a leadership setting.  You might enjoy that. 
  • We did not talk at all about executive pay, which really is a big topic.  Since the subject matter gets more than a mention by the a current Nobel Prize Winner in Economics, Bengt Holmstrom, I thought this might be interesting for you to look at.  Note in the second half of the piece the issue on whether the compensation must depend only on verifiable performance.  We did talk about that in considering the principal-agent model.  
  • This piece called Is Giving the Secret to Getting Ahead? is from a few years ago and is by Adam Grant, a psychologist at Wharton (the business school at U Penn).  The giving he talks about is more random acts of kindness than it is where a quid pro quo is expected.  You might try some of your own random acts of kindness over the break - with your friends or your family.   See how they react, particularly whether you surprise them with your kindness.  A positive reaction (as opposed to a gift in return) may encourage you to try it again. 
  • This piece called The Bell Curve is one I really like.  It by Atul Gawande, a MacArthur Genius Award winner and a prolific author (plus he is a very well known M.D.).  It is about what determines excellence when excellence can be measures, in this case in the treatment of cystic fibrosis.  It might interest you to to see excellence cast this way, as it probably defies many of the stereotypes you have for it.  
  • This one called The Expert Mind mind and should appeal to those students in the class who have a chess interest (I know there are a few of you), and other students as well.  It is about how experts differ from novices in their thinking and what it takes to become expert.  Chess is used as means to illustrate the more general issues.  

Course Grades Posted Later This Afternoon

I am waiting on a student who had a conflict and couldn't take the final quiz the normal way.  I would like to post these all at one time.

Tuesday, December 13, 2016

Reminder - Final Quiz becomes available at 11 AM tomorrow

And it will run till 11 PM Thursday night.  My intention is to post final grades in Moodle and In Banner on Friday.   I will make another announcement then when it is done.

Monday, December 12, 2016

Bah, Humbug. Scrooge was an economist!

For your amusement only.  I thought you'd find the title of this piece interesting.  There is an economics paper  published in the American Economic Review (the top journal in the U.S.) back in 1993 that got all of this started.  You can find the paper here.

Class Projects

While I am still waiting on some of these to come in, I uploaded the virtual elevator speeches I have received and also posted grades for those teams.   Below I want to make several more in depth comments about the projects.

About the Grading

The grading was pretty generous in my view.  The underlying philosophy with this exercise in particular but also with much of the rest of the course is that this is learning as intermediate product.  In other words, perhaps what you did here can be of use to you to learn something else in the future.  Evaluating that is different than evaluating final product (which is sometimes called mastery learning).  None of you have yet mastered the papers you were reviewing.  With intermediate products in learning, the mistakes can be more useful than something polished.  I really didn't want to penalize mistakes made in earnest.  So the grades were high with very little variation from one team to the next.

About the Virtual Elevator Speeches

If you haven't heard of this book before, you might look at Made to Stick.  There are also a variety of online presentations under that title that you might view.  It gives you a sense of what your job is as presenter.  Surprisingly, you don't present the paper.  Instead, you present connections that your audience might make to the paper.  This is a different task.  It is hard enough when you know the audience.  In this case, your audience was supposed to be students who might take the course in the future.  If I were in your shoes, I would have tried to envision myself (as student) as the audience but without having read the paper first.

One other general point.  If you haven't read the children's story The Princess and the Pea you should.   It is not very long and conveys an important point.  While this presentation was for class only, you can think of it as practice for presentations you will make in the future, possibly where you are a subordinate presenting to upper management.  In that case, it is good to think of upper management as like the princess in the story.  The least little thing might bother them.  You should avoid that if at all possible.  One thing that many presentations did is to end abruptly before the music finished.  That's the sort of thing you should avoid.

Now some more specific comments.  When you write a white paper you typically produce an Executive Summary to go along with it.  That is one or at most two pages which gives an overview of the full white paper.  Many people read only the executive summary.  Or they read that and then a chunk of the white paper on the topic they are interested in.

However, an executive summary is different from a presentation on the paper.  Some of your presentations were really more like executive summaries.  You didn't trust that the images could communicate the ideas.  So you put in a lot of text.  But that is because you were presenting the paper rather than the connections the audience should make.

The most common single error in a presentation made by a subordinate to the bigwigs is to give too much information early on.  The reason for the error is that the presenter is nervous and wants to establish that he or she is qualified to make the presentation.  But the bigwigs are entirely uninterested in that.  Their time is scarce.  Can they get their hooks into the idea immediately or not? If you don't grab them right off the bat, they are lost.

Some groups did have an image reliant presentation but I found the image selection challenging - meaning I wasn't sure what message I should be drawing from the image.  If the audience is confused, it is possible they will tune out before they can catch onto what is being presented.  Group C did a nice job with image selection.  Their presentation is worth looking at.  It really is very simple.  That was the goal.

About the Papers

This is where the bulk of the work was and for most of you I'm sure this was a stretch.    What is most interesting to me is how much overlap there was from one team's paper to the next, although the papers under review were quite varied.  What this showed me is that sometimes you can learn a broad topic by studying something in a bit of depth that is on a particular aspect of the topic.  The particular gets connected to the general.

I am guessing that for most of you reading the paper you reviewed was a challenge and it is probably the case that you won't be reading Econ journal articles in the future, though you might read pieces from Harvard Business Review or other Business Reviews as you try to advance through your career - a much cheaper way to learn management thinking than to pay for an MBA.  (I'm not knocking the formal business training, just saying that you can do your own professional development by reading published work on this stuff.)

The other part of the exercise that you probably won't get again anytime soon is to have someone edit your first drafts for you.  If you do end up in a job where writing a white paper happens now and then, that editing function becomes increasingly important.  If you can learn to be a good reader that way and give feedback to others about their drafts, you will be valued for that.  And if you can't do it, it's good for you to know somebody who can.

