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Tuesday, January 31, 2006

On Being Late (from Mungowit's End)

Mike Munger is at it again. He has a great post on poeple who are chronically late. Here's Mungo's "Five True Facts About People and Time" in distilled form:
  1. The busier the person, the less likely they are to be late.
  2. The closer the person's office to the meeting room, the more likely they are to be late to the meeting.
  3. Small meetings can have convergence problems, just like maximum likelihood estimations (gotta have some econometrics background to fully appreciate this one).
  4. If you are always late, it's not an accident.
  5. Lateness is ingrained, as a social convention.
There's more - read the whole thing here.

I'd also add a sixth one: "The person who's always on time for meetings is more productive than the one who's chronically late." The inability to self-disipline yourself to do something as simple as making it to a meeting on time is a very good predictor of self-displine in other areas.

And self-disipline (not intelligence, training, or anything else) is IMO the single most important factor in being productive.

Monday's Are Tough This semester

I can tell Mondays will be tough this semester. I teach two sections of introductory finance (at 11 and 2), and then teach a case course (advanced corporate) from 6-8:40.

Since the Unknown Son and Unknown Daughter get up before 7 and I have a 45 minute commute each way, it makes for a long day (particularly since I was prepping for the advanced class tonight almost up until it started).

On a good note, so far this year I'm up to 30 days in which I spent at least an hour on research each day. One of the best things about keeping a log of my research time is that skipping a day means you have to put a big fat zero into the log. So, when I got home (after unwinding a bit with the Unknown Wife in front of the tube), I fired up Hal (my notebook) and put in an hour editing tables for the paper I'm working on. The tables should be finished tomorrow morning, and will then get sent out to my coauthor for him to do a "nit check" on.

While the coauthor checks out the tables, I have to put in some time on a proposal for a summer funding grant from my university with another co-author. The grants are awarded competitively, and the process involves submitting a 6-7 page grant proposal. It's nothing new, and I get summer funding more often than not, but the due date's next Monday, so it's time to get started.

It's not that much money (a couple thousand), but since I'll be working on the project anyway, I might as well get paid for it.

Ah well, now that I've wound down from teaching, it's time to go to bed.

Monday, January 30, 2006

Go UConn Huskies!

Since Larry Ribstein just mentioned about his Illini (not a half bad team there), I thought I'd weigh in with my $0.02. Justlook at who's at the top of the rankings for now.

And no, it's not Duke.

Go Huskies! (at least while it lasts...)

This Week's Carnival Of The Capitalists

This Week's Carnival Of The Capitalists is up at Phosita. As always, there's a wide assortment of posts up in a number of categories. My picks of the week are:
David Porter at Pacesetter Mortgage answers the question, Should Home Buyers hold off buying for 2006?

FreeMoneyFinance explains Why I Use a CPA to Do My Taxes Searchlight Crusade explains how to choose the best loan in Payment, Interest Rate and Up Front Costs.

James Hamilton at Econbrowser looks at the relationship between U.S. monetary policy and commodity prices in Soaring commodity prices

The Japan Stock Blog examines Why Pioneer Delisted Its ADRs from NYSE (PIO).

My Money Blog has a Java applet that takes some of the work out of figuring out whether switching banks is worth in Rate Chaser Calculator - Just Plug It In!

Personal Finance Advice addresses where to look first if you have a little bit of extra money in Where To First Invest Extra Money .

As always, take some time to browse around a bit. I only had a bit of time (Monday's my heavy teaching day), I thought I'd highlight a few that caught my eye.

Sunday, January 29, 2006

Resolution Update- Week 4

Here's the latest in the continuing saga of my New Year's resolutions.

First off, I'm still not getting my sorry backside (or any other part) out of bed by 6 - I only managed it twice this week. I blame it on the semester starting, but the simple truth is, I need to get to bed at an earlier hour (by 10:30 at the latest).

I've done much better at my research resolution. I still have my string of no "zero productivity" days since the start of the year intact. It's now up to 29 in a row.

I put in an hour on research three days, three hours on two days, and four hours on two days this week. The best news is that I finally finished the empirical part of a paper I've been working on for the last few months (on and off), and the results look promising. Now for the writing of the paper - I've got an earlier draft, but the empirical part has changed so much that this will almost be a new paper.

I've also had a good week as far as getting exercise. I rode on five of the seven days once (for 20 minutes) inside on my wind trainer, and four days (for at least 30 minutes each day) outside. On one day, it was 35 degrees with winds gusting up to 20 mph, so I felt pretty good about just getting outside. This might not seem that cold to you non-cyclists, but heading into the wind on a bike makes for some severe windchill. On one day, the temperature got up to 53 degrees, so I got in a ten miler. Again, it's not much, but it all adds up.

My weight is still unchanged, but if I keep up with the exercise, it should take care of itself.

"Fairness" In The Classroom (via Inside Higher Ed)

From Inside Higher Ed:
At a session entitled "“Perceptions of Fairness in the College Classroom,"” at the annual meeting of the Association of American Colleges and Universities in Washington Thursday, faculty members pondered the student who works his or her tail off, but never quite edges out some talented peers who rarely study but ace the test nonetheless.

When that hard working student gets an 89.3 percent, and 90 is an "A"” wouldn'’t it be fair to just give him or her a nudge over the bar?

Read the whole thing here.

I just had a conversation with one of the other professors on my floor. It's always interesting talking to him - he teaches Management, and views many issues in ways that are completely foreign to me (and vice-versa, I'm sure). What always impresses/amuses me about our conversations is how we can both use the same term (like "fair") and have it mean two very different things.

I wonder - how many professors give credit for effort (as opposed to going strictly by "objective" measures like test grades)? And if we do, do we help or help or hurt our students? My impression is that if we're clear about our standards and stick to them, it puts more pressure on the students. And that pressure is not entirely a bad thing (Lord knows, they'll have enough of it in the post-college world). Knowing that a standard is firm and that there's no slack for "trying" makes students work harder, since the chance of failure is greater. And the reason "winning" is so sweet is that losing stinks.

I have quite a few students who took my class, failed once, and came back the second time after "getting religion". I'd guess that more than half of the repeaters ended up with a "B" or better the second time around. Most of these told me afterwad that it was one of tproudestodest academic moments. And a couple of years later, they still remember some of the material.

I also wonder if there's a difference across disciplines in the attitude of professors toward giving "points for effort". At least in my experience, it's much less common in disciplines like finance, accounting, or engineering than it is in ones like marketing, management, or english. If my experience is representative, I'd guess that it's due to several factors:
  • Disciplines like finance are more objective than fields like management (i.e. the payment on the loan is either $635 or it's not).
  • As a result, there's more potential error in assessing performance in less objective topics, and the professors take steps to make sure they don't mistakenly grade students down for errors on their part.
  • Finally, the nature of the discipline determines the type of people who choose to be faculty in that discipline. I've found that finance/accounting people are more likely to view the world in absolute terms than are those in management or marketing. This has a big effect on how we choose to organize our classes, set up our grading, and view performance.
What's been your experience?

Friday, January 27, 2006

Technology,Webcasting, and Classroom Attendance

There's been a lot of talk recently about how technology will change the academic landscape. I remember when it was "cutting edge" just to have a website of any kind for your classes (and if you had a script for a discussion board, you were in the top 1%). Now, services like WebCt and Blackboard, have made it so easy that there's almost no excuse.

