Some Final Thoughts

To get down to it, this course was truly a breath of fresh air. Up until this point in my economics career at the U of I, many of the core courses- while rich in theory- had not necessarily tapped into economics on a scale of reality in tune with 20-something college students. Your personal insight into your experiences in management offer no only fascinating but tangible examples of organizational economics in action. The marriage of theory and "teaching-by-experience" was rather enlightening. In addition blogging about concepts in organizational economics as it applied in our own experiences was an approach to economics I had never considered. Understanding and applying moral hazard, triangular principal-agent relationship, and reputation in the context of my own life has been a miniature introspective journey, and has taught me to consider economics in an entirely different light.

One particularly challenging aspect of the course was the use of insurance models. This has been my first exposure to insurance models in general, as well as in to context of adverse selection and screening. It was definitely a grind pushing through the excel homework and come test time, my ability to apply insurance concepts in an alternative format proved fatal. In the future, more step by step modeling of insurance would be incredibly helpful as well as exposure to models such as this in different formats that a student may encounter on an exam.

 Although on a more triumphant note, this course has

exposed me to a wealth of economic models, such as insurance that I had yet to work through and understand.  It has been a slow and arduous process, trying to fully wrap my mind around the mathematical models and to have the ability to describe their implications, but I have strengthened those skills immensely since day one- and that is progress worthy of noting. For posterity may be to their advantage to provide a breakdown of models; for example, as in the bargaining model, to have a chart of sample scenarios and their possible outcomes to enable students to better understand mechanism in which buyers would be better off to lie or report truthfully.

This class has definitely been one of the most unique, structurally speaking, but this is all for the better. Your approach to instruction is remarkable, and without a doubt created an open and welcoming atmosphere in the classroom, this you should never lose. I find that your teaching persona truly reflects your respect for students as well as sets a standard of performance for the class that is really based on individual effort and performance. Mirroring organization models discussed in the course, the lasting benefits a student will derive from this course comes from their individual effort and their dedication to participate, complete assignments and engage themselves fully- and isn’t this how the real world works?

I Do Give a Damn about my Reptuation

When I worked as an RA I developed a very distinct reputation with my co-workers and the residents of the hall. I began solidifying a persona and building my reputation the very first day of summer training. Throughout training I was a hardcore social butterfly, I made sure to network as much as possible and to make the most of this time to get to bond with my co-staff members especially. I was an eager beaver to say the least when it came to paraprofessional life, I was the girl who volunteered to do everything and made an effort to be there to help everyone out- at the time I felt that my enthusiasm would be the best way to establish myself as a staff member really “in it to win it” if you will. I put my best foot forward and hope others would do the same. My main goal was to build a very high rapport with my coworkers and to motivate all of us to think of ourselves as a team or a family unit- life as a paraprofessional is no cake walk, I needed to be sure I had people who had my back. To continue to solidify my reputation I would go out of my way to really treat people well and to lend a hand wherever possible. We had “theme days” such as ‘beach day’ and I was the go to woman for props and costumes, I helped RAs complete bulletin boards and door decorations for their floor and I would volunteer to do die-cuts for other staff member. I even planned and organized a small birthday party for one of my co-workers over the summer training session.

The reputation I had established only blossomed as the year went on- sometimes for the better and sometimes for the worst. As I’ve discussed in previous posts, I’m a die-hard idealist, and as the saying goes I was definitely born in the “wrong decade”, the 1960s and the hippie era would have been much more my cup of tea, then the here and now. I believe in honest to goodness altruism, and I genuinely just like being there for people, whatever their needs may be- often I wonder if I have and overzealous need to always be the superhero, the “fixer”, and the confidant. No back to the main attraction… I would really go out of my way to do something if I were ever asked a favor, often to my own disadvantage. In staff meeting, and when planning building wide programs I always volunteered to fill the positions that no one else wanted, and in every way imaginable I would go above and beyond the call of duty for both my residents and my co-staff. Essentially I was the mom of the residence hall. I made soup for co-workers when they were sick, if my residence asked me for anything I would almost drop what I was doing to lend a hand, and I once even accompanied a resident to the hospital to be treat for strep, because she had no one else to go with. I wanted to be the nurturer and the “mom” and both my staff and the residence came to see me and treat me that way.

