Williamson-like Critique

Two key governance decisions that were made were optional attendance and soft deadlines. These decisions make this course unique from other courses since most classes are on the opposite end of the scale in these respects, including most other 400 level economics courses. These rules had a huge impact on my behaviour as well as the class as a whole, but I think there was one modification I would recommend which I will look at and explain at the end of this post.

I think not requiring attendance is what caused students to not show up for class. I personally prefer optional attendance for this class since I am not a morning person can find course materials through the course website but I think if attendance was required, it would encourage students to come to class and when more students come to such a class, it makes the class better since we can learn more about different perspectives. I think a good example of this is voting procedures: In most countries, voting for elections is not mandatory which means that people do not have any inclination to vote if they are not bothered about politics or don’t feel like they have to vote. However, as an Australian citizen, I know that voting is mandatory and if I do not vote for elections, I will be given a fine for not doing so. I know that some of my friends have still tried to remain informed about politics despite not being interested in it, so that they can vote for future elections.

However, since this class did not require attendance and had soft deadlines, I did not feel as much stress due this course compared to most other courses, especially major courses. Although students should not feel extremely stressed, I think a bit of stress is always useful since it encourages students to not procrastinate due to the consequences. I think for the class as a whole, not requiring attendance is not necessarily a bad thing since students can always go to class if they are struggling.

The second rule was that assignments had soft deadlines. When I first realized that this class had this rule I was taken aback because I had never heard of this, which is something that makes this class unique. I think this rule had an advantage of giving students extra time to work on their blog posts if they want to improve their posts. The soft deadlines definitely impacted my behaviour since some of my posts were posted after the deadline, but this usually was to improve my posts instead of due to procrastination. While I don’t know how this affects the class as a whole, I doubt it is positive, since it could encourage some students to procrastinate on deadlines and in general be lethargic about meeting deadlines.

I think one thing I would change about this course if I was the professor is to do with the soft deadlines. I think instead of allowing students to submit late and still be graded throughout the course, I would allow them a few chances, to avoid consistent late submissions. This would also mean that as the professor, you would not have to keep wasting time to check posts at multiple different times. Another way to combat this problem could be by only allowing late submissions till a certain point, for example 24-36 hours after the initial due date. I think doing both of these would better (than doing only one) since if you only integrated the second one, it would still encourage students to submit it late every week which does not help them or the professor. Implementing both would encourage students to not leave their posts to the last minute whilst still giving them a bit of leniency and allowing them to learn to be more a mature and responsible person.

Principal Agent

The standard principal-agent model usually involves two principals in real world situations. I can’t think of such a situation in which I was involved, but I know that my mother encounters this daily, since she works as a real estate agent. Because of the way the real estate market works, sometimes there may be two agents involved (one for the buyer and one for the seller). However, most deals involve only one agent meaning she is usually the agent for both the buyer and seller. Since I don’t know any particular case regarding this, I will instead talk about how real estate agents generally operate.

Real estate markets function in a very similar way to what is described in the Excel homework on Bargaining. There is a seller and buyer who are looking for the best outcome in their favour (seller looks for higher price, buyer looks for lower price). However, who the outcome will favour depends significantly on the agent. Consider an example where an agent decides to work in favour of the seller and the seller wants at least x dollars and the buyer is looking for a price under y dollars (the agent usually has an idea of the max/min price for a seller or buyer unless they intentionally lie about it to gain an advantage). The agent will then try and convince the buyer that the seller wants more than x dollars (even though it isn’t true) to convince the buyer that they will need to raise their offer. This relates to the Excel homework on bargaining where we realized that the agent can affect the deal based on who he favours, by claiming that the seller valuates the product more than they actually did or by claiming a lower valuation by the buyer than the actual valuation.

Usually the agent will work in favour of the seller because of two reasons: Firstly, they usually have first contact with the seller who is trying to sell their property (and then try and find suitable buyers). Secondly and more importantly, their income from the deal is a percentage of the value of the deal so they earn more if the property is sold for more. An agent will usually only work in favour of the buyer if there is an incentive, for example personally knowing the buyer, a high possibility of being in future deals with the buyer, or even if the buyer offers the agent a financial incentive to lower the price. Therefore, what is considered as a good performance by both parties are completely different. For the seller it is selling their property for higher than their valuation and for the buyer it is buying it for lower than their valuation.

