Peter Diamond Econ 490: Final Post

Going in to the class, I knew a lot about organizations, but regarding mostly the people side of things.  I didn't know much about the economics of it.  So this class was interesting because it taught us about the distribution of preferences, production capabilities, efficient structures, and achieving goals within that setting.  I also thought the gift exchange and insurance lessons were very helpful to learn about, and probably enjoyed those the most.

Regarding the way the class is structured with the live class, I thought it was good.  Listening to any lecturer just talk for an hour and a half is tough, especially when no one wants to answer questions.  If I had to change something about the style of lecture, I would add some sort of extra credit for kids who answer questions.  It would encourage conversation and it would be more interesting hearing views from other students.  I'm sure kids have great ideas, but don't want to share it because they know responding has nothing to do with their grade.  I would also add some videos to keep interest up, and somehow incorporate games if that was possible.

In terms of the blogging, I enjoyed it.  The topics weren't too specific so you could kind of talk about anything and tie in your experiences without worrying about not answering the question.  The topics were interesting, and the fact that you responded allowed us to think about the question in a different manner after you critiqued us.  The way I went about blogging was nothing special.  I read the question, tried to think of examples where I've experienced it or seen it happen to someone else, and then wrote what I thought.  Didn't take any extraordinary effort or anything, but at the same time forced us to think.  For the excel, I would say that was a little bit harder.  The homework was good, but sometimes it wasn't always that easy to understand what equation to use when, even after watching the videos.  I would say depending on the difficulty of the excel, it would take me anywhere from 25 mins to 45 mins.  Didn't do too much if any preparation for it, besides watching the videos if they were given to help make the homework easier.

Finally, what I would have liked to see in the course to improve it, would be to start with making lectures more interactive.  Incorporate some games, get the audience to answer some questions, or watch some videos.  Give kids some reason to come to class.  I would leave the blogging the same.  And then for the excel assignment I would give instructions that are a little more clear.  Some were easy to understand, but some were harder.  And then I would say do the cider and donuts thing for the next semester as well.  That was a good call, and if you wanted to bring in snacks on other days that wouldn't be frowned upon.  Overall solid class.  

Peter Diamond Econ 490: Reputation

I would say one of the strongest reputations I ever had was when I was a member of the tennis team in High School.  Coming in as a freshman, I didn't know too many kids on the team, but I was one of the more vocal ones right off the bat.  I was also the best player out of all the freshman and sophomores, so I was named captain as a freshman.  So being captain immediately boosted my reputation, but in sports titles are one thing, but backing it up is a completely different thing.  Once I started winning match after match, and beating some of the top kids in the state, my reputation was pretty high, so much to the point that kids on other teams would come up to me after my match and ask for tips.  I would practice with Varsity, but play matches for the Fresh/Soph team because the coach wouldn't put me on Varsity.  So my reputation was very high among the team, and would only grow as the years went on.

The day when my reputation grew the most was the day of the conference championship.  I breezed my way through the tournament, and won conference (3 matches) while only dropping one game total.  This created some buzz around the conference, and the next day in school the varsity coach pulled me over and said, "can't wait to have you on varsity next year, everybody's talking about your dominant performance."  At that point, I had a reputation of this young stud tennis player, so that everybody in the school knew who I was.  To keep up my reputation throughout high school, and to even enhance it, I kept being voted captain, which meant a leadership role, and I kept winning.  I averaged about two losses on the season, out of 35 matches.  My reputation was solidified when my partner and I were in sectionals trying to get to state, and we were playing two kids who were both going to play D1 tennis the next year.  We ended up winning, and the whole school was talking about it the next day.  The key to keeping up your reputation is consistency.  If you think about all the good athletes who have great reputations, they're all consistent.

When I think about times that I've wanted to stray away from the behavior of my reputation, I can't really think of any.  With my reputation came the cheers for when we won, and not really any blame for when the team lost (because it wasn't my fault).  I got all the interviews with the newspapers, and all the benefits so there wasn't a time when I wanted a break.  I don't know of an example where I could have "cashed it in" by abandoning my reputation completely in order to gain something, so I can't really speak on that.

Everybody has a reputation, good or bad, and for the most part we control it.  So depending on what kind of reputation you want, you have to adjust and make changes to make your reputation desirable.

Peter Diamond Econ 490: Triangle Arrangement

I personally have never experienced being in a triangle like arrangement, but I have seen it from far away.  I watch a TV show called "Suits", and the main characters are a senior name partner, and an associate.  And it seems like in many episodes they participate in a triangle like arrangement.  But there is one particular case that I remember very well.