Now the latest thing is "webcasting" (video clips of class that can be delivered over the internet). For an good example of this, go to Aswath Damodaran's website at NYU.

But, using technology like this comes at a cost:
Americ Azevedo taught an "Introduction to Computers" class at UC Berkeley last semester that featured some of the hottest options in educational technology.
By visiting the course's websites, the 200 enrolled students could download audio recordings or watch digital videos of the lectures, as well as read the instructor's detailed lecture notes and participate in online discussions.

But there was one big problem: So many of the undergraduates relied on the technology that, at times, only 20 or so actually showed up for class.
Read the whole LA Times piece here:

I'm personally not bothered by there being fewer students attending class. There are a lot of reasons why:
  • I try to keep my ego out of my teaching (hard to do, but at least I try). I'm paid to show up and teach. If there are two students there, I teach to two students.
  • Students are adults (at least, that's what we tell them). So, if they can pass the tests without being in class, more power to them. Making classroom attendance required (or giving pop quizzes or passwords out in class) seems like making students come to class to assuage my ego. Of course, some students will use the support material as an excuse to skip class when they really need to attend and will end up failing. To me, that's part of the learning process - make a poor choice, and pay the cost of your bad decisions. This teaches people to make better choices (or, as the redneck father often says in raising his sons, "That hurts like hell, don't it? Betcha won't do that again!".
  • Fewer students in class means that I can spend more time on each student who shows up. Ideally, we'd have a self-selection process where those who can learn from their computer without coming to class do, and those who want the classroom experience go there.
The "virtual classroom wouldn't work well for all setting. I think it's work best for "established body of knowledge" classes, and less well for classes/subjects with a lot of ambiguity. For example, in my intro class, I can easily see me eventually doing podcasts. The website for that class already has copies of all my slides, solutions to assignments and end-of-chapter problems, a discussion board, a whole slew of announcements, and a collection of short "guides" to common problem areas (like, for example, how to calculate the principal and interest over any two arbitrary points on an amortized loan). So, webcasts wouldn't be too much of a stretch.

On the other hand, webcasts would work poorly in a subject where the discussions are the critical part of the class. My case course (the Advanced Corporate Finance class) is a perfect example. In a good case-based course, there aren't any "perfectly correct" answers (just degrees of "good"). So, the in-class discussions are the single most important part of the class (and they're different each time a case is discussed). So, in this class, I use the website primarily to put up sets of questions for the students to ponder before the case and "follow up" material following the cases. I also make all the students provide write-ups of their case analyses that get posted to the web BEFORE the cases get discussed. So, in this case, the web has only ancillary material that supports the in-class discussion.

Like anything else, it's the right tool for some situations, but not for others. Just because you have a hammer doesn't mean everything's a nail.

One thing that will likely happen because of the increased focus on technology is that those who master it will increase their market value. With webcasting, you can as easily reach a class of 200 as a class of 20 or 30. So, the "good" webcasters will become much more valuable to their schools. On the other hand, those who don't learn it will be disadvantaged in some settings. Like I said, it's not the answer for all classes, but it will work for some.

I actually wish I had lower attendance in one of my classes - it's set in a small classroom, and in their infinite wisdom, our wonderful administration has actually enrolled more students than the room holds. Luckily, there's usually 5-10% of the class absent at any one time, so it works out. And in this class, there'll usually be 20-25% of the class who drop by midterms. Still, webcasts would give the room some slack. Or, I could just do this.

In any event, I'm enough of a techno-geek that I'll have to try webcasting eventually, if just to keep my status as the Alpha Nerd (or is that "UberGeek?) among my peers.

Deducting An MP3 Player On Your Tax Return

An iPod nano for Christmas---$134

A good accountant-- priceless:
In some situations you can deduct the cost of an MP3 player. For example, purchase your MP3 player through your business and if you meet the IRS business-use test, then the business use is deductible.
HT: Sound Money Tips

Thursday, January 26, 2006

A 15-Point Tax Checklist

Hey - from now until April 15th, it's tax time. Here are some good tips from MSN Money, titled Do it right: Your 15-point tax checklist

HT: Consumerism commentary

Dad punches out teacher's aide accused of molesting daughter

This is off the usual Financial Rounds beaten trail, but it made my day nonetheless:
An angry father who marched into a classroom and punched a teacher's assistant in the face said Wednesday he was protecting his 15-year-old daughter, who had accused the man of inappropriately touching her.

...
The Tampa radio station that named him ``Father of the Year'' offered him and his family tickets for the Daytona 500 race.

``If some other parents would do this, maybe some of these pedophiles would crawl back under rocks where they belong,'' Swafford said.

Read the whole thing here.

Since I have a little girl, I like to think I'd do the same. If anyone finds a place where we can make a donation, let me know.

Update: Turns out that I was in error - it looks like the girl's accusation might have been made up. So, while I applaud the father standing up for his little girl, he should have waited a day before punching him. Then, if the evidence against the guy held up, he could go at it with a clear conscience. I'd also say that the girl should have some serious consequences for her actions.

HT: Rhymes With Right

Wednesday, January 25, 2006

Making Better Presentations

Most PowerPoint presentations well, suck - particularly for academics. And because we use them so much in class, we should do better. I have my intro finance class completely "PowerPointized", and most students like the slides I use. However, I often wonder if using slides so extensively cuts down on the interactive and spontaneous nature of the class.

Here's one possible source of help. I recently found this site called Presentation Zen. It looks to be one of the best advice/resources sites I've seen yet. Lots of resources, and a general mind set that I really like.

I'm hoping it'll help me cut down on the suckage in my slides.

HT: Vegreville

Yak Shaving Razor (via Evangelical Outpost)

Joe Carter at Evangelical Outpost has the latest installment of his
Yak Shaving Razor series up and running.

Tuesday, January 24, 2006

Revenge: The Laettner Edition

I've never been a Christian Laettner fan. So, this next news item from Sports Illustrated's The Ten Spot warmed me through and through:

Payback is a, well, you know: A bank in Lexington, Ky., is suing Christian Laettner over a $375,000 loan. Branch Banking and Trust says that Laettner defaulted on the loan that was made last November. The lawsuit, of course, comes 14 years after Laettner broke the hearts of many in Lexington by hitting the last-second shot in a 104-103 overtime victory in the NCAA East Regional. It would be even more interesting if the bank sent out Aminu Timberlake to make the collection.

Maybe it's just a guy thing.

HT: Hypothetical Bias

This Week's Carnival of Investing

This week's Carnival of Investing is up at Blueprint for Financial Prosperity. For a young carnival, it has a pretty good information-to-fluff ratio. Here are eight of this week's offerings that were worth highlighting:
I get a lot of "should I put money I'll need in ____ years in the market?" kind of questions. FMF at Free Money Finance gives some guidelines in 4 Rules for Asset Allocation.

I'm a big fan of Ben Stein, so I'm glad to see this week has two "Stein" pieces-- nickel at fivecentnickel.com presents An Interview With Ben Stein, Part 1, while Jonathan at MyMoneyBlog has an review of Stein's book (with Phil DeMuth) Yes, You Can Time The Market!

JLP of AllThingsFinancial discusses the relative merits of Index Funds or ETFs.

Fred Fry at Fred Fry International tells us you should not be trading on margin. Good advice.

Dan Melson at Searchlight Crusade breaks down Annuities, Fixed and Variable.

Jeffrey Strain at Personal Finance Advice presents Guaranteed Double Digit Returns. He actually understates the returns, since they're tax-free.