Broadly speaking, in a situation where the agent does not favour a particular principal, the agent will act with their self-interest in mind. In the case of real estate agents, that means indirectly favouring the seller since the agent will look for a higher price to increase the commission they earn. Taking this into consideration, it would not be fair to say that an agent would fail if they satisfied only one principal but not the other unless that was not their aim. Also, I think because of the way that real estate agents work, this model is not the same as other principal-agent models, since real estate agent nearly always works in their personal self-interest, since neither principal pay them based on how good their performance is but they are instead paid a percentage of the deal.

Group Conflicts

Being in a conflict is something hard to deal with for both sides. If it is a manager-subordinate situation, the manager needs to decide what sort of action to take, which is based on what type of relationship he wants to have with his subordinates in the future and how effective it will be. It is also important to understand where the conflict originated from. It could have been caused by several things, for example lack of communication, disagreements or power dynamics.

While I have not experienced any major personal conflicts in a work context, there is one that comes to mind which I had brought up in one of my earlier blog posts. Last summer, I interned as an automated tester at an IT company that provides tech consulting and business process services. When I joined the automated testing team, there did not seem to be any conflicts at all. I was going through training for the first week and during that time I noticed that everyone was working hard since there was a backlog of uncompleted assignments. However, this was cleared up quite quickly and within 3 to 4 weeks, the office and everyone seemed much less rushed.

After the backlog was completed and they were waiting to receive assignments is when I was assigned to groups with full-time employees. I quickly noticed that everyone felt tired out after the last couple weeks. Sometimes they would come to the office on Saturday or would work from home if they could not make it, and because of this everyone felt exhausted. However, the manager did not give them any time off (I found this out while talking to two other people in my group who were full-time employees) which irritated some people. I think this is where the problem may have originated from, since this could have created a bit of animosity between the manager and his subordinates. Although I did not think at the time that it was nothing for the manager to worry about since it was not a serious situation, I noticed that most people in the office were not completely understanding the manager’s point of view. From the manager’s point of view, it would be hard to give his subordinates a longer break during the day for completing work they should have completed before. Also, since they were not ahead on their assignments, if they took a longer break and did not work at an effective pace, it could lead to another backlog. At the same time, maybe giving a longer break would have helped not only avoid conflict but also relieve the group of pressure which would have helped them to work harder after the break.

A couple days later, during a meeting in the morning where everyone plans for the day, one of the more experienced employees suddenly told the manager that he felt under-appreciated and felt like his work was not being recognized. Then another person said the same thing but since she was outspoken, this came off on the manager the wrong way and he started to defend himself by saying that he should not have to recognize their work all the time since he also has his own work and that they had not been working effectively. He picked out a few people he had noticed were slacking off over the last few days. This immediately got a bad reaction and this time a few more people started to get angry at him. It became clear at this point that the conflict had reached its boiling point.

After a minute of argument in front of everyone, he said that anyone having a problem with him should go with him to the meeting room to discuss it. He was in the meeting room for over an hour and every now and then, one person would leave the room and would be crying or upset, sometimes even angry to the point that they would storm out of the office. The resulting reactions by the rest of the office was generally unfriendly and unreceptive towards the manager for a short period of time. Over the next couple of days everything seemed back to normal and there were no serious conflicts after that.

I think that the problem could have been avoided had the employees been more understanding of the manager’s point of view and vice-versa. While I am not sure, I doubt the manager explained why he could not give them a long break, since otherwise I think everyone would have been more understanding of his decision. That being said, the problem was only in part caused by this and another reason that caused this problem is the manager’s behaviour to some specific employees (again I do not know what caused this, but I think it was related to the having to work for longer hours due to the backlog). Maybe having such a conflict was necessary for everyone to clear things up and relieve the tension and animosity held against the manager.

Discipline in the Workplace

Looking at this new perspective wherein past performance was determined to be poor and there has to be a form of discipline, initially no particular example came to my mind. I think one of the main reasons for this is that most of the time I work in a group in university, it is for an assignment and is only a one-time setup (we won’t have to be in the same group again). Therefore, usually, once the assignment is over, there is no need to consider using a form of discipline for anyone who performed poorly or barely participated. Other times, if there are multiple group assignments in a class, if there is a particular person (or people) who did not perform well when I was in a group with them, I ensure to choose a group of new people who I feel will perform decently. Therefore, in this case also, there is a lack of incentives to discipline team members since it is just a short-term arrangement.

