The Royal Economics Academy

Keeping Up with the Latest Brain Research

2006-03-15T22:35:00.000-08:00

I found the cognews web site when following up a news item on brain research. What's an economics instructor doing reading about the brain, you ask?

As a teacher, I am interested in how the brain functions. If I know more about the brain, then I know more about how people learn. At least, that's my theory. The problem is that the journals that publish brain research are pretty darn inaccessible to anyone who's not an expert in the field. That includes economists. Thus, I need an interpretation of new thinking about the brain, rather than the original research. Cognews fills the bill.

For example, an article on altruism caught my eye. As a fan of Gary Becker and the whole Chicago school approach to economics, I've long recognized that altruism, doing something good for others with no apparent benefit for yourself, is quite rational. Now, if the latest research is valid, I see that altruism may be "hard wired" into the brain.

In the journal Science, German researchers report that infants as young as 18 months demonstrated behavior that suggests humans have an innate tendency to be helpful. In the experiments, toddlers aided strangers in completing tasks such as stacking books. "The results were astonishing because these children are so young - they still wear diapers and are barely able to use language, but they already show helping behavior," said Felix Warneken, a psychologist at the Max Planck Institute for Evolutionary Anthropology in Leipzig, Germany.

As a social scientist I can speculate that altruism may be a way of increasing the odds of surviving in a hostile world. So, thousands of years ago, the brain some how became wired with the helper instinct. Could this instinct also be found in animals? The researchers also asked that same question:

"It's been claimed chimpanzees act mainly for their own ends; but in our experiment, there was no reward and they still helped."

How does any of this apply to teaching economics? I'm not 100% sure, but I think I see possibilities. Students helping students, faculty helping faculty, for example. With no reward for that helping behavior.

Perhaps older wisdom anticipated these research findings. "Virtue is its own reward," is a saying I often heard when growing up. It's nice to see that science has confirmed that principle.

Make 'Em Feel the Pain, if You're a Man, That Is

2006-01-19T02:06:00.000-08:00

Here's another one of those stories about gender differences. I'll leave it to the reader to decide if this particular difference has any relevance to the teaching of economics.

Tanya Singer and Dr. Klaas Stephan, both of University College London, are coauthors of a new study, the results of which have been published in Nature. Here are the basic findings:

... a new brain-scanning study suggests that when guys see a cheater get a mild electric shock, they don't feel his pain much at all. In fact, they rather enjoy it.

In contrast, women's brains showed they do empathize with the cheater's pain and don't get a kick out it.

The two scientists offered the usual caveat, "more studies are needed, blah, blah, blah." The bottom line, though, is expressed in the title of the ABC News story: Men Enjoy Seeing Bad People Suffer. Assuming that's true as the study suggests, I suppose that if I were a prosecutor seeking the death penalty for a defendant, I would try to stack the jury with men. I also suppose if I were a novelist writing Westerns, then the lynch mob in my story would be made up of men.

In the classroom, maybe there's a lesson here that could be applied to prevent cheating on exams. If I ever figure out the lesson, I'll let you know. By the way, I can't resist adding that some of the history of Nazi Germany suggests that women concentration camp guards enjoyed seeing the inmates suffer as much as the men guards did. Hmm. I think after the war some of those men and women who enjoyed seeing people suffer emigrated to America and taught at my high school : - )

The War on Grade Inflation

2005-11-17T20:41:00.000-08:00

Professor Harvey C. Mansfield: “We should stop giving our students the same grades they used to get in high school.”

Harvard Professor Harvey C. Mansfield is controversial. More than once he's stirred the pot on the issue of grade inflation. You might think of him as the General Patton on the War on Grade Inflation. This is one General who has a pretty good take on the enemy. Perhaps he revels in the nickname students have given him: Harvey C. Minus Mansfield.

As an instructor, I like the boldness with which Dr. Mansfield approaches the issue. It takes guts to award two grades to every student in his classes, one public grade and one private. The first is the student's official course grade, which is sent to the Harvard registrar. That grade is admittedly inflated to match the overall grade distribution at Harvard, which today amounts to one fourth A's and another fourth A-'s. The second grade is an unofficial accounting of each student's relative performance, with the effects of grade inflation removed.

In defense of the two-grade system, Dr. Mansfield writes:

The two-grade device is a way to show my contempt for the present system, yet not punish students who take my course. My intent was to get attention and to provoke some new thinking.

Dr. Mansfield puts his finger on the problem with grade inflation:

Grade inflation compresses all grades at the top, making it difficult to discriminate the best from the very good, the very good from the good, the good from the mediocre. Surely a teacher wants to mark the few best students with a grade that distinguishes them from all the rest in the top quarter, but at Harvard that's not possible.

What does this say about professors who are complicit in grade inflation?

Professors do not say to themselves, "This is what I can require; anything above that enters into excellence." No. With an eye to student course evaluations and confounded by the realization that they have somehow lost authority, professors begin from what they think students expect. American colleges used to set their own expectations. Now, increasingly, they react to student expectations ...

Thus another evil of grade inflation is the loss of faculty morale that it reveals. It signifies that professors care less about their teaching. Anyone who cares a lot about something -- for example, a baseball fan -- is very critical in making judgments about it. Far from the opposite of caring, being critical is the very consequence of caring. It is difficult for students to work hard, or for the professor to get them to work hard, when they know that their chances of getting an A or A- are 50-50. Students today are still motivated to get good grades, but if they do not wish to work hard toward that end, they can always maneuver and bargain.

How did Harvard, and by extension many other American universities, get into such a mess?

Grade inflation has resulted from the emphasis in American education on the notion of self-esteem. According to that therapeutic notion, the purpose of education is to make students feel capable and empowered. So to grade them, or to grade them strictly, is cruel and dehumanizing. Grading creates stress. It encourages competition rather than harmony. It is judgmental.

You might be thinking, "What's so controversial? Here's a professor who would like to implement higher standards. Nothing wrong with that, is there?" Dr. Mansfield isn't content to let sacred cows go unslaughtered. The academic sacred cows of silent acceptance of racial preferences and the damage done by multiculturalism are central to his arguments:

At colleges, self-esteem often goes hand in hand with multiculturalism or sensitivity to people of diverse races and ethnicities -- meaning that professors must avoid offending the identities (still another name for self-esteem) of victimized groups.

I know what that means. It means that despite all the talk about free speech at Harvard, you had better watch what you say. And how you grade.

When I was interviewed by The Boston Globe about my two-grade policy, one cause of grade inflation that I cited provoked a fiercely defensive reaction from the administrators at Harvard. I said that when grade inflation got started, in the late 60's and early 70's, white professors, imbibing the spirit of affirmative action, stopped giving low or average grades to black students and, to justify or conceal it, stopped giving those grades to white students as well.

Dr. Mansfield calls for university leaders to put standards first. He's seeking a political solution to the problem of grade inflation, focused on the politics of university governance. As an economist, I'm in a position to remind Dr. Mansfield that there's another force, more powerful than university politics, that has the potential to contribute toward a solution to the problem. That force is the free market.

Here's my argument in a nutshell. Grade inflation makes it more difficult and costly for employers to sort students by abilities. For example, there are real, significant costs associated with hiring a young engineer of average ability when the job calls for an engineer of exceptional ability. Thus, employers have a preference for hiring graduates of universities where grades correlate closely with the underlying abilities of the students.

Universities that allow rampant grade inflation will, in the long run, see recruiting of their graduates suffer. Additionally, when the best students come to understand that grade inflation diminishes their chances for a job, the students themselves, in partnership with employers, will call for greater realism in grading.

Perhaps Dr. Mansfield should see that employers know about the grade inflation he so passionately writes about by putting copies of his writings about Harvard's grade inflation into the hands of companies that recruit Harvard graduates.

Now, here's the diabolical part of my suggestion. Without student's names attached in order to preserve their privacy, Dr. Mansfield should put those unofficial grades into the hands of recruiters, too, right next to the official grades. I wonder how a company would react when it realizes that the A student that it has been recruiting is really only a C student. Just maybe, he would have an instant ally in his war on grade inflation. Remember, all's fair in love and war!

False Memories! How Memory Fails Us

2005-10-01T22:12:00.000-07:00

Danger! Danger! Danger! The knowledge in the linked article from New Scientist is dangerous! In the hands of the wrong people, it could cause significant harm. Here's the lowdown:

A new study was designed to "bring people into the laboratory and set up a circumstance in which they would remember something that did not happen," said Kenneth Paller of Northwestern University.

Like what? I've read books chock full of testimony from sincere people who "remember" being abducted by aliens, taken aboard alien spacecraft, and then being forced to donate eggs or sperm to create hybrid human/alien creatures. Could someone be brought into a lab and be convinced that they were so abducted? Better yet, could I convince Bill Gates that I loaned him the money to start Microsoft and that I'm thus entitled to half his wealth?

