A couple of years ago, I had an interesting ethical dilemma. One of my friends, whom I'll call Bob, started dating a nice girl who I knew. I'll call her Erica. Things seemed to be going well for them, they were a cute couple, etc. etc.
After a few months, however, it things weren't going as well in their relationship. Bob started spending some time again with an ex-girlfriend of his, who I'll call Hilary. Erica didn't know about Bob spending time with Hilary, and Bob wanted to keep it that way.
Rumors get around, however, and Erica must have heard something, because one day she approached me and asked me if anything was going on between Bob and Hilary.
I wasn't sure what to do. On the one hand, I felt a duty to be loyal to my friend Bob and not say anything. I also felt like it wasn't my place to get involved. On the other hand, though, Bob was doing something wrong and I didn't want to support it. I also didn't feel comfortable lying to Erica.
In the end, I wound up telling her I had heard rumors, but if she wanted to know the truth, she should just talk to Bob about it.
Friday, April 1, 2011
Wednesday, March 16, 2011
Misalignment
I recently read "Freakonomics," by Steven Leavitt and Stephen Dubner. The theme of the book is the way that people respond to incentives, and the importance of determining what kind of behavior you are actually promoting through your incentive system.
One of the examples given in the book, which in my mind is a great example of misalignment, is the case of teachers in the Chicago school system who were evaluated based on standardized test scores.
The public school system in Chicago had been struggling for years, with high drop-out rates, students testing way below national averages on standardized tests, and few students going to college. As part of their efforts to improve the situation, the school board tried to create more of an incentive for teachers to better prepare their students. They wanted a fair, measurable, objective way to determine which teachers were doing the best job with their students, and one of the clearest, most objective measures they could think of was to tie the teachers pay raises and promotions to how well the students did on their standardized tests.
However, the teachers were left to administer the tests themselves. As a result, the school board's strategy to get the teachers to work harder to prepare their students created a perverse incentive for the teachers: they could cheat on behalf of their students in order to get raises.
It was eventually discovered that some of the teachers, after the students had taken the tests, would secretly erase some of their wrong answers and put in the correct ones, thereby boosting their students scores and making themselves more likely to get raises.
The school board has since created a system where independent administrators administer the standardized tests that are used to evaluate the teachers' performance, thereby better aligning incentives with strategy.
One of the examples given in the book, which in my mind is a great example of misalignment, is the case of teachers in the Chicago school system who were evaluated based on standardized test scores.
The public school system in Chicago had been struggling for years, with high drop-out rates, students testing way below national averages on standardized tests, and few students going to college. As part of their efforts to improve the situation, the school board tried to create more of an incentive for teachers to better prepare their students. They wanted a fair, measurable, objective way to determine which teachers were doing the best job with their students, and one of the clearest, most objective measures they could think of was to tie the teachers pay raises and promotions to how well the students did on their standardized tests.
However, the teachers were left to administer the tests themselves. As a result, the school board's strategy to get the teachers to work harder to prepare their students created a perverse incentive for the teachers: they could cheat on behalf of their students in order to get raises.
It was eventually discovered that some of the teachers, after the students had taken the tests, would secretly erase some of their wrong answers and put in the correct ones, thereby boosting their students scores and making themselves more likely to get raises.
The school board has since created a system where independent administrators administer the standardized tests that are used to evaluate the teachers' performance, thereby better aligning incentives with strategy.
Wednesday, February 9, 2011
Journal 3 - Cirque du Soleil and Ipads
In our recent class discussions, we talked about how Cirque du Soleil was able to be successful by bridging the gap between the traditional circus and more sophisticated forms of entertainment, such as the theater or opera. In doing so, they created (or found) a unique new space in the entertainment market.
Apple has done something similar with the Ipad. The Ipad has bridged the gap between laptops/netbooks and touch screen smartphones. In doing so, they have created new space in the personal computing market.
In the following table, I make a comparison between some of the relevant characteristics that the three different groups share. As you can see, the Ipad strikes a balance between laptop and smartphone extremes.
http://online.wsj.com/article/SB10001424052748704364004576132643125168876.html?mod=WSJ_hp_mostpop_read
Apple has done something similar with the Ipad. The Ipad has bridged the gap between laptops/netbooks and touch screen smartphones. In doing so, they have created new space in the personal computing market.
