Avinash Dixit: Fitting Profile

The year is about to come to a close and I have reviewed the number of blog posts that I made and it occurred to me that I have highlighted very few professional economists on the blog. It is suitable then to highlight a giant of the economics profession, Avinash Dixit. Jeremy Clift has written a very educative profile of Avinash in the current issue of Finance and Development magazine.

In it, he speaks to this professional economist and professor whose contributions to theory run from game theory, models of monopolistic competition to economic development. the interesting discussion reveals that he is not only alert but that his work is truly seminal to the extent that it has applications beyond what the initial papers could reveal. In all, the most interesting portion of the piece is the defense of economic theory and practice regarding the recent recession in the United states and other parts of the world. "Economic theory and economic analysis based on pretty standard theories told everybody that the situation was unsustainable, that there was going to be a house or price bust sometime. The timing is always unpredictable, but pretty much everybody knew that things were going to go bad."

Educating the Entrepreneur

One of the cliches heard when people talk about falling standards of education is that curricula are often too limiting and do not inculcate the "entrepreneurial spirit" in students. Argument against such a broad and ill-defined concept as "entrepreneurship" is difficult enough when people cite the fact that some of the more successful entrepreneurs were either school dropouts or did not have much schooling to begin with. Today, an article in the Guardian cites a discussion in which Richard Branson argued that many businessmen in the United Kingdom are over-educated.

There's a point in the discussion about what the merits or conventional education are today and whether it is possible for all to be entrepreneurs in any society. It seems to me that the argument that many mistake is that the failure to sit through classes and attain certification does not in itself demonstrate intelligence nor business capability. And that is a totally different argument from whether education by itself is useful or not. I think that Richard Branson has a point in questioning what the value of MBA education is but I do not see that he claims that these programmes are not useful. Instead, he demonstrates the understanding that these programs are not designed or even capable of instilling the so-called entrepreneurial spirit. To conclude, it is significant that he concedes to the fact that he is probably an outlier and therefore schooling is still the best shot for most people.

Nobel Peace Prize 2010

I knew very little of Liu Xiaobo when the committee announced that he would receive the award for the year's Nobel Peace Prize. And while I am completely impressed by China's achievements in some respects,  Sarah Lyall of NYT wrote about the ceremony that should have been a celebration but was more melancholic on account of the unoccupied chair reserved for the laureate. And while I still do not much about the recipient, the diplomatic response of the government has educated me about Mr. Liu Xiaobo's country and why his work is important.

Amazon's Curious Book Pricing Mechanism

I have owned an Amazon Kindle for a period approaching one year now and just recently noticed a very interesting fact. I am not sure whether it is very common but it displays the extreme ingenuity of Amazon's pricing system. A couple of weeks ago, I downloaded a sample of the book, The Rational Optimist on my Kindle reading device and read through it in bits and made the decision that it was worthy of buying after all. Soon after making the purchase,  I noted that the price of the download was US$ 14.99 and therefore slightly higher that the price that was quoted on the website.

In my curiosity to find out whether there was a price hike in less than a couple of weeks, I reversed the sale  and went to check on the Amazon site. I found out that the price for the Kindle version was US$ 11.99 and bought it off the website. Now this has got me thinking about the reason for this difference in pricing for the same item. I am sure that it is not about the variable costs of the wireless service that allows for the purchase but perhaps an attempt at price discrimination. And I am more inclined towards the latter for the reason that on other occasions, I have received alerts to versions of books that are available for US$ 0.00 but upon trying to download, realized that the books now cost US$ 2.00. It appears that I managed a small arbitrage trade this time but I am unsure whether i should develop a more sophisticated model for making purchases and ensuring savings.

Image source: Amazon.com

The Japanese Spirit

I came upon this oldish book by chance and think that I am educated about the way a Japanese scholar saw his country's history and currents that shaped it. Most interesting is the hypotheses for what makes the Japanese as seen by others. The most surprising part is the statement that Japanese people are not good at metaphysical thought and that this is related in some way to the Bushido. What I wonder is to what extent a book comprised of lectures given in the early 20th century could have confirmed or reinforced stereotypes about Japan and its people.

For those inclined to read through a very short book (available for free download in Kindle version) it may help to contemplate why the divine endowments to Japan's first emperor Jimmu were the mirror, the sword and the string of crescent-shaped jewels. Location 212-219

Nigerian Stories Told in Animated Movies

Animated movies have recently become a real profit puller for many movie studios and it is easy to tell why. I find these movies especially interesting because of the amazing confluence between technology, finance and the business side of making movies. While my keenness in this area is more recent, among the earliest movies of this kind that I watched was The Lion King which saw enormous success both on the screen and as a musical. As a story told against the background of the African Savanna, it confirms that African story telling could be successfully told in Hollywood.

A Nigerian film making corporation is taking African storytelling further by using authentic legends to tell stories in animated form. TransTales Entertainment, which was formed for US$ 5000 has ventured into making animated movies based on African legends and tales and seeks to market them worldwide. 

To my mind, the economics of the animated movie industry makes this the most cost-effective way for rich storytelling from other parts of the world to gain a foothold in the movie business. The reason being that animated stories rely on technology and while this may be expensive, it is takes out the need to get real top dollar actors into the movie. Also significant is the fact that animated movies with a fantasy element have a broad appeal to children and families and this draws families to watch the shows together thus ensuring a reasonable take on ticket sales.     

US Networks and 4G Services

One of the profound things that i learned from the book Simplexity is how modern electronics gadgets are crafted by very smart people but who are not perfectly alert to the vast difference in technical knowledge between them and users of those products. It is conceivable that  most of the technical specifications that electronic gadgets bear are not very meaningful to most buyers. To my mind therefore, this chasm of knowledge has made marketing professionals to use technical details in advertising for products in order to make them appealing to the buyers while fully aware that most of the facilities on those gadgets are hardly understood and even unlikely to be used.

David Goldman of Yahoo Finance confirms that these marketing tricks have been deployed by some mobile telephony networks in the US that claim to have upgraded their services to 4G capability when they clearly have not. The author claims that this is the result of a PR mess while I think that the main issue here is the deliberate quest to take advantage of the consumers who are none the wiser.