Class Review

Other than what I would call common sense knowledge regarding organizations, I really had never learned or knew anything about different economic theories regarding the inner workings of an organization, or how people’s behavior can be viewed through the economic lens.  Now, having saved all of the excel homework for future reference, I have a nice stockpile of information that I can no doubt use sometime in the future, especially as I take on management roles. 

The structure of the class was not exactly ideal for me.  I typically prefer to listen and take notes while your class emphasized participation.  However, I realize that this was designed to get us to communicate so I would not go as far as to say you should change the format. The blogging, which I will talk about further on in this post, was a surprise to me because of how much I progressed throughout the semester.

Before this course, I really had no idea what to expect in terms of the difficulty.  I knew it was going to be economics related, and quite frankly this scared me because math is not my forte and economics can get quite complicated.    I really appreciated the approach you took in order to make sure we wouldn’t get caught up in trying to understand formulas and instead helped us to see the underlying economic issue at a conceptual level. 

I felt that the excel homework was a valuable and excellent way to introduce the complex mathematical theory that much of this class is based on.  It made it much easier to a, take things one step at a time and not get overwhelmed by the complexity, and b, it allowed us to see things visually which is a great learning tool for myself personally.  I am fairly sure others would say the same. 

As I have mentioned before, blogging is really not my cup of tea.  At the start of this semester, it was definitely somewhat of a struggle to sit down and crank out the required word length.  However, as the semester progressed and I got more comfortable with the process, I found that I could sit down, put my ideas on paper, step away for a bit, and then come back and put those ideas into a structured piece.  I also found that the more I did this, the more I enjoyed the writing and was not really focused on a word requirement.  Rather, the words came easier and usually by the time I had fully expressed myself and responded to every part of the prompt, I was well over the word requirement.

Changes I would make to the course would first and foremost make the class partially online.  Given that most of your students are seniors, the motivation to attend class is not always there.  Having part of the class online is, in my opinion, a way to ensure the material is still communicated with literally no excuse for students not to know it since it is online and always available to look at.  I have a different course where part of the class is online and not only is attendance at the live session great, but discussion is better because students have questions about the material they were presented with in the online session. There are obviously pros and cons of each, however, I feel that online classes will only become more and more common with the advancement in technology, and it would make your class more appealing to students in the future. Other changes would be a possible video associated with the excel homework like you did in some of them which explain the harder formulas and how to work them.  I say this because I struggled at times to figure out how to manipulate them and get the correct answer.

Overall, I enjoyed the course and would recommend it in the future.

Reputations

One place where reputation comes into play in a huge way is when you are in the workplace and people don’t necessarily know you well enough to judge you based on anything but what they have heard from others, your reputation as a person.  As with anything I pursue and am passionate about, I want to do everything perfect the first time. I realize this is not realistic, but that is just my nature.  Even when making a mistake is expected, I strive to be the one person who does not make that mistake. I don’t believe in taking the easy way out and not worrying about making that mistake just because it’s okay to do so.  While I obviously still make mistakes, my attitude towards them helps me to really learn from the mistake and how to do it right the next time.  Due to this mentality, as an intern, I developed a reputation as a very fast learner, and was very quickly being approached my people with tasks for me to do.  While these tasks were beneath the level of staff, they felt most confident in my ability to do it correctly with minimal corrections needed by them, thus saving them precious time.  As I was given more and more work, I found that more and more people had work for me simply because someone else I had completed a project for had referred me as someone they felt could complete the task at hand. One of my favorite moments came when I received my official job offer, and one of the first things the human resources manager said was how many people had been impressed with my work during busy season and really wanted to see me come back.  This to me was a validation of all the times I had struggled through something and been tempted to throw in the towel but persevered because I felt my reputation was on the line. 

One thing I realized however, was that a strong reputation can be a double edged sword.  While (in my case) people may have confidence in your abilities to get the job done,  this also means they expect you to do work you may not actually be prepared for and could present a really tough challenge you may or may not be equipped to handle.  Thankfully, as I have talked about previously, I had a great support system in place and this never became a problem. 