After giving it more thought, I realized that most instances of discipline vary largely. For example, in my internship during the summer of 2018, I recall that when the manager/head of the office would discipline someone, it usually would not be one person in usual but rather the group that person is a part of. I think this is a much better way to discipline someone than do so individually, because this ensures that no one feels targeted. I noticed that after he would talk to any specific group, they would have a discussion amongst themselves for a few minutes about how they can improve. Disciplining in this fashion ensures that the group works more productively since they feel more responsible about how effectively the rest of their group works. This also meant that he had close personal relationships with everyone in that office.

Another example is my internship I went for last summer and went to the same company but worked on a different project and with a different team. The manager/head of this office would discipline his subordinates in a completely different way: He would specify a few people who he felt were not doing their fair share of the work delegated to their group in front of everyone and give them feedback. While he would give them constructive criticism, I feel like those who were singled out would often feel embarrassed and/or upset that he did not have a personal conversation with them instead. On rare occasions, some people would get really upset about this and others would have to comfort them which resulted in lower productivity.

In fact, in one specific situation, he mentioned two people who were two of the most experienced employees in that office, which lead them to get angry at him later in the day and caused a huge argument in the office. This led to a lot of time being wasted during the day since the manager and a few other people went into the conference room to talk it out in private. While I did not directly speak to anyone who was upset, that day everyone was irritated at the manager because they felt that he was trying to divert blame and did not manage the situation well. This could have just been out of bias to support their personal relationships with their friends though. In my opinion, I do not think he was too bothered about sustaining personal relationships, maybe because he did not think that doing so was in the best interest of him or them in terms of productivity. However, despite him perhaps not disciplining his subordinates in the best way, all the groups in this office were extremely productive and rarely missed their deadlines (perhaps his form of disciplining may have hardened them and encouraged them to work more productively to prove him wrong). In comparison, in the first example, the groups were not as productive and often missed deadlines due to poor planning and time management which I think was partially to do with the manager looking to sustain personal relationships and did not give the most critical feedback.

That being said, had I been in either managers’ position, I would not single out anyone in front of everyone else but rather have a private conversation with everyone in a group (if they are not working productively) to understand the cause and then have a conversation with the group as a whole to help provide constructive criticism to them as a group and provide some ways that could help them work more effectively (but eventually leave it up to them to figure out the best course of action). I think that while it is important for a manager to have a good relationship with all their subordinates, it should not get in the way of providing the most useful feedback, which is why finding the best mode of discipline is of the utmost importance.

Team Production and Gift Exchange

In my opinion, the three articles are trying to explain human tendencies when it comes to gift exchange. The first article talks about an observational experiment carried out on three-year-olds that identifies and attempts to explain situations in which they decide to or not to distribute their combined wealth (marbles) amongst themselves equally. The second article explains why people, specifically children, often feel that life is unfair if and when others get advantages. The third article considers the change in human behaviours when a moral obligation becomes an economic transaction. I think these articles try to prove that human beings act in selfless ways generally but when there are economic incentives to gain, such as increased competition, we tend to act in selfish ways.

An example that I have experienced that relates to such human behaviour is when I was working in a group for a group project, but each student was still graded individually, meaning even though we are in the same group, we have nothing to lose or gain by helping our other group members. This was for a gen-ed class, and our assignment was to write an essay about anything we have learnt since the beginning of the class. We would be given time during discussion sections to discuss each other’s essay topics and provide feedback to each other, but we were also meant to meet outside class since the time allotted in discussion sections was never enough.

