Dear Emma, stop procrastinating.

A few highlights from letters to dead people:

(should've been addressed to Charles Dodgson really)

So, actually quite a few highlights. I love that website.

Oh hi Julian Casablancas

I enjoy your rendition of I wish it was Christmas today so much that it almost doesn't bother me that you use the indicative mood where the subjunctive should be used.

Almost.

I broke my smoothie maker

I have a newfound love both for writing mathematical equations and graphs out of jokes and other things that aren't inherently quantitative. I hope to feature a few of these on this blog in the future.

To start it off, I found this on one of my friends' Facebook pages:
I didn't actually make this myself*, but it is of course true of my milkshake. The drink, that is.

*There are a few ways that you can tell this:

-the axes are not labelled;

-the units of the y-axis are not given;

-I would not have made the y-axis go up to 120 when it is measuring percentages in a situation where it is nonsensical to have percentages greater than 100%.

Review

I love fashion photography. I'm not really into modern art, but if fashion photography can be categorised as such (I know that you don't really find it in MoMA...) then it is my favourite kind. By that I mean that a lot of the time I think of it more as art than as something I'd want to wear, but of course there is an intersection.

Here is a review of some of my favourite fashion (+other) photos that I've found on the blogs that I follow. They're not my favourite ones of all time, or the clothes that I would most want to own, just photos that I like that have come up on my blogger news feed over the last few weeks.

Of course I must put Carol Han first, of Milk and Mode, because she replied to my tweet, which makes her automatically excellent. I also like that she has reminded me of velvet skirts and above the knee socks:

This is Miss Pandora (aka Louise Ebel). She's French which means that the clothes are a bit floatier and also that the background scenery is prettier:

This is Alix, from The Cherry Blossom Girl. She's Parisien (and takes a lot of Pandora's photos) and her photos of Paris are probably part of the reason that I love the city despite the fact that it houses lots of Socialist and Communist sympathisers. NB: the image that follows is actually in New York City, not Paris.

....right to the other end of the spectrum, here's Rumi Neely, of fashiontoast. Everyone seems to have an opinion on her, from "she's the most stylish person on the earth" to "she should stop loafing around taking photos and get a job". I think that I sit somewhere in the middle. Anyway, I like the way she wears her quilted leather shorts:

This is from the Superette store's Facebook album. It's not really fashion; I just like the photo:

Finally, this from Le Fashion (I wish they had called themselves 'La Mode' or something better...). If someone proposed to me with this Christian Dior ring, I'd say yes too:

So that is how I spend my non working time.

Speaking of work, I had an excellent day there today. I had another visitor today, which was pleasant. Additionally, I now have a new work computer with a flatter screen and a new keyboard, which was a thrill in and of itself, but then when I turned it on, what was the surprise that I found there waiting for me? MAPLE 13. I think that I'm in heaven in that office.

We have one and only one ambition. To be the best. What else is there?

-Lee Iacocca, of Chrysler.

Wisdom courtesy of the business school intranet home page. If you refresh it, it comes up with a new inspirational quote. This was the one with which I was greeted this morning.

Control

Fundamental to the study of economics is the idea of a market within which supply meets demand at some price/quantity level which then becomes the equilibrium. This is such a central idea for economics because it describes the world as one big market (the macroeconomy) within which there are many smaller markets (regional markets, final good markets, factor markets and so on). So it's a pretty big deal when the market fails. One of the main ways that a market can fail, and also a good reason why economic models aren't the best descriptors of how the world works, is when the information in the market is not perfect.

Perfect information is required because buyers and sellers in a market need to know all the information that will impact their decisions, so that they can make efficient decisions and thus get the market pricing and signalling correct. However, it is rarely ever the case that all such information is available. Usually the situation that exists is one of 'asymmetric information', where one side of the bargain has more information than the other side has, and so is able to manipulate the party with inferior information to take advantage of the situation. There are two resulting outcomes that can occur from this: adverse selection, and moral hazard.