In the following table, I make a comparison between some of the relevant characteristics that the three different groups share. As you can see, the Ipad strikes a balance between laptop and smartphone extremes.
| Laptop/Netbook | Smartphone | Ipad | |
| Graphics | High | Low | Medium |
| Portability | Low | High | Medium |
| 3G Network | Low | High | High |
| Software/Apps | High | Low | Medium |
| Touch Screen | Low | High | High |
http://online.wsj.com/article/SB10001424052748704364004576132643125168876.html?mod=WSJ_hp_mostpop_read
Journal 2 - Law School Strategies
Since this post is supposed to be about something personal, I figured I would make it about the thing that's been taking up most of my free time lately: applying to and selecting a law school.
In making my choice of law schools, I've noticed that some law schools tend to (loosely) follow variants of the basic strategies that are listed in our Capsim Manual. For example:
A Broad Cost Leader strategy maintains a presence in all segments of the market, gains an advantage by keeping costs to a minimum, allowing the company to compete on the basis of price.
That description seems to fit BYU's Law School very well. They are a good law school, ranked around 40th in the US News Report, with course offerings in almost all major legal fields. Where they really stand out, though, is price. With yearly tuition at around $10,000, they cost 1/3 to 1/4 as much as similarly ranked schools. That's a terrific bargain.
A company following a Niche Differentiation strategy tries to distinguishing themselves by focusing on a particular field or niche within an industry, and doing it so much better than their competitors that they can charge a premium.
Chicago-Kent Law School follows this model. They focus on patent and IT law, and are among the best in this particular segment of the legal market. They also charge a premium ($45,000 per year) for tuition.
A company using a Broad Differentiation strategy maintains a presence in every segment of the market, and gains their competitive advantage by offering excellent products in each market segment that they can charge a premium for.
Yale is a school that quickly comes to mind when thinking of this strategy. They are widely recognized as the top law school in the country, with prestigious faculty, incredibly bright students, and courses of study in just about anything that interests you. They also charge a premium ($44,000) to attend.
In making my choice of law schools, I've noticed that some law schools tend to (loosely) follow variants of the basic strategies that are listed in our Capsim Manual. For example:
A Broad Cost Leader strategy maintains a presence in all segments of the market, gains an advantage by keeping costs to a minimum, allowing the company to compete on the basis of price.
That description seems to fit BYU's Law School very well. They are a good law school, ranked around 40th in the US News Report, with course offerings in almost all major legal fields. Where they really stand out, though, is price. With yearly tuition at around $10,000, they cost 1/3 to 1/4 as much as similarly ranked schools. That's a terrific bargain.
A company following a Niche Differentiation strategy tries to distinguishing themselves by focusing on a particular field or niche within an industry, and doing it so much better than their competitors that they can charge a premium.
Chicago-Kent Law School follows this model. They focus on patent and IT law, and are among the best in this particular segment of the legal market. They also charge a premium ($45,000 per year) for tuition.
A company using a Broad Differentiation strategy maintains a presence in every segment of the market, and gains their competitive advantage by offering excellent products in each market segment that they can charge a premium for.
Yale is a school that quickly comes to mind when thinking of this strategy. They are widely recognized as the top law school in the country, with prestigious faculty, incredibly bright students, and courses of study in just about anything that interests you. They also charge a premium ($44,000) to attend.
Thursday, January 20, 2011
Competition Heats Up in the Handheld Gaming Market
Nintendo recently announced the release of a new handheld gaming device called the Nintendo 3DS. The device features 3D effects that can be seen without wearing special glasses. The 3DS also has interesting new features that the older Nintendo DS doesn't have, such as 3D photography and an analog pad.
Unfortunately for Nintendo, the market for handheld gaming devices is swamped. Sony is expected to release its own 3D handheld in the coming months, and Sharp and LG will be introducing 3D smartphones with gaming capabilities later this year. Apple is also a major player in this market, with devices such as the ipod, iphone, and ipad being popular choices for playing casual games.
It seems to me that the handheld gaming market may quickly become unattractive. With a high amount of rivalry within the market and a very high threat of substitutes from smartphones and ipods/ipads, I question whether staying in this market is a good move for Nintendo.
Unfortunately for Nintendo, the market for handheld gaming devices is swamped. Sony is expected to release its own 3D handheld in the coming months, and Sharp and LG will be introducing 3D smartphones with gaming capabilities later this year. Apple is also a major player in this market, with devices such as the ipod, iphone, and ipad being popular choices for playing casual games.
It seems to me that the handheld gaming market may quickly become unattractive. With a high amount of rivalry within the market and a very high threat of substitutes from smartphones and ipods/ipads, I question whether staying in this market is a good move for Nintendo.
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