I can think of times where my reputation has been challenged, however this takes place more here on campus than it ever did at work.  I would say I have a reputation here among my circle of friends of being very committed to fitness.  Most of them expect me to go to the gym on Friday night before I do anything else, and if I have to choose between the gym or going out with them, I will likely choose the gym.  There are many times where I would love to ditch the gym and go out to happy hour and out at night, but most of the time my dedication wins.  There are times however, when I have “cashed in”.  Usually this is after a long week of exams and my willpower to work hard is pretty much exhausted.  One thing I have found however, is that occasional deviations from your reputation don’t necessarily mean people change their idea of what you represent.  This seems to be very different for people in the public eye however.  For example, a celebrity or politician may be the most philanthropic, giving, caring person but the moment they slip or deviate from that reputation, they are jumped on by the media.  I personally feel this is very unfair, but that is a whole different discussion for another time.

More Conflict Management

One triangle like situation I am very familiar with and have had quite a few experiences with is one quite literally involving principals, or as they are more commonly known, partners at the firm I interned with.  I was fortunate enough to be able to intern during busy season, January 15^th or so, through April 15^th.   I say fortunate, because I was able to experience what life would actually be like during the most stressful time of year, as opposed to many interns who get to experience the relatively cushy summer environment at an accounting firm and then are in for quite the surprise when winter rolls around.  That is another story however.  I mentioned busy season purely due to the fact that from intern to principal/partner, everyone’s workload is very high.  Since interns and staff are relied upon to put in the groundwork, including updating work papers and collecting/requesting/organizing information provided by the client, there are often many different people who are higher on the ladder, demanding that their work be done first.  This actually presents quite the challenge at first.  Imagine you are an intern, you have been at work for one or two weeks, and a partner of the firm you are interning for stops by your desk and tells you he has a project he needs completed by the end of the day, or perhaps the week if you’re lucky.  First of all, simply the fact that this person is literally at the opposite end of the hierarchy from you is enough to make it a nerve wracking situation.  This is further compounded by the fact that at any given time, you also have projects from several senior managers, even more managers, as well as some seniors.  Of course there are several of these projects which have been deemed high priority with a “firm” deadline of no later than x amount of days. 

This all presents a rather difficult choice for a poor lowly intern.  Do I take the project just given to me by a partner and ignore existing projects that have the same deadline, or do I tell said partner I cannot complete their project by the required deadline and they should find another intern?  Doing the first will probably piss off several other people who are also very senior (and have the ability to make my life miserable), while doing the latter will also be very uncomfortable. 

Thankfully, I chose wisely when choosing where to intern, and the firm I worked for had a fantastic support system in place with these issues specifically in mind.  After quietly freaking out for a day or two as the work started rolling in, I decided to ask my senior “buddy” what to do.  He kindly explained that this was perfectly normal and not to worry, the work could be re-assigned with no issue.  As an intern, I also had a designated advisor who was a senior manager, one step below partner.  My advisor got me out of some difficult situations with less than reasonable partners quite a few times by talking to them on my behalf, and sometimes helping me work through their projects by pointing me in the right direction or explaining a complex issue. 

In response to the question of whether there is a way to resolve the tension, I believe in my particular case, what I explained above is the right way to resolve the tension.  In addition to helping me when I was new, by the end of three months I had become fairly adept at resolving the scheduling conflicts on my own, with a few exceptions.  I am fairly sure this was intended, and was a way of helping the interns grow professionally.  The short version of my long answer would be yes, with a sufficient conflict resolution program/support system, many tensions can be resolved without any fallout. 

In contrast, I can definitely see how an agent could satisfy one principal and fail by neglecting the other.  As I have said, without the higher level support I had access to, I would have been in some very difficult situations which I doubt would have been resolved smoothly. I most likely would have ended up trying to prioritize everything, which is obviously impossible and would not have ended well. 

Conflict Management

I was recently involved in a conflict at my job here at school involving an employee who also lived at the housing complex we both worked at.   For purposes of this blog, I will call them John.

