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New Faculty Essay by Professor Dmitry Shapiro in Economics

Sep 12, 2017

Professor Dmitry Shapiro
Professor Dmitry Shapiro

Written by Professor Dmitry Shapiro, Department of Economics, College of Social Sciences

Before I met my wife, all I knew about Korea were just some little bits of information here and there. Ji-sung Park, ‘the Man with Two Hearts’ of Manchester United, rapid economic growth, many internationally renowned universities including SNU, that the country is divided into north and south as a result of Cold War, a couple of Korean dramas that I randomly watched, and that was about it. Even after I met my wife who is Korean, I could not expect that six years later I will be living and working in Seoul, enjoying So-Gal-bi barbecue and teaching SNU students. I’m quite enjoying my new life here and all the new things I meet in Seoul and SNU campus. Some things were difficult to deal with like micro-dust problem or going through all the formalities needed to settle down in a new country. But thanks to help from my wife, my colleagues and the department the paperwork is in the past; and thanks to changed winds so is microdust.

I started studying Korean language. I found Korean language interesting when I got to know the Korean alphabet has a scientific structure (initial-middle-end sound consist one character) that represents how a character sounds, and that each character that forms a word have their own independent meanings based on Chinese characters. And historical background of Korean alphabet was touching. I was moved by kindness of King Sejong, feeling sorry his people suffering from illiteracy of Chinese character, designed new character system. It will take some time for me to speak in Korean naturally but I hope I can communicate in Korean with professors and students of SNU within few years at least at a basic level. I’d love to learn Korean daily expressions, so I’ll be happy if you teach me some useful one when you visit my office.

My major in undergraduate is Mathematics. When I was an undergraduate student, after taking some Mathematics courses, I wanted to learn more realistic things about the real world. Then, one of my friends recommended me to take economics class saying Economics has a quite similar logical process with math in a sense of deriving the conclusion based on assumptions, so I took ‘Introduction to Economics’ class first. In that course, I was impressed by the intuition of Adam Smith, that the perfectly competitive market itself can achieve an ideal outcome for whole society, as a result of each member of society pursuing their own interest. It is quite clear and straightforward that each individual should do what’s best for himself, and so if some good is scarce and then its price has to be high in order to satisfy the conflict between demand and supply. But that it implies that the market equilibrium is magically efficient (some people call it Pareto efficient) was surprising. It was a long jump from the premises to the result, which as a mathematician I found fascinating.

At the same time, however, it was clear to me that equilibrium while being efficient does not mean that it is fair. Later, like in Welfare Economics class, I was happy to learn that economists already considered concepts related to justice and equity. One inspiring example that I still remember was how Alfred Marshall became an economist, wanted to be a scholar seeking better society. He decided to be an economist after looking a poor urban area in England, thinking, “How can those people live in this poverty in England, one of the richest country?” and established the first Economics department in Cambridge University. My first impression about the Economics was efficiency-oriented, but later, I learned that the first step of Economics was ‘Warm heart’.

But, as you all may know, it’s easy to be lost on the way to that kind of goals while studying Economics because as you move towards more advanced Economics courses, students learn many different concepts, complicated models and methods to explain and analyze the economic phenomena. Some areas quickly get too abstract for a discipline that is supposed to be applied. That’s why I think it’s essential to keep reminding oneself his/her goal or destination especially for students who study Economics, whatever his/her goal is.

I was so captured by game theory after taking the first course on the subject. First, it appealed to my mathematical background, as it was all based on assumptions, axioms, propositions, theorems. You always knew how you got a particular result and what stays behind it. On top of that game theory was very good at providing intuition behind its concepts, something that mathematicians don’t do. Even for counter-intuitive concepts, such as mixed Nash Equilibria (yes, it is counter-intuitive when you meet it for the first time) the intuition was very compelling.

This fascination with Game Theory is why I ended up doing Microeconomic Theory. But I did not go for pure theory. I do like some touch of reality, which is why Behavioral Economics immediately captivated me. When I was a PhD student it was still a young field that was often frown upon. And sometimes for good reasons because young fields tend to be somewhat undisplined. However, social psychology findings of the seventies already found their way into axioms, mathematical formulas, and new equilibrium concepts. So I could join the Behavioral Economics team, knowing that even if my paper is theoretical its assumptions are based on human behavior and is, therefore, than a pure abstraction.

Last thing I want to mention is to remember to enjoy your life! When I heard how Korean high school students work hard to go to their wanna-go universities, I felt sorry and worried at the same time. And almost all students in SNU, must have studied hard from early morning to late in night every day to achieve their dream, but that might cause lack of exercise and relax. I recommend you to do at least one activity or exercise like tracking, swimming, Taewondo or yoga. Start with anything you find interesting, and make it as your habit. That will change your whole life.

Academic and Professional Career
• Associate Professor of Economics, Seoul National University, 2017-Present
• Associate Professor of Economics, University of North Carolina Charlotte, 2012-2016
• Assistant Professor of Economics, University of North Carolina Charlotte, 2006-2012
• Ph.D. in Economics, Yale University, 2006

The essay was first published in the College of Social Sciences Newsletter (vol. 11)