PREPARING THE NEWS HOMEWORK
1. What questions does the news you choose pose? Who are actors or actor groups affected? How are their incentives modified?
2. What are the (random) variables that cannot be controlled but may affect the outcome in the news you choose? Identify the variables which might affect the behavioral responses of the actors.
3. Link your arguments and analysis to what you have learned in this class or before (reference to concepts, results, theorems—this is a very valuable part of your analysis: showing a capability of synthesis based on what you have learned).
4. Reach a conclusion, if not a definite conclusion, clearly stating the conditions and factors that make your conclusions likely or not so likely.
How to prepare/present your final paper:
The paper consists of: (i) Introduction. Describe the news , tell us why it is interesting (maximum 10 lines) and tell us what are the current positions held by different people or groups of people on the problem(s) in the news (15 lines) (ii) The analysis. Introduce symbols for the variables that are important in your opinion, define them. Tell us how you expect the actors will behave. Justify your arguments. Is there a game-theoretic situation, or is there interaction in a large social setting? How do you expect the social outcome to come into being? Then how will the welfare change for each actor group? Use welfare concept(s) and support your arguments. Wrap up and tell us what you can say about the impact on social welfare—is there a possibility of compensation for (if any) the losers? (iii) Conclusion. Summarize your final conclusion in 7-8 lines. Identify the factors which your analysis omits and may be relevant. Tell us if there are better arrangements in your opinion about the news you chose, and explain. Conclusion should not be more than one page.
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