Mike, the associate, decides to take on a humanitarian case helping the families of victims from a deadly train derailment.  Mike meets with the client, Joe Henderson, the factory worker.  Henderson tells him the derailment was caused by inferior heat sensors that the company brass knew were faulty.  Harvey, Mike's boss and senior partner, tells him to drop the case, as their corporate clients don't like to work with firms that also handle whistle blower cases.  Mike decides not to because his parents also died in an accident, and insists this is personal.

This is an example of where both principals want something else from the agent, and they don't see eye to eye.  On one side, Harvey wants Mike to think about the long term and care about the clients who actually make the firm money.  On the other hand, Joe Henderson wants Mike to think about those who lost loved ones and not do what the typical hot shot lawyers do.

I only see one way to resolve this tension.  If Mike can get a huge settlement from the train company, he can make Joe Henderson and a bunch of the families who lost loved ones happy, as well as showing the other clients of the firm that no matter what case they handle, they can win, and win big.  Mike took the risk of pleasing one principal over the other, because he pursued the case when Harvey told him not to.  But I think he was confident that he wasn't going to lose, and that he's too valuable to the firm where Harvey wouldn't fire him even if he disobeyed.  Mike ends up winning and both sides are happy.

Being in a triangle arrangement is tough because you want to make everyone happy.  But all you can do is prioritize, try your best to please everyone, and if you can't do that, minimize the damages.

Peter Diamond Econ 490: Conflict

One of the most recent conflicts I got into that meant a lot was at my internship this summer.  During one of the projects I worked on we had to work in a group of six total.  Once I was assigned my group, I knew we would have a strong team because everybody was very impressive, but I also knew that everybody thought they were the best and there might be some tension regarding making final decisions.

Everybody was working well, and the project was coming along well, right until the end.  When the project was finished, we had to decide who was doing the conclusion.  Myself, along with one other kid wanted to do the conclusion.  I wanted to do it because I knew I was the best speaker of the group, and I wanted to leave a good impression with the audience.  The other guy wanted to do the conclusion to make sure he was the last person in the minds of the executives watching.  At this particular company interns don't get full time offers unless you absolutely blow away the execs.  So my partner thought that if he had the last say, he might have a chance at getting an offer.

I didn't really care about his intentions, but I cared because if he did a bad job, it would look bad on all of us.  And I knew this guy was not a good speaker.  So that's when the conflict arose.  This kid and I got into it a little during a meeting leading up to the presentation.  We both said why we wanted to do the conclusion, and left it all out on the table.  While I felt bad saying I was the best speaker, I had to do what was best for team.  Just like I accepted I wasn't the best at other things, I thought they would understand when I hinted that they weren't the best presenters.  Then the other guy pretty much put it out there that this is his presentation, he wanted to be the guy coming back for a full time job, and he wanted to have final say.

The other members kind of kept quiet during the meeting, but after would talk about it with me and the others.  Three out of the four others came up to me and said they wanted me to do it, so what we decided was to have a vote.  Myself and the other guy would present in front of the four other group members, and we'd bring in one other employee so that the vote wouldn't be even.  After presenting, the vote came in and I won.

The guy seemed a little mad, but after he saw the final presentation and all the execs praising the whole group, he lightened up and told me good job.

Looking back on it, the situation could've been avoided if we both sat back and didn't say what we wanted to, but I'm glad we did, because you have to communicate and talk about things in order to lead to the best product.  We had a great presentation, and the conflict wasn't a big deal after seeing the results.

Peter Diamond Econ 490: Gift Exchange

This example might be completely wrong, and have nothing to do with what the article was about, but I think the two are related so here it goes.

My example of gift exchange would be Secret Santa.  For the longest time now, I've been a part of Secret Santa at Christmas time.  What Secret Santa is, is that everybody gets assigned a random person, and they have to buy that person a gift.  This is a great idea, and everybody enjoys seeing what other people think they would like.  There is one problem though.  The creators of the game, at least in my situation, is that they didn't put a limit on how much you can spend.  In theory, you might get better gifts, but the problem is that every player is in a different financial situation.

This leads to people buying different levels of gifts, making the people who bought cheaper gifts look bad.  It ends up being a competition of some sorts, because you want to spend the most and look like the best friend compared to the other players.  The problem, is not that other people make more money and can therefore buy better gifts, the problem is that the rules should have never been made that you can spend however much you want.

If the rule was, for example, that there is a limit of $60 on a gift, then everybody can spend the same amount, buy great gifts, and still lead to healthy competition.  Instead of trying to see who can spend the most money, players would see who can do the most with the same amount of money.

This relates to the piece because like the author said, it's not a big deal that some kids have more marbles than others, it's a big deal that they got to create the rules before others had a say in it.  Having a lot money is totally fine, but creating an unfair system is not.  Let everybody have a say in the rules, and then make an executive decision.

Trust me, I want to have just as much money as the next person.  But I also want to do the right thing.

