I am a student in Professor Arvan's Econ 490 class, writing under an alias to protect my privacy, using the name of a famous economist Elinor Ostrom as part of my alias.
On summer vacation, I have developed some exciting plans. There are some options about what I would like to do or my expects expect me to do. Firstly, I can run a noodle shop in the downtown together with my friends. Secondly, I can intern in a beauty parlor which is a family business. Thirdly, I can take part in a volunteer program in Bangkok. Fourthly, I can spend my time in Bali Island. Fifthly, I can intern in a bank. It is obvious that this summer vacation has been too short for me to fulfill so many plans. So I need to choose among them. Although my parents really want me to intern in their beauty parlor, I just feel that it is out of line with my interest completely. What is more, I really feel so interested in running a noodle shop because of the fresh ideas and passion it has involved. But in the end, I still decided to intern in the beauty parlor and thus missed the chance to set up my own business. However, the study in the beauty parlor is still worth the effort. That is because I have a taste of the hard work of my parents and also manage to prove my ability to them. For example, I once helped them in purchasing the body-shaping laser equipment abroad. I also tried to buy the household goods with high performance-cost-ratio in Taobao. In a word, I have made the best use of my ability as an international student to create my value. After the one-month internship, I also decided to act as a volunteer in Thailand rather than travel around Bali Island. Although it will be a good experience for me to relax myself and enjoy the view of Southern Asia in Bali Island, I still chose to volunteer in Thailand as a southeastern country. It has been a training of greater meaning to me. When in Thailand, I tried my best to teacher children there English and Chinese. Those children also brought me to ride an elephant and eat the local fruit, which is not available in Bali Island. I could have enjoyed my vacation in Bali Island, but I just feel that I should make better use of my youth to do something meaningful. At the end of the vacation, I also interned in a branch of China Merchant Bank. During this one-month vacation, I also missed out the opportunity to get together with my classmates because of the internship, which made me feel a little sad. I still believe the internship is a worthy experience. Through the two internships, I have also managed to compare the advantage and disadvantage between two companies. What is more, I also tried to give some advice to my parents. After having a taste of the strict costume management, performance requirement and enterprise culture in China Merchant Bank, I have also identified the shortcoming of my family business. It has impressed my parents so much. We are faced with various choices in daily life. Although the transaction cost is an important consideration, I think it is even more important to learn something from what we are engaged in.
Thank you for this post. You repeatedly mentioned in it things that you did not do, Why did you write that. Were you trying to explain the "opportunity cost" entailed in the choices you actually made. That is interesting, but it is not what the prompt was asking about, when it said to discuss "transaction costs."
ReplyDeleteLet me see if I can illustrate. You didn't explain why your parents wanted you to intern in the beauty parlor. Do they expect you tow work there after you finish college? Perhaps they want you to eventually take over the business? If you take your parents' perspective on this matter, the issue then is how to prepare you for this eventuality given that you have other interests. So they have to motivate you and then monitor that you've learned enough about the business to be effective working in it at some later date. Both the motivation and the monitoring are costly. How those costs manifest I can't say, because you didn't write about that. But surely your parents put in substantial effort in both of these dimensions. Those are transaction costs. The are costs incurred to make sure that your internship was worthwhile, from their point of view.
What about from your point of view? When I was approximately your age I went to Northwestern for graduate school. This is a suburb of Chicago. My parents lived in New York City, about 800 miles away and a long enough care ride that my parents would never take that trip. At that time I wanted my freedom and being far away from them helped. But a few years later my mom had a hip replacement and my parents needed me to care for them for a time after that. Then I wished I lived closer. I don't know if that at all relates to your situation, but I'm guessing that ten years into the future. you will feel different about the choices you are making now regarding your career choices.