Let's see how false memories were induced in laboratory subjects:

They showed the participants pictures and asked them to imagine other images. Later, investigators asked whether certain objects were seen or imagined. Often, imagined images were recalled as real.

Now wait a minute, please. Could I show Pamela Anderson (or Jessica Simpson, etc.) a picture of two people having s*x, ask her to imagine an image of the two of us having s*x, and then expect her to believe that the two of us are a couple? This is dangerous, powerful stuff, folks :-)

Luckily for Pam Anderson, there is a key to separating out false memories from real ones.

The key to remembering that something was imagined when we recall it is the context surrounding a memory, the research showed. If you remember who told you to imagine something, where it was, what was going on around you, the separation between what really happened and what you imagined becomes more distinct.

When a person makes these external connections to the memory, he engages the parts of the brain that lead to true memories.

Brain research is intersting and useful. In this case, the message is simple. Not every memory is real. Some are false. Next we need an economist to study how false memories affect decision making and hence economic welfare.

Since I'd rather avoid the problems that false memories have the potential to create, perhaps the answer is to make sure to keep a written record of significant events. Unless I can back up my claim to Bill Gates' fortune with an IOU signed by him, then I guess it's just a false memory. And searching through my collection of s*x tapes, I see evidence of another false memory. It's not Pam and I that were an item. It was some guy named Tommy Lee. Darn it! Sometimes those false memories are better than the real ones!

Get in Touch with Your Inner Child (Who Just Happens to Be A Mathematician)

2005-10-01T22:03:00.000-07:00

Economics students are often dismayed by the math in even a basic economics course. Computing an elasticity of demand, for example, seems to send a number of learners into panic.

Somewhere along the line, lots of students have developed the attitude (as one girl put it to me): "I am stupid in math."

The story linked by this post offers a surprising rejoinder to that girl. According to a recent study, five year olds have innate math abilities, even when they have not received any instruction in math. Heck, you don't even have to be human to have mathematical abilities. Studies have shown similar math abilities in monkeys.

Here's an example of the type of experiment the researchers performed with 5-year olds:

In one experiment, the children saw 13 blue dots on a computer screen; those were covered, and then they saw 17 blue dots and were forced to keep the running tally in their heads. Then they were shown 50 red dots and asked whether there were more blue dots or red dots.
Presented this way, the children answered correctly about two-thirds of the time that there were more red dots than blue dots.

This and similar mathematical abilities appear to be inborn:

"What's central about numbers for us as adults is that we can apply a number like 7 to a diverse number of things," said Elizabeth Spelke, a psychologist at Harvard University and the principal investigator of the study. "We can say that there are seven dots but also that a horn honks seven times. Although these are different in their sensory qualities, the numbers are the same."
Past studies performed on infants and non-human primates suggests that these abilities are present even before the age of 5.

"The experiments of the infants and the monkeys, I think, make it extremely likely that these abilities are inborn," Spelke said.

What are we to make of this insight? For one thing, somewhere between age 5 and age 18, something happens to many people that creates "math anxiety." What are the causes of math anxiety? How can people suffering from it be helped?

In terms of teaching economics using math, the best advice I can give learners is to practice, practice, practice, if you have trouble getting in touch with that inner child mathematician.

How Much is the Life of a Reindeer Worth?

2005-09-29T20:07:00.000-07:00

Without Reindeer, How Will Santa Make His Rounds?

In labor economics classes instructors usually cover the economic value of life. In a variety of circumstances, such as when a worker is killed on the job, economists are brought in to determine the size of the financial settlement paid by the employer to the dead worker's family. The typical economic study brings considers net future earnings, discounted in a present value computation.

An unusual value of life computation is the subject of a story coming out of Denmark. It seems there was this Santa Claus (there are lots of them in Denmark) whose reindeer had a heart attack and died when Danish Air Force jets flew over his farm. The military was clearly responsible and had to pay off the reindeer's next of kin, who in this case was Santa.

How much to pay was the question. The answer was 31,175 Kroner, about $5,032 U.S. dollars. This value of life computation was probably a lot more straightforward than the computation done when a human being is killed. Why? Well, if human beings could be bought and sold like reindeer, cattle, pigs, and dogs, then there would be a market price for a person. That price would vary according to the individual's productivity, and it might not be known with certainty. In the case in question, it's likely that the market value of reindeer in Denmark is established through livestock auctions.

Of course, if the reindeer who was killed had a red nose, thus helping light Santa's way on his Christmas eve journeys, then that unique bit of human capital ... uh, "reindeer capital," would make Rudolph worth quite a bit more than ordinary, run-of-the-mill reindeer.

QuickTake: An Integral Approach to Teaching Economics

2005-09-25T21:42:00.000-07:00

From the web comes this 24-page paper by Marcelo Clerici-Arias of Stanford University. Although the paper is more than 10 years old, the approach is still fresh and would be of use to faculty in a variety of disciplines.

The "integral" approach refered to in the title is deceptively simple. First, devise a set of course objectives, design and implement activities to achieve the objectives, assess how successful the activities were, and then followup by rewriting the objectives and activities.

The reason I consider this one of the best papers I've ever seen on teaching is that the author provides several examples of the activities he's used in his own classes. That makes it easy for any instructor wanting to implement this approach to get started. The paper is also well grounded in the literature and contains an extensive bibliography.

QuickTake: Poor Writing Costs Taxpayers Millions

2005-07-05T10:46:00.000-07:00

Direct cost of poor writing: $250,000,000 spent on remedial writing instruction.

Indirect cost of poor writing: not easily measurable, but undoubtedly quite high.

Hidden cost?

Another hidden cost is that good ideas may never see the light of day.

"I see that all the time in writing and political speaking," Huckabee said. "There are some really bright people who can't communicate and as a result their ideas probably aren't given the attention they deserve."

Magnitude of the problem:

While two-thirds of companies surveyed in the 2004 report said writing was an important responsibility for workers, 100 percent of the 49 states responding to the anonymous survey said it was. More than 75 percent said they take writing skills into account when hiring.

An economy functions more efficiently when its labor force can read well and write clearly. Encouraging students to develop their writing skills is something that any economics instructor can do.

More information will be found at this web site.

Gender Differences in the Brain--Really Not a Big Surprise, Is It?

2005-06-29T11:31:00.000-07:00

Views of the brains of men and women

Brain research that has a bottom line ought to offer insights into gender differences in teaching and learning. Consider this:

Men and women do think differently, at least where the anatomy of the brain is concerned, according to a new study.

The brain is made primarily of two different types of tissue, called gray matter and white matter. This new research reveals that men think more with their gray matter, and women think more with white. Researchers stressed that just because the two sexes think differently, this does not affect intellectual performance.

Psychology professor Richard Haier of the University of California, Irvine led the research along with colleagues from the University of New Mexico. Their findings show that in general, men have nearly 6.5 times the amount of gray matter related to general intelligence compared with women, whereas women have nearly 10 times the amount of white matter related to intelligence compared to men.

It wouldn't surprise most observant, aware people that men and women think differently, but now there's research to prove it. So far, so good, but if intellectual performance is not affected by differences in thinking then what does it matter?

The results from this study may help explain why men and women excel at different types of tasks, said co-author and neuropsychologist Rex Jung of the University of New Mexico. For example, men tend to do better with tasks requiring more localized processing, such as mathematics, Jung said, while women are better at integrating and assimilating information from distributed gray-matter regions of the brain, which aids language skills.

Wait a minute. Paraphrasing the results, the study tells us that men do better in math and women in languages. Is that what I just read? What else do I need to know?

Scientists find it very interesting that while men and women use two very different activity centers and neurological pathways, men and women perform equally well on broad measures of cognitive ability, such as intelligence tests.

Here's what I think I know and ought to keep in mind in teaching economics. First, male and female students should perform equally well in the course. However, when math is involved, female students will not perform as well as males. When language is involved the males will have more difficulties.

The question remains is there anything a conscientious instructor can do about these research findings to help the females get through the math in an economics class and help the males deal with the fine points of language. Until the answer is provided, perhaps by additional research, the best an economics instructor can do is try to explain concepts as clearly as possible and provide an array of learning opportunities that engage the white matter brain cells and the gray matter brain cells.

Economics--A Journey of the Heart as Well as the Mind?

2005-06-29T10:02:00.000-07:00

Students want their universities to help them answer the question, "What's my life's purpose?" Are public universities equipped to do that? More specifically, can economics classes help students meet this need?

First, let's be specific. UCLA surveyed 112,000 students on 236 campuses and found that 67 percent of first-year students believe it is essential or very important that their school help develop their personal values. The survey also found that 48 percent of them would like their school to encourage the personal expression of their spirituality.

