Review of the Course

I thought the course was very different and interesting compared to many of the other economics courses taught here at U of I. While I am able to take away many things from this course, I believe the experience I really liked about the class was the interesting dialogue and freedom we were granted to talk about our personal experiences with the material taught in class. This was not only done through blogging, but also the discussions we had during class time. This made the material much easier and sometimes even challenging to understand, as we tried to really think about how the material affected our lives. The most interesting topic I thought in class was the model of how organizations deal with and detect shirking. It is something different from all other economics courses I have taken and I thought it was very interesting topic.
I also thought the excel homework's were not too difficult. I was very glad they offered background information of the topic before getting into them and really walked you through the homework so that you at least were able to understand the meaning of what you were calculating. However, I do believe while I understood what I was calculating, I sometimes had trouble assigning what the figure really meant on a larger scale. For instance, I had trouble with the insurance topic. I had trouble really understanding what the numbers meant in terms of understanding how to assign different types of insurance. But in all, the videos that accompanied the homework's and the explanations made the homework's easy to understand.
The only thing I did not like about the course was the tests. While I do believe they were fair, I felt that because some questions had multiple parts that often relied on previous answers to get the next parts, one mistake ended up costing big. Overall I thought the structure of the class was good and I really like the idea of having a group of people meeting outside of class to have a discussion. I believe that discussion is valuable and will help me think for myself and become a better, more well rounded individual.

Branding and Reputation

A company's reputation is a valuable asset that is used to market their product and help distinguish themselves from their competitors. This is very much like a personal reputation, where we try and present ourselves in a manner that is marketable and different from the person next to us.

When it comes to banking, there are many different companies to choose from and as a consumer, I rely on reputation to save me time from researching companies as well as making it more likely that I will be happy with the service.

Chase has a reputation in the market for being convenient as well as safe. On ads they boast of having friendly customer service and easy to use online banking. They separate themselves from others in the market by advertising themselves as a company that is secure and has anti fraud teams always working to make sure your money is safe.They brand themselves by making the Chase logo recognizable at many sporting events and applications. The brand is associated with safe, reliable, and easy banking.

Before coming to college, I did my banking at a smaller bank back in my hometown. This was convenient for me when back at home and I really did not consider any other bank because it was where my parents had set up my account and have done their banking their. However, when coming to college, I knew that I would have to switch banks because I would need access to my money. In champaign, there are many banks to choose from and I really did not want to walk into each one and research which one was best. Instead, I asked my friends where they would recommend and I ended up choosing Chase.
There are a few reasons why I chose Chase. I knew about Chase bank because they are everywhere. They have a reputation for having many ATMs and being convenient. They have many ATMs not only in Champaign, but also near my house, so when I came home, I knew that I would not have to worry about changing banks again.  The next reason why I chose Chase bank was because my friends told me that the online banking was very simple and easy to use. I personally liked hearing this because I did not really want to have a tough time learning something and setting it up. Another reason why I chose to bank at Chase was because a few of my friends who have lost or had their debit cards stolen all told me that Chase had a very good anti fraud team and were very understanding. One instance I remember was a friend of mine had his debit card stolen and Chase called him before he had noticed it was gone to let him know that various large charges were being made. They cancelled the card and send him a new one within a week with no penalty. My friends all concluded they were happy with the service and quality of Chase's customer service and felt that their money was safe. As a customer of Chase for the last 4 years, I can say I am happy with their service and they have lived up to their reputation.

Reputation

I believe that the workplace is perhaps on of the most important places to develop and maintain a professional reputation. During my as an undergraduate, I have been part of the aviation program here at the University of Illinois. From the first day of class, the chief pilot announced to the class that flying an airplane is not only demanding, but very many more precautions and thought must be taken while in college. This includes drugs, driving, and alcohol. She acknowledged that while we were mere 101 students at the time, in a few years we may wish to become flight instructors at the university, and our resume starts with our reputation. Because aviation is such a small program, I took these words to heart and modeled my life around building a reputation that I would be happy with asking for a job once I received an instructors certificate.  The way I did this was not only showing up to class on time and doing well on exams, but also making good decisions outside of class like not drinking the night before a flight or getting into trouble.

