Connecting the Dots

Reflecting on our four substantial blog posts for the course thus far has given me a chance to spot at least one consistent theme: transaction costs. While perhaps not be so obvious to the casual reader who is not enrolled in econ 490, I noticed nuances of this concept threaded throughout all my posts, which I will discuss in depth a little later. In the broader sense that each blog post has been an opportunity to process the content from that week’s lessons, relating it to our individual experiences and adding in our personal opinions, there is general fluidity as new ideas are built on top of knowledge gained the previous week.

In week two of the course, the prompt allowed us to elaborate on our own work experiences and consider the transaction costs associated with that role. At that early stage in the semester, transaction costs were still a relatively new idea to me, and I think I mistakenly assumed they were a close relative of opportunity costs solely because of their similar sounding titles. In a way, this was me synthesizing a new idea to one I was familiar with. For my current job as a nanny, I talked about the leisure I was foregoing to work at my job and identified time as my main transaction cost. Now that we’ve learned more about transaction costs, I think I could improve upon this post.

A more accurate description of transaction costs as I now understand them are the costs incurred in making the job work, or forming some agreement; not necessarily what you are foregoing. In my original blog post on this topic I mentioned the flexibility my job allows as a positive, but I think this flexibility may also generate transaction costs that wouldn’t exist in a typical employer/employee relationship. To clarify this, it’s important to explain that my boss doesn’t “set my hours” as a usual employer would. Instead, as a university professor who is understanding of my academic responsibilities, he asks me to work additional hours; it is always phrased as a “can you” not a “you will”. The transaction cost of this leniency on his end is that he is prevented from solidifying plans until he is assured he has a sitter for the night. If he instead just told me I had to work he could secure the details for his other obligation up front. On my end, these transactions costs are related to the additional time and effort of communicating our schedules so that we are on the same page.

In posts since this one, I’ve touched more on the concept of transaction costs. In our most recent post on Illinibucks, you challenged us to think extensively about this concept, which helped to deepen my understanding of what transaction costs are and how to identify them in everyday instances. In fact, I could probably go back through each of my blog posts and identify how transaction costs played a role in whatever personal anecdote I wrote about. My sorority’s recruitment committee certainly had transaction costs, as did my committee that planned the Lustgarten Fundraiser.

The point I am making is that there is certainly evidence for the connections you asked about in the prompt. I believe this was part of your goal when you tasked us with maintaining a personal blog for the semester. Synthesizing class concepts to our personal lives brings a sense of clarity that a textbook simply can’t. It forces us to really think about the topics and check ourselves for understanding. As we progress this semester and hear certain words, like transaction costs, mentioned more frequently, our understanding deepens. As I demonstrated above, it’s certainly easier to make connections in my earlier posts now that I have enhanced knowledge of the topic.

As far as my writing process, I haven’t evolved much since the first week. Generally, I try to start the posts early in the week; ideally, I like to read the prompt before our Tuesday lecture so I can be thinking in class of examples in my life that relate to whatever we’re discussing. I type my blog posts in a word document first, for the sake of having decent spelling and grammar checks, and preferably complete a rough draft by lecture on Thursday. This gives me a day to read over the material and make any final tweaks before publishing to my blog. Going forward I might strive to better integrate class discussions directly into my posts, rather than just using class discussions to stimulate my personal anecdotes.

Considering future prompts, I would like to see more hypothetical scenarios. I really enjoyed the recent Illinibucks prompt. These sorts of exercises test my thinking in new ways because they introduce concepts I likely wouldn’t have considered on my own. Simply searching through personal experiences, I find myself gravitating toward the same handful of experiences because they are the most recent or significant. A second idea for a prompt might be responding to a current event and finding the economics at play in the situation. This would allow us to synthesize what we’re learning to the bigger world and would be good preparation for the reality of employment that awaits most of us soon.