Next week is our last on Nudge. We will be covering the chapters on Privatizing Marriage and Objections. Both should be lively discussions.
The last week of class I plan to do as follows. On Monday we will read/discuss both Akerlof's Gift Exchange paper and this paper by Ericsson et. al. on Deliberate Practice. I will try to provide a bit of motivation below, then more next week when you are closer to reading those pieces. On Wednesday I want to apply those ideas to our class as we do a debrief. I hope you will blog a bit on both of those. My post next week should give you a sense of where this is heading.
Now for the motivation. In ongoing exchange that happens over time much of that (interior to the firm or organization) happens via a "trust relationship." Gift exchange is, in essence, the economic model of trust relationship. Much of what you get in the relationship should be viewed as a surplus or a rent. Both parties in the relationship understand that. We've seen this notion before, in Akerlof's Nobel lecture talking about efficiency wages, and in Simon's Nobel lecture where he talks about eliciting performance in organizations.
Akerlof in the Gift Exchange paper applies the idea to industrial work. I want to reconsider the idea in the context of knowledge work. With knowledge work, a good part of the motivation of the worker comes from their own learning. In turn, a lot of effective learning comes in the form of "Deliberate Practice." Deliberate Practice means taking effort to learn things just out of reach until that becomes routine and then going a step or two beyond that in an ongoing cycle. Video games where you go from a beginner level to higher levels have a built in deliberate practice aspect to them. It can both be fun - mastering the next step - and challenging - unsure that you can conquer what's ahead when it looks difficult. So I'd like to put that sort of learning into the workplace and talking about the economic incentives that would make it work well. I then want to argue that jobs so structured are the type we'd all like to have. But I also want to suggest that such structuring of the job has challenges to it. Earlier I encouraged people to watch a Daniel Pink video. I think he gets into a bit of a trap with what he presents. So we need to discuss that trap too.