At the beginning of the semester, I successfully gained employment at the university as a flight instructor. While I realize that I have groomed my reputation around the airport as a student, after gaining employment, I feel the need that it is now even more necessary to build my reputation further. The first reason for this is I want my colleagues to respect me and know that I take the job very seriously. This is not only because we have the same goals in educating students, but also because if we see each other in the professional world(maybe the airlines), they will know that I have a professional skill set. The next reason I take strides to better my reputation is because I have students. I want them not only to respect me, but I want them to take me seriously. For many who have not flown a plane, their instructor is the expert and I want them to know that the advice and lessons I give them are worth something and they should really consider them. I also don't want my student to feel afraid to ask question and I want to be known as someone who is there to help them. This is important because flying at times can be very high stress and sometimes having someone to count on really helps. I want to be that person. I do this by always being available for help and providing them with accurate and meaningful instruction.

The only instance I can think of where I abandoned my reputation for immediate gain was when I was a student. It was my roommates birthday and wanted to go out for the night. I knew I had to fly the next day, but I really wanted to go out with my roommate. I ended up going out that night and ended up calling my instructor the next day to tell him I was way too hungover to drive, let alone operate an airplane. My instructor was disappointed at me, but seemed to understand. For the rest of the semester I made sure that I made better decisions and always kept school a top priority.

Principle-Agent

A few years ago I was a waiter for a family friends bar/grill a few years ago. I was responsible for taking orders, maintaining the dining area and a little bit of bar tending. Furthermore, my boss expected me to always be proactive in the interaction with customers, not only to make sure customers wanted to keep coming back, but also because many of the customers were the boss' friends. 

While working, I  would answer and work for two principles; my boss and the customers. While my boss always expected me to treat/serve every customer the same, there were definitely times where I would perhaps go out of my way to avoid conflict. There were many times where the customer would try and get something for free, like sides or even drinks they said they never got, and rather than engaging in the conflict, I sometimes would just believe them and just get them what they wanted. Looking back, I probably would describe myself as a pretty crappy employee and I certainly would never do this now. But when I think about why I chose to do what I did, I really just wanted to avoid conflict and not get in a skirmish with the customer. My boss really trusted me, so I don't believe he knew what was going on, but I still feel even today that I betrayed that trust.

One time I had difficulty with the customer was when I had served a table some drinks and when their bill came, they said they never had those drinks. I poured them those drinks, so I really was not going to just write it off and let them have my drinks for free. Our conversations eventually led to my manager being called over, only to find out the customers I was arguing with where his friends from college. That put me in a very bad/awkward position because I was basically telling him his friends were trying to steal from him. Eventually he got them to pay but I really was even more careful around customers.

Group Experiences

I believe group projects, in a school setting, offer students a chance to collaborate and engage together in the subject class material and in some cases can help students understand the material in a way they perhaps wouldn't if they were to learn the material through other mediums, such as self study or lecture. I believe that this outcome not only depends on the attitudes and work ethic of the members of the group, but also the material and the appropriateness of using a group to get the project done. I have been apart of a few group projects for classes, and have mixed feelings and experiences about what makes an effective group. 

One of the group projects I was a part of was presenting a group of historical figures and relating how the individuals were relevant in understanding the history of South Africa as a whole. The class as whole had about 40 people and we were broken down into groups of 5. My group was to be the first of the groups to present and problems immediately occurred when even trying to meet/ know who was in my group, because we had just started the class. After meeting them, it became increasingly hard to meet with the members to get the project together and we actually ended up having only 1 meeting where all the group members were present. A few of the members had jobs which made it very difficult to meet up and one member had just got a new dog and he said he couldn't leave it by itself. 

The next problem we had was assigning tasks. Certain individuals we were researching were more well known and finding information about them was relatively easy. Others took more work to find relevant information and all of us wanted to be responsible for the more well known ones. One member simply just said he was already researching one of the individuals, so the rest of us decided to just randomly pick names from the list. Then, the night before the project was due, I found myself being appointed by the rest of the group to be the person who puts everything together on a power point. I really didn't want this job partially because I am not very good with technology and moving information from their emails to the power point was daunting. Furthermore, when going through the other member's material, some of it was incomplete and really didn't answer the larger question of the individuals relevance to South African history. I had to add some information in and it was both frustrating and unfair. I felt like I cared more about the grade we were going to get on the project than a few of my group members.Because we really didn't meet up and I was the only one who worked on the order of the power point, my group was not well rehearsed and unfamiliar with the structure of the power point. The presentation did not go well and we really couldn't connect our researched individuals to the larger picture of South African history, partially because the class just started and we didn't know very much about the general subject.