As every rose has its thorns, this reputation did not always work in my favor. In my efforts and from all the good that came out of this (close friendships and the opportunity to make an impact on someone else’s life, even in a small way) there was a darker side to the environment this reputation created. The atmosphere I created was a perfect storm for opportunism. Several people really used me, knowing that I would help “no matter what” led some of my residents and co-workers to become very expecting and demanding. As well, trying to be the perpetual superhero, was leading me to burn out relatively quickly. I wanted to stray from my reputation many times. Usually when I wanted to throw in the towel, I would tell myself to suck it up and play like a champ. If I had said yes to someone to do something I have to follow through- even if it’s a snappy and disgruntled resident who asks you to investigate the case of her missing bed cover or and then figure out a way for her to be refunded for if it if it cannot be recovered, and you have 2 exams the next day, 5 bulletin boards to make and cookies to bake for a birthday. I would figure out how to make these situations work no matter how ludicrous or how much it put me out and deterred me from taking care of my own life. I had ‘cashed in’ though a few times, the immediate gain usually being free time, sleep, a night out on the town and in those moments I would freeze that part of my life.  These days would be akin to something around the line of John Lennon’s “Lost Weekend”. This momentary, but complete shirking allowed me to distress and regain sanity, although the return to real life after sometimes was a bumpy ride. For very obvious reasons, ignoring any aspect of your life even for a day, sometimes does come with consequences.

Principal-Agent Triangle

              I have witnessed a triangular principal-agent model in the workplace. I have a sibling who recently completed a Co-op internship with DuPont Pioneer.  My brother is currently an agricultural engineering student at Iowa State University, although his internship was located at the University of Illinois. He engaged in soybean research developing genetically modified strains of seeds working under the auspices of a professor based in Iowa. My brother was caught in a principal-agent triangle because he had to work on projects given to him by his professor back in Iowa, while following the direction of managers and other head researchers at DuPont.

                Frequently my brother would talk about how what you might call “serving two masters” can create a very stressful and hectic work environment for the middleman being pulled in both directions. He often had to complete extra work, juggling dual employers and different systems and standards in research procedure. My brother also discussed that his relationship with the supervisors in Illinois was much different and much more distant than the relationship between the supervisors and other interns, because he was conducting research for an out-of-state professor. He particularly emphasized that the supervisors would often favor their University of interns over those from other colleges.

                If the two principals didn’t see eye to eye on what counts for good performance, the research supervisors would have a phone or Skype conference to come to a compromise and resolve the issue, or what would happen more often than not, my brother was expected to uphold the performance standards of each principal depending on which research project he was working on a given day or week. There are definitely many “paths to the same mountain” as Buddhists would say, when it comes to resolving tension and some methods are better than others. In my brother’s situation the better, more efficient resolution mechanism occurs when the different supervisors compromise. As well, in my brother’s work situation it would be a failure if he chose to serve one master while ignoring the other. In choosing to favor one supervisor over another, my brother would risk losing his internship if he only sought to meet the needs of the supervisors in Illinois. As well, if my bother chose to meet the needs of only his professor in Iowa he may create an undesirable work environment or could threaten his opportunity to network with the researchers in Illinois at DuPont Pioneer and could estrange himself form making corporate contacts.

Not All Group Production is Created Equal

             My freshman year at the University of Illinois I was assigned to a group project in an intro honors philosophy course. The project required the group to prepare for and participate in an in-class debate against another group of students; each respective group representing an opposing ethics theory/ ethics system. This group project really stands out in my mind as one of the most positive experiences I have had in a group-project setting. To this day I am still keep in contact with my group members. The group all clicked automatically in during our first group meeting planning our arguments and rebuttals for the debate. I remember our first group meeting being incredibly unproductive, but in terms of group bonding, we excelled. Our groups had been randomly assigned, and this project was for many of us the first opportunity for all of us to really socialize with one another. I think this benefited the outcome of the project because no one in the group had major predispositions about the other members’ work ethic or skill etc. There was no need to be concerned with cliquish behavior either, as we had all become acquainted for the first time. As well the group was very gender balanced there were 2 males and 2 females in the group.

                I will call my clan for this group project the “ethical environmentalists”, as this was the position we were arguing in the in class debate. The element that initially broke the ice for our group was the mutual agreement that we were all “lost at sea” if you will with this class, we could all level with one another that this ethics was one of the most abstract and challenging classes we were taking that semester. Connecting on that one element right off the bat already had us all making future plans to form a study group before the next class exam.  Another factor that benefitted the group, and made the dynamic so positive was that we were all James Scholars, as members of this honors program, there was an automatic understanding that academic success was shared priority.