From the very beginning of his questionable hiring (meaning many of the employees who already worked there, including myself, did not feel he should have been hired and we believed our manager had ulterior motives for doing so, these I will refrain from elaborating on), John was clearly not qualified and caused problems.  He managed to do so in a multitude of ways, including simply making things up regarding prices and availability of apartments, giving away merchandise without authorization from our manager, and making people within the office uncomfortable because of his comments about other employees.  Not only are the first two items I mentioned damaging to the business, it made the rest of the employees who were doing their jobs properly look bad because we had to attempt to clean up the messes created by John making promises we couldn’t keep.  I would attempt to explain this from more than one perspective, however, I genuinely believe everyone in the office shared the same mindset. 

Once it became clear that this person was the one misleading potential residents, and in general not doing their job, it became something of a joke around the office.  Every time we had an issue, the first reaction by anybody was to ask if John was responsible.  I also mentioned his comments towards other employees.  These got more and more inappropriate the longer he worked with us, to the point where some employees were genuinely uncomfortable to be around him.   This also became something we discussed at the office very openly when John was not around, including with our managers who were aware of his actions.

The real breaking point of the situation came when John got into a dispute with his roommate.  At first, he was given the benefit of the doubt, thinking that he was actually getting harassed as he claimed.  Our managers allowed him to move to a different unit in the building, problem solved right? Wrong. Only a week or so into living with his new roommates and John was involved in another dispute.  This time he claimed someone has stolen his property (toilet paper) from his room.  So again our managers let him move within the building.  John is now on his third apartment and third set of roommates within a few months. Sure enough, before long, he has an issue with his newest roommates.  At this point, everyone in the office including our managers realize it is not the roommates that are the issue, it is clearly John. 

Finally, much to the relief of every employee in the office, our property manager decided to relieve him of his duties and informed him he would no longer be employed by us.

Normally, when someone gets fired, they are obviously not happy, but generally take it like adults and move on. Not John.   Upon being fired, John not only moved out of the building to spite my manager, he began to make claims of sexual harassment publicly on social media about his former roommates, claims we know for certain to be false. 

It has now been about a month since John was fired, and thankfully much of the conflict has died down.  Nobody took his claims of sexual harassment seriously and he eventually gave up on that front.  However, he did manage to get a job at a competing company on campus, and is now abusing his knowledge of our operations and the building to spam our residents with mailers and advertisements, physically trespassing on the property and placing fliers under their doors.  This is a whole new situation and it remains to be seen how this will play out. 

I definitely believe this entire situation could have been avoided if management had recognized that John was not good for the office environment.  He never would have lived in our building had he not been an employee and management had multiple opportunities to recognized and deal with the issue.  As soon as his inappropriate comments made other employees uncomfortable, he should have been dismissed.  Instead, he was allowed to stay and the situation compounded into something far worse.  I think this is a great example of how important managerial decisions regarding people really are, and a great lesson for my future.

Sharing Doesn't Necessarily Mean Caring

Being a student here at Illinois, especially in business, I have participated in countless groups with the task of completing a case study.  These cases usually involve a huge amount of information and it is your job to pick out what is relevant and respond to the questions posed by the professor.  Many times, working together on these cases is allowed, and even encouraged with the only requirement being that you turn in your own finished case.  Some might question why that is and say that makes it too easy.  To understand why the professors encourage this you have to remember the reason behind working these cases.  There is not necessarily a right answer, it is the quality of the solution and the thinking to get to that solution that matters most.  It also allows the class to be more efficient at picking out what information matters and stimulates better discussion during the class.  

So what does this have to do with the article?  In this situation especially, since everyone is responsible for their own finished product, there is no requirement to share what you have discovered and what you believe the answer might be.  A lack of sharing can lead to several things.  Some students will have the better solutions while the others will be lacking.  In addition, when it comes time to discuss the case in class, the discussion is lacking because while there may be some good answers students have thought of, the ideas haven’t been developed further through team discussion and debate.  Typically, and I have experienced this personally, the answers people come up with individually are rarely as deep or well thought out as something that the team comes up with through discussion. On the flip side of this, the expectation to share with the entire group can lead to free riders, also something I have experienced.  Members of the class who you have worked with in the past expect that you will do the groundwork for them and they will be able to take what you have come up with, tweak it a bit, and turn it in.  While this does not necessarily get them outstanding grades, it does place more stress on the members who do contribute, since they are forced to develop the ideas with less help doing so.