A group project in which I had a positive experience in was for an aviation ground school class. My group was assigned a topic in weather. Because aviation classes are small and typically don't change people( many of the people that I had class with when I was in 101 have stayed in the program and we have always had aviation courses together), it was very easy to meet up and get along together. The information was something we were all familiar with, which made it easy for us to split up the work and find information. We also got very lucky because one of the members in the group was an atmospheric science major, and we were able to exploit her deeper knowledge. This was great for the rest of the members in our group, however, I'm not so sure she enjoyed being relied on to be the expert. We all worked collectively on the material and made sure the information was complete before it was combined into a power point. It seemed like we all took the material and job seriously, which made everything go much smoother.  

Sharing the Marbles

While the example of the three year olds deciding how to split up the marbles shows an interesting human phenomenon, where people are perhaps more willing to share the wealth if equal work is done and more selfish where unequal or no work is done, I believe the example is rather primitive. I believe the example was used for its shock value for people to believe that the average three year old has a better grasp of "fairness" than your average wealthy adult. But we don't live in a world of fairness, or marbles, or a world without consequence. No matter how you break it up, wealth, in itself, is limited. There are only so many dollar bills. This must cover food on the table, prescriptions, school, college, bills, and every other expense. While it is completely obvious that the super wealthy certainly have enough to go around and pay  for the necessities to live, who has the right to take that away from them?  What about the wealthy people's children? Wouldn't you want to make sure your children are financially sound? Can you force people to be generous? It is for these reasons I feel as though the example given in the article fails to measure up to any real life scenario. While everybody is not super rich, I would like to bring forth an example where you had a large collection of marbles. If someone had less than you, do you owe it to them for the sake of fairness? Equality? "To make sure you don't have that many more marbles that I do"?
I do appreciate the fact the article brings up the fact that there needs to be regulations in place to keep big business out of bed with big government. The author points out that recent laws have made it possible for the ultra rich to keep their wealth and there needs to be a system in place for these sorts of relationships to be broken up. This is where I believe the meat of the article is and I find it important because it shows what must be done to make sure that everyone has at least a fair shot. However, I do not feel as though tax inequality did not lead to the income inequalities that have been mounting over the past 40 years, as the article may be suggesting. Rather, a changing economy that went through globalization as well as a technological boom. While higher taxes may help ease the obligations to citizens such as the baby boomers, I find it odd to believe that taxes were the reason we are in the situation we are today. But, I do find the taxes on the super wealth must be adjusted because I think they are outrageously low.
An example I can think of that jives with the conclusion of this paper is having a friend in a group project who doesn't do any of the work. Because that person is your friend and you value their friendship, you are willing to do their part of the project and let them get a good grade. You don't let the professor know that and in the end, your group gets a good grade, wherein other groups, who perhaps are made up of people who each do the work or refuse to do others work must each put in the honest amount of work to get the good grade. My friend didn't work to get that good grade or deserved to do better than others in the class, but because he knew his friends would help him out, he was able to get through the class with a good grade.( This example lacks the exclusivity of wealth and there really aren't winners and losers in this situation because the teacher can give out as many A's,B's... as he/she wants. Perhaps a better example would be someone who was able to pay off an umpire in a baseball game or fix a lottery).

Illini Bucks

I believe that Illini bucks could be beneficial in some aspects of collegiate life. Having Illini bucks would perhaps level the playing field for various amounts of students, especially when considering programs that come on a first com first serve basis like time tickets for registration, certain times for sections of a class (valuable to avoid an 8 AM class), or even things like tickets for an Illini football bowl game. These Illini bucks would probably be used more for registration slots and class section times, because I believe that the demand for this type of utility is much higher among the vast amount of college students, and also because the Illini probably won't make a respectable bowl game this year, if at all. However, because many of the students may wish to use them for the purpose of section times and registration tickets, the effects of every student having having Illini bucks may be limited. Scheduling classes where spots are limited would leave many to hold on to at least some of their Illini bucks in order to be able to take the classes they need to graduate.

