Class Discussions 2014

1. Class Discussions 2014

2. Topic 1. New cognitive perspectives

3. Sweet tooth(love for sweet food) • Why do we like sugar and fat? • Is such preference optimal? • How do we deal with it? • Look for examples of culture, institutions, education, self-control, rationality, emotions • Does it determine our weight? • What can you do as… • … a manager? At Danone? McDonald’s? Searle Inc.? • … an economist? At the Ministry of… Health? … Education? • … student?

5. Outline: Our mind & our institutions

7. Generalizing sweet tooth • Instincts present • Poorly adapted b/c environmental change • Cultural complements regain adaptation • Often relying on instincts • Influence does not mean determinism • Similar traits? All questions applicable? 

8. Applicable to gender, sex? • Are there differences? • Are differences driven by nature or nurture? • Is there a difference in class particip.? Why? • Symmetry in biases and potentials • What should all of us, women and men, do? • Know yourself + aim + learn • Risk of using nature or nurture as an excuse

9. Why do we humans need families? What does our species specialize in? And where does its success lie? For this specialization, how should our minds work? As a generalist processor? How is our mind designed? When and where was it designed? With what consequences?

10. This year: Only voluntary participation in theory classes • How would you apply the theory of topic 1? • What will be the consequences in terms of: • Teacher’s effort? • Students’ effort re • Stress? • Intensity? • Timing)? • Class attendance? • Exam grades? • Education? • Do these answers differ much for different students?

11. Last week’s puzzle • Female students spoke much less/more than boys at EOM than IEM. Why? • Is it relevant that at IEM • the total number of students is lower? • % of women is greater? • Food for thought: Same-sex schools: • good or bad? • Who should decide? (Topic 5)

13. Crying • Is it voluntary? • Why do we cry? • See, e.g., http://www.sciencedaily.com/releases/2009/08/090824141045.htm • http://www.npr.org/templates/story/story.php?storyId=129329054 • Nature or nurture? • Do we women cry more than men? • Do Latinos cry more than Britons or Romans?

14. Evaluate these emotions:  “The signal value of tears”

16. Key concepts of topic 1 • Modular mind: in “rationality & cooperation • Maladaptation: ídem  • “Artificial” adaptation: cultural, institutional, educational complements • Determinism—nature vs. nurture—free will

17. Examples of modularity (& adaptation?) • Jealousy? (Does it change with genetic tests?) • Love? Purpose? Triggered by what? • Intriguing: What about love vs. arranged marriages? • Fear: snakes or cars? • Xenophobia? • Is it malleable, flexible? For good or for bad? • Risk aversion, losses? Change? E.g., students…? • Discount rate? • Happiness puzzle • “I wish that I’d let myself be happier” (“Top 5 regrets of the dying”)

18. Culture—e.g., “market” culture • Do market interactions make us less cooperative? • Folklore? • Evidence? • Are markets fragile? • Do emotions act against the market? • E.g., home evictions, debtors’ forgiveness, etc.

19. Freedom • Concepts of freedom • To satisfy our instincts or to govern them? • What should we do if we want to be free? • Does education make you free? • Which education? • Recording or thinking? Doctrinal? • Academic or informal? Informal = self-control? • What about “Tiger Moms”? • Is there a lesson for us? Competition? Environment? • Were we “Chinese” years ago?

20. Topic 2. Business implications of evolutionary psychology

21. Optimizing topics 1 & 2 • Getting recipes for management (e.g., “Homo Administrans”, Nicholson)? • Opening your mind, to complement you “toolkit” for self-control and social interaction

22. What are the “building blocks” of your beliefs on human nature? • Experience • Family? • Friends? • Formal education • School? • University? Homo economicus? Is it a SSSM? • Others? • Religion? • What about “nature”, e.g., mind’s hardwiring???

26. Biological “effects” on behavior and, in particular, management • Do they replace, add or interact with the environment? • Interaction  complexity applications? • Management? (“Homo Administrans” examples)

27. email • “I am ... from your class of Economic Organizations and Markets (group 2), I write you in order to comment some aspects of The Economist's article "Homo administrans". In the article, despite the fact that the author states that nurture and nature explain the differences between individuals and that both are important in order to determine our character, he just focus on showing experiments that seems to defend that biology is the only determinant of our character, almost without influence of our environment. For me this is contradictory not just with his initial affirmation but also with other studies that suggest the importance of nurture to define our personality traits. For example, a couple of days ago I read an article which says, briefly, that environment helps to determine our character and that the role of genes seems to be help to determine the paths that people take in their environment (if you want to read it carefully here is the link: http://voices.yahoo.com/the-role-nature-nurture-shaping-human-behavior-2255780.html)”.

28. “Pruned” email • “I am ... from EOM class. I write to comment on the ‘Homo administrans’ article. Despite it states that both nurture and nature are important in explaining human behavior, it just focus on experiments that seem to defend that biology is the only determinant, almost without any environmental influence. You may see http://ow.ly/sUlkE”.