In my experience, the findings of the article are consistent with what occurs in these “individual but group collaboration allowed” assignments.  Consider the first situation, where the marbles roll out when both parties pull.  In my case, when people are doing the same amount of work but there happens to be a member of the group who has more information, whether it be from simply knowing someone who has great ideas or having information from past classes such as notes, the person with more information/ideas is perfectly willing to share that with the group.  However, as in the second case where the number of marbles were predetermined, when the person with the better information feels they are doing all of the work and the other members are simply waiting for the information to be handed to them, all motivation to share that information vanishes.  Finally, in the third case, where the marbles come out in different amounts regardless of work done, the results are similar to what would occur with no collaboration.  Sure, everyone does their fair share of work (pulls the rope), but the results of their efforts differ.  Since the students have been working independently, there is no motivation to share the efforts of their own work with anyone else. 

Money & College

I would consider myself to be a very practical and thoughtful person when it comes to making money based decisions.  Even in high school, when most of my peers were more concerned with the football game on Friday night than their bank accounts, I was working after school to save up money to buy a car. Not only was I consciously saving money from early on, I was also thinking about my future.  I knew I wanted to go into business and I was fortunate enough to do well enough on my ACT and had a good enough GPA to have my pick of quite a few very good schools. I chose U of I because at the time (and 5 years later it still is) it was one of the top schools for accounting in the nation.  I had some experience with very basic accounting in high school, and I understood it.  However, other than that, I really had no idea what working in public accounting would be like.  All I knew about it was there were plenty of jobs available, it was a growing market, and the salary was pretty nice too. 

When I finally started here at U of I, I made it a point to join several organizations on campus, including a business fraternity.  I knew this would give me the best chance of making those connections that are so crucial in the business world.  Of course I made some of my best friends along the way and my college experience has been phenomenal because of them, but speaking honestly, my original motivating factor was securing a job.

Fast forward to the end of my junior year and I have secured a winter internship in tax (busy season) with an accounting firm in Chicago.  In order to take the winter/spring semester off and still graduate in time, I had to take summer classes in Champaign.  Besides being incredibly boring during the summer, and all my friends being at home, classes in the summer are much more expensive.  From that viewpoint, I intentionally took on more debt in order to increase my chances of landing the job at the firm I was interning with, a gamble if you will. Thankfully that gamble paid off.  I was fortunate enough to have accepted a job offer by the end of my senior year, however, the job requires me to attain my CPA license. 

Everyone who sits for the CPA exam needs 150 credit hours.  To obtain those credit hours, I needed another year of school, which is why I am now a graduate student.  Graduate courses are far more expensive than undergrad, but this time it is not a gamble, more of a calculated decision.  Having a job offer provides great peace of mind as well, however, it leads to less caution when it comes to monetary decisions.  For example, after interning and receiving my job offer, I took out a loan on a car.  Again, this was a very calculated decision, however, knowing I would be earning a salary and be able to afford the payments made the decision much easier to make. 

A friend of mine on a similar career path also had a great job offer towards the end of his senior year.  However, he decided it wasn’t quite good enough and turned them down in favor of going after his dream job.  While I am all for people pursuing their passions, sometimes common sense needs to rule.  After turning down his existing offer, things did not go so well.  He interviewed with quite a few firms, and was turned down by all of them.  He was forced to go back to the company his original offer was with and ask for them to reinstate the offer, which they did.  At this point, you would think he would be done.  Instead, he continued to interview with several new companies, all while letting the provider of the original offer think he was accepting their offer.  One of the new firms did end up offering him a position which he readily accepted.  He then had to tell the company he had turned down and the beginning that he was rejecting them, again.    As you can imagine, they were not happy at all about this.  My friend now has a job he is happy with but has burned some very important bridges along the way.  Only time will tell how this will impact him in the future. 

