Life After Undergraduate

I get a lot of questions about career paths, applying and interviewing for jobs, and advice about life in general from undergraduate students. Two themes come up; writing recommendation letters and where to go for grad school.

The world abounds with advice, but I did find a useful page by economist Susan Athey, who diligently addresses many concerns and offers a great starting point. Looking at placements of her students (which of course is endogenous) offers some level of credibility.

Learning What to Call Things I Already Know How to Do

It is Fall semester, and I have cranked up my teaching to 21 credit hours. One wonders if I have enough new knowledge to disseminate 21 hours a week. However, one particularly interesting aspect of teaching is that I ask better questions and learn new things.

I have learned two terms in the last week that caught my interest. The first is rational ignorance. This was brought up to describe why individuals become passionate about some things and less passionate about others. With voting, it might take a lot of effort to evaluate the different candidates platforms and how they relate to the issues compared to their impact on your personal well being. It can be applied to a variety of other things as well. In the case of recruiters, it is very costly to evaluate every person who applies for the job. In consumer products, laptops have so many attributes it is difficult to decide which laptop is best for you. In response to these dilemmas we rely on heuristics (small pieces of observable information that can be related to  to unobservable information) to help with our decision. Heuristics are also low cost. With political candidates, it is their political party; with job candidates, it is their GPA and university; with laptop candidates, it is the brand or memory space.

Another term is zero based budgeting with 3 million results. That's right, this business professor has never heard of zero-based budgeting. Basically, instead of taking last year's budget for your department and adding 1%, departments are now required to build their budget from zero, then justify the entire budget with some contribution to a metric of value.

Here is why I am upset. Rational ignorance and Zero-based budgeting are terms that describe marginal analysis (one of my favorite topics). Marginal analysis evaluates the extra benefit from doing something to the extra cost. If the marginal (not the total) benefit exceeds the marginal cost, you are making a good decision. Any time I am evaluating something (financial decision, parenting problem, conversation engagement) I have the following image in my head. I just can't help it, because it is how I see the world. So when I hear about the term rational ignorance, I think that the marginal cost of learning about the candidates is greater than the marginal benefit of learning about the candidates. When I hear about zero-based budgeting, I think the department's budget is its total cost, which is where marginal benefit equals marginal cost (or when Net Benefits are maximized). This is something that everyone should be doing all the time! Why is it now "very hot" for companies to explore this "new and unknown" strategy? I think it is because college graduates have memory attrition, and probably why they come back to get their MBA. You could also just ask your former professor.

The Puns Continue in Economics

As you get older, the allure, or the capability, or the necessity, of running increases. So, several of my economist colleagues jog, and some even compete in marathons.
I argued that economists should not do this, because of famed economist Keynes' warning, "In the long run, we're all dead."

Brother's Dilemma

Daniel and Christopher face off again, this time in the classic Prisoner's Dilemma game.

Mining for Good Puns in Economics

Good discussion in Managerial Economics last week on barriers to exit. Mining companies face a liability risk of a tunnel collapse. This liability exists whether the company closes its operations or remains in the market. In other words, the liability is a ... sunk cost!

Plagiarism in MBA programs

Plagiarism is a big deal in universities. Business schools and their MBA programs are increasingly trying to implement a culture of simply not copying and doing your own work. At the very least, give proper citation to your inspiration. Alas, this is almost exclusively brought down on the students, and, to a lesser extent, faculty. But what about the schools themselves? Are they not held to the same standards? Where is the Turnitin for universities? Below are two course descriptions about the privatization of industries. An interesting course, but from two different universities. The first is from Wharton and the second is from Virginia International University.

MGMT798 - Privatization: An International Perspective

Privatization is sweeping the globe, but it remains one of the most controversial of economic reforms. The redefinition of boundaries between the public and private sectors creates new roles and opportunities for policymakers and business people. This course will review the international experience with privatization -- the Thatcher privatizations of the 1980s, the sale of industries and utilities in developing countries, the transformation from central planning in post-Communist countries, and the recent experiences with privatizing very traditional public services and infrastructure activities by local and national governments throughout the world. What practical lessons can be learned from the myriad of methods adopted in different countries? What issues arise in privatization transactions and what are the implications for business and regulatory policy? Who gains and who loses from privatization and how can deals be structured that improve productivity and welfare? These questions will be addressed through lectures, guest speakers, case studies and simulations.


MBA 652: International Industrial Development Strategies: Privatization (3 Credit Hours) Click to collapse

Prerequisite: MBA 511 Managerial Accounting and Finance
Internship / CPT Qualified
Privatization is sweeping the globe and the redefinition of boundaries between the public and private sectors has created new and exciting opportunities for business and policy makers. This course will review the international experience with privatization, the current sale of electric utilities, airlines, and telecommunication companies in emerging and developed economies.