This chapter is different. It does not have steps that you follow as you work in Excel. It does not have any exercise questions. There is an Excel file that you will open and work on, but it is entirely self-contained. Just open the file and start reading.
Before you begin, however, consider a little of the science behind learning. Once we know how we learn, then we can optimize!
The Neuroscience of Learning
Suppose you want to improve your free throw shooting and you really cared about this so you decided to practice for one hour per day for two weeks. Most people think that standing at the free throw line and shooting free throws would be the best use of your time, but this is wrong. A much better use of your one hour per day is to shoot from all over the courtspend 10 minutes in one spot, then move to another spot, varying distance from say 10 to 20 feet (the free throw line is 15 feet from the basket). This is interleaved practice and it works also for learning and studying.
Interleaved practice is counter-intuitive and paradoxical. Many coaches refuse to believe it, but careful controlled experiments in a variety of applications reveal it is a fundamental principle (Brown, et al., 2014). It works for physical skills (don’t throw 100 curve balls, interleave with other pitches), memorization (don’t repeat one thing, interleave items), and higher learningreflect on how this book has repeated concepts like elasticity in a variety of applications.
In addition to interleaving, below is a list of best-practice learning strategies that you can apply to every course you take:
Interleaved Practice (switching)
Spaced Practice (avoid cramming)
Elaboration (invent your own how and why questions)
Concrete Examples (the more specific, the better)
Dual Coding (words and visuals)
Retrieval Practice (repeatedly recall what you know)
Unbeknownst to you, this book has been using all of these strategies to help you learn.
To get more information on these six science-based ways to learn more efficiently, visit these two web sites:
And one more thing that you believe about learning that is wrong: you think your ability to learn economics (or math or music) is preordained. Your brain either has a knack for economics or it does not and, if not, you cannot learn economics (or math or music). This is wrong.
Neuroscience makes clear that your brain is plastic. It is moldable and flexible. You have already learned a great deal of economics, math, and Excel. Yes, some details are fuzzy and you have not mastered every single thing, but keep trying. As you see more examples and applications, it gets easier to grasp and your understanding deepens.
As you work on the Excel file, you will be reviewing concepts and feel comfortable with Solver, charts, and Excel itself. This will reinforce basic material that you already know, but you will also be exposed to some new ideas as you continue to master the economic way of thinking.
This application is controversial and generates passionate debate. Non-economists, especially, find it outrageous. After you finish, you can make up your own mind on what you think about it.
Open RationalAddiction.xlsm to begin.
The epigraph is from Shakespeare’s Two Gentlemen of Verona. The Conversation sheet in RationalAddiction.xlsm explains what it means.