Wednesday, September 19, 2018

The Memory Problem

I have been reading a book by Joshua Foer called ‘Moonwalking with Einstein’. The book describes the journey of the author to the finals of the US Memory Championship. Through this journey the author shares his research on history of memory, more specifically memorization.

Over many years starting with my father and then my friends and finally with colleagues at work, I have had debates about importance of memory in academics. In India, to a large extent, even now (though dwindling at a rapid rate) rote learning is the method of “stuffing” information in the heads of students. Application of knowledge is given lesser importance and assessed sporadically. These debates have yielded mixed results. My father’s input had the first impact on me as a teenager. He said, “How can you meditate over an idea until you have memorized it?”. Friends and more importantly colleagues have argued otherwise.

Being in the education field modern curriculums emphasize less on memorization. The focus is more how a student will acquire that information and more importantly apply it. This last part has had unanimous acceptance everywhere. At the end what good is the education if one cannot apply it. But even here one cannot do away with memory. One still must recall, for example, Newton’s laws of motion to apply them. No one debates the importance of recall either. Bloom’s taxonomy clearly states that recalling is one of the fundamental skills that a student should possess.

The situation that I want to bring to notice is that the education system has confused rote learning with memorization. Memorization is often confused with rote learning with good reason as other methods of memorization aren’t known or not popular. As I have realized, by reading Joshua Foer’s book, is that there are many ways of memorization like ‘memory palace’ method, ‘person-action-object’ method, etc. These can very well be used to store information aiding in recall for application of knowledge.

The other situation is the dependence or reliance on technology to store information. Virtually every piece of information can be stored or can be found use technology. This has apparently altered our brains according to a psychiatrist friend of mine. The debate about memorization takes me back to the debate about whether automation is good for the economy, something I wrote about in one of my previous blog posts (see The Schumpeter Diagnosis). Is the change in learning environment due to change in one variable i.e. memorization good for us in the long run? Is reliance on technology for memory good for us in the long run? From Foer’s book we learn that there was similar uproar after the Gutenberg press was invented. Till that point in history the only method of gaining knowledge was by remembering things and reproduction of  any written work had to be done by hand. Hence, with printing press, one did not have to memorize content any more. They could store it externally, in books. Needless to say, it did not create much of a problem in the long run as people have become smarter and proliferation of books has led to education of the masses. But is it different this time?

But, there is a warning. It is said that destruction of library of Alexandria set the world back by atleast a thousand years. Is destruction of external storage of information possible? If so, by how many years will humanity be set back? 

Sunday, January 7, 2018

Bargaining and Perfect Competition

A few days back me and some friends my of mine got together for tea. Tea get togethers involve some good food, good conversations, and the obvious element ‘tea’. During this tea session the conversation twisted and turned from one topic onto to the other. One of the topics that my friend shared was how she cannot bargain while shopping and how her mother is excellent at it. As per my knowledge bargaining is done while street shopping and not while you shop in big stores or malls where you know the price of the item you buy by the price tag that accompanies it. The economics teacher in me ventured to ask her further about why she could not bargain and why she thought that her mother is good at it. This led me to understand something economists have known for a long time about how some markets function. It enhanced my understanding how the theory is enacted by its players in real time.

To give you a brief about the theory, markets can be of two major types; perfectly competitive and imperfectly competitive. It is better to explain these markets by their characteristics using examples. Firstly, a market is a place where buyers and sellers of product(s) come together. A market for a small business like a photocopier(copier) who provides you with paper copies of any printed material is an example of a business operating in a perfectly competitive market. Perfectly competitive markets display some characteristics which are as follows –
Firstly, there are many buyers and sellers in the markets. Secondly, the product offered by all the sellers is similar in its characteristics. Thirdly, it is very easy for anyone to enter or exit this market in the capacity of a seller. Finally, both the buyers and sellers are well informed about the market especially about the prices. Apply these characteristics to the copier business, one easily identifies that it is in a perfectly competitive market.

Imagine that an experienced bargain shopper wants to buy chappals in a street market. There are many shops who sell the chappals and many buyers who want to buy the product as well. This satisfies the first condition of perfect competition. As many vendors offer similar kind of chappals the second condition of perfect competition is fulfilled. Also, it is easy for anyone to set up shop at a street market, thus satisfying the third condition for perfect competition.
It’s only the information about the price of product that is not known. One of the main reasons why it so is because the market for chappals is not as big as the market for photocopiers. Hence, the seller has all the incentive to quote a higher price as the buyer is not aware of the price of the product. This will earn the seller higher profits whereas as the buyer will be at a loss for paying higher price. The only way the buyer can gain is buy discovering the price of the product. This will complete the final condition of a perfectly competitive market i.e. buyer and seller are perfectly informed about the market.

The way in which the price is discovered by the buyer (bargainer) is what we know commonly. The buyer approaches the first seller and asks for a price that is well below the selling price set by the seller. Bargaining ensues usually without a sale. The buyer then moves on to another seller but with the information about the price at which a seller might settle given that the products are similar. The process may be repeated with another seller till the price is discovered by the buyer leading to fulfillment of the final condition of a perfectly competitive market. Thus, those who complain that they cannot bargain in a market offering similar products should de facto accept a loss in that purchase.