Richard J. Zeckhauser

From David Ricardo making a fortune buying British government bonds on the eve of the Battle of Waterloo to Warren Buffett selling insurance to the California earthquake authority, the wisest investors have earned extraordinary returns by investing in the unknown and the unknowable (UU). But they have done so on a reasoned, sensible basis. This essay explains some of the central principles that such investors employ. It starts by discussing "ignorance," a widespread situation in the real world of investing, where even the possible states of the world are not known. Traditional finance theory does not apply in UU situations. Strategic thinking, deducing what other investors might know or not, and assessing whether they might be deterred from investing, for example due to fiduciary requirements, frequently point the way to profitability. Most big investment payouts come when money is combined with complementary skills, such as knowing how to develop real estate or new technologies. Those who lack these skills can look for "sidecar" investments that allow them to put their money alongside that of people they know to be both capable and honest. The reader is asked to consider a number of such investments.Central concepts in decision analysis, game theory, and behavioral decision are deployed alongside real investment decisions to unearth successful investment strategies. These strategies are distilled into eight investment maxims. Learning to invest more wisely in a UU world may be the most promising way to significantly bolster your prosperity.Comments on this paper can be found at: "http://ssrn.com/abstract=2205848" http://ssrn.com/abstract=2205848"http://ssrn.com/abstract=2205858" http://ssrn.com/abstract=2205858.

Investing in the Unknown and Unknowable

John D. Donahue

Karen Eggleston

This comparative study allows decision-makers to understand and use public-private collaboration to achieve governance goals.