The main example used for the analysis of imperfect information is health insurance. There is asymmetric information because while the customer is capable of knowing everything about themselves, the insurer is not. The insurer is trying to make a profit by signing up lots of low risk/good health customers, to subsidise the payouts that they have to make for the weaklings. However, healthy people don't find it hard to pay their health bills and so are less likely to purchase health insurance in the first place, and so the insurer is likely to get lumped with a lot of sickly people. This situation is adverse selection, as more of the 'low quality' product has entered the market than the 'high quality' product, the low quality product is more likely to be selected. Here, this means that while the insurer needs lots of healthy people to make a profit, because they don't have full information about the unhealthy ones, they end up with a lot of sickly people, and have to pay them out and reduce their profits.

The other issue that arises is that once people have bought health insurance, and so know that they won't have to pay their health bills, they become less concerned about getting sick, and accordingly do not take as good care of themselves as they would have otherwise. This is moral hazard: the adverse behaviour that occurs by allowing people to buy insurance for an event.

But what makes economics even better is that you can use it to look at situations which aren't obviously economic. Take, for example, the situation that follows. Because it is one of my favourite novels, I've used the characters from Persuasion and their backstories for assistance:

Let's introduce two characters to begin with: Anne Elliot and Frederick Wentworth. Anne, the daughter of Sir Walter Elliot, was a member of the landed gentry. Wentworth was a man of the navy, who, while not a member of the landed gentry, due to his profession and his calibre, was guaranteed social mobility. Despite this, Anne and Wentworth had a lot of interests in common and soon became romantically involved. Those who knew the couple were extremely envious. However, as the relationship went on, as always does happen, but people never seem to expect it, Anne and Wentworth had to work harder at the relationship. Although Wentworth was never made aware, because Anne didn't want to let it on, Anne was becoming distracted by her sister, who was becoming worryingly and increasingly ill. Understandably, receiving less attention, combined with the fact that Anne was a bit of a prude, upset Wentworth.

One night, without Anne, Wentworth attended a ball. Beaten down by Anne's apparent inattentiveness, Wentworth propositions Henrietta Musgrove, who disapproves initially, but later comes around. Distressed by the evening's happenings, Wentworth decides that he cannot tell Anne of what happened, and so leaves her.

Anne knew intuitively that there was something about the situation that didn't add up. Wentworth had told her that he was no good for her and so must leave her, but could only vaguely describe why. When pressed, the ambiguity remained. It was not until Charles Hayter, who was also interested in Henrietta, approached Anne, that she received near perfect information on the situation.

So for all that time, Anne had been moping because she thought that it was her own conduct that had driven Wentworth away. It was definitely a factor in why Wentworth left, but Wentworth put the nail in the coffin (to use one of my mother's expressions).

The issue remains, what should Anne do? For the first time since Wentworth had left her, she knew exactly what to say to him. How dare Wentworth treat her with such cold politeness, and make her feel like he was being generous in even talking to her, when he was the one who transgressed? But no, that would be too dramatic and impulsive for a character like Anne, who despite being very Romantic (capital R = the literary period, not loving, just to clarify) in her own mind, is dominated by a sense of duty to her family and to the prevailing social order. She doesn't act out of line. She takes it with a typically Augustan calm. She forgives him. She moves on.

Anne forgives Wentworth because she knows that he too has had a hard time and felt a lot of guilt about the situation, perhaps for different reasons, but still, unhappiness nonetheless. Bizarrely, the one thing that upset her the most was that Wentworth didn't just tell her the truth. The strange thing about the truth is that the more we try to conceal it, the more likely it seems to be that it will come out somehow. This is because the truth, as Winston Churchill said, is incontrovertible. Malice may attack it and ignorance may deride it, but in the end, there it is.

So I guess what that long and rambling narrative was meant to show is that as well as in relations between corporates and businesses and other money making entities, imperfect information can impact relations between friends and even my beloved Jane Austen characters. If Anne and Wentworth could have just told each other the truth, they could have saved each other a lot of economically suboptimal decisions further along the line. Although, I'm not going to lie, Jane Austen stories do lose their appeal somewhat when you think of them in terms of economics and market failure. And there is still another half of the novel to get through.

