My readers have written in with additional reasons for Gunther to avoid Powerpoint slideshows. Fredo from Boston explains that many economics departments around the country do not yet possess the proper projectors to facilitate computer slideshows. If you try to use Powerpoint, says Fredo, you will be unable to present at all. Fredo is absolutely right. Here, we observe evidence of a second signaling problem: Some economics departments do not equip their rooms with functional projectors because employing a useful technology could endanger their standing in the economics community. Just as high-powered academic universities field lousy football teams, so rigorous economics programs proudly display their Jurassic technology as if it were a badge of honor. The image that every department wishes to project—that of an army of theoretically rigorous nerds, fiercely mathematical and blissfully uncorrupted by common sense and practical intuition—is compromised by the telltale signs of interaction with the world beyond. Nothing screams “Business School” or “Diploma Factory” louder than expenditures on presentation technology. Every good department knows that scarce resources should never be diverted to this inconsequential goal: the communication of ideas. It is a goal that ranks even lower on the economist’s list of priorities than plausible assumptions, matched socks, or personal hygiene. Thanks to Fredo for pointing this out.
My dear colleague and a member of our Oceanview lunch group, Dr. Leslie Prattlemore, suggested to me that using Powerpoint imposes higher costs on economists than on normal people. Leslie, an esteemed micro theorist, hypothesized that many economists simply aren’t smart enough to figure out Powerpoint. They could figure out how to do it, says Les, given infinite amounts of time, but the cost would be prohibitive. Having already considered this possibility, I refuted him. Anyone who has attended the Katz lectures will realize immediately that economists can be induced to communicate effectively. The typical scenario: Renowned economist shows up on campus. Delivers flawless Powerpoint presentation to non-economists in the Katz lecture. Shows up the next day for a department seminar. Gives a talk using unreadable transparencies with microscopic 6-point font. Talk is impenetrable, directed at the 3 specialists in the world who are interested in his subfield (two in Australia, one in Kazakhstan).
Ichiro points out that welfare gains could be achieved if we were to reduce the content of the “stupidity signal” associated with Powerpoint. First, says Ichiro, we could devise a special version of Powerpoint that could only be opened if the user first solved a dynamic optimization problem in 14 variables. Using Powerpoint would then signal mathematical prowess and low disutility of effort. Alternatively, all parties could agree to coordinate on a “useful technology” equilibrium. If everyone were to begin using the useful technology then the “stupidity signal” would cease to be meaningful. I doubt that the second suggestion could be easily implemented. Ichiro has forgotten the most basic truth about economists. Though we come in all shapes and sizes and hold viewpoints that span the political spectrum, we economists share a single defining trait: Above all else, we are free riders.
More on this in next week’s column.