Home > Economics, Favorites > Game theory: Koreans and Hagwon

Game theory: Koreans and Hagwon

As I have told a couple of my friends, the Korean formula for success in school has been remarkably simple: Hagwon and Beatdowns. Rote learning and repetition followed with discipline if anyone gets out of hand. Screw the carrot, just stick please. The second part is self-explanatory on why it works, lets go back to the first.

Koreans are notorious for their obsession with after-school school, otherwise known as hagwon. The premise is simple: as long as I give my child enough of a leg up against the competition he will  be able to differentiate himself from the pack and emerge victorious.

Except not so fast, you see this is what we call a prisoner’s dilemma…..(I actually did really poorly in game theory, so this could be total bull$#!t)

Ok quick prisoner’s dilemma lesson per Wiki:

Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal. If one testifies (defects from the other) for the prosecution against the other and the other remains silent (cooperates with the other), the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?

Prisoner B Stays Silent Prisoner B Rats
Prisoner A Stays Silent Each serves 6 months Prisoner A: 10 years
Prisoner B: goes free
Prisoner A Rats Prisoner A: goes free
Prisoner B: 10 years
Each serves 5 years

The prisoners should of course both stay quiet and get their 6 months before they commit more crimes again. Unfortunately, each has an incentive to rat on the other guy. To put it simply, regardless of the other prisoner’s behavior one’s own individual utility is maximized by ratting on the other guy. If he rats, I can rat and get 5 or I can stay silent and get 10. If he doesnt rat, I can rat and go free or I can stay silent and get 6 months. Thus the expected outcome of this game or “Nash Equilibrium” is for both to rat on the other. (Notice how this fares the prisoners a worse outcome than if they both stayed quiet)

Now of course this “game” is not that problematic if we are actually talking about two felons here. But what if they are innocent? Both have incentives to rat on the other. It becomes rather unfortunate when this dilemma rears its ugly head elsewhere too. Let’s rephrase this scenario a bit:

Two Asian mothers are trying their best to get their kid into a top-tier school.  Each parent has discussed the notion of increasing their child’s workload at a hagwon. If one tutors (defects from the other) and the other chills out a bit (cooperates with the other), the tutored kid will get a leg up on the other kid. If both remain silent, both moms will have saved a lot of money. If both choose to tutor, each will lose a lot of money. Each mom must choose to tutor or chill out. Each one is assured that the other would not know about the tutoring before they sign up. How should the mother’s act?

Mom B chills out Mom B tutors
Mom A chills out Kids maintain relative performance Kid B gets a leg up
Kid A plays catch up
Mom A tutors Kid A gets a leg up

Kid B plays catch up

Kids maintain relative performance
Mom’s lose a whole bunch of cash

OK, this model is not perfect, (for one, this is a much larger game with more than two players, the payoffs might also differ in a few ways) but it should serve as a starting point in this debate. We can discuss the nitty-gritty later.

Within the context of this game, each mom has the incentive to tutor their kid no matter what the other mom does. As long as mom’s are more obsessed with making sure their kid can get a leg up on the other, the strategy of tutoring your kid will be always be played. This of course leads to a Nash equilibrium of a lot of Asian moms just wasting a bunch of cash.

How can I say this, doesn’t this affect everyone’s kids? Well yes and no, the important thing to remember is how Asian students are viewed within the context of college admissions. This is not a post on the merits/problems of affirmative action, nor do I want it to deviate into one.  On the basis of scores alone, Asian students would fill nearly four out of every five places in the admitted class not taken by African-American and Hispanic students. Again, I don’t care about arguing affirmative action right now (dont think removing AA would change this game either, nor do I think it should necessarily be removed), I am more concerned about the decision making of parents within the context of this game. In this case, since relative performance within race matters, this scenario is more painful to watch. Whether we examine SAT scores, GPAs or number of AP’s taken, if the median benchmark for Asians is simply shifting higher no one ends up at a better place than before.

Well, you could argue, “BDK, its better for these kids anyways since they are getting smarter, so it’s not a waste of cash”. I beg to differ. One concerned mother told me about the dilemma she has for her kid. She stated that her 8th grade son Mikey needed to take summer geometry course before he took geometry. The last time when he took algebra II, everyone else at his school had already taken algebra II in the summer. Mikey said himself, “everyone else was sleeping through class, while I was struggling to follow the teacher.”  I would argue that these other parents are doing a disservice to their kids in the future by not providing proper study habits. Nobody needed to take this summer class, but again it gave a leg up. This is also an epidemic with parents who find their kids “struggling”. Instead of teaching their kids to hash it out on their own for better or for worse, a grade lower than a A automatically prompts a tutor.