You see a lot of bulleted lists out there nowadays, a trend I find regrettable, because then the people generating the lists don't have to connect the ideas into a narrative.  That is left for the audience to do.  Part of the goal behind the paper is for you to understand that the authors really should be the ones who do that, but it is a lot of work.  We easily could have had still one more round of revisions, except for the end of the semester.  Let's be thankful for that.

Saturday, December 10, 2016

Grade for Comments Second Half have been uploaded

I will grade the project tomorrow and see if I can get the final quiz into Moodle (making sure it is not invisible).   I will also post the elevator speeches to Moodle tomorrow.  For those of you who have still to submit your elevator speech, I you can get it to me by then.


Grades for Blog Posts - Second Half Now Posted in Moodle

I need to take a break now.  I will get to the grading the comments after that.  I would expect those to be posted by late afternoon or early evening.

Friday, December 9, 2016

Comments Matrix/Moral Hazard with Music Selection

I have just uploaded the Comment Matrix - Second Half into Moodle.  Here I would like to explain what is there.

1.  For each post the alias is credited with a comment if that person made a comment.  Two or more comments don't give any more intensity in the recording.  Neither does a very long comment.  When I get to the qualitative assessment of the comments, which I still must do, it might come into play then.

2.  For the last post I only counted the comment by the author of the post.   I did previously announce this.  One of my broader issues with the class is knowing if an intended message gets through.  Often it seemed it didn't.

3.  There are aggregates, by post and by alias.  Unlike the last time where I did those manually, this time I used formulas in Excel to do the counting.  While mistakes are still possible, surely that makes them less likely.

* * * * *

The virtual elevator speeches have been trickling in.  I launch each one to see whether it will play.  So I get a sense of the music chosen.  In all cases the music appeals to me.  Why is that?  These pieces were supposed to be for students like you who were getting exposed to the subject matter for the first time.  Do you actually listen to classical music and/or jazz?

I won't hold it against you.  I'm just noting it here.  This is another one of those things that didn't happen last year.

Incidentally, another of those things is that the teams actually never chose a name.  They stayed with their letter only.  I wonder if that impacted team performance in any way.

Thursday, December 8, 2016

Update on Where I Am with the Grading

There is a lot to track! I've posted the last Excel homework on the Shapiro-Stiglitz model and the last two blog posts.  I am in the process of tracking comments and reading through them (two separate activities).  I am not quite halfway there.  This is going slow, plus my arthritis is acting up doing this (I wonder why) so I need to take regular breaks.

The upshot is that I probably won't have the grades for Blog Posts and Comments Second half till Saturday.  I will let you know that as soon as those are posted.  I will get to the projects immediately after that.  The virtual elevator speeches have been coming in, but some are still pending.

Good luck on your finals.

Wednesday, December 7, 2016

A little humor and....

.... if you've never seen it before an essential part of anyone's education about American culture.

Tuesday, December 6, 2016

What I forgot to say in class this morning.

In doing our review I failed to mention an idea I am toying with - replacing either one of the live class sessions or perhaps both with mandatory office hours.  Students would be put into groups of 3 or 4 and have a 20 minutes session scheduled during regular class time.  Since the class meets for 80 minutes, I could do 4 such sessions a day.

In this way I'd hope to get everyone in the group to chime in.  And in that setting, as distinct from the full class, I wouldn't feel reluctant to call on you if you weren't otherwise participating in the discussion.

The big deal for me is that I haven't worked through how to keep these conversations somewhat novel.  If I can somehow figure out how to do that, then this would work for me.  Focusing on the blog posts of the particular group members might do the trick.

In any event, I am toying with this.  If you have some thoughts on the matter, you might make a comment here, or send me an email about it.

Monday, December 5, 2016

A totally optional discussion group on leadership for next semester

The last few years I have invited students to join me in the spring for a weekly discussion group on the topic of how they might get more out of their learning.  Three years ago, I didn't get enough nibbles.  Two years ago I had three takers.  We met each Friday afternoon throughout the spring semester.  It was an interesting experience, unusual for both the students and for me.  Last year I had two takers initially, but one soon dropped.  The other person was extremely shy and it was kind of odd to have conversations with him.  We went for a while but didn't meet quite as regularly.

This year I'd like to do something similar but on a different topic.  I maintain a reading list on leadership and learning.  We might start with a few pieces from there to help us find a rhythm.  After that, I'd hope that students would offer up their own pieces for us to discuss.

When the group seemed to work well we went for somewhere between 90 minutes and two hours and met in BIF.  That much of what we did I'd like to keep.  Based on that experience the ideal number of students is at least 3 and probably no more than 5.  If we can get that this time around we'll be a go.

If you are interested you can indicate that either by commenting on this post (and maybe that will attract some others to do likewise) or you can send me an email.

Let me say one more thing about scheduling.  I am not teaching next semester so I am pretty happy to meet whenever is convenient for the group (if such a time exists).  But I would prefer daytime to evening.  You should probably treat that as a firm constraint in assessing your own availability for this.

For the Last Class Session

An Idealistic Approach to Student-Faculty Interaction 

I was taught the following at the Frye Leadership Institute  back in summer 2003.
  • Every students wants to have a personal intellectual relationship with some faculty member
Does this still remain true today?  (If not, why not?)  How well did we do on that score?

Class Attendance
  • Demographics by eyeballing
    • Observable factors that seem to matter: (1) gender and (2) transfer student or not.
  • What the Syllabus says on the matter
  • Some students reported (near term) disutility from going to class (test in some other class, preference for sleeping in, other possible explanations). 
  • Class mixed on requiring attendance or not.
  • The puzzle for me remains that for 2012-14 attendance was not an issue.  The vast majority of the students came to class.  

  • There were some interesting comments (because they showed a lack of rationality in the strict sense) about deadlines.  At least a couple of students wanted the blog posts to be due Thursday evening (an earlier and therefore tighter deadline).  
  • One student wanted the deadline to be Sunday night, which coincides with deadlines for other courses.  
    • I need some time between when you submit blog posts and when I read and comment on them.

