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How COVID-19 Will Change the World by Steven Mulford-Vargas
How COVID-19 Will Change the World by Steven Mulford-Vargas
Covid-19 has affected the economy and has consequently impacted small business with 20 percent closed which mean there is no income flowing in to offset the costs. More than half of the population believe that the pandemic and the conditions it has created will last for six months. About 30 percent of small businesses report that the economy in their locality is doing well. This effect on small businesses impacts the economy greatly because 99.7 percent of all businesses in the United States are small. These also mean they are responsible for creating 64 percent of jobs between 1993 and 2011.
The troubled economy has not impacted on large corporations such as Amazon, Walmart, Apple, and Microsoft. They are planning to diversify their revenue by investing excesses in different sectors. The pandemic has also created an opportunity for them to advance artificial intelligence technology since the jobs that have been vacated by people to avoid the disease will be automated among other reasons.
The government will be obligated to consider UBI when these technology jobs translate to losses for the population. The UBI will be calculated from a five-year average of the Permanent Fund’s performance that is influenced by the stock market and other factors. The likely automation of repetitive jobs will exacerbate the emotional and financial stress the American population is experiencing due to the pandemic.
Governments are also working to bring back manufacturing home by creating incentives and encouraging people to purchase locally to avoid a chain supply snarl-up like the one caused by Covid-19. Covid-19 will also change the world by increasing the number of people attending college. This is because, when there is a recession, the number of jobs decreases dramatically. Besides, the chances of losing a job increase, and getting a promotion becomes as hard as finding a placement. So most people that would not consider attending college would opt to because they have plenty of time on their hands and it remains the most desirable way to make use of time and invest in the future when circumstances change. Also, automation would mean the lack of skills will put a person at a disadvantage in the job market so acquiring a skill would be a must to remain competitive. Automation will begin replacing low-level workers who work back-breaking jobs before the technology advances even further to take on more complex tasks.
Experiment On Competitive Market Behavior (2)
Experiment On Competitive Market Behavior
Introduction
The purpose of this experiment is to investigate the various experimental games such as the decision making games in management and those that are made to simulate the so called oligopolistic phenomena in the market. The experiment aims at reporting various experimental games which are made to study the hypothesis in the neoclassical market theory of competition. The experiments are designed in a manner to simulate a certain modest scale. The main intentions of the experiments are to act as simulations of specific features in the organized markets. The conditions of the experiment’s demand and supply in the markets are closely modeled on the curves of demand and supply which are generated as a result of limit price orders that are in the commodity and stock market brokers (Fehr & Gächter, 2000).
The paper aims at studying the neo classical competitive market theory on the simple demand and supply curves which are studied in economics. The purpose of the experiment is to study the way demand and supply configurations are likely to cause equilibrium and also the way equilibrium is caused by dynamics.
Theoretical Predictions
According to Walrasian hypothesis, convergence is supposed to be faster when there is large demand or supply. This means convergence is supposed to be faster in the case of test 2 as compared to test 3.
On the other hand, excess rent hypothesis focus on profits that are unrealizable in prices such that, the higher the price, the faster it should adjust. This hypothesis identifies the stochastic equation that represents well the tendencies of price convergence. The hypothesis states that,
∆pt = Pt+1 – Pt =f[x1(pt), (1)
X2(p2) . . ].1 + er
Where x1 and x2 are characteristics of demand and supply curves as well as the individual’s bargaining characteristic in the test group. A random variable in this case represented by er has a zero mean. In an experimental test applying the Walsian hypothesis, x1(p1) could be the demand in excess prevailing. This is at p1 and f=0 when the x1 is equal to 0(Fehr & Gächter, 2000).
Experimental set up
The set up involves the groups of subject being divided into two and at random, where there is one group for the sellers and another for buyers. Each of the participating buyers is provided with a card with a number which is only known to the buyer. The number represents the highest price he would pay for a unit of a commodity. The buyers are told not to buy a commodity at a higher price than one indicated on the card (Smith, 1962). The buyers could be willing to give the same amount as indicated in the card or much less for a commodity. The buyer is also instructed to think of making some profit similar to the difference between contact price and the price on the card.
Each seller obtains a card with a number only known to him. The number represents the lowest price he can accept to sell a unit of the product or commodity. The sellers have instructions to accept selling at the minimum price other than not selling. However, they should make pure profit that is determined through deducting contact price and reservation price. In every hypothetical price, the quantity corresponding represents the amount which can be sold using this price. Supply curve will then define the likely supply quantities in every hypothetical price.
Every buyer and seller is given a chance to have a contract to exchange a commodity in any one market period. The rule is meant to simplify the process.
