In the first portion of this post, I will do a bit of reflection on the last week of class. Learning about the insurance model was very interesting to me as I have a connection to the insurance industry. Last summer, I interned at AIG, American International Group, one of the leading insurance carriers in the world. Within my internship, I worked in the executive liability group, which focused on the pricing on insurance for companies. Through this experience, I learned a significant amount regarding the insurance industry. I learned a lot about the factors that affect insurance pricing, a significant amount regarding the corporate industry, and a lot about organizations on the whole. Learning about the insurance model from an economic standpoint was very interesting to me as it put the pieces together in terms of connecting the dots from my summer. Being able to put it all together was something that really helped me to make sense of the model.
--------------------------------------------------------------------------------------------------------------------------
The main example that I can think of in terms of team production with a gift exchange is in terms of previous group projects of mine. With group projects, the ultimate goal of the group is that everyone works through the project and contributes on an equal basis. This leads to the most productive level of the group. This production level ensurers that the team is contributing to the best outcome for the entire team. In this situation, the gift exchange portion is the contributions of each member to the end goal. This gift exchange, while not necessarily tangible, is adding to the overall contribution of the team.
With this example, this is the ideal situation for a team in a group project situation. However, in my previous experiences this is not often the case. There are often team members who are too controlling or ones that do not contribute enough. This ties back to the readings that we had in terms of the example regarding the moral or economic lens for motivations, specifically from the Power of Altruism piece. For team members, there is either the aspect of putting in the work for the sake of the overall group or putting in the work for their own personal gain. The opposite of both of these aspects is also true as for some team members neither of these motivations are worthwhile. With these aspects in mind, the contributions to the team or the lack of contributions can make or break a team. I have personally had situations where both of these cases have been true, and I must say that the contributing teams are not only more productive but a significantly more enjoyable experience with significantly better outcomes.
In a metaphor that I hope is useful to you, you should think of the ideas that you are writing about as if they are an onion. Of course, you must peel away the outer skin. But to really get at the idea, you need to peel away some of the top inner layers as well. In what I comment on below, that's the essence of the comments - do more peeling away.
ReplyDeleteOn working for AIG and what you learned there about insurance pricing for companies, perhaps there is some insider stuff that you are not allowed to communicate. But, if not, that part cried for an example or two. What type of insurance for companies are we talking about - for the structure where the work is done, for liability in case there is a product defect, for managing employee complaints about unjust firing, or something else? For any one of those how does the pricing get determined? That would have made the first part of your essay for interesting and enlightening.
On the first paragraph of your part on altruism, you may not realize that there is actually an important issue that needs resolution about what it means to make an equal contribution. Is that measured by equal input (effort) or by equal output (product). You get the same result if all team members have the same ability and the same human capital. But you get different results when ability and human capital differ. I think it is more interesting to consider the case where there is some heterogeneity in the group. What is the fair way to do things when one member is a strong student in that area and another is a weak student? This is an important question, but it doesn't have an obvious answer. Working through the possibilities might have then set up what you say next.
Your conclusion that slacking within a group or having a team member be overly controlling produces less than ideal performance is not surprising. What is hoped for in these posts is that you start to see some ways for those things to be avoided, to make the good outcome more likely. Do you think there are some counters that a team member might try in the event one team member is slacking off? What about other counters to try if a member is overly controlling?
First of all, your experience in the insurance company sounds interesting, I would like to know more details. Since I have my car and have to pay car insurance every month, so I am extremely sensitive to the insurance fee (of course cheaper is better). I wonder if you know how insurance company calculate the price? Are there any regression formulas that they use to determine the price that consumers pay? Or even better, do you know what is the reasonable price that we should pay for insurance?
ReplyDeleteAlso, it is a great idea using group project as an example. Sometimes it is hard to assign task fairly, but sometimes clearly assigned task do motivate people to finish their own part as good as they can. I agree with you that equal contribution can lead to the most productive outcome.