Question

I. Rational Actor Approach to Problem Solving (10 pts)                                                   

Early in the semester we reviewed a simple three question approach to diagnosing problems based on the economic perspective of rational actors (recorded video lecture). Answer/diagnose the following questions using this three question framework for the “Rational Actor Paradigm”.

As a reminder, the three questions were:

1. Who is making the (bad) decision? [i.e. should we/they let someone else decide]
2. Does the decision maker have enough or the right information to make a good decision? [i.e. do we need to change the information flow to the decision maker]
3. Does the decision maker have the incentives to make a good decision? [i.e. should we change the incentives faced by the decision maker]

Note: You may use the internet to find additional information about these situations, but your answers should be in the format of the 3 question rational actor framework.

Choose 1 of the 2 situations to analyze

1. (10 pts) Goal Alignment at New York City Schools

Early in 2010 nearly 1,800 New York City teachers lost their permanent teaching jobs due to school closures and other reasons and entered the Absent Teacher Reserve pool where they can be called on to substitute etc. However, despite there being 1,200 job openings for teachers in the same area, 59% of those in the ATR pool have not even applied for one of these 1,200 permanent job openings. Using the three-question framework, answer the question: why not?

2. (10 pts) Goal Alignment Between Airlines and Flight Crews
   Most people that have taken a flight are familiar with planes boarding, closing the doors, pulling slightly away from the gate, and then sitting on the plane for extended periods even before taxing the plane into the take-off queue. While the plane is sitting there, it is running the engines, burning/wasting fuel and extending the time that passengers have to sit cramped on the plane. Turns out this practice often has something to do with the flight crew contracts. Using the three-question framework, diagnose this problem and answer the question: why does this happen?

Answer 1

Ans: 59 % of those in the ATR pool have not applied for 1200 permanent job opening available.

The three important parameters for teacher for choosing teaching job:-

(1) Salary

(2) Preferred grade (class) and subjects

(3) Alternative option or better option

Due to these three reasons the teacher who are currently at the ATR pool haven't applied for 1200 permanent teaching job:

(a) Not getting appropiate grade or class to teach in these new opening.

(b) Probably many of them have got better option than these teaching job available or may be most of them looking for industry change.

(c) Salary offer in this permanent school job may be lesser than the previous offer.