However, since everyone just wanted to get feedback on their own work but no one was really bothered whether other people got feedback on their work, their would often be conflicts. For example, everyone would want to display their own work and get feedback on it first. What would then happen is that anyone who has already received feedback would not be involved in giving feedback later on, yet the people who were yet to receive feedback were always involved. I think a large reason for this is that if they provide good feedback to someone, they expect that person to do the same for them. While this is usually what would happen, the people who received feedback would for the most part not even pay attention to the discussion. Also, the people who received feedback would not bother showing up when we met again to give everyone else feedback. This happened right at the start, and when everyone else realized that others were doing this, they decided to do the same thing and by the end of the semester, most people were not even willing to give adequate feedback since they just wanted to get feedback themselves (and not ‘waste’ time in class by giving feedback to others). I think this shows that at the start there was competition (for time since there was a limited amount of time) but few realized it, but as people started to realize it, everyone started to act in selfish ways.

A more positive example that relates to the first example is when I was an intern this summer working as an automated tester at an IT company that provides tech consulting and business process services. I noticed that despite some members of my team being more efficient than others, nearly everyone seemed to be putting in roughly equal amounts of effort into their individual work. Despite having individual work, all assignments were group projects since nearly all assignments were too large to be done by solely one person. I noticed that everyone in my team would act in selfless ways and would consider all team members important and all team members would be applauded. An example of a selfless act in this specific team was some members who were more experienced in using the software would take time out of doing their own work to help other less experienced members, and would still motivate them. Looking back, this example is a good display of the altruistic nature of humans.

These articles display how humans can behave differently in different scenarios, sometimes using their altruistic instincts they gain from a young age and other times not. I noticed instances of each which I had personally experienced in life, specifically the first example, which helped me to understand how gift exchange works in teams and how humans may react under competitive circumstances.

Managing Future Income Risks

The prompt focuses on how we make decisions and how much they are based on considering the future possibilities or whether they are made because it seemed like a good choice at the time. I think the purpose of this prompt is to look back on decisions we have made and try to understand what caused us to make those decisions and whether we considered the uncertainty and risks involved in making such a decision. Many of the decisions I have made in the past have been based on the future and reducing income risks, whilst other decisions have been made simply because they seemed like a good decision at the time (sometimes regardless of the potential income risks).

While I do not have much of an idea of what job I will get, where I will work and what my salary will be, I have considered these when making decisions for my future. For example, when choosing my major when I was applying to colleges, I started looking at what skills are most sought after now as well as what skills are expected to be in high demand in the future (10 to 20 years from now). While I was already interested in Computer Science, this gave me a better incentive and more reason to opt for a major in Computer Science. I opted for Computer Science and Mathematics because I was always interested in Mathematics and I found out through research, that students who study Mathematics along with Computer Science are also highly sought after. Regardless of the demand in this field, I was taking a huge risk since I was going to be paying tremendous fees despite not knowing whether Computer Science was a field I really wanted to go in since I did not have much experience in the field.

After my sophomore year, however, I realized that I was no longer interested in Mathematics and decided to switch to Computer Science and Economics since I had already taken 3 Economics courses by that point and enjoyed them thoroughly. In this case, I felt there was a smaller risk than initially applying for a Computer Science and Math major. This was because I took a more informed decision this time since I was confident that Computer Science and Economics were both fields that I was interested in pursuing which is also increases my marketability for a job in the future since there is increasing demand and low supply of people with skills in both fields.

One of my friends who graduated last year applied for a major in Computer Science, but he chose that major because he felt that it was a growing field, despite not having much experience in it and not enjoying the experiences he had with coding. He struggled with keeping up with CS courses and ultimately decided to switch to a Civil Engineering major after his sophomore year, which was something he was always interested in, but had decided not to study it since he considered it to have fewer job opportunities after graduation. However, after switching majors he was doing much better academically and enjoyed his courses much more. After graduating, he got a job offer from one of the biggest automation companies in the world and is now working there. While he took a big income risk by changing his major, it worked out well for him in the end since he enjoys the work he does more than when he was studying CS. What I learned from him is that sometimes it is worth taking a risk to pursue what you really want to do, since he took a huge risk by doing so and it paid off for him.