No one should interpret these survey results as suggesting that students want to be preached to. Furthermore, the survey tells us that it's their own "personal values" that students feel need further development, not the values of organized religion.

Economics as it is presented in the typical Economics 101 textbook would appear to be totally disconnected to spiritual needs. At first glance, it's hard to inject an interpretation of spirituality into topics such as demand and supply, monopoly and antitrust, and money and inflation. Furthermore, instructors might find themselves feeling a wee bit uncomfortable trying to supply spiritual interpretations or insights. But, let's take a second look and see if these thoughts hold up under scrutiny.

An introductory economics class is a good place to explore career choices, as part of a discussion of labor economics. Typically, that exploration will involve looking at markets for different occupations and observing how demand and supply influence earnings. However, everyone recognizes that intangibles play a huge role in occupational choice. Might there not be a spiritual aspect to the choice of teaching as a career, for example? In fact, wouldn't a consideration of the intangibles provide a worthwhile relaxation of the ceteris paribus clause?

Business ethics opens a Pandora's box of opportunities for discussing personal values. It's hard to picture an economics class so abstract and theoretical that current corporate scandals are ignored. Thus, ethical issues of business as part of the study of the firm can easily be brought into Economics 101.

If students demand help with issues relating to personal values, shouldn't instructors make the effort to supply a framework grounded in economic principles that will help them?

Look and Listen: Brain Struggles to do Both

2005-06-23T00:20:00.000-07:00

I left the title of this post exactly as it appears on the Live Science web site. It's shocking to me to think that my brain and your brain struggle to look and listen at the same time. It reminds me of the old joke about not being able to walk and chew gum at the same time, but this story is no joke.

"Our research helps explain why talking on a cell phone can impair driving performance, even when the driver is using a hands-free device," said Steven Yantis, a Johns Hopkins University psychologist. "Directing attention to listening effectively 'turns down the volume' on input to the visual parts of the brain."

"By advancing our understanding of the connection between mind, brain and behavior, this research may help in the design of complex devices – such as airliner cockpits – and may help in the diagnosis and treatment of neurological disorders such as ADHD or schizophrenia," Yantis said.

I see another application of this research, which is described in the link to this post, that goes beyond driving with cell phone in hand or the design of cockpits. Think about the student sitting in a lecture hall on a college campus. The instructor reveals a complicated graph of profit maximization, and launches into a lecture on the subject at the same time. The poor student sits there trying to look and listen at the same time. What's the brain doing? Struggling to cope.

Solution to the problem? I'm not a scientist so I can't say for sure. If I wanted to be a smart aleck, I might suggest pausing for a moment of silent prayer. But since prayer is illegal in the schools, maybe I'll just suggest pausing for a moment of silence. Let the students' brains take in information through the eyes (the looking part), before I start talking and they have to start listening.

General principle: If people struggle to do more than one thing at time because the brain has difficulty coping, then stop doing more than one thing at a time. No wonder people feel so drained after a hard day of multitasking at work. One thing at a time, and first things first. Maybe that's the way to a more effective day at work and more effective learning in the classroom. At least, that's what this research suggests to me. What do you think?

An Award to Honolulu Community College for the Teaching Tips Index

2005-06-10T21:29:00.000-07:00

The Royal Economics Academy excellence award

There's a wealth of links to faculty development resources that have been gathered on this page. Check it out. Thanks, Honolulu Community College.

Gardner's Multiple Intelligences--Implications for Teaching and Learning

2005-06-10T20:45:00.000-07:00

Thanks to Professor Lamp, I have a list of Howard Gardner's 7 intelligences. Professor Lamp discusses these from the perspective of gifted and talented children. I've taken a stab at laying out the perspective from the podium in an Economics 101 class.

1. Linguistic
Students with this intelligence are probably majoring in English or foreign languages. They might be bloggers, if they have a technological bent. They enjoy writing, reading, telling stories or doing crossword puzzles. I've created economics crossword puzzles for my classes to help linguistic learners master the subject. I'm also always interspersing true stories with technical material.

2. Logical-Mathematical
These are the math, science, and economics majors. Learners with lots of logical intelligence are interested in patterns, categories and relationships. They are drawn to arithmetic problems, strategy games and experiments. There are lots of these kinds of learning resources in course study guides provided with economics texts. Assigning study guide exercises would help these students to learn.

3. Bodily-Kinesthetic
Dance and kinesiology are likely to be the majors of choice for these learners, who process knowledge through bodily sensations. They could also be majoring in art or sculpture. They are often athletic, dancers, or good at crafts and other hands-on activities. In economics, students whose primary intelligence is kinesthetic will be at a disadvantage relative to other learners.

4. Spatial
I presume that art and sculpture majors would possess this intelligence in large amounts. These learners think in images and pictures. They may be fascinated with mazes or jigsaw puzzles, or spend free time drawing, daydreaming, or building models. This is a good intelligence for engineering, architecture, and economics majors to possess, too. Graphing assignments in economics would help these students learn.

5. Musical
I hope that music majors possess a heaping quantity of this intelligence. These learners are often discriminating listeners. I would imagine that lectures and sound files posted on a course web site would help them learn economics.

6. Interpersonal
Learners who are leaders, who are good at communicating and who seem to understand others' feelings and motives possess interpersonal intelligence. Group projects in economics allow learners with interpersonal intelligence to excel.

7. Intrapersonal
These people may be shy. They are very aware of their own feelings and are self-motivated. Appealing to that sense of self motivation may be the key to increasing the learning of economics with these students.

Too bad there's no easy way to determine the primary intelligence of each student in an Economics 101 class. What I'm left with is preparing course materials that appeal to a variety of intelligences. Since there is debate about the validity of the multiple intelligences theory, here's a little example of how a computer programmer uses several intelligences:

Gardner (1983) proposes that there are seven forms of intelligence: linguistic, musical, logical-mathematical, spatial, bodily-kinesthetic, intrapersonal (e.g., insight, metacognition), and interpersonal (e.g., social skills). As a computer programmer, I use a number of these different kinds of intelligence on a regular basis. For example, writing a Pascal program requires extensive use of logical-mathematical intelligence. Choosing recognizable variable names requires linguistic intelligence. Debugging requires intrapersonal intelligence in order to arrive at that, "Ah, ha!" experience of recognizing the problem that needs to be fixed. Finally, when I run into an especially difficult problem, interpersonal intelligence is required to get help.

QuickTake: Intelligence--What is It?

2005-06-10T20:37:00.000-07:00

I'm just an economics instructor trying to teach basic economic concepts to college freshman. However, research into the psychology of learning is sometimes as useful to me as knowledge about the latest economic research. Take a look at the page of resources on intelligence by clicking on the link in this post.

Piaget's Final Stage of Development and The Economic Way of Thinking

2005-06-10T20:16:00.000-07:00

From The Dictionary of Cognitive Science comes this statement of Piaget's final stage of development:

Formal Operations (11/12 to adult)
Children who attain the formal operation stage are capable of thinking logically and abstractly. They can also reason theoretically. Piaget considered this the ultimate stage of development, and stated that although the children would still have to revise their knowledge base, their way of thinking was as powerful as it would get.

In university-level introductory economics classes, "the economic way of thinking" is usually stressed. That emphasis fits right in with Piaget's Formal Operations stage of development. The problem is that not every child reaches this final stage of development. At least, that's what psychologists think today. The challenge in teaching economics is to help learners achieve that final stage in cognitive development, if they're not already there.

How can that be done? Several thoughts occur to me:

Limit the quantity of content and emphasize topics that involve theoretical reasoning.
Explicitly show the steps in logical arguments.
Provide practice exercises that involve theorizing and abstraction.
Build new knowledge around what learners already know.

The economic way of thinking seems obvious to instructors, but often is not obvious to students. Perhaps that's the first step to wisdom in the teaching of economics.

QuickTake: How Does Knowledge Grow?

2005-06-10T20:04:00.000-07:00

Jean Piaget (1896-1980) is a legend in teaching and learning circles. The question at the core of his research was, "How does knowledge grow?"

His answer is that the growth of knowledge is a progressive construction of logically embedded structures superseding one another by a process of inclusion of lower less powerful logical means into higher and more powerful ones up to adulthood. Therefore, children's logic and modes of thinking are initially entirely different from those of adults.

Piaget's oeuvre is known all over the world and is still an inspiration in fields like psychology, sociology, education, epistemology, economics and law as witnessed in the annual catalogues of the Jean Piaget Archives.

Notice that 25 years after his death Piaget is still an inspiration in diverse fields, including economics. While Piaget was concerned with exploring how children learn, Malcolm Knowles focused on adult learning. Since college students are often not quite adults and certainly not children anymore, the question about how their knowledge grows has always been an issue in my mind. Is Piaget's pedagogy or Knowles' andragogy more relevant to excellence in college teaching? Future posts will explore the issue.

