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Computers in the new Haas classrooms

Dealing with sunk costs

When the Haas School of Business (U. C. Berkeley) moved to its new building in 1995, each classroom was equipped with a podium that contained a computer and other hardware to allow anything that could be displayed on the computer's screen to also be projected onto a large screen at the front of the class. The computers installed in the podiums were, at the time, the state of the art Mac/PC compromise machines, "swing-Macs" made by Apple.

Unfortunately, the swing-Macs didn't "swing" as well as had been hoped. Faculty who used PC software on them frequently were faced with computer crashes and freeze-ups in the middle of a class. Someone suggested that, since nearly all of the faculty use PCs, it would be better to install PC fully compatible machines instead. As a faculty member put it, "I bet we could replace the "swing-Macs" for $1,500 per classroom." To which another faculty member replied: "Look, those swing-Macs cost $5,000 each. I don't know what it would cost to replace them with cheap PCs, but that's not the point. We can't just scrap twelve $5,000 computers. The school has to be more careful with its resources." (The latter faculty member was the one who had the idea of installing "swing-Macs" to begin with.)

Source: based on the case study "Computers in the New Haas Classrooms," by Severin Borenstein, 1997.

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