Tuesday, December 2, 2014

Class Review


Actually this class is very different compared to others; not only in terms of content, it also has unique ways of studying for homework and blog posting. Since this is the first 400+ class that I've ever taken, I actually thought it was a little bit hard for me at first. Then when I went over the excel and read the book, I found myself on the right track to study this course and really enjoyed it. So I would say this class is a process of exploring for me. 

Before signing up for this class, I actually didn't have a clue about what this course was about. But as I started, I found the economy in organization is much more complicated and interesting than other economic courses. In my micro or macro econ classes, most I learned was about theories and didn't talk a lot of examples in real life. That's why I like the class discussion because you always get prepared for some examples in real life, which makes the content much easier to understand. Also, I struggled for excel homework sometimes. I often chose to do the excel homework the weekend before so I have enough time. The longest time I spent was more than two hours because I stuck in some problem. At first I felt like rushing myself to the homework and just try to get the correct answer. While later, I realized that only doing math doesn't make sense to me. I went through all the excel homework and dig into the algebra, I found it really helpful for me to understand the models and the reason behind it. For example in the excel homework about insurance under asymmetric information, I understood the basic settings of the model develop the function about premium and coverage step by step. The process that the homework leads me is really helpful. About the weekly blog post, my reaction at first was nervous because I'm not a person like writing essays. But I like your prompt which tries to relate our personal experience with the topic in class. As you mentioned several times in class, you expect our blogs are related to our previous ones, class discussions, or the examples in the book. I think i still feel not so comfortable about relating these to my new blogs, but I really tried to accomplish that. I have to admit it is not an easy class but I'm willing to pay efforts to it, challenge myself, and do something like blog posting that I've never done before for other classes.

Overall I believe taking this class is a right choice because I have a more comprehensive understanding of how people make decisions, how organization works, regarding to risks and many different perspectives. I found the exam is relatively easy as long as I understand the content. But for the essay problem I always lose more than 10 points, which reminds me that there's still something I didn't understand well. For the whole class I think both the excel homework and blog posts are helpful. The calendar for the due day for homework and blog may be better if they appear on the due day because sometimes I feel confused about the date. And the text book is a little bit hard for me to read, especially for some graphs, and sometimes feel some content is not so related to what we discuss in class. Maybe you could point out some pages in text book for us to read.

Wednesday, November 19, 2014

Personal Reputation and Behavior

Personal Reputation and Behavior

Thinking of my own experience working with others and feedbacks that I've received recently, I would say being reliable is one of my reputation that I developed since freshman year. 
I value efficiency and hate procrastinating. So whenever I work with others or I work alone, I have the habit to make a plan and stick to my schedule. In my typical day, after I went back home from classes, I would list the things that I need to finish today and write them in the app "evernote". Then I started working, checking one by one until finish all the work. I found this work well for me because when I check something out after I finish the work, the feeling of achievement motivates me to keep going. So that's the reason I've never missed any due day for homework, paper or anything. 
In the terms of working with others, I always keep a self-motivated pace and impact others as well. As the assistant treasurer in my organization, I'm not only responsible for the budget, also I take care of many things during meeting and assign works within financial department. Every time we have meeting, I would always organize the notes and future plans to every member right after the meeting in order to keep everyone be aware of the work they need to do and start preparing for it as early as possible. And recently we have a mini workshop. After I received the material list from other department, on that day I finished the budget planning for the materials and contacted president to make sure the budget was fine. The very next day I purchased the materials and got everything we need for our workshops so no one would worry about the process of workshop. But emergency happens. The night before workshop the president just realized that we didn't get name tags. So after I received the message I asked one of the members to check bookstore to see if we can get any. Fortunately we got the name tags and successfully held our workshop.
Since I'm naturally self-motivated to solve the problem and be willing to use any approaches that I can think of and sometimes ask other's help to achieve goals, people who work with me especially rate me as very reliable and can be trusted. 
But there was one time that I somehow abandoned my reputation because some opportunistic behaviors. Last semester I had a busy schedule for 18 credits and had a group project had to be finished on the day with two midterms. That week I had crazy schedule and felt stressed. But I received all the information from other group members the day before due day and I needed to put all things into slides to finalize them. In this time I acted opportunistically. Since the project was in the afternoon so I actually only reviewed for my exams and slept early in order to get enough sleep for tomorrow. So I didn't finalize the slides. After that day I had my exams and found that I only had an hour to put all things together. The progress was very hasty because of time limit. So when we presented in the class, it was not good due to the errors I made such as the typos, which made others easy to tell this was not well prepared. I felt guilty though there was nothing I can change. 
My group members were so nice and forgave my mistakes. While in my perspective, I should never act that way to break my reputation as being reliable all the time. After that mistake I tried to prepare better in advance and have this habit to double check to make sure everything is taken care of. Trust is fragile. It was not the case that I only change my attitude after other's suspicious of my reliability; instead, I should keep working on and try to do my best in every details so that my reputation can build up continuously. 