Gift Exchange
  • Walking the walk - did students learn to reciprocate?  
  • Did the professor reciprocate when students offered up a gift?
  • Were there some acts of kindness that students initiated?  

Bigger Picture Issues that Tie into Undergraduate Education

  • Are you a sheep?  Or are you self-directed in your own learning?  
    • Many of the final blog posts made it seem as if you were a sheep, though you may not have intended to communicate that. 

Stop Googling.  Let's talk.

  • The preference to have the laptop out may be indicative of aversion of conversation more generally, because listening is slow and often doesn't provide immediate reward.
  • Alternatively, I may have intimidated students in class with my questions that were too "off the wall" and without obvious answers, so students may have sought refuge in their laptops so they wouldn't have to answer the questions.

  • Learning to Accept Responsibility without Feeling It Is an Undo Burden
    • A post written about the class last year.

Saturday, December 3, 2016

This Week's Blog Post and Comments

I moved the prompt from the calendar to the class site, because we were on vacation last week.  Some people didn't find the prompt that way.  I hope everyone will get caught up with that now.

Regarding comments, I think it is overkill here to comment on the posts of other students for this last post, but you might write a brief response to my comment.  Also, since students are divided in what they are writing about, there is less feedback for that a student when writing a comment on the other prompt.  So this time it is not necessary.

We should have an interesting discussion on Tuesday in class about this.  Students clearly have strong feelings on these matters.

Thursday, December 1, 2016

Our last class session is Tueday

We will review the blog posts due tomorrow and discuss what students report there.  Following that, I will answer any and all questions students might have about the last quiz and material that might be covered on it.  We will reserve some time at the end for administering the ICES forms.

I observe the following without comment.  Today we had the lowest attendance of the semester.  I believe there were 7 students and because of that  I forced those sitting in the back to come nearer to the front.  Also, among those who were not present, two submitted the Excel homework during the class session and one submitted it after.

I could not get the projector to work today, so much of what I had planned to do went out the window.  I will make a brief video to show some thoughts about the Excel homework - further implications.  However, I am not up to doing that today so I will do it in the morning and post it to the class site when I'm done.

Today's Quiz

The projector didn't work in class today, but truthfully I only thought of this after class was over.  There are three questions.  They all pertain to this image.

1.  What is this guy's name?

2.  What magazine is this guy associated with?

3.  What slogan is he identified with ?

Wednesday, November 30, 2016

I thought this piece was interesting in light of our discussion on cashing in on a reputation.

In class yesterday I said that cashing in on a reputation was more likely to happen either if the person or organization is "end-gamed," in which case rather than go down with the ship people start to behave opportunistically to salvage what they can, quite possibly at the expense of others who get hurt by this behavior, or even if the end is not in sight then in an industry that is declining, which cuts into the rents that address the moral hazard problems.  When the rents start to shrink cashing in becomes more likely.

Newspapers are one such industry in decline.  (And if you've never read this essay by Clay Shirky called Newspapers and Thinking the Unthinkable, I encourage you to do so when you have some free time.)  The piece below I read after class yesterday.  The first paragraph in the snippet seemed to tie into our discussion quite nicely.  I thought you'd be interested in that connection, as well as what the author argues in the next paragraph.  

At present, I am not sure that profit maximzing news organizations are compatible with journalism that is arms length, avoids senationalism, and acts as a check on power.   When I was college (think Watergate) that compatibility existed.  But things have change, rather dramatically.  So I, for one, am quite uncertain as to how this will play out.

Tuesday, November 29, 2016

What Does It Mean To Be A Good Student

Since several of your posts on personal reputations were about your being good student, I did a search on that and eventually found the essay linked below, which I thought wasn't bad.  It is from 1997, ancient history for you, just yesterday for me.  One wonders how much of it has changed since.
The piece does say that you can grow ability.  (The psychologist Carol Dweck in here book Mindset says you can grow intelligence.)  In either case, translating that into the jargon of our course, that would be increasing general human capital.  Here, the labelling matters not.  What does matter is that practice of the right sort can improve things.

The one issue I have with this is on the matter of hard work.  We may have talked about this in class earlier in the semester.  If you are absorbed in something and it has your full attention, you may learn a lot from the experience, but it might be quite enjoyable so I wouldn't describe that as hard work.  I am told that people have different innate ability to concentrate.  If that is true, for those with that ability the learning isn't hard work.  For those who find concentrating difficult, it is more of a struggle.

If you do read this I wonder if it coincides with your view of what being a good student means.

Monday, November 28, 2016

The Last Blog Post - Due Friday December 2 at 11 PM

Because of Thanksgiving, I am posting this here rather than in the class calendar.  Students do tend to monitor the class site, so I hope this will get read by everyone enrolled.

You have two options to write to.  The first is the prompt I used last year (and in prior years as well).  The second is to do a Williamson-like critique on our class based on two governance decisions that were made.

1.  Last year's prompt:

This is the last post to be done for the course.  I'd like it to be both a review and a critique.  Can you offer up some lessons learned from the course about Organizations that you didn't have already going in?  What about the pedagogic approach we took with the way the live class was structured and the online blogging.  Are there any take aways from that?  Please spend a bit of time talking about your process for doing the blogging and the Excel homework -including the preparation you do and how long it all takes.  Finally, talk about things you would have liked to see in the course but didn't or ways the approach might be improved.

2.  Williamson-like critique:

Two governance decisions were made in the class that impacted behavior thereafter.  The first is in the syllabus.  Attendance was not required for the live class session (though it was encouraged).  The second students voted on after two weeks of the semester.  This was whether students could have portable electronic devices out during the live class session.  The majority was for allowing students to access electronic devices during class.

Please describe how these rules impacted your own behavior.  Then please consider the matter from the perspective of the class as a whole.

Paper Drafts

I've now read through all the papers that were submitted.  Here are some observations/feedback/and a brief description of what is next.

1.  Only one team actually submitted a memo (which I asked for) regarding how the second draft addressed my comments.  I was disappointed that other teams didn't do this.