The Dragon and the Eagle

Christopher. Avery

Andrew. Fairbanks

Each year, hundreds of thousands of high school seniors compete in a game they'll play only once, whose rules they do not fully understand, yet whose consequences are enormous. The game is college admissions, and applying early to an elite school is one way to win. But the early admissions process is enigmatic and flawed. It can easily lead students toward hasty or misinformed decisions. This book--based on the careful examination of more than 500,000 college applications to fourteen elite colleges, and hundreds of interviews with students, counselors, and admissions officers--provides an extraordinarily thorough analysis of early admissions. In clear language it details the advantages and pitfalls of applying early as it provides a map for students and parents to navigate the process. Unlike college admissions guides, The Early Admissions Game reveals the realities of early applications, how they work and what effects they have. The authors frankly assess early applications. Applying early is not for everyone, but it will improve--sometimes double, even triple--the chances of being admitted to a prestigious college. An early decision program can greatly enhance a college's reputation by skewing statistics, such as selectivity, average SAT scores, or percentage of admitted applicants who matriculate. But these gains come at the expense of distorting applicants' decisions and providing disparate treatment of students who apply early and regular admissions. The system, in short, is unfair, and the authors make recommendations for improvement. The Early Admissions Game is sure to be the definitive work on the subject. It is must reading for admissions officers, guidance counselors, and high school seniors and their parents. Table of Contents: Introduction: Joining the Game 1. The History of Early Admissions 2. The State of the Game 3. Martian Blackjack: What Do Applicants Understand about Early Admissions? 4. The Innocents Abroad: The Admissions Voyage 5. The Truth about Early Applications 6. The Game Revealed: Strategies of Colleges, Counselors, and Applicants 7. Advice to Applicants Conclusion: The Essence of the Game and Some Possible Reforms Appendix A: Median SAT-1 Scores and Early Application Programs at Various Colleges Appendix B: Data Sources Appendix C: Interview Formats Acknowledgments Tables and Figures Index Reviews of this book: Applying to an elite college through an early-admissions program can improve students' chances of getting in by as much as 50 percent over their odds during the regular admissions cycle, a difference that is the equivalent of scoring 100 points higher on the SAT...Based on an analysis of admission data at top colleges, as well as interviews with over 400 college freshmen [The Early Admissions Game] challenges the official line of college admissions deans, who have long held that applying early does not give prospective students an advantage over regular applicants. But the research confirms what many high-school counselors already suspected, and it is likely to fuel debate over whether early-admissions programs favor wealthy and well-connected students and should be eliminated or reformed. --Jeffrey R. Young, Chronicle of Higher Education Reviews of this book: [This] important contribution to the college-admissions process should reduce the general anxiety that pervades today's transition to college and, in particular, help level the playing field for students who lack access to adequate college counseling. The book may also prompt needed reform of contemporary admissions practices...The authors' goal...deserves acclaim for helping inner-city and rural students and those in other understaffed districts to pursue admission on a much more even footing...There is a wealth of information in this well-organized, clearly-written book which will enable students to make better college choices. --William R. Fitzsimmons, Harvard Magazine Reviews of this book: Readers seeking solid information about elite colleges will find The Early Admissions Game refreshingly frank. Other readers concerned about restoring some equity to the process will also appreciate the book's generosity of spirit and suggestions for reform. The authors present a devastating portrait of elite college admissions--and early admissions in particular--as an elaborate and complicated "game"...[where the winners] tend to be privileged students who have access to highly skilled counselors with information pipelines to elite college admissions offices. --Peter Sacks, The Nation Reviews of this book: Avery and his colleagues describe college admissions as a casino on Mars: you have to guess the rules of the game you are playing, and the rules can change while you are playing it...[Their chief finding] is that applying early significantly increases the chances of acceptance...Colleges argue that the early-admissions pool is stronger than the regular pool...[but the authors] dispute that claim...The Early Admissions Game is intended as an exposÃ©, for high-school students and their parents, of the realities of college admissions, but it is also a protest against the practice of early admissions. The authors believe that these programs benefit privileged students...[and] cheat disadvantaged students. --Louis Menand, The New Yorker Researching and applying to colleges is a demanding, confusing, and stressful time for both students and parents. This book provides context and guidance to admissions professionals, to college counselors, and to families as they confront today's highly competitive, and often controversial, college admissions scene. It offers an insightful and authoritative explanation of the strategic choices that await those seeking to enroll at the nation's leading colleges and universities. It can help a student decide whether, when and why to apply early. Most important, it can give applicants the confidence to focus less on the "game" and more on the truly critical factors in choosing a college: the level of intellectual challenge and vitality in the curriculum, the strength and accessibility of the faculty, and the student's individual sense of fit with a particular campus environment and culture. --Nancy Vickers, President, Bryn Mawr College The Early Admissions Game explains clearly and comprehensively the many forces that have made early applications a prominent - and much misunderstood - feature in the high-pressure arena of college admissions. The authors clear away the hype and speculation, then offer refreshingly sane, sensible guidance that will greatly help students make intelligent decisions about their college applications. --William D. Wharton, Headmaster, Commonwealth School, Boston Avery, Fairbanks, and Zeckhauser offer clear and compelling evidence that the college admissions process needs repair. Their findings have already inspired steps toward reform. --Richard Levin, President, Yale University This is an exceptionally interesting and intelligent book-one with real 'news' to report. The authors present their important findings with great clarity. I expect that this volume will have a significant and favorable impact on policy discussion of early admission programs at elite colleges. --Michael McPherson, President, Macalester College Anyone involved in the college admissions process -- students and parents, counselors and admissions officers, top officials at high schools and at colleges -- should read this important book. It will help them achieve their objectives. The authors also present a number of suggestions for reforms in the admissions system that are worthy of debate across American higher education. --Lawrence H. Summers, President, Harvard University

The Early Admissions Game

Jonathan K. Nelson

An analysis of Italian Renaissance art from the perspective of the patrons who made 'conspicuous commissions', this text builds on three concepts from the economics of information - signaling, signposting, and stretching - to develop a systematic methodology for assessing the meaning of patronage.

Conspicuous Commissions in Italian Renaissance Art

The Patron's Payoff

All too often government lacks the skill, the will, and the wallet to meet its missions. Schools fall short of the mark while roads and bridges fall into disrepair. Health care costs too much and delivers too little. Budgets bleed red ink as the cost of services citizens want outstrips the taxes they are willing to pay. Collaborative Governance is the first book to offer solutions by demonstrating how government at every level can engage the private sector to overcome seemingly insurmountable problems and achieve public goals more effectively. John Donahue and Richard Zeckhauser show how the public sector can harness private expertise to bolster productivity, capture information, and augment resources. The authors explain how private engagement in public missions--rightly structured and skillfully managed--is not so much an alternative to government as the way smart government ought to operate. The key is to carefully and strategically grant discretion to private entities, whether for-profit or nonprofit, in ways that simultaneously motivate and empower them to create public value. Drawing on a host of real-world examples-including charter schools, job training, and the resurrection of New York's Central Park--they show how, when, and why collaboration works, and also under what circumstances it doesn't. Collaborative Governance reveals how the collaborative approach can be used to tap the resourcefulness and entrepreneurship of the private sector, and improvise fresh, flexible solutions to today's most pressing public challenges.

Richard J. Zeckhauser

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