Retire at 30 at gives us an introduction to Dollar Cost Averaging.
That's it for this week. Look around the Carnival, since there are a lot of articles that didn't "do it" for me, but might for you. After all, everybody's needs (and tastes) differ.

Monday, January 23, 2006

This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at Be Capitalism. As I usually do with carnivals, I've sorted out a number of the posts for highlighting. They are:
Amanda at Young and Broke gives us some tips on saving money on groceries in Get Smart About Groceries.

Nickel at fivecentnickel.com presents Flexible Spending Accounts, Braces, and a Debit Card.

I've never bought a car on eBay, but Jim at Blueprint for Financial Prosperity has some info in case I do in Buying Cars on Ebay: Understanding Buy It Now & Reserve Prices.

Dan Melson at Searchlight Crusade breaks down Loan Qualification Standards - Debt to Income Ratio

2million over at 2million talks about a little know facet of many 401-k plans in The 401k Gotcha.

Bill from No BS Finance has some very good advice in establishing an emergency fund.

Luckily we're out of that phase, but in case you're not, George at Fat Pitch Financials presents Saving on Maternity Clothes.
As always, look around. There are probably many other posts that I didn't highlight that you might find interesting.

This Week's Carnival Of The Capitalists

This week's COTC is up at Patent Baristas. Since my focus is finance and economics, there were a few that pparticularly caught my eye:
Below the Beltway give an update on the bankruptcy reform laws and the (lack of) impact on the number of people filing for bankruptcy.

Marketplace Monitor looks at the role of unemployment in civilization. He argues that unemployment is a sign that labor is shifting away from low demand production to high is still possible.

Econbrowser gives us an analysis of the world oil markets after the decline of U.S. production.

I'm a bit of a Ben Franklin buff, so I got a kick from this post by TaxUpdate Blog about the taxes Ben Franklin would be paying if he were alive today

Searchlight Crusade blogster Dan Nelson explains who gets the deposit when escrow falls through.

Jonathan at MyMoneyBlog explains how to estimate the size of retirement nest egg we'll need.

Finally, Personal Finance Advice blog recommends staggering your free credit reports as a way of better detecting fraud early.
As always, browse around. There's usually lots of good things at a Carnival.

The Money Blog Network (Moneyblognetwork.com)

From their press release:

Top Personal Finance Bloggers Unite to Launch MoneyBlogNetwork

January 23, 2006 – Five of the top Internet personal finance bloggers today announced they have banded together to create a first-of-its-kind personal finance blog network designed to put personal finance wisdom, best practices and commentary just a mouse click away.

The new network, with headquarters online at www.moneyblognetwork.com beginning today, will be composed of the following top-performing personal finance bloggers:

JLP of AllThingsFinancial

Jim of Blueprint for Financial Prosperity

Flexo of Consumerism Commentary

Nickel of Five Cent Nickel

FMF of Free Money Finance

“We’re confident the MoneyBlogNetwork will be the top ‘one-stop shop’ for personal finance information upon its introduction,” said FMF of Free Money Finance. “Combined, the five founding members get more than 4,000 daily visitors and more than 10,000 daily page views, and their work has been recognized in Newsweek, BusinessWeek, The Wall Street Journal, The NY Times, Yahoo Finance, PC Magazine and others.”

The new network will begin with the five founding blogs and may elect to add others over time. Readers can subscribe to its high-quality information for free using an RSS feed, which can be accessed though the network’s home page.

Blogging networks have seen growing success in the past year. In October 2005, America Online announced the purchase of Weblogs Inc., a network of Web sites focused on a wide variety of topics. The deal was estimated at approximately $25-million, though financial figures were not disclosed.

I’m sure this answers a lot of questions for many of the personal finance bloggers (and likely brings up some new ones). For now, we’ve certainly got a lot to do, to figure out, and to work on, but we look forward to making the MoneyBlogNetwork something that benefits personal finance blogging, the blogosphere in general, and, of course, all of our readers.

A great idea, guys.

Bidding For Hotel Rooms on Priceline

Here's one for the "frequent travelers" among you. Priceline.com is a good resource that allows you to bid on hotel rooms. Unfortunately it's hard to know how much to bid, since hotel markets are pretty segmented (i.e. the market for hotel rooms in downtown Dallas doesn't tell you much about the hotel market in suburban Atlanta). I's a common problem in auctions where you don't see other bids--bid too high, and you waste money; bid too low, and you don't get to buy.

Here's a very cool solution: Bidding For Travel is a bulletin board where other travelers share their recent successful priceline bidding experience on Priceline. As a result, you have better information about the minimum price you should offer to get your room.

HT: Sound Money Tips

Sunday, January 22, 2006

Teaching The Intro Course

I probably teach the required undergraduate core finance course more than any bother one. Many (if not most) experienced faculty put this class on the bottom of their list of favorite classes to teach. There are a number of factors that make this class a challenge:
  • The class demands both a sound grounding in basic accounting (many students' lease favorite course) and decent math skills
  • The class serves two purposes - for finance majors, it's the foundational course, provides the basicc background that they'll use in all subsequent finance courses. For the non-finance major, it's the only finance course they'll ever take.
  • There's a wide varience in student aptitude for the material
  • It's often done in large (40+ student) sections.
Unlike many, I consider this to be one of my two favorite courses to teach. First, becasue it's easy, and second because it's a goood opportunity to be a "finance evangelist". I figure that if I do a good job, many of the accounting students will see the light and convert.

See Jane Compute is blogging about teaching the intro computer programming course, which shares many of these same difficulties. She writes:
The biggest challenges I have at this level are (a) maintaining everyone's interest in the material, without losing or boring anyone along the way; (b) making sure that the lesser-prepared students aren't intimidated by the blowhards (many of whom really have sub-standard skills, but they know the lingo and they know how to sling it around); (c) introducing an overwhelming number of concepts in the first several weeks, and making sense out of them; (d) making sure that at the end of the class, everyone has some baseline skill in programming a computer.
She's got some great suggestions. Read them here.

Gnomonomics

Now this is the kind of analogy I wish I could come up with in class more often. Lawrence White at Division of Labour examines the similarities between the Underpants Gnomes from South Park and Jeffrey Sachs’ plan for enriching sub-Saharan Africa. While his take is interesting in and of itself, there's a bigger point being made -- whether it's a relief plan or a business plan, it's important to think through all the intervening steps from beginning to end.

Of course, if you merely want to see a South Park clip with the gnomes in it, click here.

HT: Econlog.

Saturday, January 21, 2006

Resolution Update - Week 3

Here's the latest in the continuing saga of my New Year's resolutions.

First off, not so good this week on getting up at 6:00 every day. I only got up by the deadline on 2 out of 7 days, and got up two other days by 6:30. I think a big part of the problem is that I get caught up in programming for this project (the one with the looming deadline) at night and won't be able to sleep until I'm done (or at least too tired to keep my eyes open).

On a related vein, my sleep resolution's loss has been my research resolution's gain. I had no "zero days, and averaged almost 3 hours a day on research (even with the waste-of-time beginning of semester meetings).

As far as my exercise resolution, I worked out five times this week. I bought a pair of tights and a good windbreaker so I could ride outside. Dang-- 35 degrees feels like Siberia when you're riding a bike. Luckily, the temperature was in the high 50's by the end of the week. It's going back to the 30's and 40's next week, but at least I got in some good rides (an 8 miler today) before the temperature goes back down.

Unfortunately, the weight is unchanged.