2.  Except for that one team I used track changes in reviewing these papers.  I expected you to still send a cleaned up version back to me and to do that before you start doing the virtual elevator speech.

3.  Every paper needed further editing and proof reading.  In some cases, the papers had a substantial number of squiggles in Word that should have been consulted.  Many times I found myself accepting the suggestions that Word offered.  This sort of thing really should be done by students, not by me.

4.  Making the deadline for the second draft right before the Thanksgiving break was a mistake.  I should have pushed the deadline to the week before.

So, to sum up, teams need to still send me a clean version of there paper.  They then need to work on the virtual elevator speech.  This is a departure from the syllabus, but I am insisting on it because most teams didn't send me a memo.

Thursday, November 24, 2016

Happy Thanksgiving

With the Men's basketball game against West Virginia pretty much out of hand and my inability to watch the Dallas Cowboys play football now, yet with about 45 minutes before we sit down for our meal here, I found myself looking for other diversions.  This piece was interesting and I thought, given that you all write blog posts, that it might resonate with you.  I hope you are enjoying life wherever you find yourself now.

Thursday, November 17, 2016

Second Quiz Grades Hidden

Some students alerted me that they couldn't see their grades on the second quiz in the Moodle Gradebook.  So I checked and sure enough, those grades are hidden.  I then spent about a half hour trying to figure out how to unhide those grades, but I couldn't do it.  So I sent a message to tech support (see below).  I apologize for the inconvenience.  I hope the issue is rectified soon.

Some Ideas for the Virtual Elevator Speech

I made a template Presentation for you to download and review.  It can be played in slideshow mode and then plays automatically, with background music.  The slides are meant as instructions on how to make your presentation.   So that covers the layout part.

Content-wise, the big deal is image selection.  Some thinking should go into what sort of image best represents the idea you want to communicate.  I expect that to be the bulk of the work, with there also some effort put into your slide titles to tie into the images and establish connections with your paper.  The images should be taken from the Internet, but don't use one which has a copyright notice on it.  Otherwise, everything is fair game, though do note we are a G-Rated class and your content should fit that requirement.

As to the music, it is best for it to be purely instrumental, no vocals.  This way the music complements the content on the slides and doesn't compete with it.  One possible source of such music is to find Karaoke versions of popular songs.  Here popular means for students, not for me.  Remember, other students in the class are your primary audience.  If you find such music on YouTube, there are many converters out there to make an mp3 (audio) file from the video.  I've used this one with good success.

You need to put in timings/transitions for the slides.  This requires a bit of arithmetic like this - if you have 20 slides and you want the presentation to run for 2 minutes then that is 10 slides per minute or 6 seconds per slide.  You don't need to have it completely uniform that way, but it is certainly easier.  Slides with a lot of text (you won't have many of these) should have some more time to allow the viewer to read what is on the slide.

Finally, the music should autoplay.  There are some tools for doing that.

If you need help with this I can certainly provide that, but my hope is that at least one team member will have these skills and this sort of things is something that each of you should learn, if you don't already know how to do it.

About Grades

Here are some facts about the course grades to date and also moving forward.  Recall that the course was designed to have 1000 points.  So far 415 points have been allocated and then there was an extra 10 points for that early quiz just to verify that the functionality worked.   I've looked at students performance to date and it is running okay now, so I will not make any adjustment to the grades at this time.  Also note that in spite of prior warnings, I declined to give students penalties for submitting work late.  Treat that as a gift.

There are still 585 points to allocate.  10 of those are on the last Excel homework.  The rest are for the Class Project, worth 150 points, Blog Posts and Comments for the second half,  worth 150 points and 75 points respectively, and the last quiz (the final) which is worth 200 points.

You will note that the points are "rear loaded" which means that while most of the semester is behind us most of the points are still forthcoming.  That is by design.  In class today we'll talk about seniority pay.   The concept is essentially the same here.  In the next paragraph I will  critique the approach as it pertains to grades.

I have tried in the class to separate out giving you feedback, which I think is important for learning, from giving you numerical awarding of scores on your performance, which doesn't help much and can block things especially since you learn by failing and I wanted to encourage that.  But some of you are so wound up to be aware of grades that by being less forthcoming about them I may have hindered your motivation in the class.  The rear loading of points assumes you have the rationality to figure out the rewards possible at the end of the course.  Maybe there needs to be some shifting of points to earlier in the semester just to keep students in a good frame of mind.

Personally, I'd prefer the class just to be pass-fail.  If wishing would make it so.

As to the final, since it is worth a big chunk of points and some of you might otherwise freak out about that, my plan is that between 50% and 75% of the points to come from questions you have already seen on the two quizzes (with the points in the graphs relabelled so you can't simply copy your answers from previously).  There will be some new stuff.   Exactly how much is to be determined.  Also,  the final won't be that much longer than the previous quizzes.  I will just amplify the points per question.

Wednesday, November 16, 2016

Update to Moodle Gradebook

I have finished the exercise of tracking your performance with the Excel Homework and the Blogging.  I have transferred those results to Moodle.  You will find 4 new grade entries for the Excel homework.  They are:
Insurance under Asymmetric Information
Principal-Agent Model
Bonus - 10 points.

There is still one more Excel homework on the Shapiro-Stiglitz model.  I expect that you will do that when you return from holiday.

I also made entries for 4 blog posts, those the most recent ones, with the last on the Triangle Principal-Agent model.  There is one more blog post on personal reputations, due at the end of the holiday, and then a wrap up post to review the course.

As the quiz is ongoing now and when it closes I will have been asleep for a couple of hours, in the morning I will look at those and see how the class is performing point-wise.  So there may be a message about that tomorrow.  I will also discuss this in class.

For class session tomorrow to begin our discussion about reputations and deferred compensation.

The graph below was taken from the paper Why Is Their Mandatory Retirement?  This paper is from 1979 and the labor market was quite different then.  In particular the model assumes that the employee works for the same employer for the entire working life of the employee.

