HUMAN MIND - 🧠
MILLENIALS
New times
Constant feedback
More sensitive
Underconfident / Overconfident
Feedback,
Positive? or
Negative?
Non-score education
Problem
Feedback is needed
Not having implication on facing problems
Overconfidence
Default?
expectations based on
RECIPROCITY
GLOBALISATION
Conflict
Employer: lower cost of working at X firm
Employee: lower cost of having that millenial working
Work / Contribution
COOPERATION
BASED ON RECIPROCITY
Public goods
Taxes
Based on repeated transactions
Private goods
Firms and wages
COWEN'S RULES
1) Additional efforts should be rewarded
Bonus
Promote
Rewards
2) If intrinsec motivation is absent, employee should be motivated in order to make it appear
Rigid + Variable wage
3) Rewards and promoting generate social approval and good reputation
In order to mantain good work
4) Offer "normal" rewards
To avoid stress on employees to achieve it
Quality control is essential
POLITICS
HAIDT
5 pillars of morality
Harm - Care
FAIRNESS-RECIPROCITY
Ingroup - Loyalty
Authority - Respect
Purity - Sanctity
Attitudes
Liberals
Care about
Harm
Fairness
Equality
Do no care that much about
Ingroup
They want
Inclusivity
Equality
Authority
We all are equal
Purity
Freedom to do what you want with your body
Open-minded
Conservatives
Narrow-Minded
RISK AVERSE
Traditional
Care about
Ingroup
In terms of immigration, for example
Authority
CENTRALISED POWER
To a lesser extent,
Harm
Fairness
MORALITY
Moral matrix
Allows us to
COOPERATE
without taking into account
PREJUDICES
DIVERSITY
NASH EQUILIBRIUM in society order
CSR
good REPUTATION
EMOTIONS
SELF-CONTROL
With self-control, decisions influenced by emotions are RATIONAL
Without self-control, decisions influenced by emotions are IRRATIONAL
PROSPECT THEORY
Assymetric bias
Gains
More affected by losses
Humans need TO WIN at least once
Influenced by the short run
HARDWIRED MIND
Ancestors
Instincts/Emotions before Reason
SELF-CONTROL
Confidence before realism
Lay on experience
Classification before calculus
PREJUDICES
AVOID RISK
STATUS
To show power
Survival
NATURAL SELECTION
Leaders
Promoting
SUCCESSFUL
achieved by
Facing uncertainty and obligations
Routine
That can be easily reached by
MAKING OUR BED ON DAILY
Feeling of having achieved something every day
KNOWLEDGE
Scientific
Theoretical
We all can learn it
Centralised
Jerarchy
MORE TRANSACTION COSTS
LESS EFFICIENT
Long run
Particular circumstances of time and place
Experiences, more individual
Time and place
Decentralized
Market system
LESS TRANSACTION COSTS
MORE EFFICIENT
Short run
Better to adapt at each situation
TO VOTE
Rational?
Effort
Our vote could change the result?
Social duty
Eliminated by the telematic vote
Low participation on elections
Our right
Our obligation?
EXTERNALITIES
COASE
PROPERTY RIGHTS well defined
(+)
TRANSACTION AND BARGAINING COSTS
Low
Pareto-efficient outcome
High
Inefficient outcome
OKUPAS
PROPERTY RIGHT not well defined
TRANSACTION COSTS are very high
Legal loophole
Social movements agree with Okupation
Liberal attitude
Fairness?
Care?
Moral hazard after the contract
Solutions
Increase taxes to ones ho have empty properties
PROSPECT THEORY
Mad
Intervention of the government
High transaction costs
Not efficient
BIKES at SIDEWALKS
4 INCHES SPACE BETWEEN AIRPLANES SEATS
VARIAN
Result depending on who has initially the property right
No market for externalities
BARGAINING
Intervention can help to achieve more efficient outcomes
INTERNALISE THE EXTERNALITIES
GOSSIP
RISK
Power
Reproduction
MALADAPTATION
SOCIAL MEDIA
a lot of information available in short time
INSTANT GRATIFICATION
INFLUENCERS / CELEBRITIES
"Gossip" in business
MARKETING
GENETIC BIAS
We consider them as confidence people (like family members)
COOPERATION
Ancestors
NATURAL SELECTION
Zero-sum game
Minimize RISK
Government - institutions should incentivase it
POLIANDRY
GENETIC BIAS
better to cooperate
INTERNALISE THE EXTERNALITY
1) multiple division of lands
2) Poliandry allows family keep their lands
3) Problem solved
GLOBALISATION - NEW TECHNOLOGIES
Stopped poliandry
Opened to more world, more oportunities
Change in Indian economic structure
More women available to work
CORONAVIRUS
BLACK SWAN
Nobody expected this situation
2 examples of applications
Spain
Mix of public + Private healthcare
Central planification + Market system
Expropiation of medical material in order to redistribute it among population
Disincentivated firms of produce this goods
US
Private healthcare system
Market-based
PRICE SYSTEM
All information is communicated at the moment
Incentive for firms to produce
Defense production
Signals
FOR-PROFIT and NOT-FOR-PROFIT FIRMS
For-profit firms
Maximize profits
Constant innovation
Competitive
Offer demanded goods
Create employment
Non-for-profit firms
Social inclusivity
NGO
Welfare of minorities
MORTGAGE LIABILITIES
To borrow
INSTANT GRATIFICATION
Marketing trick
PROSPECT THEORY
U (conditions short run) > U (conditions long run)
High subjective human discount rate
We want to consume NOW
Spending mind
RISK
Assymetric information
Guarantees
Economic crisis 2008
Bubble
Low interests
SIGNALS
High demand of loans
Incentivise quantity lows quality
Overconfidence
Default of many loans
Spanish "cajas"
Better conditions than in commercial banks
High prices