This short course will survey the key findings of behavioural economics and explain how they relate to day-to-day management. Participants will receive a thorough understanding of how economic insights for decision making can be augmented with experimental economics.
The course will be interactive with numerous examples and opportunities to apply the concepts discussed.
After this lecture you should be able to: Apply a range of examples of behavioural anomalies to real business situations. Understand behavioural anomalies in light of an ecologically rational framework.
Poundstone, William (2010) Priceless: The Hidden Psychology Of Value Oneworld
Kahneman, Daniel (2011) Thinking, Fast and Slow Farrar Straus and Giroux
Lambert, Craig “The Marketplace of Perceptions”, Harvard Magazine, March-April 2006 – A summary of chief insights from behavioural economics and neuroeconomics
Poundstone, W., (2011) “Prospect Theory” (Chapter 16) and “Ultimatum Game” (chapter 18) from Priceless: The Hidden Psychology of Value, One World – Good introductions to key concepts
Tabarrok, A., “A Phool and His Money” Review of PHISHING FOR PHOOLS: The Economics of Manipulation and Deception, by George A. Akerlof and Robert Shiller, Princeton University Press – A defence of standard economic theory against behavioural claims
Participants should select one of the countries under study and identify a potentially internationally competitive cluster. Using the format provided in the lecture, and the East Belarus mechanical engineering article as a guide, participants will submit a written report. The report should contain diamond analysis and cluster mapping.
If an economics instructor requires students to submit work using PowerPoint, they can reasonably expect that those students will either possess the skillset required to do so, or recognise the need to develop it. And student’s wouldn’t feel that the choice of format is a source of disadvantage.
In a few years time the same will apply to the creation of a video. This page is a collection of resources to help novices create simple content.
Your smart phone – the most obvious route is to use the video feature on a standard smartphone. Here’s an example. This can be done in a single shot without any additional resources. Here are some tips.
A 1-3 day course the leads participants through the 7 key stages of finding a solution using practical examples and plenty of team work.
Problem Solving and Decision Making is an intensive managerial programme that has proven successful in improving efficiency, performance and productivity. The course aims to provide practical skills and a management mindset rather than simply transfer knowledge. Participants are taken through the full problem-solving and decision-making cycle: from breaking down the issue, to prioritising and writing the action plan. They also practice communicating their proposal, an important and often overlooked aspect of the decision-making process. The course focuses mostly on experiential, proactive and practical learning: participants engage in individual and team problem-solving and decision-making, and receive constructive feedback to build on personal strengths and address limitations
I am an Affiliate Faculty Member of the Microeconomics of Competitiveness program at Harvard Business School, and a big fan of Michael Porter – his work consistently reminds me of the importance of bringing clarity to management practice.
I also like his inclination for frameworks rather than models. If your goal is to interpret and assess, as opposed to measure and predict, a framework is a critical analytical tool. One that I especially like is his explanation for what determines competitiveness. For example, consider the following slide (which I believe originates from here).
I’ve given this framework a lot of thought, but I don’t think it fits as neatly into the Diamond model as is often claimed. For example in this NBER paper Porter (and co-authors) present an enlarged version:
This clearly shows that the Diamond model is intended to be a more detailed view of the “Quality of the National Business Environment” segment. But consider something like nutrient rich soil, or a large natural harbour. One might think that constitutes an endowment. But it is also a relevant “Factor input condition”. Indeed what’s the difference between the “Supporting and Related industries” and “State of Cluster Development”? I suspect this is why Figure 3 above has dropped endowments and clusters, and renamed it a “Foundational Competitiveness Index”. I think this is a shame, because the “What Determines Competitiveness” slide is clearer, and more coherent, than the FCI.
I think Porter’s attempt to force fit the Diamond model into the Competitiveness index creates an opportunity to take the “What Determines Competitiveness” slide in a new direction. Indeed I think it complements nicely the “Growth is Like an iPhone” analogy:
In my attempts to merge the three level analogy with a template that my students can use in class, and with all appropriate nods to Prof. Porter, this is the “Country Competitiveness Dashboard“:
Rather than viewing the Diamond model as a subset of the “Business environment”, I see it more as a strategic tool that cuts across the whole Country Competitiveness Dashboard. In other words step 1 is to populate the dashboard, and ensure that you are covering all bases. Step 2 is to conduct a Diamond analysis – which is better suited at the cluster level than the national level anyway.
Finally, it is well worth reading Paul Krugman’s, Competitiveness – a dangerous obsession (Foreign Affairs, March/April 1994). When treated as a mercantilist trade “strategy”, or the conflation of corporate planning with national level decision making, attention to competitiveness can lead us down the wrong path. But when competitiveness is wedded to our understanding of economic growth, and the conditions required for entrepreneurship to flourish, the competitiveness framework is immensely beneficial.
This short course provides provides a survey of global poverty and a discussion of the causes of prosperity. Particular emphasis is placed on the institutions required for market exchange, and the importance of economic calculation. As a satellite photo of the Korean peninsula makes clear, socialist planning is literally groping in the dark. We will look at the theoretical reasons behind this claim, and the empirical validation that economic freedom matters.
The course does not rely on any previous study of economics.
Lectures (3 sessions)
The course is designed to tie into Chapters 4 and 12 of the following (amazing) textbook:
Economics matters: The link between economic institutions and global prosperity
In this lecture I will ask some broad and fundamental questions about the application of economic theory to the real world, and the role of the economist as a force for making the world a better place. I will try to convince you that we have a fairly good understanding of what causes economic growth, and how important this is for raising living standards and improving people’s quality of life. In other words, economics matters.
11:00am Session 2
Groping in the dark: Why socialist calculation is impossible
2:00pm Session 3
Economic transition in Central and Eastern Europe: Shock therapy or gradualism?
I see a major advantage for online courses being the opportunity to crowdsource and aggregate grading into quick, responsive, 360 feedback. My ideal grading system would be:
A web form to enter information and then WHAM it converts it into a report.
Students see each others and vote on which are the best ones.
Or, it just prints them all out and I grade them in one batch.
In terms of technology there’s a few different ways to create content:
Powerpoint with voiceover – this is probably the simplest, and I have several examples. There’s also products such as Adobe Spark that perform the same function but slightly slicker. do be careful about whether to put the slides online as well, since this can reduce the likelihood of students watching the video.
Dual video and slides – this is a great way to convey detailed content but in a personalised way (e.g. Andy Field)
Video – this is the simplest way to do it but I find it a little awkward when done as a lecture. If it’s more informal it’s more engaging, but slightly more complicated to plan. Using a light board is probably the best way to do this.
Interactive powerpoint – for my EMIB course we had an interactive green screen. This puts the presenter inside the screen and permits interaction (e.g. drawing directly on the screen). It’s basically reading the weather. It’s harder to plan but the final result can be quite effective.