Reflection Post

Before writing this post, my previous blog posts (and the prompts) seemed to address different topics and seemed to not have any connections whatsoever. The blog posts have so far addressed several topics: Transaction costs, Opportunism, Organization and structure of teams (and the features of high functioning teams), and transfer pricing (the idea of implementing a system of “Illinibucks”). Reflecting on my blog posts, most of them do not have many concrete connections with each other, but looking back, there are some instances or themes when I observed a connection. For example, when we looked at transaction costs and team structure, in my post about transaction costs, I spoke about working in a team during an internship where I felt there were transaction costs, which related to the discussion about team structure in which I talked about how group projects for classes work in different ways to teams in companies made up of employees. Also, the post about opportunism and Illinibucks were also similar in the way that opportunism was a concept that could be applied to the hypothetical system of “Illinibucks”, since opportunism would cause students to act in immoral ways, such as by misusing their allocation of Illinibucks. If Illinibucks were created, it would also create a black market for Illinibucks where students would buy and sell their Illinibucks for real money.

Initially, I did not completely understand how the prompts related directly to the course, sometimes because I did not understand the concept, although most of the time it was simply because I did not see any relation. For example, when I wrote the blog post about Opportunism, I did not quite understand how it related to economics at all, and specifically this course. However, after writing the blog post about Illinibucks and transfer pricing, I began to understand how opportunism relates to transfer pricing and how it explains human behaviour. By relating the concept of opportunism to scenarios I have observed in my life, I understood how the concept relates to several other concepts not only in this course but in economics in general. For other blog posts, the connection between the prompt and the course themes were very obvious, such as the blog post about team structure in which I was able to directly link my experiences to the themes of this course.

Thinking back on how I would write the blog posts, I noticed a few things that have changed. Firstly, I have become more confident about what I am writing about since the first blog post. At first I would be unsure whether the experience I was planning to write about was a good choice and whether I would be able to explain my thought process clearly to help the reader understand how my experience relates to the prompt and the course as a whole. Secondly, I started to provide more context in my post so that the reader can better visualize my experience and my point of view. In terms of the actual process, after the third blog post, I realized that I was having difficulties relating the prompt to the content of the course. Therefore, I since have started to read the prompt beforehand so that I have time to think about it rather than reading the prompt and then immediately start writing my response. Also, I started to write my response in different parts since I remembered that when it comes to writing long responses, this technique helps me since this way I have more time to come up with different idea to relate to my post. This is something I also do with coding assignments: I start early and work on it in small bits and pieces and sometimes I suddenly have a huge breakthrough which helps me to understand how to solve the problem.

I think there are a few things I would change about the prompt which I feel would provide more benefits to not only me, but to other students, the class and to the discussion as a whole. The key aspect of the prompt I would change is that I would try to make the prompt more clear when it comes to relating it to the course themes. As I explained, I struggled with this at the start of the semester and had the prompts been directly related to the course themes/contents, I would have better understood the concepts and fewer students, including myself, would misunderstand the prompt. Although this does not relate directly to how I would write the prompts, I think it would also help students if they could see sample blog posts about the same/similar concept since this would help avoid people misunderstanding the concept and creating an incorrect connection between the concept and their personal experiences.

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Illinibucks

There could be many uses of Illinibucks if a pre-specified quantity was granted to every student. If Illinibucks could only be used to move to the start of a line, some potential uses of it could be allowing students to register/waitlisted for courses early (for courses that are popular and have fewer seats than demand for the class), reserving study rooms, gyms or other facilities and moving up in the waiting list for advising appointments or office hours. Regardless of the different possible uses of Illinibucks, there would be many issues that implementing such a system would cause. There are ethical issues of such a system since some students may not even get the opportunity to register for some classes or may have to wait a long amount of time for advising appointments and office hours if they do not have Illinibucks left. Also, however, is the issue with pricing for the different services students can buy with Illinibucks, since if the administered prices are too low or too high, it could have adverse effects.

One way I would decide to spend my Illinibucks would be for registering for some classes early. While I would not have to do this for classes in my major since I would have priority registration regardless, I would have to use some Illinibucks when deciding what gen-eds to take. In the past I have not had issues with registering for a gen-ed course since I plan what courses to take well in advance of my time ticket for registration, but since other students will likely use Illinibucks to register for a course early, I would have to do the same to ensure I get a seat in the class. Another way I would use the Illinibucks would be for appointments and office hours, since the lines for both can get extremely long, particularly for office hours. Instead of having to wait in line for 1 hour (or possibly much more), I would be able to use Illinibucks to get help on my difficulties immediately.