My key takeaway from this whole experience and going through it with him is there is a fine line between being “complacent” with your decisions in life and being cocky or greedy.  Yes he turned down what he thought was just an okay job offer (it was actually a great offer) and ended up getting what he thought he deserved, but how much damage did he do to his reputation in the industry along the way?   

"Illinibucks"

This is an interesting idea which brings to mind a problem a former professor posed in class regarding students who drop classes at the last possible minute.  As he described it, this is harmful to students in several ways.  One, it takes up a space someone else may have been able to take, perhaps even desperately needed.  Two, it actually drives up the cost of tuition indirectly.  When a class is full at the beginning of the semester, the department must assign a professor to teach each one of those classes.  However, as people drop the class, the professor must still teach their sections even though the number of students remaining in what was once three or four separate sections could have been consolidated into one. The result of this is more professors each teaching less kids.  Professors must be paid, buildings must be maintained, and the cost of tuition indirectly rises.  

It has been quite some time since I was in the class I am speaking of and my recollection of the exact idea is a bit patchy.  In essence, my former professor’s solution to this was an idea called “drop tickets”.  At the beginning of a student’s college career, they are issued a set number of drop tickets, perhaps 3 or 4.  Every time they drop a class, they must surrender one of these drop tickets.  At the end of their college career, they can turn in every unused drop ticket for cash or some other type of reward, what exactly it was I can’t quite remember. 

This seems like a use for Illinibucks, potentially solving two issues at once.  The first issue, students need to get into classes but aren’t able to because they are full.  The second issue, students take up space in a class that someone else needs and then drop it at the last minute.  These would both be addressed by requiring students to use their Illinibucks to register for classes, as well as drop those classes.  If a harsher “penalty” were to be assigned to dropping a class, perhaps students would not add classes just to fill up their schedule only to drop them later on.  This would result in students taking classes they actually needed, and hopefully less students being shut out of classes they need because people who don’t need the class are taking up available spaces.

Another potential use of Illinibucks which I believe would appeal to upperclassmen especially, would be the option to move their registration priority up, enabling them to take sections of classes that meet at favorable times, as these usually fill up quite rapidly. A slight modification to this could be the ability to register for classes that may be blocked due to departmental restrictions. Again, upperclassmen trying to build a favorable schedule may want to take an elective but aren’t able to register for it until after a certain time.  The “easy” electives are often filled by that point, this would allow students to bypass that restriction.  Obviously there would be massive logistical issues with any of these suggestions that would need to be worked out as well.

Setting the correct price would be critical to the success of Illinibucks.  Set the price too high and nobody/very few students will use them.  This would negate the usefulness of the Illinibucks system to the students. At the other end of the spectrum, set the price too low and there will be a free for all.  This would also negate the usefulness of the system because there would be little to no reason for students to conserve their Illinibucks.  If everyone had unlimited money, would anyone actually be rich? 

Organization Structure

As a senior on my high school varsity football team, we successfully clinched our first playoff berth in several years, beating the traditional powerhouse schools in our division along the way.  Not only did we make it to the playoffs, we won the first two rounds easily, and lead the eventual state champs 17-0 at halftime in the third game, however, a breakdown in leadership led to us losing the game 34-17.  I will go into this debacle later.  For now, let’s take a look at how this team was organized, and what is was that allowed us to be so successful.

The fundamental team configuration followed a dual authority model.  I believe this is fairly common across and sports organization. This is due to the fact that there is simply too much for one person to handle in terms of physically coaching players, and managing all three phases of the game (offense, defense, special teams).  The head coach is the first boss.  He then delegates authority to coordinators for each phase of the game as I mentioned.  They have the authority over each of those areas while the head coach has the ultimate say in matters as well as handling the general game plan, talking to players, team morale, etc.  After this second level of bosses, the structure becomes what I would say it something of a hybrid between dual authority and a simple hierarchy.  For example, from the head coach to the offensive coordinator, the structure follows dual authority.  From the offensive coordinator, there are several position coaches such as running back coach, wide receiver coach, quarterback coach, etc.  However, each of these positions have equal authority which is why I believe it fits the simple hierarchy definition better.  As a running back, I reported directly to the running back coach during most of practice, but at times would be involved in drills run by any of the other position coaches, there was no difference in their level of authority over me. 

