critique (prompt 1)

I think the course website is a great idea, but sometimes (personally) I would completely space a blog post/ excel/ etc because I am so used to going to check Compass for all my school stuff. In my own mind I would check compass and see nothing is due and completely forget to check the class website (as all the material is here) and think I had no schoolwork for the time being. Major lesson learned and I bookmarked the class site to my browser so I wouldn't accidentally space an assignment. Personally I thought all the material about the principal agent problem and that excel was very interesting. Outside vs inside options, trying to determine agents compensation, and the cases where an arbitor favored one of the sides really gave me a different perspective on how complex decisions can be and how many moving parts are involved. 

Personally I enjoyed the blogging as assignments (I am usually enrolled in 1 online class per semester and there is usually a discussion board/ blogging portion so I am used to this) as I like to be able to do my schoolwork remotely and on my own time. The blogs and excels allowed for this which worked in my benefit because I like to go to the library as little as possible --> meaning I would rather go once a week for 10 hours vs 5 times a week for 2 hours. The way the assignments were structured in this course allowed for me to finish the work in this type of format. I definitely think you should keep in the comment on group member/ respond to your comments component as 1/3 of the blogs I did not even realize I was doing it completely wrong until I went back and looked at Prof. Arvan eviscerating my post. This was a good thing however as I felt once I noticed I completely biffed a post I would try and extrapolate and explain what I was trying to say better in my response comment and sometimes my response comments had more (relevent) information than the post itself. My process for blogging is that I would read the prompt and attempt to answer it as best as I could; an area where I believe I improved as the year went on. Also I typed all my blogs directly into the blogger website (I know you asked in one lecture if you type it into a word document first or not). 

The excel homeworks were interesting as I have never seen an assignment that 1) was a dynamic excel file like we used and 2) where it was 100% or nothing to turn it in. Personally I liked that component because you had to solve everything correctly to get the credit. Some were generally pretty easy because the directions on which formulas to use were given but I felt like in a dew assignments I was completely lost for 2 hours on one question. Not that these homeworks were harder it just seemed sometimes that super clear directions on which formulas to use/ work with for some questions were not directly stated and I would spend so much time messing with the formulas to try and get a box correct. I will say you were very amazing in your responses and response time to questions about the excel homeworks and multiple times you helped me solve them through communication/ comments. I would keep the excel homework structure exactly how it is going forward.

The only thing I think that needs a bit of revising would be on how some of the due dates are structured. Personally (like I said earlier) I am a minimal library guy and usually reserve all my schoolwork for Sunday to do over the course of a few hours. I think a lot of other students operate in a very similar way and I think for blogging the best due dates you could have would be have all the blog posts due Sunday night at 11:59pm and the two response comments due right before class the following Tuesday. I think making the Sunday night and comments by class due dates at these times and give no leeway on late submissions would make it much easier for students. Having things due on Friday (in my opinion) is a bad day because students check out of school for the week until Sunday when they wake up Friday morning (I do not have class Friday so I ascribe to a similar mindset). Also I think having the excels due on Thursday nights instead of Wednesday could be better as students would have another class session to come and ask you in person for assistance if they need it. I do think that Wednesday is fine but Thursday could maybe work better. 

Last thing I will say is that I hate group work and did not enjoy the experience of the group paper. Personally when I write a paper I would just rather do the whole thing myself and write it in my own voice and not have to rely on other people. If you want to do a group assignment I think making it a presentation (powerpoint in class) on something would be much easier for students to do rather than a paper. I did another econ 490 last semester (american economic history with Prof. Diianni) and it was one of my favorite courses ever. Instead of the group paper you could implement similar assignments that he did for the class where he would have us read a paper (like the one's you assigned) as we would answer the same 7 questions about them every time: what is the author describing, what is the 'commonly held' point of view, what is the authors point of view, evidence that strengthens/ weakens the arguments. These papers were usually about some commonly held myth in society and economists would essentially lay them to rest with data and statistics: showing that the myth is completely false. The papers were usually pretty interesting: an example was one talking about if the railroad was invented 25 years later St Louis would have grown into what Chicago is nowadays (because it is located on the Mississippi and the steam engine was the best mode of travel) and how other cities on rivers would have prospered more. Implementing some smaller scale, responses to papers like this I think could be a better assignment than the group paper. 