Illini bucks may also undermine principles in the current system that seem to be fair or at least respectable. For instance, registration time slots are often based on seniority. This allows student who have been at the university longer to choose their classes so that they will have an opportunity to get the classes they need before they fill up. Having Illini bucks will allow those with more resources to acquire more Illini bucks and potentially affect upper class man who are trying to graduate on time. Furthermore, programs like the James Scholar program, which allows students with higher academic standing to pick classes first, would be undermined because the incentive to do well would be marginalized by students who are able to acquire more Illini bucks. This seems to defeat the overall objective of institutionalized learning and undermine student initiative  and hard work.

When thinking about how Illini bucks would be priced, it is very hard to think about how market price would be determined for a slip of paper that allows for perk for students who have enough of them, especially when all students who go to the University have already paid tuition. That point aside, if the price were too low, everyone would be able to get them and their effect on the system would perhaps be relatively minimal. If the price were high, which I believe would be the case if these were to exist, only a small amount of perhaps rich students would be able to afford them. This perhaps would also leave the system minimally effected because a small amount of major diverse students will have little effect on taking up classes and section times. If the price was perhaps fair for everyone, then I believe the most problems would occur there and the majority of students would be put at a disadvantage.

Future Income Risk Management

I believe that income risk management has undoubtedly shaped many of the decisions I have made throughout my college career, but other factors definitely have played a role in those decisions. To begin, I transferred to the University of Illinois as a sophomore from the University of Iowa. At Iowa, I had a very high GPA and was on an accelerated track in the business program. However, I was not very happy there. While doing really well in school was important to me, I made a decision to transfer for my own happiness and ambition of a different college experience. Part of my decision to transfer to the University of Illinois was influenced by the fact that my sister was attending the school and was an economics major, but also because the University of Illinois has a much better reputation than the University of Iowa and having a degree from here really made me think about how that would look when it came time to apply for jobs after college. Furthermore, I believed that I would be a stronger applicant for jobs because of the quality of education, which gives the University of Illinois its reputation. 

After getting accepted into the University of Illinois as undecided, I now was faced with the choice of picking a major. Before coming to Illinois, a friend of mine was in the aviation program and wanted to be a pilot. He talked to me about how fun and different it was than many other majors. While flying had always interested me, I really was not sure what to do with that interest until I met a friend of my father who is a captain at FedEx. His described his job as great and when researching the income of veteran captains, which is pretty high, I decided to give flying a try. However, while choosing to join the aviation program here at Illinois, I still wasn't sure how valuable a degree in Aviation would be, especially if my health were to fail and I was no longer able to fly. It is primarily for this reason I decided to major in Economics. While there were many other majors to choose from, knowing that people in the business realm often made salaries that they could survive on as well as having a sister who would soon be entering the job market with an economics degree made me decide that economics was right for me. While many of these major decisions seem to be influenced by the here and now (not being happy with another school, needing a major), I believe that the life after graduation is what drove me to be on the path I am today.

For instance, if I had chosen to become a theater major and my health had failed, the probability of making enough money, or at least the an amount that I could see acceptable for the amount of tuition I pay to come here, is very low. There are many other majors that have this sort of high level of competition for a decent paying job. With economics, where the concentration is perhaps undefined, I felt as though I could hopefully fit in somewhere if I need to.

There are also many decisions I have made during college that I believe were made with the future in mind. For instance, I have done a small amount of research (on Egypt and the role economics played in the Arab Spring), as well as joined the University of Illinois flight team. I also am currently employed as a flight instructor here at the University and hope that will grant me at least more experience. 

One thing that I found surprising from my sister who had to enter the jobs market was the amount of things the told me that she wish she had done in college, both with her future in sight and without. For instance, she tells me to take advantage of the university facilities that can help you get a job, build a resume and work experience. She notes that while you may not want to do them at the time, in the end they really can help you make an excellent candidate for a job. She also notes that you shouldn't make everything about your future and experiences may only come once, especially in college.

