Катя (inostranka) wrote,
Катя
inostranka

.Wharton | Day 3

Microeconomics

A little humor goes a long way:
"This is a dull course, but it serves a really important role in the Wharton curriculum. It helps keep Accounting from being the most boring course of the summer term."
"I've done this course for 19 years. My guess is they will keep me doing it until I get it right."

Class thoughts:
- Wharton teaches the discipline of posing problems and (this one is same as MIT) of ways of thinking about problems
- Common analytical fallacies: tunnel vision; confusion between correlation and causation (causation can be "proven" only with theory, not data); fallacy of composition; reality "hangup" (criticism that theory is too abstract, leading to inability/unwillingness to make any assumptions).

Process thoughts:
- Giving motivation and overview for the class (discussion, project) up-front is very important.
- This is the only class that did not list class participation as a grading component. Will the class behavior change? In the other classes it's hard to get a word edgewise right now.
- Related to the above - why do people want to raise their hand? Is the motivation self-centered (grade, wanting to hear one's voice, desire to stand out, etc.) or "sincere" (real questions, desire to find out more)? Same question about small talk, discussions with professors/bosses/etc.

Accounting

Reason for the bubble burst of the dot-coms: companies were growing very rapidly and going public while the profit (net income) was still negative. However, people were willing to base valuations on revenues (sales) rather than earnings (revenues minus expenses). The rationale was that as long as revenues are growing, and the expenses aren't growing as fast, the profit will show up eventually, and the companies must be valuable even before they can post an actual profit. The problems started appearing because revenues are much easier to "manage" creatively than net income.
Examples: priceline.com boosted its revenues by posting the full fare of airline tickets as revenues (offsetting it by the full fare minus commission in the expenses section); portals did barter deals of exchanging banner ads on each other's portals and valuing the deals at millions of dollars of revenue on each balance sheet.

Team Building

Another team building session at 7:30pm. Our group's doing pretty well, and so we decided to use the alcohol-serving lounge as our study room for the 40 minute assignment. I faced a tough decision of whether or not to bring the unfinished glass of Rioja back to the class session. Encouraged by my alcohol-bringing teammates I did, and I am still of two minds as to whether it was a strategically smart decision. It did help with the relaxation aspect.

Following the team building session we did a microecon study session, which was surprisingly useful. My Indian Institute of Technology teammates turned out to be very sharp in the analytical subjects, complimenting my US-educated teammates well. Luckily, I was humbled by the fact that I did not have the stuff down cold - when we started digging in with questions, I realized that I was quite confused myself.

Self-evaluation notes:
- I still believe that the study aspects of the course will not give me much trouble, but it's not going to be as easy as I initially imagined.
- I work pretty well in small groups, but am much more timid in larger group settings, especially when I don't know the audience well (like when they put the entire class together, while we are usually split up into 2 sections).

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