Per this Atlantic article on How a New Jobless Era Will Transform America:

“The ability to persevere and keep going” is “a much better predictor of life outcomes than self-esteem.” She (Jean Twenge) worries that many young people might be inclined to simply give up in this job market. “You’d think if people are more individualistic, they’d be more independent,” she told me. “But it’s not really true. There’s an element of entitlement—they expect people to figure things out for them.”

Over-tutoring prevents kids from really reaching out and finding any sort of entrepreneurial spirit. The formula has been simple, do everything mom says and you’ll go to a good school. But whats next? It should make parents wonder why so many SAT camps boast of tutors with 1500+ (now 2300+) SAT scores. I am sure the thinking is not: I wil send my kid to get tutored and pay thousands of dollars so he could eventually become an SAT tutor?  Or write a really dumb blog?

The article continues:

They’re used to checklists, he (Ron Alsop) says, and “don’t excel at leadership or independent problem solving.” Alsop interviewed dozens of employers for his book, and concluded that unlike previous generations, Millennials, as a group, “need almost constant direction” in the workplace. “Many flounder without precise guidelines but thrive in structured situations that provide clearly defined rules.”

Dare I say this might be the reason Asians find it difficult to rise to the top of management positions? I want to be careful here and overreach so I won’t necessarily conclude that. But certainly such controlled environments lead to more passive receivers of work rather than the movers and shakers in the corporate world.

I also want to be careful here about my own views on education. I respect and admire my own culture’s inclination to focus on education. Perhaps its the Confucius philosophy or it stems historically from  of preparing wholeheartedly for the Civil Service Exam. I just think the educational emphasis needs to be there without the fallback of tutoring every single time.

Well, whats the solution BDK? I don’t really have one. Games like this are usually solved with a commitment mechanism.For instance in the nuclear arms race, the US told the Soviets that if they ever picked up a missile fired by the Soviets on radar, US computers would already be programmed to launch a full, retaliatory arsenal back at the Soviets. I doubt a commitment mechanism to kill other parents for reneging on a deal not to tutor their kids is an optimal one.

Let me offer a different avenue (though incomplete solution). As one who played football and was pushed by a coach who believed in more probably more than I did in myself, I learned a lot more about overcoming obstacles; probably more so than solving a math problem I found easier than most else. As a scrawny kid surrounded by kids who were superior in every aspect of the game, I first recoiled a bit but then eventually attacked my weaknesses and became stronger both physically and mentally. While I am sure now every Korean kid has his sports, along with his orchestra and community service, I think allowing your kid to actually struggle in a sport that he really likes might end up serving him better in the long run. Perhaps this is why we see many successful athletes also rise to the prominent positions of power. Not because of raw smarts  but because of an ability to persevere and keep going.

Romans 5:3-4

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  1. igloo
    February 26, 2010 at 2:38 am

    this is definitely a post i can sympathize with… luckily, i never had to go to after-school school, but coming from a public high school that was 75% asian this is an issue i can see in a lot of asian families. i think the real problem isn’t so much the parents’ decision-making itself as to whether to send kids to hagwon or not but rather on the building up of certain skills in kids from a young age to teach them to persevere and be motivated to do more and improve for their own sake, as opposed to being forced to do extra work assigned to them in the name of academic success. so i guess this leans more towards the issue of how parents should teach and raise their kids in the first place to help them develop the character to persevere. my dad actually sent me this article a while back to explain why i was never praised as a kid… haha
    http://nymag.com/news/features/27840/
    the main idea is that teaching and encouraging kids to make an effort to do their best and continue even when they “fail,” instead of praising them for “being smart” or beating their peers, makes a huge difference in their aspirations and motivation to succeed in what they do–studies show that the kids who struggle but are motivated turn out stronger and more successful in the long run…

  2. longley
    February 26, 2010 at 10:22 am

    Spoken like a true conservative: “The prisoners should of course both stay quiet and get their 6 months before they commit more crimes again”

  3. greg
    February 26, 2010 at 12:40 pm

    Seriously, you should definitely rat. You either go free or spend 10 years mooching off the system. Unless you’re in California. Then everyone rats, everyone spends the 10 years, and the state has no money.

