Hypothetical Implementation of "Illinibucks"

Implementing “Illinibucks” to allow students at the University of Illinois to cut lines with regards to registration and other services around campus, would make drastic changes to the way these services are provided. Having been a part of the Division of General Studies for two years at the University, I would allocate a majority, if not all, of my Illinibucks towards registration. Being in the DGS, I was always one of the last people to register and that led to having very eschewed schedules and undesired professors/classes. Through this hypothetical system I may have been able to move up the registration list. However, I feel that most students would prioritize there bucks for registration because it has such a large effect on your time spent in college. If there happened to be a tie in use of bucks, would it then differ to your year in school? If this is the case then we would essentially be back to the priority basis that we use for registering now. 

Due to a very high demand for early registration, I could see the University setting the price for this service relatively high to deter some students. For the deterred or less studious students, these bucks could be used to cut lines at concerts, sporting events, and maybe even registering campus facilities. The prices for these would be less to raise the demand. If the University could not lower the demand for early registration by raising its price, they could set a maximum amount of bucks allowed to be spent for this service. This would be similar to a government intervention in a real market. I would also wonder if the University would allocate the same amount of bucks to each student or would they allow students to purchase additional bucks. If this were the case, then the University would be giving an advantage to students who could afford this luxury. It would also affect the money supply and alter supply/demand. 

 

 Aside from that, would students have the bucks tied to their university account, or would they be allowed to trade bucks to other students? This would create another miniature economy where students spend bucks not for campus services, but for services from other students. Clearly, this could create legal issues for the University, but it would be interesting to analyze this situation if it came to fruition. For students who really wanted to register early, they could pay other students for their Illinibucks or do work for them. Due to the low supply of Illinibucks, they would raise in extrinsic value to the point that they could be seen as more valuable than real currency. 

The implementation of Illinibucks would be a very interesting experiment. It would illustrate many economic models as well as show how the students prioritize the services that the University provides. 

Team Compilation and Performance

During my senior year of high school, I helped lead our varsity football team to its first playoff berth in a decade. With regards to the text, “Reframing Organizations, Artisry, Choice, and Leadership”, by Bolman and Deal, my football teams structure followed a dual authority model. It all starts with the head coach, who is essentially the head boss. Branching off from him are two coordinators, the offensive coordinator and defensive coordinator.

These coordinators have their respective position coaches that work for them. For example, there are specific position coaches for the running backs that would report back to the offensive coordinator. Obviously, every week we played a new team and therefore required a new offensive and defensive game plan. On Sundays, the head coach and his two coordinators would meet and design this game plan to be implemented on Monday. This was then relayed to the position coaches and team through film sessions and chalk talks. It wasn’t until Tuesday that we put pads on and physically practiced the new plays.

This is only when it comes to practice, during games the pressure is mostly left to the players. I happened to play free safety on defense and was in charge of communicating are coverages to the rest of the secondary defense and linebackers. Although I made the initial call, any other secondary member or linebacker could communicate back a different call if he saw something that I did not. This would follow the model of an All-Channel network. There was communication floating freely between all members.

With reference to Katzenbach’s six distinguishing characteristics of high-quality teams, I think his first bullet point applied to my position in football dramatically. That is, our coach and defensive coordinator would put forth a plan with an opportunity. Then it was up to my defensive platoon to handle the challenge with flexibility and coordination. Essentially, once our coaches taught us the game plan, they had to stay out of the way and let us go to work. Our defense, which was rather successful in stopping opposing defenses, did have a good mix of expertise and specialization. For football purposes this is pretty straightforward, we had large linemen that could create piles at the line and a quick secondary that could drop back into coverage or come up and stop the run. We also had corners that were able to drop into zone coverage, as well as play man to man. This combination of teammates with different specialties is what lead to our defenses success. 

