Sunday, September 15, 2013

Reactions to First Real Blog Posts

The bulk of the class did submt something interesting to read and react to.  If you have still not made the post that was due on Friday, I will read and comment on any submission that comes in until early afternoon tomorrow.  Also, a few people posted but on the prompt for next Friday.  That's ok.  Next time, just go back to the first prompt.

I promised an OPML file for the class, so you can track what the class is doing with blogging.  I will deliver on the promise but probably not till tomorrow.  I discovered that the reader I'm using makes OPML files but without content (meaning there is a bug in the software).  So I need to recreate the student blogs in another reader.  That will take a little time.  I'll get it done, but probably not till tomorrow.

Let me get to the posts themselves.  Reading these and commenting on them is the closest thing I get to what feels like teaching.  Lecturing is not teaching.  I get very little feedback of what is sinking in and what bounces off the surface when I lecture.  For the pure joy of teaching, I would much prefer to have one-on-ones with each of you.  Then when you provide your current understanding of the subject matter, I can react to that.  The blogging is a reasonably good substitute.

These first posts illustrated how students in the class are still getting acquainted with the concepts and are not yet really understanding them.  That's fine.  You learn from your mistakes.  In particular, on transaction costs, I assume it is a new term for each of you, most of the class is really not understanding what it means.  We will discuss this more on Tuesday.  Here let me try to clarify the meaning.  There are also production costs.  Transaction costs and production costs are distinct.  Most of you when talking about transactions costs were counting production costs as well.  And many of you noted that opportunity cost of your own time.  Any economic activity that requires labor input will entail somebody putting in the time.  That itself is not evidence of transaction costs.

Let me give a little question here by way of example to illustrate these ideas.  If I give the class an exam there are in essence three separate activities, each which take my time.  The test must be written ahead of time. The exam must be proctored while the exam is ongoing.  And then the exams must be graded afterward.  Which of these are production cost and which transaction cost?

The writing and the grading are the production costs.  The proctoring is a transaction cost.  If students were known to be honest ahead of time, the proctoring would be unnecessary.  The proctoring aims to encourage honest behavior by the students but it does nothing regarding producing a graded exam.  Likewise, in air travel what the pilots and flight attendants do are production costs.  What the TSA does is a transaction cost.  Monitoring isn't the only form of transaction cost.  Coordinating is a big part of transaction costs. But not all activity that management does is coordination.  Some of what management does is production cost in that it supplies a necessary input in production.

These distinctions are subtle and it takes some time to practice with them and get comfortable using them.  One way to get at this is by asking if the person being managed were instead a robot, would the cost still need to be incurred.  If the answer is yes it is more likely a production cost.  If the answer is no it is more likely a transaction cost.

Much of the class wrote about RSOs or Greek Houses, which was to be expected.  And there was some discussion of student members acting in an administrative capacity to run those organizations.  But most of those who wrote this way didn't ask the core economic question.  Is doing this something people want to do in itself or not?  Remember the very first day of the semester when we talked about doing cleaning in the apartment and we asked what made people do their share?  The same sort of question needed to be asked about the administrative work.

Then many of you wrote that things didn't go as well as might be expected.  There are multiple possible explanations for this.  One is that people in the positions of leadership, though earnest, didn't know how to do their jobs well.  When this is the case it typically means they weren't well trained or didn't have enough prior experience to warrant having the position.  Another possible reason is that leadership, while knowledgeable, didn't put in the requisite time to coordinate.  Some of you wrote about wanting top down mandates, but more democratic approaches can work.  However, they do require that those participating understand what their roles are.  That too may require some training.  Then, a third possibility is that the structure itself is flawed and even with a serious effort only mediocre outcomes would emerge, at best.

Let me turn from the economics to the writing.  The big deal issue here is that you are describing a situation that you know and I don't know.  There is then the issue as the writer as to how much information you need to provide to give me a reasonable picture of what is going on.  Mostly the error was on not giving enough relevant information.  This is not an easy thing to learn.  It will take you some time to become proficient doing this.  My questions are meant to prod you into taking the task seriously.

Finally, on some of your posts I told a personal anecdote.  These were meant to show that I identified in some way with what you wrote about and experienced something similar.  In addition, sometimes I did this to offer a different interpretation than what you gave in your post.  In social science one can usually identify multiple possible explanations for why something happened.  Hypothesis testing is about identifying the more likely explanation.  But we don't always have enough data to test hypotheses.  So, instead, we argue and entertain plausibility that way.  It may be more art than science.  But it is still very useful in trying to understand what is really going on.

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