In the graph, W* is the wage that is actually paid, W tilde is the reservation wage (what the employee could earn elsewhere), and V* is the marginal value product.   That the lines are straight is simply to make the graph more readable.  It is more reasonable to imagine time variation of these curves that coincides with human capital accumulation over the working life and then later some deterioration in skill due to aging  But even with the straight lines that Lazear uses, we should note the slope.  That W* is steeper than W tilde connotes a seniority premium to the actual wage.  That W tilde is upward sloping suggests that with experience some of the human capital accumulation is general human capital that has value when working elsewhere.  Recall in class we talke about a simple model where a  person's output depends on human capital, ability, and effort.  After some age (perhaps 55 or so) the person slows down (ability declines) and that trumps the human capital accumulation part.  Where the peak is surely depends on the individual and the nature of the work the person does.  Also note that at some age, the reservation wage reflects more the value of leisure than the productivity in some other job.

Likewise, the marginal value product curve is probably humped, with a peak somewhere in mid career.  I think that is more realistic, though there is no doubt that the graph below is cleaner to look at.  Economics modeling says to look at the simplest possible model that illustrates the points the author wants to make.  So Lazear's graph wins over  a more realistic alternative.

Finally, as the picture is drawn, the employee does not want to retire at T because W*(T) > W tilde (T).  So in Lazear's model mandatory retirement (which is no longer legal) gets the separation of the worker from the firm to happen when it should.  Absent mandatory retirement there needs to be some other mechanism to encourage separation (perhaps certain types of pensions will do this) or one can't rely on seniority premiums as much as one could when mandatory retirement was legal.

Excel Homework Due 11/30 at 11 PM

This is the last Excel Homework.

This homework is on extensions of the basic Shapiro and Stiglitz model, with a particular focus on making the monitoring intensity a choice variable.

You should watch the video presentation of the basic model first.   This is a full lecture on the math of the model.  It takes about a half hour.  (If you want the PowerPoint file, a link to it is in the description of the video.)

The actual Shapiro and Stiglitz paper.
The video that derives the equations from the paper.

Tuesday, November 15, 2016

What I forgot to mention in class today

Multiple choice exams where individual questions have one right answer are often called "objective" tests.  The score you get on such an exam can be readily determined.  There are ways where use of the word objective may be a bit of a misnomer.  For example, since we already talked about exam difficulty, you can envision individual question difficulty.  An exam might have many easy questions and a few hard ones.  One student might get all the easy questions right but not get any of the hard ones right.  Another student might have gotten some of the hard questions right but missed several of the easy ones.  Which student did better on the test?  The typical way this is considered is by having points per question and by adding up the points for right answers.  But a different point scheme can change who is the better performer and there is nothing which tells you what point scheme to use.

This is the introduction to a topic we won't really discuss, but I should have mentioned, called performance review.  Often that is done via subjective impression of the work of the employee done in the period under review and it is much about simply reviewing whether goals were met and setting new goals as it is about measuring performance for promotion.   The U of I instituted a formal requirement for performance review around 15 years ago.  It is done separately from decisions about salary increases and decisions about promotion.  But obviously the two are related.

The last wrinkle to consider here is to combine the performance review notion with Argyris and Schon models I and II.  In particular a Model I manager probably will not value an employee who shows the manager up.  So if it is evident that the manager is Model I, there is some incentive to "suck up" to the manager as a way to advance.  Sometimes you hear expressions like "not a team player" for someone who performs well but doesn't behave this way.  (Of course, it can also apply to a truly selfish person.)  The point here is that to implement well a system of promotion based on performance where there is some subjective measurement of performance, it would be preferred to have Model II managers.

Monday, November 14, 2016

Second Quiz

I just uploaded the second quiz into Moodle.  It will be available starting immediately after class tomorrow (12:20 PM) and will go till 11 PM on Wednesday night.

The format is slightly different than the first quiz.  There are two matching questions like before.  Each of those is worth 20 points.  And there are two multiple choice questions.  Each of those are worth 5 points.  This gives a total of 50 points.


In the blog posts for this week a significant fraction of the class confounded principle (note the ple spelling at the end) for principal (with the pal spelling at the end).  These are different words with different meanings.

Principle - is an idea or rule.  A basic principle of economics is that the market price adjusts according to supply and demand.

Principal - the way we are using it is a person.  You probably first encountered the word in school.  The top administrator of a school is the principal.  In our setting the principal is the person who hires the agent and who pays the agent for services rendered according to a predetermined agreement.

Thursday, November 10, 2016

Considering President Killeen's Massmail in Light of Our Discussion in Class

The snip below is from the IPAC Web site that is referenced in the massmail.  Note that all the metrics of performance - enrollments, retention rates, etc. are on what is referred to as the extensive margin.

There are no metrics on the intensive (quality margin).  Frankly, those are harder to come by.  In our language in class, the intensive margin includes variables that are either observable but not verifiable or variables that are not observable (at low cost).  They include things like how much students learn, how engaged students are, and satisfied students are with the education they are getting.  These things might be measured at the individual course level.  But aggregating up to the university is difficult if not impossible.

If we do emphasize the extensive margin measures, what might happen on the intensive margin?  That is a question to keep in mind with this proposal.

Thursday, November 3, 2016

Some Linked Content for the Party in Class

The Fun Theory

Wrong Answers Jeopardy

Some music Professor Arvan listened to when he was in college 

From Bob Dylan:
This song was on the flip slide of the album.  It's really wonderful but not that well known.  The big hit at the time was called Tangled Up in Blue and was the first song on side one.   

About Bob Dylan:
This song is from an album by the same name.  Joan Baez has a truly wonderful singing voice and it really shows here.  She and Dylan were once a thing, maybe a decade earlier. 

From Cat Stevens:
This song is from the album Tea for the Tillerman.  The entire album is worth a listen.  I had forgotten about this music entirely until quite recently a friend posted something to rekindle the memory.  Then I realized that Jeep seems to be using one of Cat Stevens' songs in its current commercial.

