What helps students learn?

Individualized instruction and confidence building: http://qz.com/444250/we-cannot-rely-on-the-internet-to-teach-our-children/.

Education

Decision rights and information flows

The beginning of this article on the NBA draft discusses decision rights and information flows, two of the three pieces in the Rational Actor Paradigm. What are the incentives?

Labels: Rational Actor Paradigm

Why Google spends more to hire and what they buy

This review of a book in the WSJ describes Google's hiring practices. After reading it you may ask How well your employer screens prospective employees. Here are some highlights.

1. "The biggest predictor of whether you'll succeed, Laszlo Bockoutlines in 'Work Rules!,' is how you fare in a sample work test. 
2. "... Google wants generalists. The company prefers 'clever and curious over someone who actually knew what he was doing.' In other words, they want people who will try something new.
3. "Top performers are doing well where they are; odds are they are enjoying it and being suitably rewarded. Google therefore strives to identify those top people—those passive job seekers who aren't thinking about applying to work at Google (or often anywhere else)—and cultivating them, sometimes over years.
4. "... while Google spends more than most on recruiting, it spends far less on training. Top people need less training. 
5. "Recruiters at top companies, who are usually inundated with résumés, often limit where they recruit from and the avenues from which to apply. Mr. Bock says that's a mistake: The right policy is to increase access; just have smarter filters. In Google's case, this involves using an internal tool called qDroid that provides interviewers with pre-formulated questions. Alongside administering the all-important sample work test, Google strongly recommends that its interviewers assess for cognitive ability, conscientiousness (will an applicant see a job through to completion?) and leadership. Notably, Mr. Bock writes that the company today prefers 'to take a bright, hardworking student who graduated from the top of her class at a state school over an average or even above-average Ivy League grad' because Google prioritizes resilience and overcoming hardship."

Game theory in the movie business

The 'Summer' Blockbuster That Debuts in March
by: Ben Fritz
Apr 01, 2015
Click here to view the full article on WSJ.com
TOPICS: Game Theory
SUMMARY: What makes a "summer" movie? As Hollywood churns out more big-budget "tentpoles," a packed calendar from May-to-August means more such films are being released in March and April. The article makes several interesting points about the economics of movie release dates. First, as more movies are crammed into the summer months, studios will push "tentpole" movies into less-popular movie-going times. Second, the exhibition industry prefers to spread releases out more evenly throughout the year than do the movie studios. Third, the summer months are a popular release time in part because kids are off from school and can go to movies during weekdays.
CLASSROOM APPLICATION: Students can examine optimal release dates and the game played by studios in choosing release dates.
QUESTIONS: 
1. (Advanced) Suppose the revenue per movie during the summer months as a function of the number of movies exhibited during these months, x_s, is 200-5*x_s; and the revenue per movie during winter months as a function of the number of movies during these months, x_w, is 100-5*x_w. Two studios, A and B, must decide number of films to release during the summer months, x_sA and x_sB respectively, and number to release during the winter months, x¬_wA and x_wB respectively. Each studio has a total of 20 films to release. In a game in which the studios simultaneously decide release periods, what is the Nash equilibrium number of films released during the summer months?

2. (Advanced) Why are studios packing more movies into the summer months and at the same time releasing more "tentpole" movies in the early spring?

3. (Introductory) Why does the movie exhibition industry prefer to spread releases out more evenly throughout the year than do the studios?

Reviewed By: James Dearden, Lehigh University

Label: Game theory

Is streaming a good way to monetize songs?

The Numbers. Selling Songs for a Song? Scrutinizing the Streaming Model
by: Michael Driscoll
Mar 28, 2015
Click here to view the full article on WSJ.com
TOPICS: Contracts
SUMMARY: The Numbers: Ever since Spotify put a number on the price of one stream of a song, the music industry has debated whether the figure is fair.
CLASSROOM APPLICATION: Students can evaluate the royalties earned by artists from compact disc sales and streaming services. One interesting point in the article is in the comparison of artist royalties from compact disc sales and streaming on a per listen basis. Furthermore, an interesting question is whether streaming services expand the market of listeners who pay for music or whether these services steal customers from the markets for downloads and CD sales.
QUESTIONS: 
1. (Introductory) Use the data in the article to calculate the number of listens (i.e., a break-even point) in which the royalties generated from streaming music equals the royalties generated from compact disc sales.

2. (Advanced) Does music streaming expand the market of paid listeners? Discuss the empirical issue of whether streaming services expand the market of listeners who pay for music or whether these services steal customers from the markets for downloads and CD sales.

3. (Advanced) Explain whether the comparison of the royalties from streaming music and compact disc sales be on a song-to-song basis.

Reviewed By: James Dearden, Lehigh University

Cali's water "crisis"

Jerry Brown recently issued an executive order seeking a mandatory 25 percent reduction in use of water in CA and other restrictions designed to reduce water use in the future. Economists see a simplier and more efficient solution to the "crisis": increase the price of water.

Click here to read a post in the blog by Marginal Revolution.
Click here for an opinion from Bloomberg.

Of course, for this solution to work someone must be able to measure how much water a customer uses. One reason for the crisis is that many areas in California either do not have meters or have installed them only recently. The results are predictable.

"In steamy Sacramento, where half of the homes still don't have water meters, residents use 279 gallons a day per capita -- almost triple the 98 gallons that residents of foggy San Francisco use." Click here to read more.

Soybeans vs. corn

This article in the WSJ shows how farmers are responding to lower prices for corn. The shift from corn to soybeans is an example of exiting one market with sub-normal returns and existing another market where the returns are higher.

Labels: Long-run equilibrium