The experiments took duration of 5-10 minutes depending on the number of individuals participating(Smith, 1962).
Analysis of the experiment.
It was observed that the quantity and equilibrium price are almost the same for the demand and supply curves in two tests. i.e, 2, 3.
(Fehr & Gächter, 2000)
The only difference is that the demand and supply schedules in test 2 are flat as compared to the ones in test 3 which are steeply inclined. Walrasian hypothesis states that the increase rate in the exchange price becomes an increasing function in excess demand of the stated price. It would have been expected that the test 2 market could converge rapidly as compared to test 3(Smith, 1962).
However, the results showed a less erratic and more rapid tendency on the equilibrium. The results are in line with several other hypotheses such as the excess rent. In test 4, the supply curve was elastic as the sellers had cards with $3.10. The sellers had similar lower bounds on their acceptance set reservation price. The sellers did not harbor divergence attitudes even though they showed marked variation on the propensities of bargaining (Smith, 1962). The results showed that the market wasn’t slow in the process of converging but does so in a stable price that is $0.20 higher than the equilibrium predicted. Test 7 was to give additional information for contradicting or supporting the hypothesis indicated. It was evident that the buyer’s rent was smaller than that of the seller. This means the convergence on the side of equilibrium is much slow. For instance for three periods of trading, the exchange prices were $3.32, 3.33 and 3.34 respectively (Roth & Kagel, 1995).
Experiment 5 was meant to study effect of market change of behavior in the demand and supply conditions. The experiment was performed on a mature group and normal profits were obtained (Fehr & Gächter, 2000). This means, there were small returns even when the goods were sold at lower supply prices or even bought at higher demand prices. The aim of test 6 was to determine the way marked imbalances on the intramarginal buyers and sellers affected the market equilibrium. The demand curve was able to fall towards right in steps of one unit while supply curve was elastic at $4. The hypothesis held that the large rent of $6.75 that the marginal seller enjoyed with large rents of intramarginal sellers could prevent the establishment of theoretical equilibrium.
Test 8 was done to test the effects due to changes in the organization of market and prices in the market. In the first instance, only sellers could enunciate offers. Buyers had a passive role and could either reject or accept offers and couldn’t make bids. This was meant to simulate ordinary market. The results were that the quotations of price were above equilibrium. In tests 9 and 10, the sellers and buyers were allowed to have 2 contracts in each period and the market experience was gained two times (Smith, 1962).
(Fehr & Gächter, 2000)
Each of the traders is able to experiment more in every market.
Conclusion.
Experimental literature however describes that poor performances may be improved with very much intense subject training on instructions. Smith focused on interactions among agents in certain market environments and looked at methodological issues that develop practical methods in experimenting and coming up with what constitutes better experiments. This calls for further research in developing more experimental methodologies and coming up with more ideas in new areas of research. It is not possible to assert a broad generalization basing on the experiments discussed. However, it is important to note the following points related to the experiment.
One, even if the numbers are not many, strong tendencies for demand and supply competitive equilibrium are attained especially when one is in a position to prohibit collusion and maintain publicity of transactions, offers and bids. Two, the changes in demand and supply conditions lead to the change in transaction volume in every period or general level of the contract prices. Three, some evidence in predicting static equilibrium especially on competitive market should have knowledge in the shapes of demand and supply schedules. This is evident when the supply curve is elastic and empirical equilibrium is much higher than theoretical equilibrium. The markets with institutional organizations is made in a manner that only sellers can make quotations of prices. This could lead to weak equilibrium as compared to when the sellers and buyers make quotations of prices (Smith, 1962).
Finally, the Walrasian hypothesis which is in relationship with market mechanism adjustment is not confirmed. The most adequate hypothesis is excess rent that relates “ speed” in adjustment of contract price to buyer algebraic excess and seller rent and in this case “virtual” rent instead of the seller rent and equilibrium buyer.
References
Fehr, E., & Gächter, S. (2000). Fairness and retaliation: The economics of reciprocity. The journal of economic perspectives, 14(3), 159-181.
Roth, A. E., & Kagel, J. H. (1995). The handbook of experimental economics (Vol. 1). Princeton: Princeton university press.
Smith, V. L. (1962). An experimental study of competitive market behavior. The Journal of Political Economy, 70(2), 111-137.
Diversity management
Diversity management
Name
Institution
Introduction
The paper attempts to examine the how the management of diversity improves the performance of the company. The paper examines two current scenarios of management diversity in today’s business world and explores various ways the diversity management can improve the growth and the development of the business. The pool of talents and skills from different people’s backgrounds leads to creativity and innovation, thus improving the performance of the business.