However, there could be various problems with the administered prices. If prices are too low, then students would use their Illinibucks freely and this could cause serious problems. For example, when registering for courses, if registering early costs a very low proportion of the allocated Illinibucks, since it is at the start of the semester (when most students won’t have used any of their Illinibucks), there is a strong possibility that many popular courses will become full extremely quickly and the waitlist will also grow immensely, meaning that students who want to register for the course at their actual registration time ticket, will have nearly no chance of successfully registering for that course. Low prices would also mean that students may use their Illinibucks for reserving facilities and skipping lines for appointments/office hours with excessive frequencies. This will create long lines of students who used Illinibucks to skip the line or be put on the waitlist, which does not actually give any student an advantage since everyone is using their Illinibucks.

If administered prices are too high, it would mean that students may end up using their entire budget at once and therefore won’t get much of an advantage out of it. Although this does mean that students would be more wary of where they spend their Illinibucks, it also means that if they have already used up their Illinibucks, they will have to wait in a long queue every other time, even if they urgently need to skip a line for what may be a valid reason. Therefore, the pricing of services offered for Illinibucks would be a key issue.

However, another major issue would be the ethical problems with Illinibucks. While some students would see it as unfair, such a system would most likely also result in a huge market for Illinibucks where students will try and buy and sell their Illinibucks for real money. Since Illinibucks would not be transferable, the buyer will get the seller to use their Illinibucks for them. This would clearly benefit wealthier students and while students who are selling Illinibucks may prefer the system since they can make real money of it, this clearly poses an ethical problem. While some students would prefer the implementation of such a system, other students may not and the advantage all students gain will never be equal. Therefore, while considering the benefits of Illinibucks, due to the various problems it would cause, I think it makes more sense to not implement such a system.

Team Structure

While I have been part of many teams with varying levels of success, most of them were successful in terms of how efficient they were, although I would not define those teams as ‘successful’ in a professional manner or a ‘high-quality team’.

Most of the groups or teams I have worked in have been assigned to me for group projects for classes. As a result, group members do not have any sort of commitment to working relationships with other team members, which is one of the distinguishing characteristics for a high-quality team. Since most of these groups tend to have the structure of a circle network and have a lack of motivation and equal participation, they are usually inefficient and lack collective accountability.

However, I have been part of a team I would say is successful, which was during my internship after my freshman year, when I worked for a company that provides business solutions. The team I was working with were in charge of mobile app development, meaning they would work on building mobile applications for clients. The team had around 20 members, who were all permanent employees and most of the team members had been part of the team for around 2 to 5 years. While I was only part of that team for 2 months, I recall observing many characteristics of that team that relate to Katzenbach and Smith’s 6 distinguishing characteristics of high-quality teams.

The structure of this team was a one-boss arrangement, although since there were several sub-groups under the boss that had a team leader, the structure that this team had was closer to a simple hierarchy, since there were 3 middle manager (team leaders) who would report daily proceedings to the boss as well as ensure that daily goals are being met within their own groups. However, the structure was also similar to a one-boss arrangement in that every morning all 20 team members would have a discussion (including the boss) for half an hour when all members are communicating with all other members and the boss.

In terms of teamwork, I noticed that all the teams were communicating within their groups as well as with other groups when necessary, such as when they are stuck on a technical issue which they are unable to resolve. In such situations, there seemed to be a seamless flow in communication and teamwork amongst most of the team members. While it is hard for me to comment on whether the style and structure of the team was suited for what the team was trying to do, I would say that this team was reasonably successful.

According to Katzenbach and Smith’s research, we as a team had the capability to perform better since there were some characteristics that we were missing in order to be a high-quality team. I think the team I was a part of matches the first characteristic perfectly, since while the manager would talk about the targets that need to be met, he would leave it up to the groups to decide on their plan, while only intervening when he felt a group was not performing to its potential. Also, the goals the groups would make were achievable and optimistic, although those were not always met, which indicated a lack of meeting their performance goals. The team size was optimal since it included 20 members, which avoided the complexities which come with adding more team members whilst maintaining a decent enough team size to ensure tasks are completed when planned. However, I noticed that nearly all team members only had a background in the technical requirements, and most members had little to no experience in presentation and communication skills, which are two key components for at least some members to have in order to perform at a higher level as a team. Finally, I think that we as a team were committed to relationships with fellow team members since everyone was in a good relationship, and they were nearly always were able to divide up the work without any quarrels based on what each member would be most effective working on any given task.

