Thursday, September 1, 2016

Some follow up to today's class session

Food Preference

It is interesting what one learns from asking for frivolous information.  I was surprised by how popular Chipotle was as a food preference, so I did a stock lookup for them.  Their price was much higher a year ago.  I wonder why.  In any event, if the popularity within the class is indicative of a broader based strong demand, perhaps there is an investment opportunity there for those of you who do that sort of thing.

Decisions for Tuesday

There are two issues pending for the class to decide by next Tuesday.  One is about the seating and along with it the mode in which we interact.  I did realize about an hour into the session today that if we stay with the horseshoe seating and keep to discussion mode that I need some crib sheet to remind me how to steer the conversation.   The other issue is about whether electronic devices should be put away or available during class.  If you'd like to indicate your preference to me electronically, you can email me that.  Otherwise I'll poll the class about it on Tuesday.

Student Blogs

Also note that you are supposed to be sending me the link to your blog in the next day or so and that you should have a post up about the economist who is the basis for your alias.

The Economics in Today's Discussion

Now I want to turn to the economics in our discussion today by considering two different things.  The first is to view Simon's research as providing a gateway for behavioral economics and to better understand the psychological underpinnings of decision making.  There has been much written on this by now, but I wonder how much students have been exposed to these ideas.  Here I will content myself with just one concept, which is kind of the obverse for search.  It is called WYSIATI (What you see is all there is).  The decision maker (mistakenly) assumes there is nothing to learn by gathering more information so goes with his gut.  Once in a while this is actually right because a real search would be unproductive.  But many times people decide too quickly and would be better off getting more information.  Such people need to be educated to be less impulsive in making a choice.  That's a long process.

The other thing is to reconsider the student moral hazard and use that as an example for our upcoming topic - transaction costs.  In this case, the issue is that while I am posting PowerPoint slides which have quite a bit of discussion in them in the notes area, that students could access before class so they are ready for the live class session, students don't seem to be doing that.  This became obvious today when I asked about whether students had heard the term satisficing.  (I've checked and there is no "y" in the spelling of that word.)  Most indicated it was new to them, but in fact it is mentioned and discussed in the PowerPoint for the session.

Further, provides me with access data.  Here is the information for the pptx file.  Note that the two downloads at 12:22 today were by me in the classroom, as I was giving a demo to a student who had just added the class, and I accidentally clicked the download button a second time.

And here is the analogous information for the pdf file.

In the future I will not look at this sort of information.  I've done it here only to confirm a general impression that most students in the class are not getting at this content that I'm providing.  

Taking that as a fact, there are probably three questions to ask as follow up.  First, does it matter?  Second, if it does matter what can be done to encourage greater actual access to the content in the future?  And third, why is it happening now?   

My conjecture on the third one is that students have become accustomed to using their classes (which are mainly lecture) as gateways to the subject matter.  They make their initial foray into the topic via the professor's discussion of it.  If that is right, then this is happening as a consequence of a previously formed habit, which most students in the class seem to possess.  

Let me offer up an alternative hypothesis for you to consider.  That would be that the answer to the first question is that it doesn't matter, so why put in needless effort.  I wonder if any students actually have thought it through enough to believe that, but it is clear that if that were the majority belief it would be largely self-enforcing.  If one or two students came prepared but everyone else did not, either the others wouldn't talk up much at all or most of the conversations would be conducted by those who weren't yet informed on the matter.  Either way, that would not encourage others to be informed in the future.  Encouragement would be more likely if the conversation seemed interesting so students wanted to be a part of it.

I do think that if most of the class were better prepared then it would matter, a lot.  It might take a while for the class to find its rhythm that way, but the conversations would be far richer because people would be ready for that.  Rich conversation in class is my own aspiration level. 

So, finally, let me talk about encouraging your preparation in the future.  And if you think about this some, you will begin to understand what really is at root in considering transaction costs.  This post is meant to alert you to the issue, so you can consider it on your own.  You do need to ask yourself, what is it that you want and why do you want it?  

Perhaps the answer to that is, you don't really know.  We mentioned in class the notion of experimental consumption.  You might consider experimenting with your preparation, as a way for you to learn about how the works for you.  Incidentally, if you do that, I'd expect you to have questions about what is in the PowerPoint.  Having those questions is part of what it means to get ready.  You might try to answer some of them yourself. And then you might compare that with how they get addressed in the class discussion.  That could be engaging for you and you would surely learn more that way.

In any event, thinking it through this way is my approach to providing encouragement.  Some of you might react that instead I should provide class participation credit for your performance in the course.  I can understand that thought, but I will not do that.  Here are two reasons why.  First, it is somewhat stressful to try to keep the flow of the discussion going.  To burden that further with noting student performance is just too much for me.  Second, as I've now said repeatedly, I want to work in a collegial environment where there is gift exchange.  You can then think of your preparation as a gift to the class.  I think that's the way it should be.  You benefit as part of the class because the overall level of discussion is higher.  But you don't get a private benefit because your own performance shines compared to others in the course.  This is not meant to be a competition.  It is meant to be a community. 

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