Now I've reached the "can't keep my eyes open" stage, so it's good night.

World's Shortest Political Quiz

Mike Munger has the academic version of the world's shortest political quiz.

And the heck with Alex Tabarrok- Mungo for Dictator!

His campaign slogan - "I'll keep the boards clean. Or else!"

Publish and Flourish: On Being a Prolific Scholar

Lately, I've been on a self improvement kick. As I've mentioned before, I kind of let my research slide over the last few years due to my son's health problems. So, in an effort to retool, I started reading about the craft of being a productive writer. There have been a number of books written by people who study this stuff, and they all contend that prolific scholars are made, not born. In other words, many of the "big dogs" tend to use the same strategies. Two of the best sources of advice on this topic are books by Robert Boice titled Professors as Writers and Advice For New Faculty Members (the second book is mistitled, IMO--it's not just for new faculty members).

While engaging in avoidance behavior for my own research the other day, I was trolling through Academic Coach, and came across another one, by Tara Gray, titled Publish & Flourish: Become a Prolific Scholar (I've ordered it, and will report later on it).

Professor Gray also did a piece for Tomorrow's Professor where she summarizes the advice in her book. I've put her key points in bold type, with my thoughts after:

  1. Write daily for 15 to 30 minutes. This and #2 may be the two best pieces of advice I've seen.
  2. Record time spent writing daily, share records weekly. Accountability's hard, but it works.
  3. Write from the first day of your research project. One of the advantages of this is that it keeps you focused on the topic, and makes the subsequent writeup much easier. In my discipline, the typical mode of research is to first gather data, then do a lot of analysis, and then do the writeup after the analysis. For my next project, I'm keeping a log of everything, and writing as I go.
  4. Post your thesis on the wall, then write to it. This helps you "boil down" your piece to whatever the core idea is.
  5. Organize around key sentences. It helps you focus - and the key sentence doesn't have to be the first one.
  6. Use key sentences as an after-the-fact outline. If you don't, it's too easy to see where your writing has gone. Writing tends to be "path dependent" (we're all-too-often unwilling to change what we previously wrote). Making key sentences into an outline makes it easier to see what need changing after the fact.
  7. Share early drafts with non-experts. This keeps you from overestimating what your readers already know.
  8. Share later drafts with little-e experts and Capital-E Experts. Little-e experts include anyone trained in your discipline; Capital-E Experts include the biggest experts in your discipline or your sub-discipline.
  9. Learn how to listen. If someone thinks that something you wrote is unclear, then by definition they're right. Clarity is defined by the reader, not the writer.
  10. Respond to each criticism. This applies to after the reviewer has savaged the paper.
  11. Read your prose out loud. This is something my third-grade teacher (Sister Lorraine) told me, and it still works.
  12. Kick it out the door and make 'em say "No." The best piece is the one under review. Here's a good quote to put on your wall: "the perfect is the enemy of the good".

Read the whole thing here (there's also a link so that you can order Gray's book).

Academic Presentations vs. Bad Meetings (via Vegreville)

Vegreville has put up a short (but good) piece on the difference between academic seminar/presentations and "bad" meetings.

Here's a follow up to one of his points - occasionally you have an individual in the audience that hijacks the presentation with one question after another (or gets in an argument with the presenter). Since I recently read a piece in the Wall Street Journal on Ben Franklin, here's some advice from him I came across a while back. I repeat it here more to remind myself than anything else, since I have a thick head that processes and retains new information very, very slowly.

Friday, January 20, 2006

Men Enjoy Revenge More

Now here's a piece of research with findings that aren't too surprising.. A UK researcher (Tania Singer) did an experiment where people played what's known as a repeated Prisoners Dilemma game. In this setup, players have the choice of either cooperating with or stiffing the other player:
Following the game, participants were placed inside an MRI machine and then saw their fellow players zapped with electricity. The activity in their brain was recorded as they watched.

The scans revealed changes in activity as players who had cooperated got zapped, compared with those who had double-crossed them in the game. The results suggest that men get a much bigger kick than women from seeing revenge physically exacted on someone perceived to have wronged them. (emphasis mine)

Click here for the whole thing.

Does this really surprise too many people? My experience is that men are much less likely to be forgiving of being crossed than women, and much more likely to enjoy seeing the people who crossed them get their comeuppance.

HT: Mahalanobis at The Alpha And Omega.

Thursday, January 19, 2006

Top-100 Essential Downloads of Free Software

I've used about a dozen of these, but there are some others that look pretty good.

Top-100 essential downloads of free software & freeware for Windows XP

HT: Newmark's Door.

Changing the Incentives (from Inside higher Ed)

My school is hiring this year, and we were just lamenting the fact that the salary we'll be offering is a bit below market levels. So, the discussion ended up focusing on what else we could offer - reduced teaching load for the first year or two, fewer preps (for non-academics, a "prep" is a course you must prepare for. So, if you teach two sections of the same class, it would be only one prep), and so on. The chair's initial response was, "We can't do that" (that's her response to most things, but that's a story for another time).

Inside Higher Ed has an article that's directly relevant to this point. It sounds like Duke has realized that different people want different things (news flash, there). They're examining a proposal geared towards faculty that take on administrative duties (like department chair, or other administrative duties), but the principle could easily be expanded to many other issues. In case you're not aware, taking on administrative duties often comes with a reduced teaching load. But, here's what Duke is considering instead:
A faculty committee proposed a system recently adopted by the dean of the College of Arts and Sciences, which has 600 faculty members, to create a menu of rewards. A reduced teaching load would still be an option. But a professor might also choose extra money for a laboratory, a travel fund to visit a far-off archive without having to spend time applying for a grant, or just extra cash.
Read the whole thing here.

IMO, the system could be expanded to things other than taking on administrative duties. In the Duke case, they noted that some administrated faculties wanted to keep teaching, so the reduction in teaching load wasn't that valuable to them. For them, extra cash might be preferable. For others, a better travel budget might be the appropriate carrot. The point is that people have different preferences, and a "one size fits all" solution invariably doesn't fit too many people that well.

Jeff Cornwall recently wrote a piece on staffing difficulties faced by smaller companies. His key point was that flexibility was key - take the time to find out what people really want, and you may find that it's often not all about the money.

Unfortunately, being flexible and entrepreneurial is an approach that dosen't come easily to most academics (and even less often to academic administrators).

Wednesday, January 18, 2006

The New Class Monitors (from Inside Higher Ed)

This just in from Inside Higher Ed:
In a move that some professors see as a new low in efforts to monitor their classroom activities, a conservative group is offering students at the University of California at Los Angeles money to tape lectures and turn over materials distributed by professors.
In essence, an outside group is paying students to document (and record) lectures by professors. This is the natural next step to many folks' frustration with the perceived liberal bias in many disciplines. The article highlights a website run by a UCLA alumni group:
In essence, an outside group is paying students to document (and record) lectures by professors. This is the natural next step to many folks' frustration with the perceived liberal bias in many disciplines. The article highlights a website run by a UCLA alumni group:
The Web site is a project of the Bruin Alumni Association, which is working to encourage alumni of UCLA to hold back their donations to protest the actions of liberal professors. The association has been working for several months sending thousands of booklets to UCLA alumni and compiling a list of the Dirty Thirty those professors it finds most objectionable. Scholars at the top of the list earn five power fists in the group'’s ranking system.
Read the whole thing here.

