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- S1 E1 - Man, Nature, and Economic UncertaintyMay 28, 201533minProfessor Fullenkamp begins with "black swan" events - occurrences that are considered as improbable as black swans. A notable recent example is the 2008 financial crisis. This leads to an examination of the nature of uncertainty and the best strategy for dealing with it.#Literature & LearningFree trial of The Great Courses Signature Collection or buy
- S1 E2 - Turning Uncertainty into RiskNovember 27, 198730minWhen faced with an uncertain situation, try turning it into a "risky" situation. Risk is probability. Knowledge is power. This may sound counterintuitive, but it's a surprisingly effective approach, pioneered by University of Chicago economist Frank Knight. See where it applies and does not apply in economic settings.Free trial of The Great Courses Signature Collection or buy
- S1 E3 - Five Ways to Face the UnknownMay 29, 201529minIn dealing with uncertainty, it makes sense to have an arsenal of different strategies. Explore five techniques for risk management that can be used in every sphere of life: producing information, diversifying, sharing risk, avoiding risk, and absorbing risk. Probe instructive examples of each.Free trial of The Great Courses Signature Collection or buy
- S1 E4 - Probability: Frequency or Belief?May 29, 201530minExamine two different types of probability. Frequency-based probabilities rely on many examples of a phenomenon, while subjective probabilities call on personal experience and judgment, often drawing on relatively few cases. Learn to think critically about these two approaches, and know when to use them.Free trial of The Great Courses Signature Collection or buy
- S1 E5 - How We Misjudge Likelihood and RiskMay 29, 201530minImprove your ability to handle uncertainty by studying two ways that people reach decisions. System 1 excels at making snap judgments, while System 2 is analytical, methodical, and more time-consuming. Weigh the strengths and weaknesses of each, focusing on the problem of estimating probabilities.Free trial of The Great Courses Signature Collection or buy
- S1 E6 - The Reward in RiskMay 29, 201533minHaving learned to convert uncertainty to risk in Lecture 2, now go deeper by investigating how probabilities can gauge rewards and risks. Test risk-assessing tools used in finance, including expected value, variance, standard deviation, coefficient of variation, Sharpe ratio, covariance, and beta.Free trial of The Great Courses Signature Collection or buy
- S1 E7 - Decision Science ToolsMay 29, 201531minWhen is a risky project worth doing? Learn how corporate managers decide whether they should undertake a new enterprise. Discover that simple graphic aids, such as scenario analysis and decision trees, are powerful tools for weighing risk in both business and daily life.Free trial of The Great Courses Signature Collection or buy
- S1 E8 - Gambling EconomicsMay 29, 201531minGambling makes some people nervous, but it gives valuable insight into any type of risk-taking activity, including investing and entrepreneurship. Explore the role of games of skill and chance in the economy, and apply their lessons to activities such as banking and retirement planning.Free trial of The Great Courses Signature Collection or buy
- S1 E9 - Game Theory: Reveal or Conceal?November 4, 198830minUse game theory to shed light on strategic interactions, which are competitive transactions involving people or organizations. Such interactions can range from negotiating the sale of a house to pricing products for maximum sales. As an example, analyze an intriguing competition between two potato chip brands.Free trial of The Great Courses Signature Collection or buy
- S1 E10 - Adverse Selection: Hiding in Plain SightApril 22, 199031minAdverse selection occurs when the lack of information by one party leads to a distorted result. See how this situation surfaces in many different contexts, from used car sales to investment deals to Internet purchases. Learn to recognize the adverse selection trap, and know how to correct it.Free trial of The Great Courses Signature Collection or buy
- S1 E11 - Moral Hazard: Whom Do You Trust?May 29, 201531minExamine another outcome of asymmetric information: the moral hazard problem. This peril arose spectacularly in the 2008 financial crisis, with the widespread sale of bad loans to unwitting investors. But it also lurks in many small-scale transactions. Discover what you can do to combat it.Free trial of The Great Courses Signature Collection or buy
- S1 E12 - The Principal-Agent Problem: When Mice PlayMay 29, 201531minFocus on a special case of moral hazard: the principal-agent problem, in which an agent is appointed to handle a matter beyond the expertise of the person doing the hiring (the principal). The agent may easily take unfair advantage of this situation, which covers everything from home repair to government contracting.Free trial of The Great Courses Signature Collection or buy