When we look at Katzenbach & Smith’s distinguishing characteristics, several stand out to me as defining characteristics of the team I was part of.  First, high performing teams shape purpose in response to a demand or opportunity.  This was definitely a huge aspect of the team when I played.  Coaches communicated their goals and expectations to the players, and in turn the players knew what they needed to do in order to keep the team functioning as a well-oiled machine, avoiding conflicts and collectively growing stronger as a team.  The second characteristic also holds true.  I remember very clearly our stat board hanging on the wall outside the locker room.  After every game, the coach would post key stats on the board, really allowing us to absorb what we had accomplished that game, or sometimes, not accomplished.  This served as a powerful motivator in several ways.  When the stats were great, we felt great as a team.  Confidence is a powerful factor in any sport.   On the flipside, when the stats were not so great, we were embarrassed and sometimes a little angry.  Pride is another powerful motivating factor, not just in sports but in life. The last characteristic, members of high performing teams hold themselves collectively accountable, was a major driving force the entire season.  When someone on the team failed, missed a play call, blew an assignment, or anything else, the rest of the team felt collectively responsible, and in turn we did our best to not let that particular thing happen again.  This is a huge boost in morale for the player involved, and ultimately leads to the team, truly playing as a team where everyone is involved and nobody is left on an island to suffer the consequences of their mistake.   Feeling a mistake was one person’s fault creates division within the team and division leads to failure.

Ironically, as I mentioned at the start of this post, we were leading the eventual state champs 17-0 at halftime.  However, our head coach decided to change the structure of the organization to a one boss structure.  He allowed his ego to get in the way and began calling the plays himself, deviating from the original game plan which was working perfectly.  This completely changed the tone of the game and ultimately led to us losing the game.  Sure, there were mistakes made by players, but only due to the coach putting us in a position where we weren't able to perform at our best.

Opportunism is Lacking

There is one type of opportunism, or lack thereof, I am very familiar with.  As a student in college, I do not have to work 40 hour weeks, nor do I have class all day, every day.  Given these facts coupled with the availability of a syllabus which outlines due dates in detail,  in theory, I should have ample time during the week to complete my assignments well before they are due, and save myself the headache of a last minute rush to finish my work. Yet week after week, year after year, hundreds of thousands of students find themselves pushing deadlines and cramming before exams. In fact, I am suffering the consequences of this lack of opportunism at this very moment.  Even though I have had multiple hours of free time every day this week, I have not started this blog post until 8 pm on a Friday night.  There are many things I would rather be doing right now, including joining the rest of my apartment as they go into “fun mode”. 

Procrastination is not limited to college students.  People procrastinate in all manner of ways.  People put off dieting, even though it may be critical to their health.  Some people put off paying bills, even though doing so will result in financial penalties. It’s not always something unpleasant we put off doing.  It may be telling a friend you will buy concert tickets again and again until finally the tickets are no longer available and you don’t get to go, or you have to buy them at a much higher cost. It may be seeing an incredible deal on a vacation package, yet we don’t purchase it when we have the chance and sooner or later it’s gone.  Another I can think of is how people avoid going to the gym, even when they have the time and ability.  This is ironic to me because going to the gym is something I would do to avoid writing this blog post, or other homework. 

So why do people procrastinate?  There are a variety of answers to this question, most pointing to an avoidance of pain or fear on various levels. By procrastinating, we don’t leave our comfort zone.  Ironically, eventually we all have to face the music. By avoiding our fears, they simply grow larger until the deadline arrives and we are forced to face whatever we have been avoiding doing. This would explain why an action that some people avoid doing (working out), is something I do to avoid another action (writing this blog).  Going to the gym is well within my comfort zone, I love working out.   Blogging on the other hand, is not.  