However, that being said, there were other ways the team could improve on motivating individual members if they are not meeting requirements and not standing up to the expectations of the rest of the team. That is part of what being a good teammate means, since you should be helpful, motivate them and stand up for each other. Doing so helps create a personal bond that increases collective accountability and ensures that each member has a better morale and feels motivated and encouraged to work with the rest of the team in order to help them become a high-performing team.

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Blog Post 3

In everyday life, there are many times we act opportunistically and many times we decide not to despite having the chance to. Our decision whether to act opportunistically or not could be due to many reasons, for example not wanting to act unethically by taking advantage of others or taking advantage of the situation you may be in. There may even be several reasons for not acting opportunistically even when given the chance.

An example of when I had the chance to act opportunistically but decided not to was when I had the chance to take answers for an assignment for a class from one of my friends who was taking the same class with me during my first year. Since I was struggling to complete this assignment, I thought I should ask him to send me his answers since the assignment was due the same night. I had the chance to act opportunistically in this situation because I knew that he would say yes since we were friends, and I would have been taking advantage of him in that way. Finally, though, I decided not to act opportunistically in this scenario and did not ask him for his answers. However, my decision to not act opportunistically in this scenario was not based solely on one reason or decision. One reason I decided not to ask him for his answers and copy them was because it was unethical, but what affected my decision more significantly was the fact that I did not want him to get caught for cheating because he tried to help me.

An example of when someone I know had the chance to act opportunistically but he/she decided not to was when a friend of mine thought about stealing some snacks from a store a couple years ago. He finally decided not to because it was unethical but more importantly, he thought that if he got caught then there would be harsh consequences. Similarly to why I decided not to act opportunistically, he decided to act in this manner because of several reasons, the main one being consequences, but also partly due to the ethical implications, religious reasons (in other words, wanting to be a good person) and the fact that the food was not worth much.

Our decisions about whether we act opportunistically or not are not based simply on one reason, but rather a multitude of reasons. For example, whether taking advantage of a specific situation yields a non-insignificant advantage, whether we consider the ethical implications and the consequences of doing acting in such ways.

In my opinion, I do not think that every such instance amounts to the same thing regardless of one’s explanation for not acting opportunistically. I think every such instance is different, which is due to no small part of the reason for doing so. For example, imagine a situation, similar to that above, in which someone sees an opportunity to steal cash from a store. If one person (let’s call this person Alex), decided not steal because he thinks it is unethical, but another person, (let’s call this person Ben), decides not steal cash because he is scared of the consequences, I see those situations as different due to the reasoning for not stealing. This is because if there were no/lenient consequences, Ben would probably still steal, whereas Alex would not. The only reason the outcome was the same for both Ben and Alex was because Ben did not want to get caught and therefore decided not to steal. This is a specific and basic example, but in my opinion, this would apply to any situation when anyone has the chance to act opportunistically but decides not to.

Blog post 2

Over the last several years, I have had many experiences being in RSO’s as well as working in organizations as an intern. Every organization I have worked in is different in its own respect, whether it be the organizational structure, the size as well as the companies’ cultures and sub-cultures.

During the last summer, I interned as an automated tester at an IT company that provides tech consulting and business process services. When I joined the automated testing team, the team had a major backlog on their assignments and therefore my manager was busy with meetings and overlooking his subordinates, who were also busy with their own work. Therefore, for the first week, I did not get much work assigned to me and was often given vague assignments such as learning to use a software through online tutorials. During my second week, when I would go to my manager and mentor to check if there were any assignments that I could work on, they would be unable to assign me tasks since they were not aware of which tasks were already being worked on by other members of the team. This seemed to indicate that perhaps my manager was not communicating sufficiently and efficiently enough with his subordinates on tasks they were working on and deadlines for those tasks.