Wednesday, November 2, 2016

Excel HW Due 11/9 at 11 PM

This homework is on the simplest possible version of the principal-agent model.  It is this model that produces pay for performance as a feature.  It is important to understand this base model before we delve into various realistic ways of complicating the model.  (Mostly we will talk about that but I might do some additional modeling in class after going over the basic model.)  There is a video I'd like you to watch first.  It should give you the background you need to do the homework.


Sunday, October 30, 2016

Update on Review of Papers

I had some health issues yesterday and only started to look at the papers today. It has been going slowly.  I hope to have them all done by end of day on Tuesday.

Here is a little general reaction on everything I've read so far.  Jargon from the paper under review gets introduced without giving a definition of it in plain English.  I've already encourage one team to produce a glossary as a prior exercise to writing the paper.  Perhaps each team should do that.  Whether you include your glossary as an appendix or just do it for you as a first step in the writing, I leave to your judgment.

The other big deal issue is giving reasons why as you say what the author argues.  The reasons why are the heart of the paper.  Then you illustrate those with examples.

Some people are doing this a bit better than others.  Nobody I've read yet is doing it really well.  Part of the reason why my reviews are taking a while is that I have to determine what sort of feedback will get you to do this reasonably well in the second draft.

Thursday, October 27, 2016

Wednesday, October 26, 2016

Why Health Insurance Is Different From Car Insurance

Here's a little bit on the history of health insurance in the U.S.  Note that getting insurance through your employer means every employee is paying the same in premiums even if everyone is not equally likely to access the care that the insurance is meant to cover.  So the accident in history encouraged an approach that we'll call a pooling equilibrium.

Excel Homework Due 11/2 at 11 PM

The homework is on bargaining.  Note that M&R have a discussion of bargaining in Chapter 5.  You should read that.  The model they go through has both the buyer and seller having two types.  In the Excel homework, the model has a continuum of types on each side of the bargain.  In that sense it is harder but also more elegant.  And, I believe, it should give you a better understanding about the relationship between the private information and the inefficiency  created.

There is a fiction in the model that helps to understand what is going on.  The fiction is that there is a third party - an arbitrator - who provides rules for how the bargaining will happen, when trade will occur, and at what price.  The fiction is necessary because the model is static.  Real world negotiations happen over time and to model that correctly one needs a dynamic model.  There are such models, but they are well beyond the scope of our class.  So we will keep the modeling relatively simple and wave our hands about what happens in real world bargaining.

There is a rather extensive discussion in this homework before you log in.  I encourage you to read that carefully and not gloss over it.  It is about how to bargain well and what happens in real-world procurement, which entails a good deal of such bargaining.  There are practical lessons here that you can carry over to your work life, even if you don't engage in procurement.

Tuesday, October 25, 2016

Not Course Related - My Prediction for Game 1 of the World Series

I will be asleep before the end of the fifth inning.  I wouldn't bet against that one.  As to who will win the game, it's an exciting matchup so let fate decide.

Monday, October 24, 2016

What make for successful teams?

I thought this piece was an interesting read for the class on several grounds.  The notion of social capital is quite interesting as is teaching empathy.  And, just to make the world seem quite small, Carol Vallone who ran WebCT is one of my contacts in LinkedIn and our campus was a WebCT client when I had my campus job of Assistant CIO for Educational Technologies.  On campus, that was called Illinois Compass.

Friday, October 21, 2016

Modeling Insurance Supply

While I covered the demand side pretty well in class yesterday, demonstrating the fundamental result that if insurance is priced in an actuarially fair manner then then insured demands full coverage for loss, I glossed over the supply side.  So here is a bit on that.

We would like to consider both the case of perfect competition in the long run and the case of pure monopoly.  Perfect competition in the long run means firms make zero economic profits.   The mental picture of this is that there are many firms, each one small relative to the size of the market.

If there are many small insurance companies one needs to ask are they nonetheless large enough to get the full benefits from diversification so they can be taken to be risk neutral.  In other words, there is some tension between having insurance companies get the full diversification benefit but assuming no individual firm has market power.  The waving hands I did in class was meant to assume away this particular difficulty.  In reality, there are several insurance companies that are name brands (you know their TV a good neighbor) and they do have some market power but they also do compete with one another.  The oligopoly case then is more realistic, but it is harder to model, so we won't do that in our class.

For the most part, we will then make another highly simplifying assumption - the only costs the insurance companies have is the payout of coverage in the event of loss.  In the perfectly competitive case this means the premiums just cover the expect payout of coverage.   That is how we will model perfectly competitive supply.  It can be interpreted as saying there are no fixed loads and the variable load equals the probability of loss.  This makes the math of supply very simple.

One can extent this a little bit if there are administrative costs per policy that the insurance companies need to cover.  Then in perfect competition there would be a fixed load, to cover those administrative costs, but the variable load would still equal the probability of loss.  In either case, we will then assume that supply is perfectly elastic at that price, which is what a long run supply curve looks like in a constant cost industry.  That keeps things quite simple, which is good, because the interesting issues are on the demand side.

Thursday, October 20, 2016

For Class Session Today

PowerPoint that reviews the blackboard presentation from last class.

Brief PowerPoint that has the basics of the demand for insurance.

Akerlof's The Market for Lemons

                Brief video to illustrate the adverse selection problem in insurance markets (this video assumes the policies will have full coverage so is simpler than next week's Excel Homework.)

Spence's Job Market Signaling

               Rounders - an interesting take on high stakes poker, one example of signaling outside the labor market.

Wednesday, October 19, 2016

Excel Homework Due October 26 at 11 PM

This one you should find interesting.  It is on insurance under private information.  A person could be a low risk (low probability of loss) or a high risk (high probability of loss) but there are no distinguishing features that lets the insurance company know which type an individual is.  The individuals know which type they are, but if low risk types get better rates then both types have incentive to claim they are low risk.  The market must somehow address this incentive problem.