Thursday, November 6, 2014

Principle-Agent Triangle

Principle-Agent Triangle Model

The triangle relationship might cause conflicts because the two principles have different standards of what is called a "good performance". As the example like a lawyer, he or she is probably expected to solve the case as soon as possible and earn high profits from customers by the law firm. But from the perspective of customers, a good performance is expected to be responsibility, great efforts or simply wining in the case. Since two principles' have different views on agent's performance, it gets hard to satisfy both sides at the same time for agent.

Actually the example given in the class is a little bit different. Regulators who worked in government is likely to work in companies which they have involved with after they retired. So in this situation, government needs to maximize overall benefit in the market, while companies are more interested in industry profits. So when the agents (regulators) satisfy government interest, the companies are probably prevented from pursuing their highest possible profits. The agents would have to choose one principle to be satisfied. In this case, since agents have tendency to pursue their own interest as well, such as corruptions or high wages received by working in companies after retiring. 

I have this similar experience in which a triangle model exists. During this summer when I was in Shanghai, I went to check out contact lens in the mall. So in this situation, I was the principle and the agent is the person who works in the optical shop. I was trying to find contact lens that are comfortable to wear, do little harm to eyes, and, of course, at a reasonable price. Another principle for the agent is the owner of the optical shop. This is a typical triangle relationship. From the view of the owner, agent's performance is determined by the profits agent brings to the company. So there is a gap between evaluation from the owner and me. 

I told the agent my request and asked about recommendation. Also, I need to purchase enough for a year use because I don't plan to go back to China during winter break. The agent then recommended me a kind of fancy contact lens which she claimed to be protective for eyes and very comfortable to wear. This kind was daily disposable so the price is super high after I calculated roughly for each lens's price. I told her that the price was unreasonable and since I want the quantity for a year, I was considering for week disposable contacts instead. But she didn't give up recommending the expensive one to me until I showed the intention to look around for other shops. So apparently there is a conflict between owner's interest and mine. And she tried to put her boss's satisfaction in priority rather than mine. The reason is probably that her wage is related to the profits she makes for the company.

One way that I think can resolve the tension between two principles is that when their intention is not really opposite or can be compromised by negotiation. In my experience about purchasing contact lenses, even if I don't choose the super expensive kind, the owner of the shop would still make some profits. Jus like in the bargaining model, the transaction can only happen when the price exceeds cost of production and less than value for customers. Since the information is dissymmetric, I, as customer, have no idea about the cost of production. In general the producer have more advantage in this market. Secretly I assume that the cost of production actually is way lower than the prices. In addition, the quality of lenses is hard to verify unless the customer actually try it on for some time. Thus in this case I chose the one that seemed with good quality and with the price that I can accept. What I want to say is that when I can find the product meeting my needs, and at the same time the owner can make profit from that, then it is easily resolvable. But when the two principles have totally opposite desire and intentions, then the agent's own interest would determine which principle the agent would try to satisfy as a result. 

Thursday, October 30, 2014

Conflict in Organization

The conflict between Anne and Harry is really an interesting example for group dynamics. It seems impossible to avoid conflict within any organizations because people have different personalities, communication skills, working abilities and perspectives. When working together, someone like Harry, acting somewhat arrogant and condescending, is going to create unpleasant experience. Even he has great experience and strong working skills, it seems he is tend to over control the marketing plans and is exclusive to other opinions.