References:  “Reframing Organizations, Artisry, Choice, and Leadership”, by Bolman and Deal

Opportunism: An Ethical Issue

In class we discussed some of the reasons people do, or do not act opportunistically. In this post I would like to focus mostly on the ethical factors that drive peoples decisions. The only personal example I can think of occurred during my high school job at my home towns local pool. It was a mind numbing job, sitting at a cash register checking all the residents with pool passes and charging those who didn't about five dollars a person to enter. It was an outdated pool so there was no real register, just a box with a lock and a sheet of paper the cashier would use to tally all of the customers. On top of that there was only one manager and no cameras to monitor anything a cashier was doing. Although an outdated pool, it still managed to draw in a decent crowd of residents and non residents alike. During a single day there would be upwards of five hundred dollars in the register. A large amount of money in the eyes of high school student who was making minimum wage.

The reason I had this job was because one of my friends, we'll call him Adam for the sake of privacy, worked there and recommended applying because it was an easy job. After working a couple shifts it became apparent that Adam was taking money from the register and altering the tally sheet to cover his tracks. At first, I saw this as a golden opportunity to possibly double the money I was making for the summer. I would have untaxed, straight to pocket cash and almost no chance of getting caught. In the end, I couldn't bring myself to take any money. All the funds from the pool went back to the village I lived in and would negatively impact any recreational activities it funded. Anything from little league sports to the various art clubs it sponsored. How could I take money away from the same activities I grew up participating in?

Besides making choices to act based on ethical views, humans find other ways to not jump at every opportunity that presents itself. In class we discussed being a "good citizen" and how that can affect peoples decisions. I think the fact that acting opportunistically can be unethical and the fact that society idolizes the "good citizen" both amount to the same thing. Most people will decide not to act if that act is frowned upon by the majority. Another reason is that people believe patience is a virtue and that if you wait good things will happen. This reason to not act opportunistically is very different from the other two in my opinion. I see this as more of an excuse than a reason not to act. One could argue that waiting is foolish and that action is the only way to make something of oneself. 

Merging Organizations and Transaction Costs

This past summer I was a research analyst intern at Superior Manufacturing Group or SMG. SMG is a family owned business that manufactures premium, rubber floor matting and other various rubber products. My primary job was to do competitive price reviews and assist their marketing team but I was hired at a very special time for SMG. I was lucky enough to witness first hand a private equity firm acquire Superior Manufacturing.

Whilst experiencing the entire process I was required to avidly research Audax, the private equity company, as well as learn about the benefits of acquiring other firms. Essentially, Audax seeks out companies with high potential but ones that either don't have the funds to get to the next level or are mismanaged. Audax will then buy out these firms and implement a system that will cause the acquired firm to appreciate in value. In the end, Audax can reap the benefits of the newly managed firm or sell it for more than they initially paid.

Clearly, both parties are benefiting from this transaction. The owners of SMG are getting paid top dollar for their company, granted they negotiate well, and Audax is adding a high potential company to their portfolio. There are potential negatives to this transaction. If Audax realizes that a company they are acquiring is seriously mismanaged then some workers will be laid off and replaced. There is also potential for the company that is being acquired to not be completely honest with Audax, in an attempt to get offered a higher price. Complications such as this create an elongated due diligence period and waste time for both parties.

Organizations interacting with one another deal with transaction costs at all times. Ultimately, both sides  aim to minimize these transaction costs in a way that both parties receive benefits. However, transactions costs can be found in more than just business settings. Any expenses incurred while reaching a deal or agreement can be defined as a transaction cost. This can occur in all facets of life and is a key term within economics.

Donald Patinkin Bio and Impact

 

Pictured above is Donald Patinkin, an Israeli and American monetary economist. Born in Chicago in the early 1920s, Patinkin was raised by Russian Jewish immigrants. Patinkin attended the University of Chicago where he received his PH.D and later taught at the University of Chicago as well as the University of Illinois. He wrote some of the most influential books regarding monetary macroeconomics in the 1950's and 60's. His work traversed the roles of money and value, and was widely valued as the most advanced literature in this time period on those subjects. Being that I am currently studying intermediate macroeconomics coupled with economics 490, I am excited to learn more about the studies he so heavily influenced.