Diversity management
The growth of any business in today’s fiercely competitive market relies on diversity management. Organizations seeking global relevance in the global markets are identifying the need to embrace cultural intelligence to promote creativity and innovation at the workplace. As such, most of the corporations, no longer presume diversity to be just employing many workers. Rather diversity entails how the organization is treating its employee authentically from the management, to the root of the business model. In order to comprehend the role of strategic management diversity to the business, it is important to identify the key players that can implement the best practices and ensure the sustainable growth of the business (Barak, 2010).
The benefits of gender diversity
The gender diversity is not important to any business workplace for laudable goals, but it brings the sense to the business from the bottom to the top of the corporate structure. Research findings reveal that companies with gender diverse teams perform better than other with single-based gender teams. According to a Gallup study on hospitality and retail industries which included more than 800 business units in the United States, the findings done in 2013 showed that employing demographically diverse workforce can lead to the improvement of the performance of the business. The financial outcomes of the gender diverse business units were higher than those of businesses dominated by one gender. On a deeper analysis, the less diverse units generated 5.24% revenue compared to 14% in diverse business units in the retail company. In the hospitality industry, diverse gender-based business units indicated 19% increase in quarterly net profit compared to the less diverse business units. The results are a substantial proof of the additive effect on the overall performance of the company from the bottom line to the top management. Diverse based businesses can get wide customer base and attracts talented women who have the potential to make the organization gain competitive advantage in the global economy (Badal, 2014).
Diverse leadership talents
Lathon Ferguson has recently taken a mission to transform talented and underserved students to become the leaders of tomorrow at INROADS, Inc Corporation. The company operates as a technology and financial service provider worldwide. Being the regional director, he planned to implement strategic corporate management based on diversity of talents from the youth to the professional associates. As a result, he has been increasing the number of interns from the Mid-West of the United States to other countries where the corporation has opened its branches. The company has recorded increased performances on the sales department due to the training programs and initiatives intended to construct a culture of diverse knowledge at the corporate management. The company has been creating strategic corporate partnership with other companies such as Nestle Purina, Express Scripts and Saint Louis Zoo. The collective diversity management has enabled the corporation to maneuver the ever increasing economic difficulties (Kirton & Greene, 2010).
Benefits of management diversity to the performance a company
Innovation
People with diverse cultural backgrounds think differently and have different ideas. Bringing the workforce under the same business entity encourages the sharing of new ideas. The diversity of talents, skills and problem-solving approaches reflects consumer’s insight and the wisdom of the crowd. As such, a global, diverse workforce acts as a gateway for creativity and innovation which in turn leads to the increased performance of the business. In addition, the use of a diverse workforce provides an opportunity for an inclusive working environment where ideas can germinate and grow into inventions (Kirton & Greene, 2010).
Profitability
Marketing is based on the concept of understanding the end-consumer; therefore, the use of a diverse workforce promotes the sale of good and service to a diverse consumer population. Furthermore, inclusion of a diverse workforce in the marketing department enables an organization to overcome the communication barriers with the customers. The pools of qualified workers reap the economic benefits easily compared to the organization with the homogenous make-up (Kirton & Greene, 2010).
Talent pools
An organization with a wider selection of people from diverse cultural backgrounds can pick up a variety of talents from the recruitment shopping basket. Many talented and gifted people are always daring to venture into the unknown and discover business models that improve the performance of the business. People who use their talents in a business environment are always willing to go the extra mile and discover more profitable opportunities (Kirton & Greene, 2010).
Multiformity
Individuals with different experiences and skills can specialize and address the quality of the product of the service that the company is offering. It is difficult for a corporation to perform with excellence when it does not include a culture of the workforce with different strength and skills (Barak, 2010).
Conclusion
Presentations received from participants who have diverse backgrounds during a corporate seminar provide comprehensive solutions to the business problems. The range of experiences and context represented by at the organization management provides a sound basis for the development and the growth of the business. As a result, business organizations are adapting the management of diversity at a fast rate in order to expand their market niche and to stay on top of the competition (Barak, 2010).
References
Badal, S.B. (2014). The Business Benefits of Gender Diversity. Gallup Business Journal. Retrieved from:
http://businessjournal.gallup.com/content/166220/business-benefits-gender-diversity.aspxBarak, M.E.M. (2010). Managing Diversity: Toward a Globally Inclusive Workplace. California: SAGE
Kirton, G., Greene, A.M. (2010). The Dynamics of Managing Diversity. Oxford: Routledge
O’Neil, B. (2013). Lathon Ferguson of INROADS develops diverse leadership talent. The St. Louise American.
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