Understanding Market Behavior: Insights from a University Environment

Navigating university life is a journey filled with insights about human behavior and economic principles. On campus, I have noticed fascinating interactions that act as a miniature version of the larger market and some that deviate widely from what I would expect. Here, various factors influence decisions, interactions, and ultimately, how individuals behave. In this post, I will explore these observations on market behavior within a university, connecting them to broader economic principles. These insights can resonate with students, finance professionals, economists, and behavioral researchers alike.

Scarcity in a land of plenty

A university campus is an interesting contrast between scarcity and extreme privilege and this semester I had the opportunity to experience an example that I now find amusing and which I thought I would share. My university (or some magnanimous donor) installed a new marvel of technology and competitive advantage, a Bloomberg terminal with a $40,000 annual subscription, providing 24x7 access to real-time market data, insights, and analysis. Having access to this resource can be a great advantage, with Bloomberg access, you can acquire experience and certifications that are not available to those without access, a quick way to establish which sneetches have stars.

As great as this new capability is, it came with some constraints:

1. There is only one terminal for 1,200+ business and finance students

2. It is in a locked classroom that you can only access if you are enrolled in one of a select group of classes

3. It is not available while classes are being taught in that classroom

All of this combined to create a tempest in a teapot for observing market behaviors in the university environment.

The Role of Information

Information acts as a valuable commodity in a university setting. Students often depend on recommendations from friends when choosing where to eat, study, or buy supplies. This casual exchange of information can greatly influence market behavior.

For instance, when the new Bloomberg terminal arrived last year, there was no fanfare and the students in the Investment Analysis class made every effort to ensure that it stayed that way. They assured those that asked that the terminal was only available during class and that greater access was coming soon. Annoyed at the barrier, students across the business school tried to enroll in the class but ran up against limited class sizes and sections. At the end of the semester, 100% of the students in that class completed their Bloomberg Market Concepts (BMC) certification but three people outside that class had done so as well.

Once word got out about the other three students, the games began..

Supply & Demand

Once it was established that there was a way to access the terminal without being in the class, a market was created. Rental of a University IDs for the required 8 hours of terminal time started at $25 and rapidly rose to $75 as time slots during business hours (when the building was open) were exhausted .

The Bloomberg Terminal

Once the market was established, shenanigans ensued, and a secondary market was created for off-hours building access, effectively doubling the timeslots available, but at a premium.

The Market Crash

In the digital era, technology profoundly influences market behavior. Many students use apps and online platforms for their purchasing choices—whether ordering food, buying textbooks, or finding study resources.

I have noticed a trend where the convenience of technology outweighs traditional shopping methods. For instance, students are significantly more likely to use delivery apps rather than walking to a nearby restaurant. This shift illustrates broader consumer trends that highlight the importance of accessibility and convenience.

In this case, the market was undone when Bloomberg made access to their terminals available via the Web to students at universities with a subscription. In a moment, the supply became infinite and the physical terminal became idle as students opted to access the tools from the comfort of their laptops.

Final Thoughts

Through my observations, it’s clear that market behavior within a university environment involves a complex interplay of factors that guide decision-making and consumer choices. From supply and demand dynamics to the significant influence of peer pressures and technology, this setting serves as a engaging case study for understanding larger economic concepts.

Students, finance professionals, economists, and behavioral researchers can extract valuable insights from this microcosm. By realizing the unique characteristics of the university marketplace, we can better grasp the nuances of market behavior, allowing us to apply these lessons to broader economic landscapes.

The university is not only a center for learning but also a dynamic marketplace that highlights the intricacies of human behavior and economic principles. Through careful observations and analysis, we can deepen our understanding of the forces that guide our choices and shape the markets we interact with every day.