  4. Tim
    February 26, 2010 at 2:09 pm

    i never went to hagwon, but i identify with that stultified life approach more than i’m willing to admit. although, i just admitted it.

  5. CYKJ
    February 26, 2010 at 2:11 pm

    This is a piss poor analogy BDK.

    For one, it’s a huge mistake to compare the kids relative to one another. It’s almost a socialist point of view where it’s not the absolute/cumulative wealth one/society enjoys but how “equal” one is to another. Neither wealth, nor knowledge, is a zero-sum game, as one may rationalize from you post. If the ultimate goal was college admissions, you may have a point (as the number of spots on top schools are limited). But we all know that it really doesn’t once you graduate.

    It would have been better to do a cost-benefit analysis. Is it truly worth the time and money to drill these kids into an awkward, socially retarded brainiacs?

    Lastly, who are these “many” successful athletes rising to prominent positions of power? I can only recall a few who amass money (and money is power) or become successful politicians (mostly due to the fame they carry with them). If anything, we hear about athletes only a few years removed from retirement and completely broke and penniless. Perhaps not the best example to use when Kobe’s SAT score of 1080 would have put him into the Einstein tier of his peers

  6. ama
    February 26, 2010 at 4:24 pm

    now, if you only you would ever find some chick, got to work making some babies, and put that great child-rearing advice to practice.

  7. esther han
    February 28, 2010 at 2:16 pm

    kane, thanks for posting this. very insightful.

  8. Don
    April 17, 2010 at 5:47 am

    Wow, I never had imagined that these kinds of things were prevalent even in the states! I was grown up in the states in my early life, and back then, I had never heard of these instances. These things are VERY common in Korea, and this is eventually hurting the country’s long-term competitiveness. Actually, the problem in Korea is worse than you can even imagine (assuming that you haven’t lived in Korea). Public education system is in disarray, and more and more people are relying on hagwons. To give you a typical example, students don’t even listen to the lectures provided during the classes. They think the teachers are not capable enough compared to the cram tutors or they are just too tired to be awake, because they have gone through all of these hagwon courses until nearly midnight.
    The results? They expect the same shit of support even after they enter into colleges. It might be hard to believe, but hagwons targeting university students and adults are ballooning! Med school entrance exam preparation, CPA, government official exam, English hagwons, and even Samsung group aptitude test preparation online courses! You name it, there is every kinds of hagwons that you could have not even imagined.
    The most egregious example; 10 out of seven or eight pays 10K~30K for their MBA essays to be sent to top 10 schools. Eventually, these kinds of guys will succeed in getting ahead of others at least in Korea. Isn’t this a sad commentary? This is truly a travesty, and at the end of the day, every Koreans will pay the price.
    If you want to learn more about these issues, including the fundamental problems going on in corporate Korea that are hampering the state’s overall prospects, visit the links provided below and read the articles and comments written by “Don04”
    Again, I can’t tell you how bad the situation is in Korea. Every expert outside of Korea, including famous economists, are pinpointing that there is a fundamental problem in the education system, and that is why Korea is won’t surpass the $20,000 GDP per capita level.

    http://www.economist.com/node/15816702/comments#comment-510244

    http://www.economist.com/node/15398293/comments

    http://www.moneyweek.com/investments/stock-markets/poison-pills-one-more-reason-to-avoid-korea-94613.aspx

  9. gwern
    April 19, 2010 at 11:20 am

    Agree with the other commenters; I’m not sure you make the case that double-defection is not a global optimum from society’s perspective.

    All of your arguments that the emphasis on education is bad seem to apply to education in general; it may be that industrialized nations invest too much in education, but that argument is a tough row to hoe.

  10. April 19, 2010 at 4:46 pm

    gwern thanks for your commentary….I agree a hundred percent, education is a solid investment per se and I guess an over-investment in it would be better than an underinvestment in it. That being said, if I could clarify, I think there are diminishing returns to education especially when hagwons are being used merely as substitutes for learning.

    I am definitely not saying America needs to stop over-educating its kids (this is not a universal problem, rather a select group (the rich, Koreans) seem to utilize hagwons to negative effect (sleeping in class and not really enriching their learning). If hagwons are doing such a “great” job, perhaps this could also be in part a reflection of the current educational system we have in place.

    Thanks for your comment gwern, makes me want to focus this analysis a little bit more.

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