I have no problem with my students recording my lectures and giving them to any party they want. I just ask that if they distribute them, I get paid (after all, I am a Finance professor, and therefore motivated by money). I generally try to stick to the topic at hand as much as possible, and keep my politics out of the classroom. When we do get into "controversial" areas (e.g. privatizing Social Security), I'll give students both sides of the issue, and let them argue it out.

Of course, if they catch me while I'm getting coffee, that's another story.

It's also interesting that someone in the article made the obligatory over-the-top comment: "Paying students to inform on professors is right out of the Stalinist playbook. Now all we need is a Hitler reference, and we're all set.

I notice that Steve Bainbridge didn't make the list. No doubt he'll console himself with a good bottle of wine (or two).

Shatner Sells a Kidney Stone

This could be straight out of News of The Weird (in fact, it may be-- I'll have to look around a bit): William Shatner just auctioned off a kidney stone for $25,000. Way to go, Denny Crane.

HT: Marginal Revolution, who also have a link to him singing Mr. Tambourine Man.

Tuesday, January 17, 2006

Bored Meetings

Ah yes - another beginning of semester meeting. Rather than gripe about it, I'll just point you to an article in today's Guadian titled
Alexandra Luong and Steven G Rogelberg think you should think again. In a newly published study, they say: "We propose that despite the fact that meetings may help to achieve work-related goals, having too many meetings and spending too much time in meetings per day may have negative effects on the individual."

Luong is an assistant professor of industrial and organizational psychology at the University of Minnesota, Duluth. Rogelberg is an associate professor of psychology at the University of North Carolina at Charlotte. Their report appears in the journal Group Dynamics: Theory, Research and Practice.

...The results speak volumes. "It is impressive," Luong and Rogelberg write in their summary, "that a general relationship between meeting load and the employee's level of fatigue and subjective workload was found". Their central insight, they say, is the concept of "the meeting as one more type of hassle or interruption that can occur for individuals".

Read the whole thing here.

I'll just file this in the folder marked "Duh". Other than my department chair, I don't know of many people who think meetings are a productive use of time.

HT: BusinessPundit

Political Calculations: Taxable Or Tax-Exempt Investment?

Political Calculations has yet another online calculator - this one gives a rough estimate as to whether you'd be better off investing in a taxable or tax exempt investment.

Monday, January 16, 2006

Winter Biking - Brrrrr!

I biked outside in the winter for the first time today. I'd been wanting to try it for a while, so I bought a pair of biking tights and a good windbreaker a couple of days ago. It was "only" 34 degreees outside, and I had wore the tights (which the Unknown Wife and Unknown Daughter thought were quite amusing), a windbreaker, a couple of layers, and hat and gloves.

However, even though I only went about 6 miles, I was COLD! It's amazing how much colder it feels when you're making your own 15-20 mph wind.

Still, it beats the daylights out of being on the stationary bike down in the basement.

Glory Road, Jackie Robinson, and The Economics of Discrimination

Since it's Martin Luther King's birthday, I though it the following piece was appropriate:

King Banaian at SCSU Scholars has a short piece on Jackie Robinson and Glory Road. (the new movie about the basketball team at Texas Western).

He makes a great point: that there's an economic cost to discrimination. After all, when you eliminate a portion of either your customers or your workers, you will suffer a cost. The converse of this is that if everyone else is discriminating, there's a "first mover" advantage: If you're the first to stop discriminating, you gain a competitive advantage. According to a number of accounts, neither Don Haskins (the TW coach) or Branch Rickey (the Dodgers' owner/manager) were primarily concerned about being civil rights pioneers. They were just trying to improve their teams' chances.

There are a lot of applications to this concept. One is that the more competitive the market, the less likely it is that there'll be discrimination, since the competitive advantage to being the first mover is greater. Another (the converse of the previous point) is that if the market is protected (either by regulation, geography, custom, or some other friction), discrimination becomes less costly.

This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at Savvy Saver. Here are my usual picks of the week:
Fearless Money talks about some of the Unexpected Benefits of Budgeting.

Funny Money talks about how to make the best use of Flexible Spending Accounts.

In two related posts,
Ashish's Niti gives us a rent vs. buy analysis for the Bay Area, while Consumerism Commentary discusses the effects of buying vs. renting

Free Money Finance has a good collection of advice for the new year.

Finally, Financially Independent discusses liquid savings and fixed savings
That's all for now - look around the Carnival once you're done. After all, what I find interesting, you might not (and vice-versa)

OOPS!

This sounds like something my current school would do. With emails like this, who needs coffee?

HT: Newmark's Door

This Week's Carnival Of The Capitalists

It's Monday, so it must be Carnival Day. This week's COTC is up at Wordlab (I like their "pull quote", but I'd call it the "Money Quote"). As usual, here are my picks of the week:
In Your 2006 Paycheck, Political Calculations provides a calculator that tells "how much money we'll be able to keep after the U.S. government has gotten its dirty, stinking ape paws all over our paychecks." Ouch!

It's beginning to look a lot like tax time, so Free Money Finance gives us some helpful advice in Five Common Tax Filing Mistakes.

voluntaryXchange examines Prices of Liquids by the Barrel. Oil doesn't look that pricey after all. I actually have a breeder friend who sells one of the liquids in question over the Net - you can't buy a barrel.

The Entrepreneurial Mind has a post called Economic Growth is Creating Staffing Challenges where he makes an obvious but often overlooked point -- give people what they want, and you're more attractive.

ProfessorBainbridge.com asks Who Owns the Corporation? His answer is not what most people would think.

Econbrowser is wondering when interest rate increases will end in What's the Fed waiting for?

Personal Finance Advice has a post illustrating the power of compound interest in Compound Interest, Manhattan & the Indians

Financial Reference makes a good point about Mutual Fund Expenses -- looking at expenses is more important than chasing past performance (particularly if markets are efficient).
That's it for this week's COTC. As usual, look around, since everybody has different interests. I'll post my picks from the Carnival of Personal Finance later today once I've had more coffee.

Saturday, January 14, 2006

New Year's Resolution Update - Week 2

It's so windy out tonight (gusts up to 45 mph) that I can't sleep. So, I'm back downstairs working some more (more programming) and blogging away until I'm so exhausted I'll sleep hrough the howling wind.

Anyway, here's the latest in the continuing saga of my New Year's resolutions.

I did better this week on getting out of bed by 6:00 -- made it 4 out of 7 days, and got up at 6:30, 6:40, and 7:30 on the other days. So, I'm making progress, and my body seems to be acclimating.

I also did much better on the research goal-- one day I put in 2 hours, and put in at least 3 hours on every other day (and, once again, NO zero days). So far, it's going well. Next week I have more beginning-of-semester BS, and the week after it's back in the saddle for the new semester. So, at least I'll have three weeks of habit formation behind me before classes start. So, with luck I (and more importantly, some discipline) I should be able to keep the momentum up.

As far as the aerobic activity, I only worked out 3 days (did almost 20 minutes each time). Since we had 55 degree weather one day, I took the bike outside and put in an quick 5 miles. It was so enjoyable that I went out and bought a pair of tights and a good windbreaker. I figure I can ride with these additions if it's at least 40-45 degrees out. We'll see.

Unfortunately, no change on the body weight.

And with that (and my eyes crossing), it's finally time to say good night.

Some Movies Are Worth Paying For Twice

Since the Unknown Wife hosted a baby shower for one of her friends today, I took the Unknown Son and the Unknown Daugher out on the town for a few hours. This way, everyone was happy - we were out of their hair, and I didn't have to be anywhere near ten women oooing and aahing over how cute the presents were.