reputation

A place where I developed a strong reputation was the old pool I used to lifeguard at when I was in high school. I started working there the summer going into freshman year of high school just as a normal lifeguard. The pool was a small neighborhood pool that required membership, so not many people that lived outside this neighborhood would go here. This meant that it was usually a very relaxed shift with minimal chaos and as lifeguards we would only have to watch over between 5-12 people max while in the chair. On every shift there would be 4 lifeguards that would come in and one manager- with one guard watching the pool, on working the small snack bar, and the other two left to sit at the front desk on break scanning people in. The guards switch positions in 15 minute increments and rotate and the first summer I worked there the managers allowed for the two guards not watching the pool/ snack bar to both be able to be on break at the front. A lot of the guards that I worked with there were people I was friends with so almost all of the shifts were very enjoyable- and the managers rule to let both guards on break sit in the front was very well received. 

Fast forward to the second summer I worked there, very similar staff, except our previous managers all graduated and were now in college. Two of the three new managers were the relatives of the person who owned the small, neighborhood pool and they changed the break rule. Most likely under pressure to look good for their uncle, they implemented a stricter rule that made the guards have two rotations in the chair, regardless of how many people were in the pool. While it would make sense to have two guards when it was very busy to maximize eyes on the patrons - usually this pool had less than 10 children in it and it was very easy to guard alone. So if there were 3 kids in the pool you would have to be on the chair for 30 mins straight and 2 rotations; cutting into everyone's break time. This rule was definitely not well received by the guards who were now expected to work harder with no increase in the actual intensity of the work and have less break time out of the hot sun. The owner of the complex never expressed that this rule was necessary and all the guards definitely did not like it - everyone was hoping eventually it would get changed back. Fast forward that summer and another one, that rule was in effect and the guards had minimal break time. 

However the summer going into my senior year I was promoted to one of now four managers as well as my friend Pete. Pete had been working there as long as I had and definitely hated the less break time rotation structure like I did. We quickly became favored to be working with over the other two managers as we would not make the double chair rotation happen unless it was absolutely necessary (pool very busy). It was usually never busy and the guards appreciated us allowing them to have more break time, as it makes you much more alert for the one shift you actually have on the chair. To keep my reputation in tact I just allowed my guards to have more break time all summer - cementing myself and my friend Pete as the 'cool managers'. The only time I strayed from my more relaxed style of managing was on the 4th of July I was working and the owner came in. Although there was only around 7-10 people in the small, rectangular pool at the time - I implemented the old style of rotation for the 1.5 hours he was around the premise. I did this only to appear that I was more proactive than I was on this 'busy pool day' for the management, but in reality it was a farce. Once he left I let the guards return to the more relaxed rotations. I never cashed it in for an immediate gain, I liked being the 'cool manager' and allowing for more breaktime and opportunities for the guards to hangout with each other at the pool. 

principal-agent model

The principal-agent problem usually arises when one party (agent) agrees to work in favor of another party (principle) in return for some incentives. Such an agreement may incur hie costs for the agent thereby leading to the problems of moral hazard and conflict of interest. Owing to the costs incurred, the agent might begin to pursue his own agenda and ignore the best interest of the principle, thereby causing the principal agent problem to occur. Usually information asymmetries will cause the agent to withhold some type of information and work within self-interest even when it seems like they are working for the principle. I think a good example of this is an example I have read about and it is when you want to sell your house and you use a realtor to help.

Imagine that you live in a suburb and your old neighbors house (which is the exact same model as yours) sold for $250,000 six months ago. Obviously since the house is the same (in terms of how many bedrooms, baths, walk in closets, finished basement, etc) you are assuming that you can get the same amount and strive to make $250,000 yourself. You receive an offer today for $240,000 and you are wondering if you should take it or not. The realtor (agent) say they work for you and your house (principle 1) but they are also doing a job and have a boss/ agency they need to make money for (principle 2). The realtor will say absolutely take this offer as your interests are aligned so they want you to sell it for as much as possible. They will most likely also say things like "oh the market is softening up" or "you do not want to turn down an offer within 'x' amount of your asking price", I am an expert I have been doing this for 10 years, etc.