                

                Beyond this the group was able to achieve a really good balance between productivity and socialization. I don’t know if I have ever laughed so much while working on a group project, except for this one. We had inside jokes, would share with each other our crazy, hilarious or embarrassing college stories, and we even had a competition to see which one of us would be “accepted as a friend on Facebook” after we all had sent our professor a Facebook friend request. We were all very comfortable goofing around. Yet, when it came to crunch time we all pulled through on our respective end of the project. We pulled together our strengths to bring the project together. We had one group member who took the initiative to organize the group he would set goals and deadlines that would guide the completion of the project. His leadership was fundamental to the operation of our group. As a group we divvied up the work and did the majority of the “hard work” separately and then would come together to show our progress and we finally met to put the final touches on the project. Separating the work into individual components that we were each responsible for, and then holding each other mutually responsible for completing the task maximized our productivity and efficiency and then allowed for “group bonding” (if you will) when we met- an overall recipe for success.

                Not all groups, and group projects are created equal, any college student can account a horror story of a group project gone very, very wrong. My own tale comes from my experience as an RA planning building wide programs with a staff of 10 other Residential Advisors. The program was geared toward social justice education and was called “Little Restaurant of Horrors”. The basic premise of the program of the program was that the RA staff would cook and serve a spaghetti dinner for the residents who came to dine at the “Little Restaurant of Horrors”, while the residents ate RAs would act out common scenarios of prejudice and intolerance that a college student may encounter, following each scenario would be discussed and debriefed with audience of residents.

                  I was the central coordinator for the program. When the program was first being discussed the overall sentiment among my staff members was one of eagerness and excitement. Tasks for the program were divided up in and assigned to committees of two to three RAs, such as food purchase and preparation. The actual event was a success, but the preparation leading up to the event, was nothing short of mayhem. Part of the downfall in the organization of the even was in my managerial style. I gave each committee a general idea of what their responsibilities were and sent them on their merry way. I trusted that each committee would follow through with their responsibilities without setting deadlines or checking in on the committee’s progress until right before the event, this led to a last minute scramble on my part, with some assistance to fill in the gaps where the committee’s had a fallen short. 

                  Another major downfall of this event was the lack of commitment to the program from several key members of the staff; on the day of the event several people arrived late to set up, while others goofed off during the event- this individual ended up dropping several liters of drinks which erupted like Mauna Loa all over him and the staff kitchen. There seemed to be a general lack of dedication to the program- so staff members just did not come to understand the amount of work, and coordination and cooperation a program of this magnitude would require. Some of us came ready to give it our all, while the rest hung along the sidelines thrusting the majority of the work onto just a few individuals. 

Trials and Tribulation in Team Production

Just this fall, I was a co-chair of my sorority’s annual fall philanthropy Mud Olympics benefiting the Juvenile Diabetes Research Foundation. Mud Olympics is a team event where Sorority and Fraternity chapters and RSOs compete in events in mud against other teams, including mud-tug-of-war and mud human bowling. Both the organization of the event and the actual execution of the event required major team production, starting first from the planning committee and extending to the women of the sorority. The relationship between team production and reward is a bit of a far cry from the psychology experiment recounted in the New York Times article, primarily in the sense that the reward of the philanthropy event is more intrinsic, intangible, and altruistic in nature.

                I want to discuss of the planning process for the event. I as well as three other members of my sorority ran for, and were elected into our leadership position to organize the philanthropy Mud Olympics. In essence we were the hub of the production team directing and guiding other members as we prepared for the event. Huge levels of collaboration were required in the planning process, to coordinate the designing and ordering of t-shirts, to advertise, and register teams, as well to design the relays and obstacle races that would part of the event. Lacking a direct incentive and relying on individuals to hold true to their commitments, the organization of the philanthropy event was a challenge. I along with one other co-chair ended up bearing the brunt of the work in organizing the event while our other co-chairs did not uphold their responsibility as they should have. Much of this was due to lax communication and minimal initiative taken by the other co-chairs. The results of the imbalance, really did affect how the “reward” was distributed, because my co-chair and I had been the main contributors before the event to place, much of the work required to wrap up the even after it had occurred was assigned to the other co-chairs. Whereas, had the efforts to put on the event been equitable at the start, the work required post-philanthropy would have also been dispersed more equally.  My and the other co-chair who was my partner in crime- who had busted her butt alongside to make this event a success, while our other co-chair remained mostly in the periphery- were not inclined to “share the spoils” after the event because the other women had not upheld their end of bargain in the team production. It was their “just desserts” to take on more of the work post-philanthropy.   