QuickTake: EconomicsAmerica National Standards

2005-06-01T23:28:00.000-07:00

The 20 national standards in K-12 economic education are listed on the linked page. In future posts I'll be commenting on the standards, and the related online lessons that accompany them, from a higher ed perspective. For now I'll just say that if students really met the standards it would make the job of Economics 101 instructors much easier.

The Economics of Online Surveys

2005-06-01T22:38:00.000-07:00

I posted a companion piece to this post on Socrates Tech a few minutes ago. Researchers in pyschology are finding that people will go online to take surveys, which provides them with a richer data base than the traditional method of surveying undergraduate students.

Some sites offer small prizes to people who take part, or promise to post the results of the research. But more often than not, there is no reward.

"I think there are a lot of people who are just generally interested in filling out surveys - probably the same people who would do all the Cosmo surveys sitting in doctors' rooms," says Paula Saunders, who is running a survey on workplace bullying (www.psy.unsw.edu.au/BullyingSurvey) as part of her PhD research at the University of NSW.

Researchers like the swing to online surveying because it takes them to a global audience at a low cost. It seems to put the subjects more at ease: it is far easier to share secrets, intimacies, fears and embarrassments behind the anonymity of their computer screen than face-to-face with a research assistant.

"When I advertised for face-to-face participants, I had a great deal of reluctance. I had people phone and say they are interested, but quite often they will give me false names after talking to me six times trying to get a feel for whether or not they can trust me," says Saunders. "It's been a huge struggle. With this, I think people feel more comfortable expressing themselves because they know I don't know who they are and I won't be able to track them."

David Mallard, a psychology lecturer at Charles Sturt University in Bathurst, has used online surveys for research since 2002, including one no longer online that flashed up a series of photos re-enacting a mugging. A week after watching the crime onscreen, folks who took part were asked to return to the site to view mug shots to see if they could correctly identify the perpetrator and detail some other aspects of what they had witnessed.

The followup for economists is obvious. If the psychology faculty are finding that online surveys provide richer, more economically acquired data, there's no reason it can't be done by economists.

Women and Competition: Do Gender Differences Matter In the Classroom?

2005-05-26T19:44:00.000-07:00

More economics in the news is good for economics instructors. At their best, stories with economic content can engage student interest. The linked New York Times story made a big splash today.

Two economists, Muriel Niederle: Department of Economics, StanfordUniversity and NBER, and Lise Vesterlund, Department of Economics, University of Pittsburgh, experimented with competitive responses by males and females. Not surprisingly, they found a number of significant differences in the way men and women respond to competitive situations. Let them put their conclusions in their own words:

In this paper we examined an environment where women and men perform equally well, and where issues of discrimination, or time spent on the job do not have any explanatory power. Nonetheless we find large gender differences in the propensity to choose competitive environments. We feel that the effects we discover in the lab are strong and puzzling enough tocall for a greater attention of standard economics to explanations of gender differences that so far have mostly been left in the hands of psychologists and sociologists.

I want to use the conclusions of the Niederle and Vesterlund paper to tentatively explore the implications for teaching and learning in the economics classroom. Niederle and Vesterlund refer to women leaving science and engineering, thusly:

There is indeed evidence that, for example, the decision of women to quit sciences and engineering is not primarily due to ability. For example, a report entitled “Women’s Experiences in College Engineering” writes that “Many young women leave […] for reasonsother than academic ability. These reasons can include their negatively interpreting grades that may actually be quite good, diminished selfconfidence, or reluctance to spend all of their waking hours ‘doing engineering.’” (Goodman, Cunningham and Lachapelle 2002). The report mentions that many women that left mentioned negative aspects of their schools’ climate such as competition, lack of support and discouraging faculty and peers. Similar effects have been found by Felder et al (1994).

It seems therefore that decisions of women to remain in male-dominated areas are not driven by actual ability only. In natural settings issues such as the amount of time devoted to the profession, and the desire of women to raise children may provide some explanations for the choices of women.

These conclusions, you may recognize, are the similar to those that got Harvard President Larry Summers in trouble a couple of months ago. I applaud the fact that the paragraph immediately above is in the paper. However, the insights of Professors Niderle and Vesterlund don't address gender differences in response to teaching methods and styles.

What I'm getting it is that I'm still in the dark about how to create a classroom environment that appeals to female students and male students equally. The reason for raising the issue relates to my previous post on The Royal Economics Academy about the AEA's efforts to increase the number of women in the economics profession. Women students, at least in my classes, perform as well or better than the males. Nonetheless, the number of females moving on to economics majors and careers in economics lags behind what I would expect. I hate to end a post with a question, but I must. Why the gender difference?

QuickTake: The FOMC's Calendar

2005-05-24T19:42:00.000-07:00

A useful tool when teaching monetary policy is the FOMC calendar page. Just follow the link in this post and then click on the FOMC press release or the minutes of the FOMC meeting of your choice. We teach monetary policy in an abstract way, but seeing the actual minutes of an FOMC meeting makes monetary policy more concrete.

QuickTake: The IDEA Paper Series

2005-05-24T18:51:00.000-07:00

The IDEA Center is up to #42 in their series of papers on teaching and learning. While these papers are not specifically directed toward the teaching of economics, they offer solutions to many of the problems economics instructors deal with in terms of class management, motivating students, etc. Each paper is short and practical. Highly recommended.

Free Online Book: How People Learn

2005-05-24T18:19:00.000-07:00

How People Learn is one of the best free online resources for instructors, and parents for that matter. Among instructors, t's not just economics faculty who will find the book useful. Any instructor, no matter his or her field of instruction, will be mesmerized by learning about how students learn.

The book is also available in a print version, which would be easier to read and thus justify the $22.45 price. The interface between the reader and the book in the online version is awkward because the book is provided in html format rather than a pdf. (A pdf version can be purchased.) That said, and even though a good bit of the book's context involves children, this is a worthwhile resource for all college faculty.

EcEdWeb: An Award for an Excellent Resources Page

2005-05-24T17:45:00.000-07:00

The Royal Economics Academy excellence award

The University of Nebraska at Omaha's Economic Education Web page (EcEdWeb) has been online for 10 years now. I've provided a link to the homepage, but once there you'll probably want to click on the link that says College Teach. I counted well over 100 clickable links to online resources useful to economics instructors. That makes EcEdWeb the most comprehensive resource page I've found yet. I'll be reviewing some of these links in future posts. Thanks, EcEdWeb for helping improve the quality of economics instruction.

Quotable Ideas for the Economics Classroom

2005-05-23T23:28:00.000-07:00

From the AACSB e-newsline B-school quotables page come these thoughts:

Leaders must inspire change from the top. Success happens in the minds of people and you can have all the systems in the world, but if you really want to have change it must happen in the minds of your people.

Woodroffe said if companies were to become more entrepreneurial, they had to be willing to accept failures.

The one thing that's common to entrepreneurs is that really successful people don't go around succeeding all the time. Sometimes they fail.
--Simon Woodroffe, founder, Yo! Sushi UK restaurant chain, speaking to an audience at the University of Auckland Business School

Running a classroom is like running a business in some ways. Instructors must be leaders. Change must happen in the minds of your people--your learners. Sometimes you fail.

Yep, no wonder that former teachers sometimes go on to success in the business world. We've seen all the things that can happen in the economy happen in the classroom.

Economics 101 classes probably don't pay enough attention to entrepreneurs and entrepreneurship studies. Yes, we teach that there are four resources, land, labor, capital, and entrepreneurship, then quickly move on to the concept of production possibilities and its graphs.

Since entrepreneurs are such interesting people, it wouldn't be a bad idea to spend a bit more time discussing them. A good way to break the ice on this topic is to survey students about their plans for future businesses, followed up by questions about the qualities of successful entrepreneurs.

Hot on the Heels of the Apprentice Comes The Scholar

2005-05-23T15:41:00.000-07:00

It's easy to see the similarities. A group of attractive youths compete for a prize worth $250,000. While The Apprentice offers star power in the fleshy form of Donald Trump, while The Scholar offers offers insights into academic excellence.

In looking over the Web site for The Scholar I didn't see a contestant express an interest in pursuing an economics major, but then again does anyone ever enroll in college as an economics major. My impression is that students are exposed to economics and a handful of them are drawn to it and change their major.

The Economics Department at Indiana University offers a web page that sketches the benefits from majoring in economics. Dr. Martha Olney has this page, which has graduates with economics degrees writing about their experiences. Valpariaso University offers this excellent pdf informing prospective economics majors about career opportunities.