Actually from my own experience, I haven't experienced serious conflict within organizations. But recently, in my RSO Intercultural Community Development Initiative (ICDI), I've experienced some conflict ideas. Since I'm the assistant treasurer, I'm working with group members and fundraising chair to get prepare for our first fundraising event on the quad. In our proposal we planned to sell cookies, tea eggs (which is a traditional Chinese snacks), and bubble tea. So in the last general meeting when I presented our fundraising proposal, some members thought that selling tea eggs is not a good idea because it might make people label us just a "Chinese related organization", which we are not. The identity of being recognized as "intercultural" is really important for our organization because our purpose is be inclusive for every culture, instead of showing up as a specific cultural organization.

After member showed disagreement in this problem, I thought about that after the meeting for some time and tried to promote this proposal as how it was originally. I understood what members were worrying about but my point is that we don't have to deliberately avoid some specific cultural related things. First of all, cookies and bubble tea, which we also want to sell is not related to Chines culture at all. Secondly, what we can do is selling other cultural related foods in our future fundraising events to avoid being labeled, such as tacos, hot dogs, pizzas, sushi, etc. Also, I don't think people label us by looking at what we do for fundraising but by what we really do in our workshops. I sent the email to board members and discussed with vice president and other members as well. Actually some members also think it was not  a problem at all. While, still, after about four and five days I received the e-mail from board member saying that we'll just stick to cookies and bubble tea. It actually was frustrating. Since I think tea eggs might attract some students to try and  bring more opportunities to raise more money. At the same time, I found the communication between organization wasn't that smooth and efficient. But since the board member explained the reason and concerns, I totally understand that they tried to make a safer decision for the whole group.

Now I'm working on the fundraising event and other funding resources. This conflict in different opinions in our RSO actually is not fierce but truly made me think a lot about how to be inconclusive to all the opinions and how to present my reasons to others. It actually helps me to understand gift exchange in a total different perspectives. As we discussed in class, the example of gift exchange could be performance above minimum requirement as an employee. In my RSO situation, people who against the idea in proposal would feel being respected and inclusive in decision making. They are trying to help promoting the organization forward because they contribute to what is not their responsibility to pay efforts to. For people who like the idea of selling tea eggs, they also feel being considered and given opportunities to make some changes, though it didn't work out. This kind of respect and inclusive in decision making is a kind of gift exchange happening in our organization and I really appreciate it. Given that we're a small group with about 25 members in total, more inclusive ways in decision making would probably helps us to make more efficient decisions and improve our performance overall.

Thursday, October 23, 2014

Gifts Exchanges in Team Production

Gifts Exchanges in Team Production


I actually really enjoy reading this article, especially the description about the experiment with children and the discussion about the implication. The result is actually not surprising. When the resources are already there, people naturally act self-interest because there seems no reason for sharing. But when people pull the rope at the same time, the efforts suddenly bound them together and make them have this tendency to sharing the rewards. I believe this is because of the feeling of group production. When the rewards take some effort and people have to cooperate, the group production leads to the gift exchange.

This reminds me the experience of working with other students in calculus discussion section. During the discussion we'll be randomly assigned to group of three or four and to finish the worksheet together. Then TA would give everyone the same score based on one person's worksheet. That means in order to get good grades, group members would try to make everyone on the same page and work hard on every problem because we don't know whose worksheet would be graded. This works as gift exchanges. 

When I am assigned to students who seemed to be well-prepared, I feel much more relieved. Because at most time, we'll read the question together, and then come up with an agreement on the solution, then check whether we get the same answer. If other members are motivated to solve the question as I do, I would be very willing to pull the rope and put as much efforts as I can because at last we'll all get great scores. And this is actually an effective way for group members to learn from each other because students can share different perspectives and everyone can take the benefit if anyone proposes a great idea. Thus in this group production, we are motivated to pull the rope together and share exactly the same rewards.