However, due to the workload, during my third week, many people were hired as temporary employees (for 3 to 6 months) and joined our team. As a result, they had to go through practical training for a week (they had already done on-site training for 1 week prior to joining). Since the other members part of my team had a lot of work on their hands, they were not able to communicate with the new employees effectively. This not only led to confusion about what they need to do to complete their training, but also made it difficult for the new employees to become familiar with their fellow team members and vice-versa. After this, there was still a lack of communication since the new employees were not being given tasks and would often be sitting idle since they would only be assigned small tasks for the entire day, and therefore would only work for around 1 to 2 hours despite being paid for the full day.

This is an example of a transaction cost to our team as a whole. Since there were several new employees joining our team, it was initially difficult to get used to the change. The change also meant that when both groups (new employees and employees who were there prior) struggled to work together since there was a lack of familiarity about what task should be assigned to who – based on their skill set and personalities. Another transaction cost of this situation is also to the business, since employees were being paid despite the organization not getting any return from them. However, since this is a huge company with annual revenues in the billions, this is a fairly insignificant cost, although on the larger scale it shows that there may be inefficiency and lack of communication in other parts of the organization. Also, after the first week of the new employees joining, despite the initial transaction cost, our team begun working more efficiently and became significantly more productive.

A transaction cost for me was when I was not able to communicate often with other members of my team because they were busy, and I did not have work assigned to me during my first two weeks. Regardless of the work me and my fellow interns were doing, this was barely a transaction cost to the organization since I was doing an unpaid internship, but it was nonetheless a transaction cost.

Blog Post 1

Maurice Allais was born in 1911 in Paris, France and later became a famous French economist and physicist who primarily studied macroeconomic theory and policies and helped pioneer the field. He was the first ever French citizen to receive the Nobel Prize in Economic Sciences, which he received in 1988 for his contributions to the theory of markets and efficient resource allocation. However, he did not get as much credits as other economists because he was committed to publishing his findings only in French rather than also publishing translations in English. As a result, there is a belief that Allais’ impact on economic theory would have been much more significant had his writings been in English. Nonetheless, Allais’ earliest writings have contributed significantly to what is now considered the generally accepted economic theory.

Apart from this, he is also known for his discoveries in utility theory, specifically decision-making under risk, in which he discovered a paradox about how people behave when choosing between various risks. This paradox is now known as the Allais paradox. Using this paradox, Allais was able to show that John von Neumann and Oscar Morgenstern’s widely accepted theory of maximization of expected utility was contradicted based on observations Allais’ had made about how humans behave when taking important decisions with risk involved.

Many of Allais’ observations and discoveries have been applied to the real world, for example Allais’ knowledge in the field was applied to helping set efficient prices for France’s many state-owned monopolies. Allais and his work have also been cited as a key source of inspiration by several young French economists and this will most likely have an immense impact on the field of economics in the coming decades. Allais has also had a huge influence on market theory by trying to generalize it since there are many dynamic aspects of the market in reality.

Allais’ work has been extremely significant in developing the field theoretically and understanding the way the world and humans’ function practically. Additionally, his work has also contributed via the many ways that his theories have been used in the real world. Apart from his considerable contributions to economic theory, Allais’ has also done research and published studies in relation to history and physics, specifically geophysics. For example, Allais carried out research about the behaviour of pendulums (their angular velocity) during a solar eclipse which yielded an unexpected anomalous effect. This effect is now known as the Allais effect. While proceeding experiments and research was carried out by several other scientists regarding this effect and have yielded mixed results, this shows that Allais’ impact outside the field of economic theory is still substantial.

Before taking this class, I did not know much about Maurice Allais’ contribution to field of economics, although I had come across his work in the past, specifically experiments he had performed in the geophysics field.

While most of Allais’ work does not have a direct link to the economics that will be discussed in this course, parts of his work have an indirect link and would be interesting to consider in discussion in relevance to any organization and its efficiency. Parts of Allais’ work can be applied to this course specifically and is relevant to the economics discussed in this course. Firstly, a large chunk of Allais’ finding concerns understanding human behaviour, and while it does not directly relate to the economics discussed in this course, parts of his study may be useful in understanding how employees would react in certain situations and expected behaviours when it comes to taking decisions involving risk, which is common in any organization. Secondly, Allais’ research and insights on setting efficient prices for state-owned monopolies could be interesting case studies to look at since it is at work in real life in many of France’s such organizations. Therefore, the effectiveness of such price setting measures and techniques can also be evaluated.