My advice: Direct only the best students in your Econ 101 classes to these materials. Economics isn't the easiest subject in the world!

QuickTake: Ask Dr. Econ

2005-05-21T02:48:00.000-07:00

Another winner from the San Francisco Fed: Ask Dr. Econ. The good Dr. can't answer all questions, but he/she posts answers to selected questions. I'll be putting up a link to Ask Dr. Econ on my class WebCT resources page.

QuickTake: The Economic Letter

2005-05-21T02:45:00.000-07:00

The San Francisco Fed has a nice bimonthly Economic Letterthat can be useful in teaching current economic issues. The level is about right for an Economics 101 class.

QuickTake: The Current Account Deficit

2005-05-21T02:40:00.000-07:00

The Atlanta Fed has a nice article on the deficit in the current account. This would make a nice supplement to textbook coverage of the topic.

Teaching as Leadership

2005-05-21T00:38:00.000-07:00

What are the characteristics of a good teacher? If you believe that good teaching requires servant-leadership, then ponder:

The Ten Characteristics of a Servant-Leader
1. Listening
2. Empathy
3. Healing
4. Awareness
5. Persuasion
6. Conceptualization
7. Foresight
8. Stewardship
9. Commitment to the growth of people
10. Building community

Visit the Greenleaf Center for Servant-Leadership for details on how to put these characteristics into action.

Where are the Women Economists?

2005-05-18T23:17:00.000-07:00

I found two items next to each other on the UBDaily newsletter today. One item linked to an NPR audio file discussing efforts to increase the number of women in the sciences, the issue that got economist and Harvard President Larry Summers in trouble. The second was also a link to another NPR audio file, this one discussing the fact that the majority of college graduates these days are female. Putting 2 + 2 together and arriving at 4, I shouted "Eureka!" If more women than men are graduating from college these days, then ceteris paribus, the relative number of women in the sciences can't do anything but increase. Imagine all the grief Larry Summers could have avoided had he realized this implication in the data!

The American Economic Association has long concerned itself with increasing the number of women economists. The Committee on the Status of Women in the Economics Profession (CSWEP) is the vehicle by which that concern expresses itself. Here's some of the Committee's work:

CSWEP was the moving force behind the establishment of a child-care program at the annual AEA meetings and, with NSF support, organized a successful mentoring program at the national and regional levels in 1998. With new funding from the NSF, CSWEP launched another mentorship initiative in 2004. The first set of workshops were held immediately after the January 2004 ASSA meetings in San Diego. There will be a second set of national workshops in 2006, as well as one mentoring program at each of the regional association meetings.

I don't have any data telling me how successful the Committee's efforts have been. When I was in college, most of my English teachers were women and most of my economics teachers were men. From what I can see at the meetings, there are still a lot of male economists, but more women than when I was in school. As for the teaching of economics, I don't know what role gender plays. I've found an article that might give me some answers: "Gender and the Study of Economics: The Role of Gender of the Instructor." Journal of Economic Education. v30, n1 (Winter 1999): 3-19. If I find definitive answers while reading the article, I'll share them with readers of this blog.

Controvery in the Classroom--A Remedy Worse than the Problem?

2005-05-18T22:17:00.000-07:00

From USA Today comes the linked story about efforts by 14 state legislatures to shape classroom discussion via proposed legislation. Since economics is about choice, just about any topic might come under discussion in the economics classroom. Who's to decide what's legitimate?

Let's take a quick look at the legislative proposals:

Though proposals vary slightly from state to state, core principles remain the same. In Ohio, for instance, a bill would bar faculty or instructors from "introducing controversial matter into the classroom or coursework that has no relation to their subject of study and that serves no legitimate pedagogical purpose." Ohio's state colleges and universities would also have to create "a grievance procedure by which a student, faculty member, or instructor may seek redress for an alleged violation."

To be a professional in the classroom means understanding Socrates when he said, "I cannot teach anybody anything, I can only make them think." Some instructors might corrupt this educational philosopy to read, "If I make them think, they will think like me." An instructor might consider it a personal failing if students haven't come around to his or her way of thinking. That's confusing the outcome with the process. Contrast it to the Socratic perspective, which emphasizes the value in the process of student discourse.

There is a simpler solution than state legislation, grievance panels, and the whole bureaucratic jungle that both faculty and students will have to navigate if legislation is enacted. First, those few faculty who lack professionalism and thus let personal feelings toward students' beliefs influence their grading need to read their teaching surveys more carefully. Students do not care for such nonprofessional behavior. Many will and should avoid taking classes with such instructors. That's the market for information making for an efficient outcome. Second, a grading rubric can contribute to the amerlioration of the problem. A rubric spells out in great detail what factors will influence a student's grade. Every class should have a well defined rubric as part of the syllabus so that students will know how their grades will be determined. If those nonporofessional instructors insist that students agree (or pretend to agree) with their point of view or be penalized, then let them put it writing as part of the rubric.

In economics, rubrics are especially important since so many current events and theories involve belief systems. Ever seen a neoKeynsian and a monetarist go at it? I feel for the aggrieved students who have complained about their inability to express themselves freely in the classroom or who have been penalized by lower grades because their thinking did not match that of their instructors. Fair grading and a fair hearing of everyone's views is the least that students have a right to expect in exchange for their hard-earned tuition dollars.

Cantillon's Paradise: A Student's Economics Blog

2005-05-18T20:33:00.000-07:00

Next fall I'm going to have my students create their own economics blogs. They'll be required to post weekly to their blogs. As far as I know I'll be the first economics instructor to require students to blog. I'm aware of a few English instructors requiring blogs, but no economics instructors, so I'm not quite sure how good an idea this is. In future posts I'll discuss the rubric and other dimensions of that course assignment, but this post is about an exemplary student economics blog, Cantillon's Paradise. Click on the title of this post and pay it a visit.

Why is Cantillon's Paradise exemplary? Consider the title. Student blogger David Skarbek obviously spent some time coming up with it. Just from the name of his blog, you know a lot about Mr. Skarbek's economics. Then there's the frequency of his posts. I don't know Mr. Skarbek, but I would assume that like most students he stays busy with his courses, his part-time job, his friends, family, and other interests. Yet, he posts a steady stream of items to his blog. Good for him!

The quality of the posts are excellent. The latest as of this writing, Mill on Theory, is a good example. The style is authentic, the thoughts clearly expressed and well developed. The previous post, Wine, offers readers Mr. Skarbek's analysis of the recent Supreme Court decision striking down state laws banning direct-to-consumer interstate wine shipments. I dare anyone to find a better written or more thoughtful analysis of the reasoning behind the existence of those laws. I would suggest the New York Times or other mainstream media pick that post up and run it as an op-ed piece.

I'll have my students take a look at Cantillon's Paradise next fall. I'll also let them know that I expect them to make every effort to match its quality. In the meantime, I hope David Skarbek continues to find the time to keep blogging. With all the noisy drivel and ranting in the blogosphere, it was a good day when I happened upon the quiet reasoning in Cantillon's Paradise.

Don't Miss Cantillon!

2005-05-18T19:43:00.000-07:00

Mark Thornton has done an admirable job of filling in a gap in my economic knowledge. Like many Ph.D. economists of my generation, my undergraduate schooling consisted of Keynesian economics a la McConnell, spiced with a bit of Alvin Hansen and other admirers of Keynes.

When I entered the doctoral program at Tulane University it was a revelation to discover that other schools of thought existed. Still, I managed to make it to a doctoral degree without ever having heard of Richard Cantillon. Since my electives were in other areas, I never took a course in the history of economic thought. Now I wish I had because I've clearly missed something. Click on the title of this post and you can read Dr. Thornton's article yourself. The brief outline of Cantillon's incredible life is alone worth your time.

Every Economics 101 course rightly mentions Adam Smith and the invisible hand. Of course, Keynes and the General Theory are also usually covered, at least minimally. I'm more concerned with what Economics 101 students are not learning. My text, unlike many others, mentions the Austrian school and Mises, albeit briefly. Because of the Mises Institute at Auburn University, I can type in a link to their web page on the computer at my classroom teaching station and show students the modern incarnation of Austrian thought.

Now, I can also mention Cantillon. It seems that we have Cantillon to thank for being the first to articulate the concept of opportunity cost. Cantillon's examples, presented and discussed by Dr. Thornton, are fresh and easy to understand. Cantillon may not have gotten his due in my undergraduate education, but I'll fill in the gap for my students. Perhaps other economics instructors would like to join me.

Dr. Yoram Bauman--Economist, Comedian, A Man for All Seasons

2005-05-13T23:58:00.000-07:00

I love Dr. Yoram Bauman's Small Party web site. There's plenty of food for thought for economics instructors throughout. On his humor page, I found a link to this parody of Mankiw's 10 principles. Check out Yoram's web page and read the explanations for his translations. There is a keen intellect at work here, so don't let the silliness fool you.