So, when I asked the kids what movie they wanted to see, they both said "Chronicles of Narnia". This is despite their both already having seen it (and the Unknown Son twice!)

It's a movie that stands up well under repeated viewings, whether for a child or for an adult. The kids said they liked it even better the second time around (which means we'll probably end up adding it to the DVD library). Afterwards, we even scored an Edmund figure at McDonalds (although it took going to three stores to get one).

Best of all, I managed to avoid being at the shower. Everyone was happy, and no one got hurt. One of the nice things about being married for fifteen years is that we're comfortable with the idea that we're actually better off NOT doing some things together (like shopping, sporting events, or "chick flick"). Adding testosterone into some situations is a recipe for disaster all around.

Stupid Programmer Tricks

I've been writing SAS (statistical programming language used by academics, among others) for about 13 years now. All false modesty aside, I'm pretty good at it - I know a lot of stuff, write pretty good code, and even (in my better moments) comment it fairly well.

One of the first lessons I "learned" when I started programming was to save changes to my programs regularly in case something happens (power goes out, the mainframe crashes, etc...). When I'm being good, I may have a save the current version in a new file every hour "just in case". Then, at the end of the day, I delete all the old versions and just save the daily changes.

Of course, when do I forget to save my changes? After I just put in about 8 hours of work. To make it more fun, the program takes about a half hour just to get to the point of the program where I made the changes. So, I not only wasted the 8 hours, I also have to wait 30 minutes just to get set up.

ARGHHHHH!

At least I can gripe about it to y'all while I'm waiting.

Economics and Business Podcasts (via Marginal Revolution)

My favorite present this Christmas was an iPod Nano from the Unknown Wife. Now I can listen to my music of choice while working or driving. I can also start exploring the world of podcasts.

Tyler Cowen at Marginal Revolution brings together links to a number of economics/business podcasts in his post titled Invisible hand podcasts. Rather than repeat his material, I'll just direct you there - if you don't already have Marginal Revolution on your daily reading list, add it now. It's the best economics blog on the web, bar none.

Friday, January 13, 2006

Inside Higher Ed :: What They Don't Teach You in Graduate School -- Part IV

Inside Higher Ed has been running a series called "What They Don't Teach You In Grad School'. The previous pieces in the series have been chock full of good advice (go back and read the them- it's worth it). They've just posted Part IV, which focuses on "life as an academic". It gives a lot of good advice, but here are parts I particularly liked (the bold typeface is my addition):
  • Never, ever choose sides in department politics. The side you are on expects your support because they know they are right. They will give you no reward for it. The side(s) you are not on remembers forever.
  • Secretaries are a scarce resource. Treat them as such ... If you develop a good relationship with them, they will work miracles for you. They know every arcane administrative procedure needed to get things done. They can say nice things about you to people who matter in the department. If they don’t like you, they can kill your reputation.
  • Learn the idiosyncrasies of your institution’s computer center... Although a computer center is a service organization, it is usually staffed by people who are not service oriented.
  • Like the computer center, you have to deal with physical plant.
  • Maintain collegiality... Don’t be perceived as a loner or a misanthrope, particularly by the senior faculty.
  • When you do something noteworthy let your college’s public relations department know and have them publicize it.
There are a lot of other good points - read the whole thing here. I've merely highlighted the ones that hit home with me. In general, they seem to come down to being aware of the poeple around you, and acting graciously toward them. One of the best "life's rules" I ever heard was, "Don't make enemies for free". In any organization, there are a few poeple who can make a huge impact on your quality of life. A generally good strategy is to always stay on good terms with those people.

In graduate school, the elder students in the program stressed from day one that we should never, ever, ever get on the bad side of the director of the computer center (empirical finance research is often computer resource intensive, and she could make or break our time in the program). I took this idea even further, and made it my business to put her strongly on my side. I found out that "Joan" liked two things - slightly off-color jokes and good coffee. So, instead of only stopping by with problems, I'd often pop my head into her office with a cup of coffee or the latest joke. As a result, I had more space allocated on the mainframe than any faculty member in the college, and Joan would regularly spend hours working on my computer programs.

It may seem like manipulation (or selling out), but the ability to get on people's good side (and to put them on your side) is IMHO one of the most important skills for an academic (or anyone else).

Thursday, January 12, 2006

Advice For Economists On Starting, Writing, and Publishing Research

John Creedy of the University of Melbourne has written two very good pieces on the research, writing, and publication process. Here's the abstract from the first, titled Starting Research and Writing a Research Paper:

This paper provides a brief guide for those undertaking a research project and writing a paper or report. It discusses the nature of research and gives suggestions for specifying and planning a research topic. The structure and appearance of a paper are described and suggestions are made regarding the writing process. Emphasis is placed on the need to achieve clarity.

The second, titled From Manuscript to Publication: A Brief Guide for Economists takes up where the first left off:
The aim of this paper is to give a short description of the nature of books and journals, their respective editors, and the difficult process and proprieties involved in publishing papers. It describes some of the main features of the publication process, so that readers may be in a better position to make judgments about published work and writers may be, to some extent at least, prepared to face the difficulties that inevitably lie in their path.

Emphasis is given to the need to deal with rejections and the often substantial revisions requested by editors. While some of the features of publishing are common to all disciplines, this paper is specifically intended for economists.

As the abstract mentioned, the second piece talks at some length about the difference between books and articles. While both are written with economists in mind, there are a lot of similarities across many social science disciplines. So, unless you're in the sciences, they're probably worth printing out and putting in your "academic advice" folder..

HT: New Economist for the links.

Putting Arcane Symbols Into Powerpoint (from Econbrowser)

James Hamilton at Econbrowser has just written the "Idiot's Guide to Using Tex with Powerpoint": simply download this and copy the symols you need into your presentation.

Wednesday, January 11, 2006

Insider Buying At Closed-End Mutual Funds

The other day, The ETF Investor mentioned that there had been some insider buying in the Equus closed-end fund, and that could be a signal of good things to come.

At the time, I was puzzled by the statement. Usually, insider trading patterns provide information to the market because of asymmetric information (i.e. insiders know more about the company's prospects than the market does). I was at a loss to explain how this could apply in a closed-end fund.

So, I called a friend who does mutual fund research. His guess is that looking at insider trading patterns for closed end funds could be useful if they helped predict the fund changing status from a closed-end to an open-end fund. When closed-end funds that trade at a discount change to open-end status, their discount often disappears. So, seeing insiders buy could affect the market's probability of a change in status, and could be therefore be followed by a decrease in the discount (i.e. a rise in the fund's price per share).

Now, there's a follow up: it turns out that a lot of the action came from the fund advisor buying shares from an activist investor. So, the likelihood of an opening of the fund has just dropped.

Click here and here for the original and follow up pieces.

It's Time For Dumb Beginning-of-Semester Meetings

Classes don't start for another two weeks. But, my university makes all faculty get together for a two-day series of meetings before each semester (it's today and tomorrow).

What a massive waste of time! It's supposed to be a means of passing on and/or maintaining our school's unique culture. It actually accomplishes this end, since part of our culture seems to involve wasting time in boring, unproductive meetings.