But group production is not always work efficiently. I remembered that one time, TA didn't randomly assign the group but instead let us group up ourselves. A girl just directly walked to me and asked to join my group. Her intention was so obvious because at last time we were in the same group and she found that I seemed to be really good at math. Then this "pulling the rope together" motivation disappears once someone decided to do nothing but waiting for other's actions. This is what happened. She just sat there and checked her Facebook on the phone. After we got a question done, she looked at my worksheet and copied on hers. At first I tried to explained to her how we got the answer. But later on I realized that this was just a waste of everyone else's time and she cared more about the final answer. So in group production, equaling everyone's reward regardless individual's efforts might cause inequality. But in the grading parts, we're not actually sharing any physical thing, so that when she gets the points, no one else is worse off. While in group, when some member tend to rely on others and not willing to make an input, that would lead to inefficiency. Others would also be affected by this attitude and try to pull the rope with less efforts or not at all.

When people work alone, then the reward is fully dependent on individual's input. As long as someone takes all the responsibility for himself or herself, it would be less likely to take a step back. Unless he or she loses confidence to achieve the goal and just give up. So for me, no matter working alone or within a group, I think the best way is to try my best to contribute despite other's reaction to the problem. There always have to be someone to bring up the responsibility awareness and attract more people to pull the rope together.

Tuesday, October 14, 2014

Future Income Risk

Managing Future Income Risk

Since now I'm a sophomore, I don't really have a specific idea about what kind of company I would work in and how much salary I would earn. But I know that I'm interested in working in companies and I enjoy working with different people. With a strong sense of responsibility, I found myself do well both in academy and organizations I've involved in. 

The first thing I think is related the most to my income is the major. Currently I am double majored in Economics and Psychology. The reason I choose Econ is that I believe it can helps me to think critically and learn how to use limited resources to maximize the outcome. Though a lot of topics are related to the markets, firms, financial problems, I think it can provide me well both in econ topics and other knowledge that I need if I want to work in big companies related to international trade, etc. And also, it is closely related to daily life choices which lead us to efficiency. Actually this class really build up my holistic idea of economics. So for the Econ major, I would probably be capable of working in companies with positions related to marketing, HR, or stocks, etc. And in terms of Psychology major, I believe it is actually a really comprehensive subject that helps me thinking analytically. Consisted of many fields such as social psychology, cognitive psychology, clinical psychology, etc, psychology builds up my understanding of the whole world. And it is definitely helpful for positions such as HR, or managers, etc. For these two majors, I believe it is really important to make practical uses of them to reduce the future income risk. Furthermore, GPA might be another academic aspect that employers would pay attention to. My goal is to keep about 3.9 overall to ensure that my academy competence is recognized. Actually double major can be seen as a kind of self-insurance mentioned in the class. When I'm interested in both of them, and believe they both provide me resources that I can use for my future career in different aspects, they are sort of like insurance to lower my risk. In addition, as I am planning in go to graduate school for HR, Finance or Marketing, the higher education can act like another insurance in this case.

Also, the experience and internships during college are both important components. Companies essentially need people who have good working ability. So great activities that I engaged in, the leadership positions I obtained, and internships are crucial to reduce future income risk. For now I'm involved in three organizations and have acquired some leadership positions. The important thing is that I've really learned a lot about how to work in teams. The most exciting part for me is working with various people from different backgrounds. This experience helps me to realize totally different perspectives and concerns. By interacting with people in different cultures, I feel more comfortable to communicate with them and have a more comprehensive understanding of others, which could lead to more efficient communication outcome and reduce transaction costs. Things I believe most companies value the most are communication skills, executive skills, team working skills, leadership skills, etc. So what I try to accomplish in college is to gradually develop these skills and overcome my weaknesses. Diversification investment (for those are independent from each other) can help reduce risk. For me, developing different skills is a great way to reduce future income risk and prepare me to become more outstanding.