While I agree with this answer, I also feel there are other reasons why we do not take action when we have the opportunity.  I believe some people are simply lazy and choose the action that provides immediate gratification.  There are many times where I have chosen to sit on the couch and watch TV rather than completing an easy assignment which presents little to no challenge at all. A perfect example of this is the surveys many professors conduct at the beginning of the semester, including in this class.  These are easy, require no actual work, and take very little time, yet many students, including myself, don’t complete these until they are in class the first day.   In the case of buying tickets to an event, we put it off even though we know the event itself would be incredibly fun and have no concerns about the event.  I don’t believe the “fear” rationale is appropriate in these situations. 

On a side note, several hours of my free time this week have come while sitting at work on a computer.  I could have easily shifted my work responsibilities to someone else, and worked on this blog post instead.  I chose to do my work and put off writing this post.  Was this lack of opportunism or was the driving factor my desire to act ethically?  Even I am not quite sure.

Organizational Change & Transaction Costs

As a sophomore, I was fortunate to be accepted into a very prestigious organization here on campus.  When I say prestigious, you might be tempted to laugh a little, after all, how prestigious can an RSO really be?  Rest assured, as a student within my major at the university, there really was no higher goal in my young college career.  In fact, I was not accepted into the organization the first time, but the second time around I had matured and worked on my communication skills, and I was lucky enough to be offered a bid.  The fact that I was offered a bid during a fall semester but not a spring semester is rather ironic now that I have experienced it from the other side.  Typically a fall rush has around 400-500 candidates, which are then whittled down to a pledge class of about 20, while a spring rush may usually only have about half that.  Once admitted, my experience lived up to everything I could have wanted out of a school organization.  I found my circle of friends on campus, began to build my network, and in general had a great time.  I know this story is not unique, most students go through some sort of searching out process and finally find their place on campus.  I only describe what being a part of this organization meant to me as an attempt to highlight how much the change which occurred within this organization really impacted myself as well as my close friends. 

By now you are probably wondering, what happened?  Well, as in most organizations, there are certain “traditions” which develop over time, and to the members of the organization, are an integral part of what makes them so close.  Unfortunately, from the standpoint of a governing central office, these traditions often violate bylaws the organization is supposed to follow. It so happened that a disgruntled member took it upon themselves to detail several of these violations to the central office of this organization.  Long story short, this resulted in an extended investigation and suspension of many activities myself and the other members valued, essentially changing the culture of the organization as well as the structure.  Many new guidelines were put in place, with the chain of command as well as organizational bylaws being changed, all due to harmless transgressions. As a byproduct of all this, many members, including myself, felt that the organization had changed to such a degree it was no longer worthwhile to continue to pledge time and effort to the organization.  While the organization still exists, it is essentially completely changed from what it once was, and does not hold the same meaning to many of its current and former members.  

A transaction cost is defined as the cost incurred in making an economic exchange, or in other words, the cost of participating in a market. Of the three types; search and information, bargaining, and policing and enforcement, bargaining costs hold the most relevance to me due to recently having gone through the negotiation process after receiving a job offer.  After receiving the offer, I went through several rounds of negotiations to work out the salary and benefits that seemed most desirable, and fair, to me.  Besides the discomfort in negotiating, it took a considerable amount of time that could have been used elsewhere. This is also similar to a scenario in game theory called the game of chicken.  The game of chicken states that while both parties prefer not to yield to each other, the worst possible outcome is when neither party yields. I believe a job offer negotiation is very similar in many aspects.  I have my own self interests in mind in terms of compensation, as does the firm’s representative.  However, the firm has already invested considerable time and resources into my growth while I was an intern, and does not want that to be wasted.  On the other hand, I have invested my own time as an intern, and have nurtured the relationships at that firm in hopes of being offered a job.  Clearly, if we cannot come to an agreement, both parties lose.  These are all factors in determining when is the correct time to accept the offer on the table, a very important decision in any young professional’s life.

Who is Alvin Roth?

Before picking up this class at the last minute, and before being assigned this alias, I really had no idea who Alvin Roth was, what he did, or what he was famous for.  In fact, I know very little about any famous economists, although being a business student, I probably should make it a point to learn more.  But enough about me, back to Alvin Roth.  Interestingly enough, Alvin Roth was not an immediate success.  In fact, Roth was initially a high school dropout and it was only after a failed Ph.D. qualifying exam that he met the mentor and advisor who would help him get through his struggles at Stanford.  Soon afterwards, Roth ended up taking an appointment in economics at THE University of Illinois where he developed much of his research on game theory. After his time at Illinois, Roth then went to Pittsburgh and finally to Harvard. At the peak of his career at Harvard, Roth decided to leave and take a job at Stanford University, surprising quite a few people along the way.