I can see some benefit to getting faculty across the campus together before each semester. In fact, it has a nice community feel to it, and it's a good way to catch up with colleagues in other schools/departments. But I wonder why they don't cut the thing to a single half day event? Doing that would force some discipline on the program, and would actually make them think about whether it was worth spending a scarce resource (time) on a given speaker. Instead, they try to make sure that the have 2 days of material, and there's definitely a decreasing returns to scale effect.

But having shorter meetings would mean "we aren't accomplishing as much", so the chances of it happening are pretty much (as Don King said, "Slim and None -- and Slim left town").

So, blogging might be light for the next two days, unless I decide to just sign in at the beginning and leave at the first break. But that would be wrong. Productive, but wrong.

Update: By 10:00 I couldn't take it anymore. At the first break, I walked to my car and just drove away (hint - always park where they can't see you drive away). I figure my name's on the roster, and I talked to the right people (chair, dean, and assorted senior faculty). So, back to research (with occasional blogging).

Tuesday, January 10, 2006

Lowering Your Credit Card Interest Rate

Getting a lower interest rate on your credit card debts can be a big help in getting them paid off faster. Of course, one way to do this is to switch your balance to a card with a lower interest rate. Unfortunately, doing this too often could have a negative effect on your credit score.

A better alternative might be to get your current credit card company to lower your rate. Sound Money Tips give some excellent suggestions on how to go about doing this in the best way in this short piece titled Tips For Lowering Your Credit Card Interest Rate.

Shades of Janis Joplin

Now this is a severance package - but it would have been more poetic if it were a Mercedes.

HT: Footnoted.org

Updated 1/10: A car is small potatoes (or is that "potatos"?). Someone else got a dang PLANE in their severance package (note: also from Footnoted.org, the source of all things found in the fine print of corporate filings)

This Week's Carnival of Investing

I'm a day late, but This week's Carnival of Investing is being hosted at FreeMoneyFinance. It's arelatively new Carnival, and worth checking out. Here are some of the this week's pieces I found interesting:
Blueprint For Financial Security tells us that Taxes Should Affect Your Stock Decisions. In particular, he discusses the difference between short and long-term capital gains.

JLP at AllThingsFinancial is Looking at an Investment Strategy for Retirement.

The Radical Guide To Investing discusses portfolio allocation in An Optimised Portfolio Using Only ETFs.

Abnormal Returns talks about Taking advice from the already wealthy. The key point (understand their biases) is applicable to evaluating advice from anyone.

Fat Pitch Financials found a link that allows you to get Free Morningstar Stock Research for 15 of Morningstar's top rated stocks.
All in all, a good carnival. Of course, there are other pieces too, so look around.

Options Markets For Tickets

Yesterday I wrote that Tickets Are Like IPOs. Now I find out that tickets are optionable. So, like George Costanza, it seems that my two worlds (College Basketball and Finance) are colliding. Here's an interesting application of markets (and derivatives) in a new setting.

A Chicago company, Sports Reserve, has opened up an options market for tickets to major sporting events. For a fee, you can buy an option (they call them "Fan Forwards") to purchase a ticket to a sporting event (like the Super Bowl) for a particular team. So, if you've got the good sense to be a UConn Huskies fan, you can currently buy two Fan Forwards to the 2006 Final Four at a current price of $245 each. This gives you the right to buy two upper deck seats to the Final Four at their face value of $140 each if UConn makes it. If not, the Fan Forwards expire, and would be worthless.

Based on finance theory, the value of these contracts should be the expected probability of their being "in the money" (i.e. of UConn making to the Final Four) times the expected amount that their market price will exceed face value if the option is in the money.

But, there might be different economics at work here. Two Fan Forwards for the Evil Empire are selling at $399. In an efficient, rational market, this could reflect a higher probability of Duke making it to the dance than UConn, or a higher expected price of the tickets conditional on their actually making it. But, we know that Duke fans aren't entirely rational, so there's probably a mispricing there, and a chance to make money off them (and, if so, someone certainly should).

I think it would be an interesting research project to see how prices in this market react to changes in rankings, announcements of tournament pairings, etc...

If I didn't already have so much on my plate, I might do it myself.

HT: Marginal Revolution

Monday, January 09, 2006

I'm On Someone Else's Syllabus - Woo Hoo!

John Whitehead at Appalachian State mentioned me on his syllabus. A while back, I had made a comment on his blog (Hypothetical Bias) with some study tips I give my students. Here they are (with some additional comments):
  1. When you read the text, don't highlight the things you think are important - highlight the things you DON'T understand. After all, highlighting what you already know is a waste of time (and yellow highlighter)
  2. Better yet, don't use a highlighter at all. Instead, keep a sheet of paper handy and on it, write all the questions you have (no matter how trivial) as you read. Then go back and try to answer each one.
  3. After each class, rewrite your notes. When you do this, don't just copy them from one page to another. See if you can organize them as you rewrite them (make lists of key points, etc...). In addition, keep a sheet of paper handy during the rewrite, and write down all the questions that WILL come up as you re-write your notes.
  4. Take your "questions" pages (from #1 and #3) and make sure you get answers before the next class (or, at the latest, at the beginning of the next class). Many professors start each class by asking, "any questions about the material we just covered?" At this point, everyone fumbles around in their notes to see if there's anything they have questions about. However, if you have your questions organized, you get to go to the front of the line. When we ask that question, we have a set amount of time in our heads we've budgeted for answering questions. It's like a run on a bank - you don't care if there's enough money in the bank for everyone, as long as you're in the front of the line.
Tell your students to try them - based on the two or three students of mine that actually follow my advice each semester, they work (particularly #3 - it got me through grad school). It reinforces their notes, and moves them from the "passive note taking" to the "active learning" part of their brains.

Professor Whitehead also has this little gem on the syllabus:
Here is a typical office exchange after a disappointing exam score:

Student (sincerely): What can I do to get a better grade on the next exam?
Professor:
Well, how did you study for the first exam?
Student:
I went over the notes and thought that I understood them.
Professor:
Did you read the textbook?
Student:
No.
Professor (shouting):
Read the #@$%& textbook!
Student (giving me the look like I'm crazy):
I tried to read it but I didn't understand it.
Professor (calmly now, regaining his/her composure):
Right on, that's why it's called "study."
Student (excitedly): Oh. I get it! I can't wait to get started!

You've gotta love it - a syllabus that actually shows a personality and a sense of humor.

UPDATE: The link to Professor Whitehead's syllabus was incorrect - it's been fixed.

Attention Surplus Syndrome (from Mike Adams)

Mike Adams is a professor of criminal justice and all-around smart-alec at UNC Wilmington. He has a pretty good piece on what he calls Attention Surplus Syndrome (and yes, it works quite well as an acronym). He describes the symptoms to his students as:
  • Lateness
  • Interruptive-ness
  • Cell phone addiction
  • Excuse making
He also goes at great length into how he deals with those students who exhibit these symptoms in class. It's worth putting in the file to share with your students. Read the whole thing here.

As an aside, I had a former student (who currently works for an investment bank) come back to talk with my students. After describing her typical day at work (and it's a long one), we had a question and answer time. One student asked her what were the most important lessons she's learned since she got out. She said that the business world works on three rules:
Rule Number 1- It's your fault.
If your boss needs a set of numbers on his desk by 8:00 a.m., he doesn't care why it's not there, only that it isn't. He's got money (and his job) on the line, and you might just have cost him both. So, don't expect understanding on his part.