Mankiw’s Principles

#1. People face tradeoffs.
#2. The cost of something is what you give up to get it.
#3. Rational people think at the margin.
#4. People respond to incentives.
#5. Trade can make everyone better off.
#6. Markets are usually a good way to organize economic activity.
#7. Governments can sometimes improve market outcomes.
#8. A country’s standard of living depends on its ability to produce goods and services.
#9. Prices rise when the government prints too much money.
#10. Society faces a short-run tradeoff between inflation and unemployment.

------------------------------------------------------------

Yoram’s Translations

#1. Choices are bad.
#2. Choices are really bad.
#3. People are stupid.
#4. People aren’t that stupid.
#5. Trade can make everyone worse off.
#6. Governments are stupid.
#7. Governments aren’t that stupid.
#8. Blah blah blah.
#9. Blah blah blah.
#10. Blah blah blah.

The Dead Grandmother/Exam Syndrome--What Can Instructors Do?

2005-05-13T23:21:00.000-07:00

Here at The Royal Economics Academy the Provost issues a warning to the faculty each semester. That warning reminds the faculty to consider the fact that exams are hazardous to the health of students' grandmothers.

The Provost's memo is grounded in solid research, published by Mike Adams of Eastern Connecticut State University in 1999. His paper The Dead Grandmother/Exam Syndrome is a classic in the literature. Furthermore, the faculty members I know confirm his results through their own experiences. With every exam that comes around, more grandmothers die.

Since academic freedom is a cornerstone of the charter that created The Royal Economics Academy, our Provost chooses not to dictate how faculty should respond to the dead grandmother/exam syndrome. Some of my colleagues have decided to stop giving exams altogether, thus saving the lives of hundreds of grandmothers around the world. Other faculty members put a requirement on their syllabi that makes students sign an oath promising to keep their enrollment at the academy a secret from their families. The problem with this approach is that sometimes family members get nosy, investigate the whereabouts of a student, and are shocked when they discover that Susie or Sam is in college.

Economics instructors everywhere need to remember grandmothers as they schedule exams. Give as few exams as possible to keep the death toll among grandmothers down. In my experience, exams that contain math are especially deadly. Eliminate the math. The grandmothers of the world will thank you.

Brain Research and Economics Instruction

2005-05-13T22:16:00.000-07:00

This article from Scientific American provides a wealth of information about recent findings relating to male-female differences in the brain. The implications for economics instruction are not clear, yet when I read the article my first thought was that economics instructors need to find ways to make economics appealing to both sexes.

Since this post is a QuickTake, I'll just copy and paste a few intriguing statements from the article:

These anatomical differences might well relate somehow to differences in the way males and females navigate. Many studies suggest that men are more likely to navigate by estimating distance in space and orientation ("dead reckoning"), whereas women are more likely to navigate by monitoring landmarks.

Even the neurons in the hippocampus behave differently in males and females, at least in how they react to learning experiences.

The more we discover about how brain mechanisms of learning differ between the sexes, the more we may need to consider how optimal learning environments potentially differ for boys and girls.

That last statement deserved the bold, which I put on it.

I have to warn you that if you read the article, you'll learn more about rat brains than you ever wanted to know. My purpose is to remind instructors that male and female brains do differ and that's going to make a difference in their reaction to the subject matter and the way it's presented.

Assessment--You Have to Measure Something Meaningful

2005-05-11T22:25:00.000-07:00

Florida is best known as the home of palm trees, hanging chads, hurricanes, and missing children. It is also the home of Hillsborough High, the nation's 10th ranked high school according to Newsweek magazine. If the state of Florida ranked schools, the school would likely be a wee bit lower in those rankings. You see, Hillsborough High received the grade of D in an assessment performed by the state. How can these differences in the performance of the school be reconciled? There is a lesson for instructors.

The linked story tells us that

The Newsweek list is based on a single factor: the number of Advanced Placement and International Baccalaureate tests taken by all students at a school, divided by the number of graduating seniors. The students don't have to do well on the tests either. It matters only that they take them.

Test scores? No.

Graduation rates? Nope.

Closing the achievement gap between whites and minorities? Forget it.

Unsound assessments are performed all the time. Take the example of student self assessment. A student predicts an A on the next exam after answering all questions correctly on a self test that the student created. The problem is that the student's questions are all at the first level in Bloom's taxonomy, requiring only that the student recall definitions.

Sound assessments measure at least four abilities: comprehension, interpretation, analysis, and synthesis. I'll discuss the question of how to create sound assessments in economics classes in a follow up post later this month.

Constructivist Learning: A Hands On Assignment--The Microsoft Antitrust Case

2005-05-11T18:00:00.000-07:00

I've copied and pasted an assignment that I gave my Honors Micro Principles class this semester. It embodies constructivist learning principles, which are discussed in my other blog Socrates Technological University. Readers of The Royal Economics Academy can use this assignment provided attribution is given to the author.
__________________________________________________

You Be the Judge! The Microsoft Antitrust Case

Sections I. through IV. provide information that will be useful in completing the assignment. Section V. poses questions for you to answer in parts a. through d. You will be working with your group in arriving at answers. The actual assignment isn’t that long, but it may take some time to wade through the background in the Microsoft case and the provisions of antitrust law. Four links are provided in case you would like to do more research on the case.

http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm

I. The above link will take you to the U.S. Department of Justice web site to the Findings of Fact in the 1999 Microsoft case. This is a long document. You don’t need to read it in its entirety, but you might take a quick look to get the flavor. I’ve copied and pasted item 34:

34. Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible PC operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows.

Here is item 63:

63. Finally, it is indicative of monopoly power that Microsoft felt that it had substantial discretion in setting the price of its Windows 98 upgrade product (the operating system product it sells to existing users of Windows 95). A Microsoft study from November 1997 reveals that the company could have charged $49 for an upgrade to Windows 98 — there is no reason to believe that the $49 price would have been unprofitable — but the study identifies $89 as the revenue-maximizing price. Microsoft thus opted for the higher price.

Here is the last item, item 412:

412. Most harmful of all is the message that Microsoft's actions have conveyed to every enterprise with the potential to innovate in the computer industry. Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products. Microsoft's past success in hurting such companies and stifling innovation deters investment in technologies and businesses that exhibit the potential to threaten Microsoft. The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self-interest.

II. The following link will take you to the text of several of the antitrust laws:
http://www.usdoj.gov/atr/foia/divisionmanual/ch2.htm

Since Microsoft was charged with violating sections 1 and 2, I have copied and pasted them here:

§ 1 Sherman Act, 15 U.S.C. § 1
Trusts, etc., in restraint of trade illegal; penalty
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

§ 2 Sherman Act, 15 U.S.C. § 2
Monopolizing trade a felony; penalty
Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

The Sherman Act is not very specific, is it? How can a company tell is if it is violation? Well, I guess keep up with the case law.

III. The Final Judgment of the court, rendered in 2002, is stated in this document, which has many specific provisions:
http://www.usdoj.gov/atr/cases/f200400/200457.htm

IV. The following link contains a 2005 status report on Microsoft’s compliance with the court’s decision:
http://www.usdoj.gov/atr/cases/f207200/207283.htm
The court will be monitoring Microsoft’s efforts to comply, and its behavior through 2007, I believe.

V. As you can see, an antitrust case plays out over a significant period of time. There were two critical elements in the court’s decision that we talk about in economics, but don’t spend much time applying. One of these relates to the question, “What is the market?” The other is a related question, “What are the substitutes?” For example, is beer a substitute for coffee? If it is, then the market would be the market for beverages. If it’s not, then the beer market and the coffee market are two separate markets.

a. From your perspective as a consumer who uses computers and software, how closely do you think Microsoft fits the textbook model of a monopolist?
b. Microsoft products include Windows XP and Internet Explorer. From your perspective as a consumer, what do see as the substitutes for Microsoft products? Do you personally use any substitutes for Microsoft products?
c. Do the facts in item #63 (copied above) surprise you? Should firms be punished for charging the “revenue-maximizing price”?
d. At the time this case was in court, the talk was that Microsoft was going to broken up into two different companies: one company would create operating systems and the other company would create word processing software, web browsers, games, etc. That radical punishment was not meted out by the court. I am guessing that there are economies of scale that would be lost if Microsoft were to be broken up. Explain briefly.

Instructions: You should contribute at least two postings to a group discussion designed to arrive at answers to the questions in a. through d. Since none of us has training in the fine points of antitrust law, you are to discuss from the perspective of a student who has read the material on antitrust in the book and the material about the case contained in this document.

