Archive for April, 2010
Economics of Drinking
Posted by Anthony Rindone in News and Current Events on April 28, 2010
Looking for some interesting economics reading? I found this paper today on the ‘economics of drinking.’ http://repec.rwi-essen.de/files/REP_09_158.pdf
The title is a bit deceptive, for the ideas in that paper can be applied to any drug. In essence, alcohol acts as a ‘social lubricant’ that facilitates easier communication between players in a game (or some interaction.) This therefore allows for the participants in the game/interaction to understand the opponent, and thus facilitate full information.
The theory is a bit sophisticated, but those who have taken 14.04, or other advanced game theory classes, could work through it; those in 14.01 could trudge through it with some effort or skim the methodology.
Cheers!
Teaching and Economics
Posted by Anthony Rindone in Classes, Uncategorized on April 9, 2010
Note that I did not title this “Education Economics.” Rather, the focus is on the element of teaching the subject, and not the field of economics that examines problems relating to education as a whole.
Over the past three years, I have tutored around 14 or so different students in microeconomics (14.01) Probability (14.30) and Econometrics (14.32). I have also been able to lead the 14.01 Exam Review sessions in large lecture halls for the the past two semesters. During this time, I have gathered a bit of “data,” if you will, on how students learn economics.
At MIT, probability and econometrics are not tough subjects to tutor, due to the fact that most have such strong mathematics backgrounds, and thus most questions are centered on how to apply equation X to problem Y. “How does Bayes’ theorem apply here? What could the omitted variable be in this problem?” And so on…
But introductory microeconomics (14.01) gives many people a bit of trouble. Much of it stems from a textbook that focuses on math over concepts; yet much of it lies in developing a new mindset, a new set of intuitions. Thinking as an economist is matched by few others. And development takes time, little of which MIT students have.
One student asks me: “What’s the difference between ‘long term’ and ‘short term’ in production?” Another asks: “If perfect competition ensured 0 profits in the long run, why would any firms go through the trouble of starting a business?” Finally: “Isn’t this model an oversimplification?”
All are good questions; yet they are also quite revealing. The students could recall from memory the exact equations involving solving optimization problems, but the students also desire a deeper qualitative understanding, which may not be emphasized enough.
(Though the observant economics student could point out that this may be a problem of a small sample size, of which I will not hesitate to agree on the possibility.)
Thus if you are reading this and are struggling through the introductory classes, relax…The moment when it all clicks is a beautiful one that will make the effort all the more satisfying.