However if the real estate agent was selling their home that was the exact same type of house as the seller above then they would hold out and wait for a better price (the $250,000 or higher). This is because the contracts between home buyers/sellers and realtors are not well aligned. The realtor will say take this asking price of $240,000 for a variety of reasons: first the extra $10,000 made is split up into many parts where the realtor would only get 6% ($600) commission but then that is further divided in half to pay the buyer's realtor. Now the realtor only has $300 extra commission that is further divided in half to pay the agency so the realtor is only walking away with ~$150 for helping you get to $250,000 selling price. To get to that price the realtor may have to organize open houses, show potential buyers around, and pay for the advertising for who knows how many more days/ weeks. The realtor could be off selling another house whole with this time making much more money than he would be helping you get $10,000 more from selling your house because he is making 1.5% ($150) only of that increase in price.

I cannot honestly say if I truly know how these different principles would resolve each other in practice I would assume that half of the realtors act with fiduciary-intents and half want the person to take the lower offer so they can move onto selling more houses. The way I see it there are only 3 options in the scenario: take the money the realtor is saying (lower than asking price), do not listen which essentially forces the realtor to keep working on your behalf, or just fire the realtor and attempt to sell the home yourself. In this scenario I think the agent (realtor) only 100% succeeds or 100% fails because if they sell the house the agency is still making some sum of money (maybe its a bad sale and the realtor gets yelled at for not making enough but thats a different issue) or they do not/ are fired wherein both principles are not satisfied (seller for not getting good advice and paying this realtor and the agency for being pissed off that the realtor did not close a deal).

Group Dynamics

Obviously like in all walks of life, the workplace will also have it's share of conflicts and differing viewpoints/ motivations. Sometimes employees are put into positions where they may have to hurt a friendship in the name of what is ethical within the office. Even more so a manager burdens this responsibility because they are most likely the ones having to deliver the bad news. Managers can be put in a position by upper management to potentially fire someone that they wholly like as a person/ employee or they may face unnecessary backlash from other employees for just doing their job (like how rumors were spread about Anne by Harry in the example in the book).

An example I have from my work experience where manager/ employee conflict comes to a head is when I worked at an Irish pub in high school. When I say Irish pub I mean that as literal as possible, the owner and half the staff I worked with were actually originally from Ireland itself and established as authentic of an Irish pub as possible in my hometown. With this came a very apparent family type of working environment at the restaurant (I mean this in a good way, it was a great place to work). The restaurant was 3 floors: basement was the kitchen, middle floor was the main bar and seating area, and the 2nd floor was another smaller bar with less seating as well. I never participated in this exactly as I was 16-17 when I worked there but, every night when we would close up the kitchen (and by association the 2nd floor area as well) the busboys/ servers/ food runners/ chefs would all gather in the closed 2nd floor while waiting for tips/ rides/ etc. Most of the employees under the supervision of the bartenders would pour themselves a frosty Guinness or take a shot of some Balverine 12 year scotch or something. This was viewed as a privilege to be drinking the nice liquor of the establishment but the owners allowed for a drink or two by the employees after a shift as they themselves promote the family atmosphere.

The conflict arises from (changed name) a guy named Mike, who had been working there for a few years and was a legitimate amazing worker. This was the type of guy who was putting himself through some type of college and would work 30+ hours a week as a barback/ food runner at this restaurant and he always worked super hard. Mike was actually the person who trained me my first shift, telling me tips on how to clear tables faster, how to politely ask people if they need their plate taken away/ more water, best way to carry ice, any small tips that improved working efficiency from my position essentially. Well, Mike had been indulging in these after work beers/ shots the whole time he had been employed there and no one thought anything of it because he was such a good worker. Fast forward to me being there a few months and it is Mike's birthday; naturally employees go on facebook and see it is their coworkers birthday and while going to wish him a 'happy birthday' one of the bartenders notices it is Mike's 21st birthday. This obviously poses a huge problem since Mike had been drinking the restaurants liquor for years after his shift and even would go in there to drink casually and no one would question him as he worked there and the bartenders have had a beer with him before.