Note:  In years past students have had a hard time understanding when a pooling equilibrium will occur and when a separating equilibrium will prevail instead.  I plan to cover that in class after the homework is due. 

Tuesday, October 18, 2016

The Basic Insurance Model

Because the blackboard was in such bad shape and I wasn't sure whether students could read what I was writing on the board, I made a little PowerPoint to review what I did in class today.  When I continue with this stuff on Thursday, I will do it in PowerPoint.  I won't do very much of that, but I will do some.

For class session today

The question nobody asked in their posts but should have:
What was the reason for this prompt?

Let us recall a distinction we've made in class previously between
(a) information that is verifiable (by a third party),
(b) information that is observable (by the parties in contract) but not verifiable, and
(c) information that is not observable (meaning one party has the information but the other does not).
Which of these is most relevant to what we will be studying in the next few weeks?

The life-cycle model of consumption.  This graph is useful to keep in mind when considering income risk.

What causes income to rise during one's working life?
Economics answer - It is a return to human capital.
Normal person's answer - it's what happens when you get promoted.  So the rising portion of the curve is associated with climbing a job ladder.

What might block moving up to the next rung on the ladder?

The Peter Principle - People rise in an organization till they reach their own level of incompetence.

Are there things you can do now or things you've already done that can shape how you'll performa after being promoted a couple of time?  

Non-proximate causes - The Fifth Discipline

Life lessons - School of Hard Knocks (Experience)

Are there prior experiences you have had that will shape your performance as you climb the job ladder but are not anywhere on your resume or on your transcript?

Can you identify any such experiences?

A big deal issue with your generation as perceived by mine:

A blog post written by me called Slapball, written before The Overprotected Kid came out, which is partly nostalgia for childhood and is partly a description of how kids played when they didn't have adult supervision during the time I was growing up.

Monday, October 17, 2016

Friday, October 14, 2016

Does the behavior in marriage translate into like behavior at work?

The piece linked below is about how well people do in marriage and the factors that make for success or failure.  So, on the one hand it would seem to be entirely out of scope for our class.  Yet on the other hand, I find the parallels with the gift exchange model we have talked about quite striking.  I wonder if you'd agree.

Thursday, October 13, 2016

Some things I forgot to say in class today

You will note that I teach without notes.  This is an old habit that encourages me to be mindful in what I am saying during the live session.  When I used to teach with notes I would go way too fast for the students.  This helps to regulate the pace.  But my memory isn't what it once was.  So I miss saying things I had planned to say.  Also, sometimes things occur to me only after the session that didn't come to mind during the preparation.

On determinants of risk aversion -

Some diversification happens over time.  You try one venture now.  A few years later you try something else and then again a few years after that.  When you are younger, there are more possible episodes, so a greater chance to diversify these things.  This gives one simple explanation for why younger people maybe tolerate risk more than older people, something we mentioned in class.

Risk attitudes almost surely correlate with personal wealth.  People of modest means typically can't diversify their wealth, which may be tied up entirely in just a few assets (home, car, perhaps one bank account).  Wealthier people can have a more balanced portfolio and thereby make themselves immune from idiosyncratic financial risk.

On economic forecasting - 

Don't say I didn't warn you.

On the class project - 

There are currently two posts on the class site that give instructions about how to proceed.
This one gives information on structure and formatting.
And this one gives information about timing and process.

Also let me say that co-authors argue and that arguing is a good thing.  That doesn't mean being rude or intolerant.  It means offering up your view based on your current understanding of what is going on.  Disagreement in this setting can happen and when it does it is a good thing.  It means there is a tension that needs to be resolved.  Coming to a resolution in a reasoned way is a way to learn.

However, sometimes the learning gets cut short because there are deadlines to be met.  That's how it goes.  Dealing with deadlines is an important life skill.

Finally on Econ in the News - 

I normally would not link to a piece like this because it has a bit of a political angle and I am trying to keep national politics outside our course.  However, in the section that discusses the work of Jason Furman, there is mention of monopsony in the labor market.  As we mentioned that in class while reviewing the Excel homework with transfer pricing, I thought it worth noting here.

Are you rational (in an economics modeling sense)?

We will use this Excel workbook for an in class demo today.  But I won't go over the third worksheet in class.  You should do that yourself.  (It will take perhaps 10 minutes).  It has some small experiment for you to try and then gives an explanation afterward.  Don't read the explanation till after you try the experiment or you will ruin it.

Wednesday, October 12, 2016

Grades Updated - Including Blog Posts First Half

I am sorry this took so long to do, but it is now done.  Let me explain where we are:

1.  The Excel Homework scores are now all correct.  There were a maximum of 40 possible points here for the tutorial, efficiency and equity concepts, strategic approach to efficiency, and coordination mechanisms.  Each submitted homework gives 10 points.

2.  For the quiz that was just to try out Moodle quizzes, for everyone who did them I gave the full 10 points, even if you got something wrong.   The content was not relevant to the course, so I rewarded doing it.

3.  The actual quiz was auto graded in Moodle.  That had a 50 points max.

4.  The last thing I did, which took quite a while, was to assign points for the blog posts and to give comments on how to improve your blogging in the second half.   There were 150 points max.  Nobody got all the points but I believe I was pretty generous overall.  The average was not quite 125 points.  In coming up with this I relied more on getting the work in regularly (or not) than on the quality of what you posted.  Truthfully, it is too early to grade your on quality.  You are still getting your feet wet with the blogging.  Post quality will matter more in the second half allocation of points.

Do note that this.  In the second half I will not accept any posts that I do not see by Sunday evening at 6 PM, unless the student has contacted me ahead of time to explain some issue of why the post is late.  As I said in class yesterday, it is just too hard for me to track the late posts and keep up with the class.  I hope with this to encourage everyone to get their posts in on time.