- S1 E13 - Compensation TrapsMay 29, 201532minDelve into the uncertain realm of compensation contracts, which ideally motivate employees to do a good job, but too often have unintended consequences. Survey the pluses and minuses of efficiency wages, piecework, milestone payments, commissions, promotions, stock options, and other incentives.Free trial of The Great Courses Signature Collection or buy
- S1 E14 - Caring, Sharing, and Risk BearingMay 29, 201533minAltruism is more complicated than simple selflessness. Instead, it may be the world's oldest and most effective risk-sharing system. Discover the power of viewing altruism as economists do--as a mathematical expression called the utility function. Also study altruism's connection to the moral hazard problem.Free trial of The Great Courses Signature Collection or buy
- S1 E15 - Mayhem! Insurance ProtectionMay 29, 201530minInvestigate the multitude of ways you can insure against misfortune, from extended warranties to travel insurance to identity-theft protection--not to mention health, car, home, and life insurance. Learn how insurance products work, and get tips on what you should cover and at what value.Free trial of The Great Courses Signature Collection or buy
- S1 E16 - Uncertainty in the NumbersMay 29, 201531minStatistics are essential tools for dealing with uncertainty, but they should be used with caution. Put numbers such as the unemployment rate and consumer price index into context, probing how such statistics are measured and what the sampling error and confidence interval say about their reliability.Free trial of The Great Courses Signature Collection or buy
- S1 E17 - The Business Cycle's Wheel of FortuneFebruary 23, 199032minNothing is as certain and yet so unpredictable as the business cycle; economic expansion is invariably followed by a recession--and vice versa--but economists are at a loss to forecast the timing. Study different theories of the business cycle, and learn how to prepare for the next boom or bust.Free trial of The Great Courses Signature Collection or buy
- S1 E18 - The Danger of InflationMay 29, 201531minEven in times of low inflation, no one knows when prices will take off again. Look into the causes of inflation, efforts to control it, and the surprising wisdom of promoting a small degree of inflation. Also examine the disaster of deflation, which is a generalized drop in prices.Free trial of The Great Courses Signature Collection or buy
- S1 E19 - Extreme MarketsMay 29, 201530minAt any given moment, some market somewhere is making headlines because it's either hitting record highs or crashing down to earth. Learn how to approach the uncertainty of financial markets with savvy and common sense. Focus on strategies that can help you reach your financial goals.Free trial of The Great Courses Signature Collection or buy
- S1 E20 - Regulation, Innovation, ExcessMay 29, 201532minGovernment policies are a major source of uncertainty, since they can alter our lives in unpredictable ways. Study the surprising outcomes from several government interventions in the U.S. economy. In particular, look at the regulatory cycle model, which shows how a complex system responds to new regulations.Free trial of The Great Courses Signature Collection or buy
- S1 E21 - Global Trade in EmploymentMay 29, 201532minFree trade produces uncertainty and anxiety in economic players at all levels. Understand how comparative advantage governs who benefits in the competition for international trade. Then hear Professor Fullenkamp's tips for how individuals can cultivate their own comparative advantage in the labor market.Free trial of The Great Courses Signature Collection or buy
- S1 E22 - No Limits to GrowthMay 29, 201532minLook at possible catastrophes that are decades away: alarming trends such as overpopulation, scarcity of raw materials, and environmental degradation. Observe that society has so far escaped the worst predictions of experts, and explore why that is and what the future may really hold.Free trial of The Great Courses Signature Collection or buy
- S1 E23 - Hedging Business and Personal RisksFebruary 23, 199030minExamine tools that professionals use to hedge against financial risk, such as forward contracts and financial options. Study the suitability of these instruments for individuals. Then probe a more flexible strategy: real options, which are opportunities that can be seized or declined as conditions warrant.Free trial of The Great Courses Signature Collection or buy
- S1 E24 - Stress Testing Your FinancesMay 29, 201533minClose by learning how to take the economic "stress test," inspired by bank evaluations made in the wake of the 2008 financial crisis. This simple exercise helps you anticipate the most significant reversals you are likely to meet, helping you approach uncertainty with confidence and calm.Free trial of The Great Courses Signature Collection or buy
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