29. Analysis “Homo Administrans” • Contents: • Research grounded on biology (nature) effects • Emphasizes interaction nature-nurture. E.g.,: • “Genes do not operate in isolation. Environment is important,…, they interact in subtle ways” • Describes research on such interaction: Arvey: “Business-women, it seems, are born. But businessmen are made”. • Cautions on the limited explanatory power (2 last paras.) • Puzzle: It is perceived as contradictory or biased • When reading new info • Confirmatory (100% nurture)  “of course”, no complaint • I.e., do you subject nurture argument to the same standard? • Conflicting (interaction nature & nurture)  complaint!!!

30. Outline of “Business Implications of Evolutionary Psychology” • Organizing exchange • Opportunism and ‘Farsighted contracting’ in TCE • Moral hazard in principal-agent theory, etc. • Management • General management • Managing people • Marketing • Finance

31. How to deal with homo sapiens? (endowed with cheating detectors, emotional commitments, etc.)

32. Questions on functional management Leadership Is self-deception effective? In what areas? Why do leaders usually feel alone? What do we ask them? Finance Why do people continue to fall for pyramidal frauds? (e.g., Madoff, Foro Filatélico, preferentes, etc.) Why do speculative bubbles keep happening? Marketing Why do customers not like it when brands change their logos? Is advertising that addresses men sexist? And advertising that addresses women? Any examples?

33. Managing your career Which emotions threaten your career? How can you train yourself (“nurture”) for... Postponing gratification? Interacting better with others? Speaking in public? Keeping control over your career? How would you deal now with your partner? Making a deal, establishing “safeguards”?

34. How is to achieve work/life balance? What regrets are expressed by many managers, both men and women? Are they the same? Why? How can they be remedied?

35. How should our studies change? Groups: Size? Continuity? Identity? Competition? Exams: Necessary? How often? Homework: Necessary? Effects? Provision of information on: Type of exam? Ranking in the class? Change: Teaching method? Others? Can you help UPF make students more rational? Meaning by rational? Improve self-control?

36. For topics 5, 6, 7 • What is the role of “emotions” in understanding and regulating markets, politics, institutions, and business firms?

38. Topic 3. Incentives

39. Does voluntary cooperation exist? • Examples? http://bit.ly/wt61P6 • Do all individuals cooperate voluntarily? • When voluntary cooperation does exist, how do explicit incentives affect it? • Can “strong” reciprocity... • ... help us negotiate? • ... create new types of incentive? • ... alleviate the problem of collective action (“public goods”)? • How do you interpret social “indignation” with the analytical tool of “strong reciprocity”?

40. What would happen if we were to fine you for arriving late? What’d happen if we lift the fines 2 weeks later? How will you motivate your children to make their beds? BTW, do you make your own bed? How would you interpret it in educational terms? If NYC could fine foreign UN diplomats for parking incorrectly, would they park better? Would they all react the same way?

41. What would happen if an army paid its officers for the number of casualties caused? • How should we provide better incentives for university teachers? • How should we provide incentives for university students? • Consequences of bonuses? Fee discounts better? • And for teachers’ evaluations by students? • What would happen if teachers were paid according to students’ evaluations? • What have you learnt from the Bocconi study?

43. Is “corruption” present among UPF students?

44. What do we think of someone who… … often misses classes? … copies in exams? … copies in problem sets? ... copies from you without permission? … does not return a wallet containing money? … uses Bicing without paying it? … steals a bike in the street? … your bike? … slips a friend in for hospital tests? … gets medicine with a pensioner’s voucher not being a pensioner? … works while collecting unemployment benefits? … dodges paying for a ticket on the Metro? … steals someone else’s Metro season ticket? … avoids paying taxes? … keeps some of the money collected for a graduation trip? … keeps a commission for organizing a graduation party?

45. Block III. Institutional environment

46. How to decide on…? … life expectancy? How do we decide? Individually? Socially? Is there an optimal level? Is the maximum level optimal? Individual = market? “Social” = political? Are they the same? … education? How should decisions be made? Individually? Socially? What is the optimum? Is the maximum the optimal level? Does the optimal way of deciding on these matters change between basic education and university education?

47. Topic 5. Market and politics The three elements of the economic problem Optimization (Robbins) Information (Hayek) Exchange (Coase) We are interested in: Analyzing how they are resolved by the market and by politics—(BTW, Is the market “social”?) Learning to compare how they do so Understanding how they complement each other

48. Decisions affecting life expectancy

49. Life expectancy: shorter in USA than Spain • Why? • Which one is optimal? • Might there be decision failures in the USA? • Might there be decision failures in the Spain?

50. Are there failures in these decisions? How do these decisions differ? Do the failures also differ?