Opportunistic Behavior

Opportunism describes the behavior of someone that seems to take advantage of the current set of circumstances for the advancement of their own interests. People are faced with these decisions everyday and there are many driving forces, such as ethics, strategy, and expectations, that influence whether one will chose to behave opportunistically. While behaving opportunistically seems to offer people a chance to maximize their happiness, it is interesting to consider the decisions we make and opportunities we are willing to sacrifice for a seemingly non-quantifiable outcome.

A personal example of a time when I decided to not act opportunistically happened when a few friends and I had purchased tickets to a concert. The concert was in Chicago for 3 days and would eventually sell out. When the day of the concert came around, we went to retrieve our tickets from the front door at will-call. It was there we found out that one of my friends had accidentally purchased a ticket for the next night and they would not let him in to the concert because it had sold out. My friend, who felt bad, offered to take a taxi home so my other friend and I could go in and still enjoy the concert without him. Although seeing the concert sounded very attractive and my friend was willing to leave without making us feel bad, we decided that we did not want to go unless all of us were able to attend the concert.

After leaving the concert, my other friend and I decided that we were going to sell our tickets to the people on the street looking to get into the concert. Because the concert was sold out, demand for tickets was particularly high. On many sights like Craigslist tickets were going for as much as twice their original value. At that point, we really weren't sure how to price the tickets. We eventually came across a couple looking to buy tickets to the event. They immediately were interested in buying tickets for the event and politely asked how much we wanted for our tickets. Although this couple seemed willing to pay more than the original value for the tickets, I decided not to charge them more because they seemed very polite and desperate to get into the concert. Furthermore, because we did not want to go to the concert because our other friend could not get in, I felt as though it was just best to not take advantage of other people and just spend time with my other friends. While I did not get any profit from selling my tickets, I felt good about the transaction because I was able to help someone else out while still being able to spend time with my friends at a place where we could all hang out.

Organizations and transaction costs

Although I have held very few jobs in my college career, my experiences while working have truly made me recognize and appreciate the keys to running a successful organization. While at first the makeup of these structures seem to be invisible to a newer employee, with more work experience they become more apparent, especially when things do not run as smoothly as intended. For instance, as a new worker at a food delivery restaurant, I was able to notice that there was at least some hierarchy that had been established. There was a general manager, then several store managers, then managers in training and then in-shop employees.

While the order of the chain of command made sense to me, I was not clear on the responsibilities of each post and even less clear on how the system relied on the completion of ones job at every level until things didn't run smoothly. An example of this is when a store manager had allowed several deliveries to pile up, he disobeyed company policy to call the general manager to get more people to come in and work and simply let the orders keep piling up. Customers became very unhappy and began demanding their money back because their food was arriving so late. The general manager had not expected the store manager to act on his own and not follow procedure and eventually fired the store manager.

Because I was fairly low on the totem pole in terms of the hierarchy at the deliver restaurant, it wasn't until I became an executive officer in an RSO that I truly understood why strict and good organizational structure were essential to running a successful organization. While I was still not at the top of the chain of command, I still had to work very closely with the people around me in order to attract others to join our organization. Like any group of people working together, there is often a collection of ideas on how to best go about the task as well as who specifically we wanted in the organization. With so many opinions and ideas, conflict was unavoidable. However, with a common goal and interest, we devised  plans (which often took many sessions for people to realize that they were not going to get absolutely everything they wanted) to allow for maximum utility.

Many of the transaction costs associated with being a member of an RSO deal not only with school, but also with your personal life. For instance, in order to make sure the RSO would continue to grow and thrive, others counted on me and my fellow board members to recruit the right people. This meant taking the time to not only meet the students, but also spending time with them to get to know them and attract them to our organization. This subtracted time for studying as well as time I could have spent with my other friends ( or even finding a job, which would have at least made me money). However, I felt as though being a part of the organization and making sure there were going to be people there even after I graduate seemed more important to me and I willingly accepted my duty.

Alvin E. Roth Econ 490 Blog

Alvin E. Roth is an American economist born in 1951. He graduated from Columbia University in 1971with a degree in operations research. Then in 1973 and 1974, he would achieve his masters and PhD in operations at Stanford University. He would then go on to teach at a number of schools, including the University of Illinois, before finally settling in at Stanford University and Harvard as an Economics professor. He has made contributions in game theory, market design, and experimental economics. In 2012, he shared the Nobel Memorial Prize in Economic science for theories in stable allocations and market design.

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