An Award for an Excellent Resources Page

2005-05-09T22:04:00.000-07:00

The Royal Economics Academy Excellence Award

The Department of Economics at California State University in Fullerton has created a homepage that would help to interest students who may be thinking of majoring in economics. I like the message the pictures of the faculty-student potluck dinner sends to learners. I also like the data page, with nice links to various resources that economics instructors will find useful.

QuickTake: A Failure to Teach the Whole Story?

2005-05-09T18:46:00.000-07:00

Gil Guillary has a nice post (May 5, 2005) on the Mises blog, titled What are You Calling Failure? The points he makes in the post are ones that economics instructors might want to make when teaching the standard textbook pablum on market failure.

QuickTake: An Online Currency Converter

2005-05-09T18:28:00.000-07:00

A good way to engage student interest in exchange rates is to utilize an online currency converter. There are many of these on the Internet, including the one at itools linked in this post. I like to show students the conversion of the dollar into the euro, the peso, the Canadian dollar and several other currencies before launching into an explanation of how the exchange rates are determined.

Economics as the Foundation of the Gestalt

2005-05-09T17:09:00.000-07:00

No word play intended, but William F. Sharpe is a pretty sharp guy. Professor Sharpe, 1990 Nobel prize winner in Economics, writes, “. . . one needs a gestalt from which to make business judgments.” To put it another way, the whole is greater than the sum of the parts, and business people had better darn well know it. The issue is how can colleges and universities instill in students the gestalt they must possess to make sound business judgments.

I'm glad to see that a Nobel prize winner and I agree on the prime importance of economics in creating the gestalt. Critical foundations of the gestalt include microeconomics and macroeconomics. In most syllabi the goal is listed as "the economic way of thinking." Sharpe notes that the micro and macro contexts of business are not very likely to be front and center in a business environment. In short, business leaders must master the economic way of thinking in school or risk forever missing the key elements in the creation of gestalt.

Let me use an analogy. I've never had the patience to put together a jig-saw puzzle, but I can imagine how it's done most effectively. I would pull out all the pieces with straight edges and then begin to build the outside edges of the puzzle. I'd pay attention to colors in order to mate adjacent pieces of the puzzle. I'd use the picture on the box the pieces came in as a guide. For example, if the only thing red in the puzzle was an object in the middle of the picture, I'd find the red pieces and put that part of the puzzle together. Proceeding in a systematic way, utilizing all information, I would put the puzzle pieces together. To me, a systematic process to put all the pieces of the business world together is what economics provides.

Simply put, the job of economics instructors is critical in creating first-class business leaders. But then, you already knew that, didn't you?

QuickTake: Tap Into Tom Peters Brain

2005-05-07T02:16:00.000-07:00

Tom Peters is blogging now! Your visit to his blog will find you in search of excellence.

The Economics of Student Retention

2005-05-06T20:17:00.000-07:00

Student retention is an ongoing issue despite the efforts made by universities to increase retention rates. At a Faculty Senate meeting yesterday one of my fellow Senators proposed that incoming freshmen receive a healthy dose of counseling on financial matters, along with the standard fare of advice on academics.

With that excellent suggestion fresh in my mind, I eagerly took a look at a new report, College Dropouts Who Borrowed for Education Face Long-Term Economic Hardship. Here's part of what I learned:

Known risk factors for dropping out appear to be more important than
borrowing in affecting a student’s chances for degree completion. Among the known risk factors for dropping out are delaying entry into postsecondary education after high school, attending college part-time, and working full-time while enrolled.

The problem with the conclusion as stated in the excerpt is that the risk factors mentioned are not independent of each other. Adverse economic circumstances correlate with all the behaviors that are associated with dropping out. In other words, there be no magic bullet that will solve the problem.

Another aspect of dropping out, not discussed in the report, relates to how effectively student loan programs are administered. Some colleges and universities do a better job than others in getting the money into the hands of students without unnecessary bureaucratic delays. Delays can result in the inability to buy textbooks, for example. That doesn't help retention.

Another relevant factor, in my estimation, is the large tuition increases of recent years. Students who borrow face a mountain of debt after graduation. Since tuition increases have far outstripped the starting salaries of college graduates, the real burden of that mountain has been rising significantly. Not every student likes the thought of climbing that mountain.

As a professional educator and teaching and learning specialist, I recognize the value of good teaching in keeping students around. Universities at least pay lip service to better teaching. Some actually make real efforts to improve it. The financial side of retention needs to be better understood for administrators to allocate resources effectively. The report suggests that private scholarships and other community support can be a significant part of the effort. Unfortunately, it isn't likely that significantly more private scholarship money will be forthcoming. That takes me back to the first paragraph and my colleagues suggestion that financial counseling be an integral part of the first year experience. Knowing how to wisely spend money can be as useful a skill as knowing how to make it.

Learning How to Learn--It's About Time

2005-05-04T23:34:00.000-07:00

I love Fast Company magazine's weekly Fast Take Newsletter. The newsletter is all about business. Often, there are links to stories that relate the significance of learning and the ability to learn to business success in today's economy. Learning is "in" in business. I usually find a lot in the discussion that I can take to the classroom and apply.

The linked story about educational reforms taken up by the Rotman School of Management at the University of Toronto has left me hungry to learn more. Here's the revolutionary idea the dynamic Dean of Rotman, Roger Martin, has implemented: a course in the MBA curriculum that will look into "learning how to learn," or developing skills that will enable students to learn faster and more efficiently.

I do this all the time in my freshman Economics 101 courses. Why wait until the MBA level to do it? Wouldn't it be better for students to learn how to learn sooner rather than later? Even before they become freshmen in college?

One of the exercises I ask students to perform that can help them learn how to learn is laid out in my economics text in chapter 1. Here it is, word for word:

Models--From Einstein's Mind to Yours
The renowned physicist Albert Einstein (1879-1955) was in the business of modeling. The most famous model to come from his mind, summarized in the equation e = (mc) squared, provided key insights that led scientists to the ability to split the atom. It is not only economists and physicists that model, however. Psychologists tell us that all of us walk around with models of life in mind.

Take your model of learning. How do you perceive the learning process? A simple model holds that the job of the instructor is to fill your mind with knowledge. In this model you are a passive recipient of facts, figures, and principles. Students whose internal learning model is similar to this one often fail to prosper academically because some important elements of the learning process have been omitted. Remember, Occam's razor tells us to omit only the nonessential elements from models. As Einstein told us, "Everything should be made as simple as possible, but not simpler."

A more sophisticated learning model allows for the student to interact with the instructor, the material, and other students. Key elements of this model involve setting aside time to reflect on the material, to ask questions, and to work with others. Which model is yours?

Freshmen often view the instructor as like a water boy and themselves as an empty glass. I'm there to grab a carafe of water and fill them up with everything they need to know, at least in their minds. If I'm a water boy, then I'm a darn expensive one!

QuickTake: The Teaching Economist

2005-05-03T00:58:00.002-07:00

I hate to feature the work of a competing textbook author, but good work deserves kudos. The Teaching Economist is an online newsletter about teaching . . . what else, economics. There are always several good items in every issue. The newletter comes out twice a year, in the spring and fall. Looking for something more often than twice a year? To learn about new ways to make your teaching more current, more effective, and more fun, read this blog (and my other blog, EconOpinion) daily. If you have an RSS Aggregator, you can receive both blogs via syndication.

QuickTake: Teaching Economics Club Style

2005-05-03T00:45:00.000-07:00

The learning benefits from creating fractal depth among groups is well recognized. For a group of economics majors, creating fractal depth shouldn't be a problem. An active economics club, one with plenty of faculty involvement, can be a tremendous resource to create and strengthen the bonds between learners. The link searches Google using the term "economics club." Does your school have an economics club? Does the club have a web site?

QuickTake: When Less is More

2005-05-03T00:40:00.000-07:00

I'm introducing a new feature to my corner of the blogosphere: the QuickTake. Posts that carry this label will be short and sharply focused. Like this post!

QuickTake: Awesome Tool to Teach the Federal Budget Deficit

2005-04-30T01:55:00.000-07:00

Thanks to the Williams College links page I've become acquainted with the National Budget Simulator. This is a tool any instructor of macroeconomics would find valuable and easy to use. Instructors can use the simulator to provide students with an in-class demonstration of how difficult it is to balance the federal budget. Highly recommended.

The Best Seat in the House? Student Learning and Classroom Seating Patterns

2005-04-29T22:22:00.000-07:00

I teach most of my classes in a shoebox--one that's about 150 feet long and half as wide! Nearly 300 students crammed into that shoebox, by the way. Students in the back row are not only sitting 150 feet away from me, but because the classroom is tiered upward, they are one floor above me!! From the teaching station it's impossible to describe in any detail those sitting in the back rows. Common sense would suggest there are implications for teaching and learning.