Since I haven't accumulated any debt, the future consumption risk is pretty low if I get a job that can cover my regular expenses. I'm the only child in my family (because of the one-child policy in China), my parents probably feel pretty relieved after I find a job and don't have to worry about other risks. I actually have several cousins who have already worked for some time. My oldest cousin is about 30 years old, who is majored in Computer Science in college. Now he works in China and earns pretty decent income every month. At the very first beginning, he started well because the economy in China is developing rapidly. But about two years later, when it was 2008, the financial crisis affected the market. He lost his job for several months. But actually during this period, he was trying hard to get interviewed by companies. At the same time, he did get some payment from making some video games for some companies. Becoming more experienced, he got a new job and got increasing salary from then on. What I really admire was that he never stops learning. During the time that he was unemployment, he read a lot of CS books and improved a lot. Though the market is competitive, the ones who are the expertise in specific fields would eventually get attention. For me, he is the example that inspires me to develop myself consistently. If I am rejected, the only reason is that I'm not outstanding enough. The thing I take away is that failure actually can motivate me to work harder to make improvements and always keep an incremental mindset.

Thursday, October 2, 2014

Illinibucks

It is interesting to imagine that students could use illinibucks as some sort of "money" to exchange for some privilege, such as registering for classes and housing, going to office hours, a spot for popular sports games or shows on campus. 

So in the first place, the illinibucks should allocated to every students in the same quantity every month or every semester. No matter the student is a freshman or a senior, he or she should have the same right to get access to illinibucks. The illinibucks might expire just like credits in the i-card if students don't use it during certain period. Because if students could accumulate illinibucks over semesters, it would probably give incentive to students to overuse illinibucks after accumulating for a long time, which might give other students inconvenience if the student always use illinibucks to get the priority in office hour. Thus in this way, students would try to use illinibucks properly during every period and make it more fair for everyone.

I think one of the most important candidates is registering classes, which is always a hot topic at the beginning of every semester. Many students reload the registration page in order to get into a class that might be required, or the professor is really excellent for this class, or maybe this is just the only section works for schedule. So it is expected that a lot of students would use illinibucks to get to front of line in registering classes. Actually it should be divided into two parts. First, if the illinibucks are supposed to allow students register class early, which works like James Scholar, then the existence of illinibucks actually won't bring positive effects to students. Because when a lot of students all choose to use illinibucks and move forwards, the students who don't use illinibucks would be left behind and struggle. Eventually everyone moves forward, thus nothing actually changes when everyone take a step forward. A second proposal for illinibucks is that students use it just for specific class which they are eager to register. In that case, illinibucks would do well for students' convenience. Actually this semester I failed to register for one statistics class especially for Econ , which is prerequisite class for many Econ classes. Because of that, I had so many limits in choosing my other Econ classes this semester. I have to find some classes fit my schedule and more importantly, I meet the standards for registering class. So if I have illinibucks I would choose to exchange privilege to register this class so that other things would go well. 

Luckily I just became a James Scholar this semester, thus I could register early for next semester class. So for now, illinibucks doesn't seem appealing to me because I have already got privilege through that approach. Therefore I would probably use illinibucks for privilege in purchasing ticket for specific show. A few weeks ago, when I realized that Chicago Symphony Orchestra is going to perform in Krannert Center in October, I went to the Krannert Website immediately trying to buy tickets. But it turned out that it was already sold out and I was put on the waiting list, which is frustrating. If I have illinibucks, then I would pay illinibucks in exchange to get forward to the line and buy the tickets. 

What about the administrated price for Illinibucks? Of course the price for moving forward in line for every event would cost different quantities of illinibucks. For example, in registering early for specific class, it might cost 1 illinibuck. While if the class is super popular, the high demand will push price to 2 illinibucks. Then But if the price is still 1 illinibuck for this super popular class, then the demand would exceeds the supply a lot, leading to inefficiency in allocation, for when a lot of students pay for the privilege, it's still the problem that not everyone can get into the class. So when the purchase of privilege for certain class is very high, it is necessary to add an extra section to meet the high demand. So there is a way out in this situation. While for the performance or show it is not that simple. Chicago Symphony Orchestra would not just add another performance when the demand is too high. When the price for this show is too low, a lot of people purchase the privilege but many would still stay on the waiting list. Thus in this case, the price should increase so that people who value this higher would have higher chance to get the tickets. But inefficiency still exists. People who value this very high but can't afford it would be left behind after all. Thus when the supply quantity cannot change, in order to get a relatively higher surplus overall, raising the price is the solution.