Indecisiveness and other related matters

salvete! As you've probably noticed, I've been messing around with the layout of this blog for a while. Finally I have something that I'm vaguely happy with, though it is annoying that the original layout that I had when I started this blog seemed to disappear from the layout selection list, and also annoying that the background images available to choose from are so unsophisticated. I think I'll have to write some HTML for this blog at some point, so that the design will be nicer (HTML: the things you learn from myspace...), but this is it for now. It's not as bright as the other one, but I think that my years have private schooling have drummed into me that writing should only be in black or navy blue. So there we go.

I'm also writing this post as a reminder that I've thought up two blog posts that I need to write:

-varium et mutabile semper femina, which I had posted, but then deleted, because I wanted to write a more complete entry on it;

-The deal behind the whole 'imperfect information' thing.

I also need to find a flash drive for work tomorrow. Where are these things when you need them?

Bonne nuit for now!

0100101

For the last six days, I've been on holiday at my family's beach house. Fortunately, the weather has been excellent so I've been able to spend the time outside, hopefully soaking in some vitamin D and generally enjoying the holiday period. This has been a huge relief, because I am by nature a city dweller, and I start to go a bit nuts when I find myself in remote (i.e. 1 hour north of AKL) places like Omaha. This is particularly the case when the weather is bad, because fine weather is pretty much a condition precedent to a beach holiday. However, many times have my parents driven me up to Omaha to stay there for weeks in the rain, with nothing to do. Accordingly, we now have quite a large collection of magazines to get us through rain at the beach. I always thought it would be easier just to drive home. My parents disagreed.

A few days ago, as I was lazily eating my breakfast, I started to flick through an old Hello! magazine, from when Prince William first started dating Kate Middleton (I am not quite sure why I am so keen on all these royal family stories; perhaps it is as they say that girls secretly want to be princesses). The article basically detailed all her background, as told by a 'close friend'. It painted one of those classic and almost cliche stories of the girl who was ignored all through school then went on to befriend a prince at university. Charming. The bit that interested me was that apparently when she was in high school, there was a practice in place whereby the boys of the school would rank the attractiveness of the girls from one to ten, and tell them. Kate was a seven.

This then brought back a high school memory of my own. At Dio, at the end of fifth form, it was quite common for quite a lot of girls (typically the very bright ones, or the ones whose parents wanted them to marry into a rich family) to leave the school and go to King's, another of the country's top schools. King's College is a private boys' school from years 9-11, and then there are boys and girls for years 12 and 13. As it happened, a lot of my Advanced Maths class was leaving to go to King's, and those who were leaving talked incessantly about King's from as soon as they found out that they had been accepted, until the end of the year. Anyway, someone had heard that King's College too had the practice where the boys rated the girls according to their appearance. Immediately, many of the prospective King's girls laughed it off, and one began a lengthly speech essentially about how women shouldn't see themselves as objects to men, and somehow linked this in with the ranking system. I wasn't fooled. I could feel it. Panic was in the air.

I never did find out whether my friends were rated. In fact, I never really thought about it again for a while. However, last year I was in the car with two of my male friends, who were rating seemingly all the girls in our year of Law. I probed them for more information on the rating system. Apparently, the 'marks' that the girls receive go from one (ugly) to ten (beautiful), and obey a skewed bell curve distribution. The mean is seven (because apparently at our age most females are in the prime of their lives) and you can't give out fractions.

I went home and pondered the information I had just been given. The conclusion that I came to, however, is that despite how seriously my two friends were taking their rating system, it simply fails to provide any useful information. If the distribution of female attractiveness is really bell shaped, meaning that a perfect ten is extremely rare. However, most men are married, and to women who I'd say are objectively less than tens. So, giving a girl a rating out of ten is useless, because the ratings are not given relative to the score at which that the man would 'settle'. For example, saying 'that girl is a seven' is unhelpful unless you add 'but I'd be happy with an eight'. The whole dilemma is further confounded by the (scandalous!) fact that some women's personalities add to or detract from their overall attractiveness. The interpretation of the figure is just too uncertain.

It's also unnecessary. Attraction is binary. Yes or no. 0 or 1.