I know that students are advised to "sit toward the front" to increase their learning, but obviously not everyone can sit in the first few rows. Too many students and not enought rows. Learners with vision or hearing problems are likely to want to sit toward the front. Other students know from experience that sitting toward the front gets them higher grades. What of the others?

Most instructors have a gut feeling about seating patterns and grades. Students who sit toward the front are usually the better students and students who sit toward the back are usually the ones with the lowest grades. Is there empirical evidence to prove this gut feeling? If anyone knows of a paper on the subject, please leave a comment. If the paper is available online, I'll go back and provide a link to it in this posting. I'd like to know if there is cause and effect or self selection. Does sitting in the back cause less learning to occur or do students with less ability choose to sit in the back?

I'll bet I could really shake up some students by choosing one student every class period from the back rows and inviting that student to come down and sit in the first or second row. Would that be too mean?

An Award for an Excellent Resources Page

2005-04-28T23:49:00.000-07:00

The Royal Economics Academy Award of Excellence

This award is being given to the Department of Economics at Williams College in recognition of their outstanding page of links to economic resources useful in economics instruction. I was not formerly acquainted with many of the links provided. The resources page can be accessed by clicking here. I'll be giving out more of these awards as I find other Economics Departments that do an excellent job of providing accessible online materials that facilitate the teaching of economics. Thanks, Williams College.

The Price of Gasoline--What If I Don't Wanna Ride the Bus?

2005-04-25T01:21:00.000-07:00

It's no surprise to an economist that higher gas prices could lead to less driving:

. . . in an Associated Press-AOL poll conducted last Monday through Wednesday, 58 percent of Americans said they have reduced the amount of driving they do as a result of recent increases in energy prices

To repeat the point made in my earlier posting, higher gas prices should lead to a reduction in the quantity demanded. That's a movement up the demand curve for gas, not a leftward shift in the curve.

The most interesting point in the story is that the use of public transit is up, at least in some parts of the country. We teach this all the time in Economics 101: When the price of X rises, the demand for substitute Y increases (shifts to the right).

I don't like buses, but apparently some people do. They're noisy, smelly, and uncomfortable. Unless the price of gas hits the stratosphere, most people will probably avoid the cheaper substitute provided by public transit, so that rightward shift in demand for public transit might not be very far to the right. In the meantime, rather than ride the bus, I'll confine my contact to looking at pictures of buses.

Hybrid Car Sales Up as Gas Prices Reach Record Highs

2005-04-25T00:51:00.000-07:00

I don't know much about hybrid cars other than that they cost way more than their traditional siblings. On the one hand, I've read that they purportedly offer purchasers high gas mileage. On the other hand, I've read that buyers of hybrids have been disappointed in the actual miles per gallon.

The one thing about hybrids that makes the most sense to me is that their sales are headed upward at a fast clip. Because hybrids are relatively new and not many models are offered, they still make up only about 1 percent of all new vehicles sold. Pay no mind to that number, though, because proponents of hybrids see a rosy future for them. R. L. Polk, the firm that collects data on auto sales, explains the popularity of hybrids this way:

. . . federal and state tax credits for fuel-efficient vehicles have helped spur hybrid sales. More people also are buying into the idea that driving a hybrid is socially responsible . . .

I think the key motivation driving hybrid sales is ignored by that explanation. High gas prices always increase the demand for more fuel efficient vehicles. In the 1970s Ford's Pinto and Chevy's Vega rode the crest of the wave of rising gas prices to the winner's circle. Those vehicles were quietly discontinued when it became apparent that they were trouble prone. I wonder how reliable is the hybrid technology. The economics of hybrids is already pretty iffy given the higher initial purchase cost. If they prove trouble prone and costly to repair, consumer demand for fuel efficiency may have to be satisfied in some other way. Check out the cool 1958 GoGoMobil converted to electric power at this link. For a look at the full line of GoGoMobils, go here. Back to the future, anyone?

Reporters ALWAYS Get This Wrong!

2005-04-25T00:33:00.000-07:00

The headline blares, "Gas Prices Down on Lower Demand." What caused that lower demand, according to the story? The higher price of gas, of course. Do I detect circular reasoning here?

Every good principles of economics text emphasizes the distinction between a change in demand and a change in quantity demanded. Newspaper reporters must have slept through Economics 101 the day that topic was covered.

What the reporter in the linked story was trying to say is that the higher price of gas reduced the quantity demanded. Of course, the source quoted in the story, the Lundberg Report, fed the reporter the wrong interpretation of events:

This is the first significant price drop in retail gasoline this year,"said Lundberg. It's not possible to quantify, but demand for gasoline is surely being dampened by high prices to a level lower than it would have been.

Here's an easy homework assignment or quick in-class assignment for your Economics 101 students. Give students the quote and ask them to tell you what's wrong.

Always Assessment

2005-04-17T00:27:00.000-07:00

When I was in college they were called tests. Now, in the teaching and learning field the idea of assessment has gobbled up the concept of testing and spit it back at faculty to emphasize the distinction between formative assessment and summative assessment. One paper I found useful puts it this way:

. . . teachers can build in many opportunities to assess how students are learning and then use this information to make beneficial changes in instruction. This diagnostic use of assessment to provide feedback to teachers and students over the course of instruction is called formative assessment. It stands in contrast to summative assessment, which generally takes place after a period of instruction and requires making a judgment about the learning that has occurred (e.g., by grading or scoring a test or paper).

The ability of students to practice the "economic way of thinking" is probably on the list of goals, implicitly or explicitly, for every Economics 101 class. In an economics class formative assessment is as important as summative assessment in motivating students to learn. At least that's my experience.

A simple formative assessment technique is The Muddiest Point, alternatively called The One-Minute Paper. The technique is easy to implement and it works. I've been doing it for years, off and on. The trick is to actually get meaningful feedback rather than the stock reply "everything clear." In other words, students have to be prompted to think hard about whether they've really mastered the concepts. When the instructor follows up with a report at the beginning of the next class as to what concepts were the muddiest and gives students the another chance to learn those concepts before the class moves on, students see the value.

Eye-Hand Coordination: Don't Just Look, Draw

2005-04-09T02:37:00.000-07:00

I've never seen this issue taken up in the literature, but I nonetheless firmly believe that students learn graphs best by drawing them AFTER seeing them drawn accurately by the instructor. That idea may seem obvious, but I wonder how many PowerPoint-enhanced classes skip the step where the instructor draws the graph first.

The problem is that PowerPoint slides, often prepared by publishers as part of a textbook package, present beautifully drawn graphs ALLatONCE. The instructor clicks the mouse, the graph appears, and the students frantically scribble the graph into their notes. The whole graph is often more information than the brain can absorb, though. The result is that the graph is drawn incorrectly in the students' notes.

Doesn't it make sense that if the students can sit back and observe the instructor's hand in motion and hear the instructor's thoughts as the graph is drawn, the students are going to generate a more accurate rendering in their notes.

Here's my challenge to you, the instructor: While the classroom is filling up before the start of class, ask the students if you can see their notebooks. Observe the graphs drawn by the students in their notes when you present the graphs by PowerPoint slide. I'll bet you'll find a significant number of errors. As an experiment, draw the graphs yourself before showing them on a slide. Then followup with an examination of student's notebooks.

Let me know the results of the experiment.

2005-03-29T02:10:00.000-08:00

Students can learn simpler material on their own. The most effective teaching focuses on helping students learn more complex topics.

The Devil is in the Details

2005-03-29T01:46:00.000-08:00

One of the vexing questions that arises in teaching economics is how much detail to include when teaching a particular topic. A common sense guideline is to provide the level of detail that students need to know. A student's need to know depends on the goals the instructor has set for the course. For example, how much national income accounting do Economics 101 students need to know? A course that reflects the goal of fostering economic literacy would provide less detail than a course that reflects the goal of developing students to be practioners of economics.

In practice, a course that develops economic literacy might stop at a thorough investigation of GDP, while a course that aims to turn students into professional economists would likely include detailed accounts of GNP, NDP, NNP, national income, personal income, disposable income, and so forth.

How To Create an Economist

2005-03-22T19:29:00.000-08:00

Teach a parrot the terms "supply and demand" and you've got an economist. Thomas Carlyle

Why Should Students Major in Economics?

2005-03-22T19:06:00.000-08:00

Check out the link and let the words of the students speak for themselves.

Economically Illiterate? Take This Test and Find Out

2005-03-22T17:45:00.000-08:00

How much do your Economics 101 students know when they walk into your class the first day? Send them to the online Economic Literacy Quiz posted on the Minneapolis Fed's web site. The quiz is a good exercise to start off the semester and it can give economics instructors insight into how much students know when they start the course.