The one bartender who notices it starts telling other employees and it becomes hot gossip in the pub. The dilemma arises from 1) Mike is drinking underage and has a lot inside the establishment he works in, but 2) Mike is an amazing worker and genuinely good guy that everyone likes so they do not want to just throw him under the bus and 3) No one really knows what the very Irish owner is going to think if/ when he finds out. The bartenders perspective she likes Mike and knows he works hard but the bartenders are 2nd in command behind the owner here (it is an Irish pub, drinking is important) so she does not want to withhold this revelation from her employer. From Mike's perspective (from as good as I can guess) he lied on his application and no one questioned him so he continued to drink underage without anyone noticing- I guess the burden is not fully on him to stop himself from doing that. Most of the staff acted very surprised at the situation as in it was not something they ever thought could be a problem, but now everyone has to view Mike differently. Eventually the bartenders (correctly) caved and informed the owner the situation maybe a week or so after it had been discovered. Luckily for Mike I have never seen a person in a spot of responsibility act so indifferently to underage drinking. The owner felt rightfully deceived that Mike in a way had lied to everyone but since Mike was legitimately such an amazing worker (specifically mentoring all the younger busboys as he was the oldest out of like 9 of us) he decided to only suspend him. The owner cited that he himself started drinking at age 14 and only viewed this as a legal infraction and not some moral wrongdoing by Mike. Since most of the consumption Mike did were in the context of these little after work pow-wows the owner decided that not too much real harm had been done. He suspended Mike 2 months from being scheduled but invited him to have a beer "on him" since he was now finally 21 when he could return to work.

The situation I would say was inevitable to a degree since it started with Mike lying about his age on his initial application. However a case can be made that individual employees, specifically the bartenders, should have done their due diligence and confirmed Mike was not old enough to drink legally instead of just assuming because he worked there. However the situation was resolved decetly tidy and Mike returned to work later that summer.

team production

A very relevant example for gift exchange and team production for college students is having to do group work in your courses. I would say at least 1/3 of all courses in college will require group work in some format- whether it be working in groups in a discussion section or having to do a group project. I would also say for the most part that students generally do not like to do group work even though they will tolerate the assignment. There are a few different styles of group work and I believe some of them are more effective than others.

Group work in college is related to Johnathan Haidts article about marble sharing. Haidt states that that the "share the spoils" button in humans brains is not pressed by the mere existence of inequality,  but when 2 or more people collaborated to produce a gain. In the scenarios where the children would either find the marbles in the cups or be pulling on different ropes to get the marbles out of the machine- they would not end up sharing their wealth between them as they viewed it as 'finders keepers'. Michael Tomasello, a psychologist who created this experiment, believes that the 'share the spoils' response  emerged at some point in the last half-million years as humans began to hunt cooperatively. The main key is that if the humans could develop stable, ongoing partnerships they would be able to accomplish much more as a team than if they were alone. So essentially these early humans were responding to the incentive that if they were willing to do work for someone else (and other persons reciprocate) that they will all be better off for it. This can be applied to group work in college if you can put an expectation/ incentivize them to have to work together or else it will negatively impact their own personal grade.

I think this is best accomplished by having two separate grading scales when it comes to group work: an individual grade and a group grade that both go in to calculating the final assignment grade. Group work that only assess participation points or just has a singular completion grade and doesn't assess who did what are much less effective, especially if the professor assigns the groups themselves. Half of the group members are probably incentivized by not wanting to have their grade suffer at the expense of two lazy students and are willing just to do the whole assignment. The two lazy members in this scenario are more than willing to allow these other two students to do the whole assignment in discussion section especially since the hard working students are stuck with the lazy ones because the teacher randomly assigned them. Since there is only one grade that applies to all members regardless of who contributed what, it is more likely than people will be doing uneven amounts of work to receive the same grade.