The upshot is that 240 real points have been allocated and then 10 points more for that one little quiz in Moodle to test out the functionality.  So that is almost one quarter of the points in the course.  Based on that you should be able to track how you are doing.  I know you care about grades, a lot.  Though I am definitely not as wise as King Solomon, my hope with this approach is to encourage all students to put in their best effort in the second half.


Now let me conclude with an ethical dilemma, which is about comments on the blogs and what it says about that in the syllabus.  Some of you have done that with some energy.  Others have not done it at all.  I am not sure why.  What I'd like to encourage is that people do comment with energy for the rest of the class.  So for the time being, I have not assigned these grades.  (It says 75 points in the grade book.)

If I graded by the book the people who haven't commented at all would get zero, meaning they'd really get slammed.  I see little good in that.  However, I don't want to ignore the effort of those students who have been commenting in earnest.

So I've been thinking about giving every student some base level of points, B, and then awarding the remaining 75 - B points on a performance basis.  Doing this is NOT IN THE SYLLABUS.  So it should be considered by the class.

I do want to point out that I don't grade on a curve.  Your own grade is not impacted up or down by the performance of your classmates.  I hope you understand that as you consider this alternative approach to grading the comments for the first half.

The Nobel Prize in Economics

This is the announcement of this year's winners, Oliver Hart and Bengt Holmstrom, who have done fundamental work on contractual incompleteness (the inability to specify all contingencies in the contract).

And here is an essay by last year's winner, Angus Deaton, on The Threat of Inequality.  It is an accessible piece meant for a general audience.  (The link should work if you are on the campus network or if you use VPN from off the campus network.)

Making comments more effective - how and when

Yesterday in class we spent some time talking about one of the pitfalls possible with vertical (power) relationships, namely the subordinate sucking up to the boss.  I brought this up because I thought some students tried to do that with their most recent blog posts.  It actually took some effort to construct a post that way, I am appreciative of that effort, but at the same time it would be much better for students to voice their own point of view and thereby develop that in a deeper and more confident way.

There is a different but similar issue with horizontal (peer) relationships, especially when the people don't know each other very well and the person sending the message wants to be polite and friendly.  Then one is apt to say something rather bland, more encouragement than substance, a pat on the back rather than an thoughtful provocation.  Our world is now filled with - have a nice day, LOL, various emoticons, and other similar messaging that may serve some useful social function but doesn't produce learning in the recipient of the message.

If taken to the extreme, there is the risk that this sort of thing can lead to a "hive mind" which is not capable of independent thought.  (On the entertainment front, an excellent depiction of the hive mind is in the Borg, part of the Star Trek Next Generation series.)  I leave it to you whether the hive mind remains an issue in real life.  I am using it here rhetorically to set up its opposite.

I learned about this after I had taken extensive leadership training, which at its conclusion offered up several things we might read.  One of those was the Contrarian's Guide to Leadership, a book that does provoke one's thinking.  If you click on the Look inside link, you can get to the first chapter of the book, which is called Thinking Gray.  I encourage you to read it.  It will challenge you, not because it is difficult intellectually, but because it is different from what you are used to.  Virtually every student in the class expects right answer and right ways of thinking about a situation.  So the issue is whether students can try on a different hat, one where there aren't right answers so much but rather multiple points of view, each with something to speak for it.  A thinking gray leader tries to maintain multiple points of view and, this is the part that will drive you nuts, doesn't commit to one of those being the better point of view, until it is absolutely necessary for making choices.

So you might consider your job when offering comments as getting the student who wrote the post to consider a potential different angle for looking at the topic.  I'm hopeful that with this orientation the commenting will become more valuable both to the student making the comment and the one receiving it as there will be a more evident value add.   I will note however, that coming up with such a comment might not be immediate, so let's consider timing issues below.

- - - - -

I also suggested in class yesterday that at the author's discretion part of the blog post can be more on the topic from the previous week.  (The other part would be on the current topic.)  Reflection is a way to continually make connections between posts, something I'm definitely trying to promote.  Given that, comments might encourage deeper reflection and clearly more interesting comments are more likely to do that.  So let's abandon the requirement that the comments on other students' posts need to be done before Tuesday's class, which was based on the idea that everything would be wrapped up in a bow via the class discussion on Tuesday.  That was naive of me and probably encouraged students to make trivial comments.  Teammates might discuss among themselves when they are likely to be writing their blog posts and when, as a consequence, they are apt to review the comments of their teammates in a way that might be incorporated in their next reflection.  I hope you can internalize the timing so that it works for each team member.

Let me close about the poster responding to my comment.  I would still like that to happen before the Tuesday class.  I hope that is sensible and do-able.

Tuesday, October 11, 2016

I made a small error in the grade upload to Moodle

This is why I hate clerical work.

In uploading the scores for the Excel Homework on Coordination, I mistakenly called the homework by a name for a previous assignment.  So the Excel grades need to to be changed to have the right entries in the proper columns.  Once that is sorted out, I will get to work on assigning scores for the first half blog posts.  That will almost surely be tomorrow rather than later this evening.

I apologize for the delay.

If you can have a look at this

And if you'd like to offer some reaction, please do so as a comment to this post.

Monday, October 10, 2016

For class session on 10/17

Connecting the dots

From my grade book on tracking the last several blog posts.

The prompt and student responses as a game of charades.

Cultural Literacy - For making connections and communicating about them.

Blogging with threads

Excel Homework Due Wednesday October 19 at 11 PM

Note - so you can start making some progress on your projects and so you can do the background content for this Excel homework, I am having no Excel homework next week.  This one is pretty easy.  The next one after that is harder (but much more interesting).  I will make these homeworks available early so if you want to progress faster you can.

This is the homework on the Math of Risk and Risk Preference.   While you might be able to grind through it without viewing the content in the previous post, my expectation is that you will have done so.  It will greatly increase your understanding of what is going on.

Also, if you are an eager beaver in the crowd and do the homework before class this Thursday (I applaud the eager beavers in the class) note that when you get to line 86 of the spreadsheet it says we have covered these ideas in class already.  We should get to those ideas on Thursday, if only briefly.