                On a more general note, it seems to me that the benefits of collaboration and collective efforts are most prevalent in situation where and individual cannot complete a tasks single-handedly, and when the rewards or gratification are material, or immediate. For example, I find that groups of individuals are most willing to make a team effort and “share the spoils” in activities such as in sports or when each member possess a special skill that other members depend on to complete the given- this matches the results of the experiment.

Illinibucks: Buying Tme

Illinibucks may be useful when incoming freshman students are first selecting University Housing, rather than utilizing a random lottery system as is currently in place. Illinibucks may also be a major help whenever students are in a bind and need to get somewhere very quickly such as to cut to the front of an extremely long line at the grocery store or when running late to class to take the fast lane to the front counter when you need a caffeine fix and there’s a line out the door at a coffee shop.

            My ideal Illinibuck would be used to extend time and deadlines. Throughout my college career I have struggled to manage my time efficiently and effectively. To be quite honest, I’d prefer that the days we 48 rather than 24 to fit in more activities, classes, research, a job, that swing dance class I have always meant to take. Per se I had an incredibly hectic week, and was scraping by just barely finishing assignments, forced by the t-me crunch to do the bare minimum just to fit every class, extracurricular and life commitment in to the narrow bounds of time! This epic mental battle of the quicksand hour glass- racing against the clock on a day to day basis; at some point or another this is every college student’s reality! We want it all. Could you blame us though? During the college years the world is truly your oyster if you choose to take the initiative, strive for it, and make so. Moving on from that slightly impassioned rant, the power to control time and deadlines, to buy extensions on homework or an extra day to study on an exam could make all the difference in a college student’s life. Rather than acting as a direct route to the “front of the line” using Illinibucks to schedule your time would allow you to get ahead in terms of the “quality of work” and would enable you to truly put forth your best efforts when “lack of time” is your primary adversary. In the realms of test taking and exam preparation, buying that extra day could easily mean the difference between an “A” and a “D” and give the student a opportunity to excel in the class as well as to devote enough energy to other commitments.

            If the administration price was too low, students may approach the Illinibuck system opportunistically to their short term benefit and detriment in the long run. In the case of buying time on exams and homework, Illinibucks could encourage students to slack or promote the formation of habits of procrastination. Cheap Illinibucks would remove the pressure to excel and work hard and destroy the entire purpose of deadlines to motivate student progress and create academic stagnancy. If the price of the Illinibuck was too high most students couldn’t afford it and its benefits would only be reserved to the wealthier students. This unequal distribution may build negative sentiments in the student body and give wealthier students and unfair advantage academically over those who could not afford to “buy” and extended deadlin

OPPORTUNISM: AN ALTRUISTIC SPIN

Opportunities… life is replete with them- some golden, some missed, some once in a lifetime. With opportunity comes the opportunism a chance to “take advantage of a situation” can carry either a negative or a positive connotation depending on the context in which it is set. Unethical “opportunism” implies manipulation and making unfair gains, while “opportunism” may also reflect a sense of entrepreneurialism and initiative when one takes advantage of a situation.

 In reflecting upon this question, I often find in my daily life that I strive to act as selflessly as possible, which in essence is the antithesis of “opportunism”.  I approach life with a perspective that I would rather give than receive, and basically, do everything within my capabilities to support and help out the people in my life. I’m always willing to volunteer to do the tasks that others do not want to and am more apt to go out of my way to do something for someone else to avoid “putting them out”. The above anecdote about my personality is not in any way supposed to come off as self-righteous or hubristic. I am a pushover and a people pleaser, more often rather than not the disadvantaged party in cases of “opportunism”. Seeking to live a life based on altruism carries numerous challenges and obstacles, both from the outside world and intrinsically.

I chose to act un-opportunistically usually in the hope that the good deed will be repaid someday or to uphold morals or even to gain that sense of pride and self worth when doing “the right thing”. I often think people act out against “self-interest”, because their personal conception of “self-interest” may not lie solely within themselves. Human beings-the social creatures that we are- often invest what we consider our version of “self-interest” in the well-being of others around us. In another sense, what I’m posing is that opportunistic behavior may need an expanded definition. There may be a way to reconcile both opportunism and altruism. It is perfectly possible for one individual to deny and opportunity in the interest of the betterment of another person, operating so that another person can ‘take advantage of the situation’. Rather than controlling a situation for their own individual gain, someone may act to “open a door for” or “give a boost to” someone else. This still implies taking advantage of a situation, but with altruistic intentions. The personal benefit derived from this comes in service to another person. 