To remedy this, or to achieve a 'share the spoils' scenario and incentivize members to share wealth (work) evenly, like I stated earlier making two separate grading scales is a good move in my experience. An example of this that I have personally experienced was when I was in a political science course and my group and I had to present on Obamacare. The professor split us into groups but said we are welcome to divvy up responsibility for each part of the project between ourselves as we saw fit. Also he said that 60% of the assignment grade was determined by your own contribution and how well you individually presented and 40% of it was determined by the groups overall presentation. This made it so that if you were with even two sub par group members, that your overall grade could still be high if you did your part well. However, this system incentivized all members to actually want to contribute as the expectation of your grade riding on other peoples work and vice versa makes it so everyone wants to do well by everyone else. We split the project up into 4 parts: background of the bill (what it is trying to do), conservative stance, liberal stance, and actual implementation/ cost it will have. Luckily I was in a rational group and they all worked very hard on their individual parts as did I, and we all just dropped our own individual contributions into a google powerpoint doc without ever meeting up. We all just practiced our parts and expected the other members to show up having done the same since a good proportion of our grades was in eachothers hands. We all received very good grades on the project because we were incentivized to want to share the work as equally as possible and that everyone tried very hard on their part because there was an expectation that others would do the same for your benefit just as much as theirs. 

future income risk

I would say a good amount of choices I have made have been made with an eye looking towards the future and reducing income risk. For starters, and this will apply to everyone's posts, we all are enrolled at the University of Illinois Urbana-Champaign which is ranked #44 by USnews for best national colleges. Being from the suburbs of Chicago and therefore the state of Illinois, eventually coming to UIUC was a no-brainer. Weighing the average cost for a 4-year university which is $24,061 (according to http://www.collegedata.com/cs/content/content_payarticle_tmpl.jhtml?articleId=10064) versus the average cost to attend UIUC which is $15,698 (http://colleges.usnews.rankingsandreviews.com/best-colleges/rankings/national-universities) that is a difference of $8363 saved by attending here over the average cost of 4-year public universities. Much less considering being able to drive myself and all my belongings only 2 hours to reach the campus is saving myself/ parents a large variable cost amount compared to if I went to school in California and had to pay for flights home/ move all my stuff out there and back/ store my things over summer etc. So attending the best public university in the state to get the lower tuition costs and the benefits of being a top-50 overall university (including private schools) is definitely a double win in my eyes. I have taken out student loans every semester and I would prefer not to say the exact amounts but we will put it at $80,000 (or $10,000 x 8 semesters) to have some easy math.

Here at UIUC I am an economics major. Although in my opinion my major is not as marketable to employers for the types of jobs I am trying to apply to, an economics background is right behind finance, marketing, and management majors that are in the business school here. In this sense I would say I have put myself in a decent position from my major choice to be marketable to employers; mostly based off the fact that I am graduating from such an accredited university. What will luckily help me out to reduce future income risk is that I have had internships the two previous summers at the same company in two completely different roles. I worked in a customer-oriented role for a third party logistics company where I would have direct contact with many people working at Costco Wholesale Corporation. I would take care of scheduling, issue resolution, accounting incidents, and just general operations of an enterprise customer account for my company. The second summer I worked in a sales-operations role where I (along with my mentor) would be responsible for 30-40 automatically booked trucks per day as well as transactional selling of freight to our same automatically booked carriers (trucking companies). We would have to track all the loads transit times, deal with trailer rejections (at the dock while loading or unloading), issue resolution usually related to breakdowns/flat tires (a lot of these), accounting incidents, and general operations of a sales account. These past experiences, as well as being employed for 2.5 years at a campus bar, have given me a very strong resume and many relevant skills/ experiences/ human capital development that I can talk to recruiters about while applying for jobs. The jobs I have worked the past three years (although I cannot give an exact $ amount) have most definitely reduced my future income risk vs. having no internship experience.

