Excel Homework on Shapiro-Stiglitz Efficiency Wage Model is due Wednesday evening.
One caveat on shirking - don't take it too literally. It makes the most sense for physical labor where the work is painful or for repetitive work that is "mind numbing". It makes less sense as a defining characteristic of "knowledge work." Professionals typically don't shirk. The moral hazard issue there is not that professionals do no work at all, but rather that they want to define the work that they do, while their manager has other ideas. The "alignment problem" is where moral hazard in knowledge work is likely to manifest. Shirking per se is not the big deal issue. We have modeled it as if it is.
The last blog post is due Friday. In addition to the prompt, I think it useful to consider that post from something we discussed the first week of the semester - it is your human capital. Has the course given you some new ideas about how to extend your human capital and better maintain the human capital you already have. In particular on the blogging, do you think you are now capable of writing your own prompt and in offering comments/critique the way I've done during the semester. Could you apply that to other courses you will take in the future and/or to paid work you will do after you graduate?
Personal Reputations - An Example: Professor Arvan when he was a student
Found with artifacts from cleaning out my parents' condo.
The Generation Gap
An alternative view from several years earlier.
Page from High School Yearbook about It's Academic
email response from Mr. Conrad.
From: Steve Conrad [mailto:email@example.com]
Sent: Monday, January 05, 2009 12:43 PM
To: Arvan, Lanny
Subject: Hi from Manhasset
Sent: Monday, January 05, 2009 12:43 PM
Of curse (that WAS a typo, but I think I shall leave it there) I remember that game of TWIXT. My nature is to play games to win, so your win was not with my assistance. You just plain old beat me. You actually caught my business Web site (Math Leagues and Math League Press) just as we are preparing to sell it. We began offering math contests to schools around the country in 1975. Were it not for that, I do not know how I would have sent my sons to the schools they attended (Harvard and Princeton). They are identical twins, as you must recall, and they are both mathematicians, it so happens. Brian, a math professor at Stanford, and Keith, who teaches math at the University of Connecticut, were surrounded by math as they were growing up, so . . . :)
You must remember James Kraft, right? One of my sons was giving a math talk to a group of mathematicians once and James Kraft walked up to him after the talk and said "I was in your father's algebra class when he was called to leave because you were born."
Brings tears of joy to my eyes. I too recall that very well.
I had lunch with Robin Block over 4 years ago. After retirement, I returned to playing bridge. I had dropped out of college and was going to be a professional card player when I decided to return and lead a normal life. Anyway, after retirement, I returned to bridge, and my wife and I had lunch with Robin when I was playing in the North American Bridge Ch ampionships when they were held in New York City in the summer of 2004. These days, I am tournament chairman for Long Island, and I spend almost half a year each year teaching bridge on cruise ships (I teach only when the ship is at sea -- when it is in port, I go ashore with the passengers).
So I see you are in academia. What was your academic field? College administration? :)
Conclusion: Since personal reputations are held by others about that person, that reputation might very well vary by the holder, who brings his or her own memories into it.
Organizational Reputations - An Example: The U of I
Professor Arvan's first encounter with the U of I when he was in High School
New Yorker's view about everything west of the Hudson.
1. What movie is this from and what does it represent?
2. From a Saturday course on Fortran.
3. A few years later when at Cornell - a friend of a housemate was going to the U of I for grad school to study?
......... computer science.
Conclusion: The U of I has a reputation for being good with computers. This was the reputation Professor Arvan had of the place before he came to the midwest.
Some years later after arriving on campus
Undergrad Library built underground
Department of Ag Econ
Conclusion: The U of I has a reputation for being the Land Grant College for the State of Illinois.
Other views of the U of I
What is the movie?
Scene from later in the movie:
Now a view from the world of sports.
Question: Which if any of the above are part of the U of I's brand?
More generally - What part of the organization is responsible for the organization's brand? the organization's reputation?
Does it matter for our course that the Web site is not in the illinois.edu domain and lacks I-mark?
Branding for cereal aimed at kids.
What about cashing in on the reputation?
Example - student backpacks. (Good brands? Brands to avoid?)
Different example - student laptops? (Same questions.)
The economics of reputation and cashing in
Experience goods versus inspection goods. (Nelson) There is no seller moral hazard with inspection goods. There is with experience goods. What encourages seller to produce good quality?
Klein and Leffler - Quality Assuring Price
The economics of reputation from an Industrial Organization perspective
1. Encourage customers to be loyal.
2. "Steal" customers from a rival.
3. Bring new customers into the market.
Competition between firms in an industry is muted if most of the customers are loyal and there are not a lot of new customers to compete over. Conversely competition between firms is fierce if there is a lot of business stealing and there are many new customers entering the market.
There can be a tension between having too much competition in an industry and maintaining a quality assuring price.
Student Blog Posts on Organizational Reputation
For the most part the posts focused on a few sectors of industry.
1. Sporting Goods (Nike, Addidas)
2. Financial Services - Big Banks (Chase), Local Banks, Credit Card Companies (Discover), Investment Services (Merrill Lynch).
3. Technology Companies - Facebook, Google, Apple - from perspective as consumer, also as potential employer
4. Misc - Amazon as virtual Walmart, A Conglomerate for Auto Parts.
Let's first ask whether the reputation that was described is shared by other holders of the reputation. Or do they see things differently? How do you know?
Next consider these from the IO perspective, then the moral hazard perspective.
Then let's ask whether merger or takeover of a company impacts its brand and its reputations.