Organizations: The Saga of University Housing

     One of the largest and most complex organizations I have been employed by is University of Illinois Housing. Last year I had worked as a Residential Adviser (RA). My experience as an RA was one of the most challenging yet, most rewarding in my college career. 

     I had worked with a very diverse staff of 10 other college students and a central Residential Director who served as a staff manager and the liaison to upper levels of University Housing Staff.  University Housing is a highly decentralized institution with multiple tiers of administration from the main director of University Housing to student paraprofessionals.  The institutional hierarchy of University Housing was incredibly extensive. University Housing was very unique in the scope of its activities, providing residents of the University not only with a residence hall, but also affiliating with dining services, technological and academic resources, facilitating student employment as well as renting out available spaces in residence and dining halls for events and meetings.  

     Residential Advisors served as the face of University Housing. As a residential advisor I was trained through the Course EOL 199 and three weeks of onsite training. Residential Advisors act as a mentor, emergency responder, and academic advisor for student residents of University Housing.  As an employee of University Housing, I gained very valuable insight into the process and daily operation of such large and important University of Illinois entities. Decentralization of Housing was crucial to effectively meet the needs of University of Illinois students. Yet information asymmetries often enhanced the difficulty of the position of an RA.  The dispersal of information from upper levels of Housing was often slow coming to RA who were the primary actors dispersing the information. I often found it challenging to enforce rules and regulations dictated by the administration University Housing due to incomplete information. As well, due to the massive structure of Housing it was often a very complicated and timely process to get into contact with and communicate with Housing Administration on any particular issue in residential life.

     Transaction costs also played a major role in the organization of University Housing and were particularly prevalent to the job description of a Residential Advisor. Beyond community-building, providing networking and social opportunities and serving as a guide to campus life at U of I, residential advisors bore the main brunt of transaction costs incurred in the market of University Housing. RAs serve to reduce transaction costs in the market exchange between students and student housing administration.  Policing and enforcing  came into play whenever Residential Advisors handled paperwork for Housing administration, such as distributing and collecting student “room condition reports” and performing  mid-semester fire inspections to ensure that students are upholding fire safety regulations specified in their housing contract. As well in building a community within a residence hall, RAs were responsible, along with residents to compile community rules to be respected throughout the year in order to provide the fullest and best living experience for all residents in the residence hall. Developing community rules incurred a good deal of bargaining costs in the process of compromising upon the personal living preferences of the more than 40 women living on my floor to establish an middle path equitable to all involved,

Greetings,

Amy Finkelstein serves currently as the Ford Professor of Economics at the Massachusetts Institute of Technology. Her other academic endeavors include the wonderful honor to work as a co-Director of the Public Economics Program at the National Bureau of Economic Research, where she is a Research Associate, and to work as a co-editor of the Journal of Public Economics. She proudly calls both Harvard University and Oxford University, England my alma mater. 

            The focus of her research in the field of economics has focused primarily on healthcare systems and markets, particularly in the US. She has published several large scale studies on Medicare and Medicaid and has sought through my work to provide insights on such health insurance markets that will help inspire future policy design. 

            The MIT News Office Reports that a recently released working paper written by Finklestein and 4 co-authors found that enrolling in Medicaid, a US federal program for low-income individuals and their families, helps the health and financial stability of participants, and makes them more likely to receive medical care than they otherwise would be. The MIT News office continues to report that, Amy Finkelstein has published significant works about the effects of asymmetric information in health insurance markets — elucidating, among other things, how frequently individuals with information on their high health risks purchase health insurance, and alternately, how frequently lower-risk people purchase insurance because they are risk-averse. Her research on the public’s behavior in health insurance markets directly applies to Economics 490, where the behaviors of purchasers of health insurance will impact the manners in which companies, who provide the services respond to customers and seek to manipulate customers. 

            Before this class I have not ever heard of Amy Finklestein, but I look forward to expanding my knowledge. I am particularly interested to read Amy’s work and apply it to enrich and deepen my understanding of federal decision-making in healthcare, especially with the recent launch of Obama-Care.

References:

Dizikes, Peter. 2012. “Amy Finkelstein wins John Bates Clark Medal MIT economist lauded for

work on health care markets”. MIT News Office. http://web.mit.edu/newsoffice/2012/amy-finkelstein-wins-clark-medal-0427.html. (Accessed September 6, 2012).