I am also a part of a social fraternity on campus (120+ members) and have served on the executive board multiple times. This is not as strong of a case as my previous job experience, but (in my opinion) one of the main hiring criteria for a lot of companies is a "culture fit". Culture and cool company culture (sponsored happy hours or monthly outings) are things I hear literally every company tout in interviews/ career fair/ on their websites etc. Being a part of a social fraternity and having relevant leadership positions within it have also helped me out a lot in recruiters eyes when it comes to "company culture". From a recruiting standpoint hiring the 15 people with the best GPAs (although a very important metric and indicative of good work ethic/ intelligence) is not how they approach their hiring practices. Recruiters obviously want as good of GPA/ coursework as possible but this metric is weighted against the culture fit. This is because the recruiters want to hire people they think will mesh with the office and just in a general sense someone who they think is a very normal, sociable person that they would be willing to see 40 hours per week every week for the foreseeable future. Being able to talk about a leadership role I had within a social organization combined with relevant job experience/ skills have made me a decent hiring candidate. I will say you could get the same effect from being a part of a business fraternity or an RSO that is related to your major/ type of job you are hoping to seek, but this is the choice I made.

So saving money versus the average cost of universities (staying in state), being at a top-50 university, having a solid resume from 2 separate internships, and being on the executive committee for a social organization are all factors/ choices I have made to reduce my future income risk. Also, hopefully when I am employed shortly after graduation, I plan on working in downtown Chicago and most likely living at my parents house for a few months to start saving money. This is absolutely to reduce my future consumption spending (living + utilities + food for the most part are free) and to save up some capital so when I decide to actually move downtown I will have money saved up. I will most likely move in with friends from UIUC who would be doing the exact same scenario I was (living at home) so my future place downtown will most likely not be in the gold coast or anywhere that is too expensive. I do not own a car nor do I plan on getting one anytime soon so I will be taking public transit, and I like to think of myself as a frugal person who does not eat out too much so I will also save money by cooking for myself. I definitely believe the choices I have made vs potential choices I did not make will reduce my future income risk to a good degree and that I will have a very content life with (hopefully) no big surprises.

connecting the dots

1) I will discount the first two posts I made because one was a test post and another was a short history/biography of my assigned economist Ben Bernanke. The following four posts: transaction costs, opportunism, teams, and Illinibucks are the remaining ones of note.

*also would like to write apologies for doing this late, I was at a wedding this weekend and got back last night*

It is obvious that all the posts (besides the first 2) are related to decision making and the dynamics of making decisions as an individual or in a group setting. My first post I wrote about the transaction costs I had to make while inside an organization (where in this case) I was employed at. The second post was about any opportunistic behavior I did/ did not take advantage of while in an organization. Both posts were related to my previous work experiences at my logistics internship. The second two posts about teams and Illinibucks can be slightly related because they are both looking at a more macro-level of how organizations work. My teams posts was about another previous job I had and the chain of management that was employed there. The Iliinibucks post was about an idea for Iliinibucks and how/ what type of organizations would be able/ willing to try an implement such a system.

2) Not exactly what I wrote about in my post but at one of my previous jobs the system of matching up interns with their mentors for the summer was very similar to the hospital matching examples from homework. Interns would go on mini-shadow opportunities in the first few days on the job and talk to many full time employees in different positions. The interns would then rate (not the person) but the job roles they shadowed in an order of preference. The recruiters would then go through and match up the interns and mentors into different roles/ geographical focuses- attempting their best to try and give everyone their top preference.

3) My process for writing these posts has not really evolved at all from the beginning. Besides from my first two posts which were very short in length, nothing has changed that much. I still read the prompt a few times and think about what I am going to write for a few minutes before I start writing into blogger. If I get stuck at any part or feel as if I am now elaborating my thoughts well enough I will frequently glance at other students posts to try and gauge how I should write the rest of mine.

4) I think the posts so far have been relevant to the course material. The only thing I can think of is initially make groups at the beginning of the semester and have very concrete guidelines on how the commenting on group members posts should go. This is to hopefully avoid confusion on expectations on the blogging at to make it easier to grade for yourself Prof. Arvan. As far as future post expectations I think the formula for the posts you have been using so far is working very well and the posts are relevant to course material. I will say however I believe if you had hard deadlines every Sunday night rather than Friday at 6pm more students would do it ontime. I realize this would mean my current post would still be late which I accept responsibility for. However I will say I, along with a good amount of other students in this course I assume, do a majority of schoolwork on Sundays. Also a good amount of students start enjoying campus nightlife starting on Thursday night- mkaing the Friday night due date a bit hard for some students to make. A hard Sunday night deadline could make it much easier and transparent for students to finish posts and to see which students are actually doing them.