Rule Number 2- It's not your fault, refer to Rule #1

Rule Number 3- If you can't deal with Rules #1 and 2, there are 100 people out there who'd love to have your job.
I share this story with my students at the beginning of the semester. Before each assignment is given out, I ask them, "What are Rules #1 and #2?" They eventually get it. I may even put a question about "the rules" on the first quiz - after all, we should quiz them on the material that's most important to their success in class, right?).

This Week's Carnival of The Capitalists

This week's COTC is up at The Social Customer Manifesto. As usual, there are a lot of good pieces to read. Here are my picks of the week (these that either had a finance/econ spin or otherwise tickled my fancy:
Financial Reference tells us why hedging our bets may not be the best long-term strategy in Irked.

Steve Bainbridge give us an Insider trading Exam Question.

Blueprint for Financial Prosperity talks about his experience Buying A Car On Ebay

Seeking Alpha reveals (sorry, couldn't help myself) Playboy's strategy to sell financial content with sex in Can Sex Sell Online Financial Content?. My geuss it that it'll work. I can just imagine guys saying, "honey, I just read it for the stock tips".

Financial Methods discusses biases in index funds in How Index Investing Harms Your Portfolio

Finally, Interested-Participant talks about a bank that operates under Muslim financial principles in Bank Offers Sharia Compliant Services.
That's it for this week. As usual, browse around the other entries - you might find something else you like.

This Week's Carnival of Personal Finance

This week's Carnival of Personal Finance is up at AllThingsFinancial. As usual, here are my picks for the week.

Unfortunately, we'll soon begin the tax dance once again. Blueprint for Financial Prosperity has some advice on Organizing Your Tax Information.

Consumerism Commentary is talking about Rebate Scams.

Retire at 30 continues his series on budgeting with Budgeting Made Easy, Part 2: Buy Quicken.

We may be selling a house this year if things work out. So, this one really caught my eye. Searchlight Crusade gives us some pointers on Buying One Property While Selling Another.

Just Another Money Blog gives us 10 Financial Strategies for the New Year.

InvestorGeeks discuss options for short-term funds in The Money Market and You.

As always, there are many other good pieces in this week's Carnival - these are just the ones that caught my eye. Check around, 'cuz tastes differ.

Sunday, January 08, 2006

How Are Concert Tickets Like IPOs?

Are concert tickets like IPOs? Not in most people's minds, but there is at least one similarity-- both are often "underpriced" and end up selling in the secondary market for a much higher proce than the inital offering.

How can I call concert tickets "underpriced"? According to this recent Wall Street Journal article (online subscription required),
One of the hottest tickets in Boston is the Rolling Stones tour, which swings through later this month. But it took Keri Heffernan only a few minutes to purchase a pair on an Internet site that links buyers with ticket scalpers.

The catch: She paid $1,004.35 for her seats in the arena's loge level -- triple their face value. " It is unfair," says the 29-year-old pharmaceutical sales representative. "The prices of concert tickets are out of control."

The article goes on to explain that tickets for "hot" concerts like the Rolling Stones are often quickly snapped up at their initial face value by internet buyers who quickly turn around and resell them on the internet for a much higher price.

As an economist, I'd have to say that if people buy the tickets at these prices, thenby definition they aren't overpriced.

What's puzzling is why the concert promoters leave so much money 0n the table and let it be captured instead by the ticket resellers. There's a similar phenomenon in the market for Initial Public Offerings of common stock. One of the big puzzles of finance is why IPOs are so consistently underpriced. By this, I meant that many IPOs end the first day of trading 5% - 10% (or even more) higher than their initial offering price. This underpricing results in many millions of dollars that could have gone to the issuing company going instead to the early buyers, who subsequently "flip" their stock".

So, why don't the ticket issuers "disintermediate" (a fancy term which means "cut out the middleman")? They could set up an auction process just like the scalpers do. In fact, this exactly what some recent IPO issuers have done with "dutch auction" selling mechanisms.

One possible answer is that there's too much risk involved in going this route. So, one reason the middlemen make money is their willingness to take on this risk.

Larry Ribstein at Ideoblog discusses this idea, but also provides another possibility:
Artists (and their promoters) don't want to look like money-grubbing capitalists. After all, "it's about the art", and looking like they're in it for the money is just declasse.

Unfortunately, when demand for a good exceeds supply, there has to be some way of rationing the good. One way is a lottery. Another is by some rule like "first come, first served". Government fiat is another. Finally, you could let the market decide. At least in the final case, the tickets will largely be bought by the individuals who place the highest value on them. I figure, if you want to pay over $1,000 to see some geriatrics prance around the stage, go for it.

As for me, I'd rather buy more coffee, sushi, and CDs with the money.

Tim Harford And The Economics Of The "Short" Cappucino

Starbucks doesn't publicize it, but they do sell a "short" beverage size - an 8 oz. drink. For example, a short cappucino sells for $2.35 instead of the $2.70 charged for the 12 oz. tall size. It has the same amount of espresso, just less milk. One of my colleagues used to regularly order a short coffee - he said all he wanted was the 8 oz., so why pay the higher price for coffee he didn't want or need?

In his latest Slate piece, Tim Harford of "The Undercover Economist" explains the economics behind the "short" cappucino:
This is the Starbucks way of sidestepping a painful dilemma over how high to set prices. Price too low and the margins disappear; too high and the customers do. Any business that is able to charge one price to price-sensitive customers and a higher price to the rest will avoid some of that awkward trade-off.

It's not hard to identify the price-blind customers in Starbucks. They're the ones buying enough latte to bathe Cleopatra. The major costs of staff time, space in the queue, and packaging are similar for any size of drink. So, larger drinks carry a substantially higher markup, according to Brian McManus, an assistant professor at the Olin School of Business who has studied the coffee market.

The difficulty is that if some of your products are cheap, you may lose money from customers who would willingly have paid more. So, businesses try to discourage their more lavish customers from trading down by making their cheap products look or sound unattractive, or, in the case of Starbucks, making the cheap product invisible.
Click here for the whole thing. Very cool, and combining two of my favorite subject: coffee and economics.

Out of curiosity, I just tried to order a short cappucino at my local Starbucks. They said they don't do "shorts" at that store. I wonder if it was just that store, if it was because it was a Barnes and Noble affiliated one, or if it's because the jig was up.

All this reminds me (after all, I did get up by 6:00 this morning - Woo Hoo!). I haven't had my morning medication yet. Time to go brew some...

Saturday, January 07, 2006

New Year's Resolution Update - Week 1

As promised, I plan on keeping y'all up to date on my New Years Resolutions (to get up at 6:00 daily, to put in at least an hour daily on research, and to lose some weight - primarily by getting 30 minutes of exercise daily). So, here goes the first update
  • I did horribly on getting my lazy carcass out of the rack by six o'clock. I only made it one out of the past seven days. Part of it is my natural preference for staying up too late.
  • I did much better on the research goal. I managed an hour on one day, three hours on three days, and four on three days (and, NO zero days). These are actual hours spent on research, not just time spent kidding myself that I'm working - I got a computer software stopwatch program, and now log my actual time on work (when I flip over to blogging, for instance I turn the stopwatch off). It's a but anal, but is sure cuts through my amazing ability to lie to myself.
  • As far as the aerobic activity, I put in between 15-18 minutes on the bike and/or elliptical trainer four days this week. I'm trying not to increase this part too quickly, since I have a slightly arthritic knee that is prone to swelling up (getting older really stinks).
  • And yes, I dropped about a pound and a half.
So, not bad for the first week. One down, 51 to go.

And on that note, time for bed.