Peter Diamond Econ 490: Managing Future Risk

Ever since I was very young I would say I've been planning for the future.  I used to get paid three dollars for every A on my report card when I was in grade school.  And while I could have bought video games or toys, I saved up every dollar I got.  I saved all my birthday money and good grade money that by eighth grade I was able to invest $1000 in the stock market.  Now, I didn't know much about the stock market at the time, but I knew how to save money because at a very young age I knew that the future is never promised, so you need to have a good plan for it.

Skip ten years to now, and I would say more than ever I worry about the future, and that's why most of my decisions are based on 10,20,30 years from now, and not based on the present.

I am an Economics and Psychology major because I thought it could bring me more money in the future.  Most big money jobs like Investment Banking and Private Equity hire Finance/Econ/Accounting majors.  So if they look at me compared to other applicants, I have all the knowledge regarding numbers, but I also understand the people side of things, so I could excel when closing deals and forming relationships.  That unique characteristic that I brought made me more valuable, which lead to more money then, and will in the future.

My summer jobs I also chose based on the future.  After freshman year I worked at a law school because I was interested in law and knew I could make a ton of money if I was an attorney.  After sophomore year I worked at a private equity firm because if I excelled in that I would be making a million dollars a year by the time I was 28-30.  After I graduate I also plan on living at home for a year or two to save money.  Hopefully my job is in a big city so I don't need to buy a car either.  In my opinion there's no point in living a fancy life when you're young.  That's why I plan to save as much as possible when I'm young so I can enjoy the final 40 years of my life.

When kids are starting out, they should build a financial cushion, because you don't want to worry about paying bills in the future.  If you're worrying all the time then you can't focus on more important things like your work.  I don't live cheaply because I want a lot of money in the future, I live cheaply and make financial decisions because I don't want to worry in the future.  Simple as that.

Peter Diamond Econ 490: Illini Bucks

If the University of Illinois put into place an "IlliniBucks" system, I think it would be an awesome opportunity and learning experience for the students.  But I don't think it would work.

IlliniBucks could be used for moving to the front of the line in terms of registering for classes, moving to the front of the line at bars, or even moving to the front of the line at the bookstore at the beginning of the year when it's extremely crowded.  So many kids complain about these long lines, but as of now, there are only a few ways to beat the system.  At the bars, if you know the door guy then you can skip the line.  At the book store, if you're with a friend you can have them buy your book when they buy theirs and you can pay them back later.  And in terms of registering for classes, right now you can have older students or James Scholar students hold classes for you.  Those are the current ways to get out of long lines.

But with IlliniBucks that can all change.  I think most students would use the majority of their IlliniBucks to be the first ones to register for classes.  While skipping the line at the bar is fun, even if you don't you still end up in the bar at some point.  If you don't get the class you want, and get stuck in a bad class, there's no changing that if the good classes are full.  And most students will tell you, there is nothing like being in an awful class for a semester.  It's brutal.  I personally would use it to skip the lines at the bars if I were an upperclassmen, because we have first priority for class selection.  But if I was a freshman or sophomore, I would definitely use it to be the first one to register for classes.

Now clearly, there are many problems with this idea of IlliniBucks.  One, if they are priced too high, then nobody would use them..  If they are priced too low, then they will be overused and you might not even have them.  But the biggest problem is the idea in itself.  I don't think it would work.

If you tell kids that for five bucks you can skip the line at the bars, you would have a good number of students take that offer.  But then they just end up standing in a line with all the other kids who paid five bucks.  So they end up still having to stand in line, but now they've lost five dollars as well.  Same thing would happen at the book store.  Another long line would form of the kids who paid to skip the line.  Regarding registering for classes, if you tell the freshman and sophomores that you can pay five bucks to be the first ones the register, then you would lose all your James Scholars.  The one benefit of being a James Scholar is that you can register first.  But if that's not guaranteed anymore, then kids will stop doing the extra essay or whatever it takes to become a James Scholar.  Also, if freshman and sophomores end up paying more than juniors and seniors, then you end up having kids who can't get in to classes that they need to graduate, and they get screwed over, potentially having to stay another year.

The only benefit I see coming out of IlliniBucks is that it would create a black market, and that would be kind of interesting to see.  An IlliniBuck is worth something different to each student, so for the ones who want them more, and really want to get into that one class, they might pay a lot to buy an IlliniBuck off someone who hasn't used theirs yet.  It would be pretty cool to see how much money you could make.  It's similar to my high school.  My econ teacher gave Extra Credit Bucks to kids who received A's on their exams.  At the end of the semester, these Extra Credit Bucks would sell for $20-$50 each to the kids who were on the border of getting A's.  And they would be sold by the kids who got enough A's that they didn't need extra credit.  Very cool system.

Overall, I don't think this system would work.  There are too many kids on campus who would pay to skip the line, that the "Skip Line" would be just as long as the normal line.