After reading up on Alvin Roth as a person, as well as some of his work, I would have to say not only is he a fascinating person, but he has done some very interesting things with economics.  As I mentioned, I know very little about famous economists much less the complex theories they are famous for studying and/or applying.  So I did a bit of side research on game theory.  There are myriad high level definitions of game theory, but the one I found to make the most sense defined it as “the study of how people, companies or nations (referred to as agents or players) determine strategies in different situations in the face of competing strategies acted out by other agents or players.”  This all lead me to wonder, how did Roth apply his expertise in game theory and subsequently win a Nobel prize? 

Roth used game theory to develop some very relevant systems that play a role in very critical areas of our lives.  Roth further developed a mathematical algorithm which was then used to redesign several existing systems to work more efficiently. The first major area in which Roth applied game theory was within the medical field.  Roth developed a system to match doctors with hospitals, and a system to match organ donors with patients.  Roth also applied game theory to the school system, developing a system to better match school pupils with schools.  

The best known of all these is the National Resident Matching Program.  Also known as “The Match”, this system adopted Roth’s algorithm in order to more successfully match US student doctors to hospitals.  Roth also applied his algorithm to the live organ donor system.  In a nutshell, this “enabled patients to trade nonmatching donor kidneys for those that match, connecting people who need kidneys with the right donors” (Woolhouse & Denison, Boston Globe).  According to the program manager at UNOS National Kidney Paired Donation Program in Richmond, “Al reinvented the way living organs are donated” (Woolhouse & Denison, Boston Globe).  

My personal favorite, and something I can relate to because of going through the process of applying to schools myself, is Roth’s application of game theory to the problem of Boston’s school selection process.  “In Boston, the school assignment system was operating badly. Parents competing for popular schools were often penalized if they did not get their first choice; if their second and third choices were also popular, those slots would be filled by students choosing them first” (Woolhouse & Denison, Boston Globe).  Roth created a system where parents and students would be incentivized to select their true preferred schools, and therefore not attempt to “game” the system.

Above all, in spite of his success and knowledge, all accounts point to Roth being an even better person.  A genuine, down to earth, and inspiring person, loved by everyone who knows him.  This, to me, makes me pretty content, and inspired, to be using his name as my alias for a semester.

 Is Alvin Roth’s work relevant to this course?  I believe it is.  Going back to the definition of game theory, I believe it would apply to the classic problem of participation in class.  I have two options, participate or don’t participate.  If I do participate, I may be wrong and feel embarrassed, while everyone else benefits.  However, if I don’t participate, someone else will take the risk of being wrong while I benefit.  In order to correct this, most classes include a participation grade which then forces students to participate or risk being penalized for not doing so.   This situation appears to me to be agents (students) acting out strategies (participate or not participate) in the face of competing strategies by other agents (students & professor).  While my interpretation may not be completely accurate, game theory at its core involves agents, or organizations, which is what we have set out to learn more about in this course. Given this, I feel it is very relevant to our class.

Sources Used:

"Alvin E. Roth - Biographical." Alvin E. Roth - Biographical. N.p., n.d. Web. 04 Sept. 2015.

Ro, Sam. "NYC And Boston High School Students Can Thank Nobel Prize Winner Alvin Roth For Their Fates." Business Insider. Business Insider, Inc, 15 Oct. 2012. Web. 04 Sept. 2015.

Scheve, Tom. "How Game Theory Works." HowStuffWorks. HowStuffWorks.com, n.d. Web. 04 Sept. 2015.

Woolhouse, Megan, and D.C. Denison. "Harvard Professor Alvin Roth Awarded Nobel Prize in Economics - The Boston Globe." BostonGlobe.com. N.p., n.d. Web. 04 Sept. 2015.

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