Is Facebook Like a City?

To be honest, I have not figured out exactly how the leading enterprises in the social media industry will be able to convert the large user-base into a revenue model. I am certain that the answer is out there but unlike a majority of people who are enthusiastic about the rise of these new industries, I do not mind being educated on how that will happen. I would be ready to bet that it will be very hard and that at best, only a handful will succeed in finding and executing that revenue plan.

To me, the most obvious value in social media today is that they represent a platform for rich and real time data that is subject to interesting analysis. That idea resurfaced as I was going through this original take on Facebook by Wabi-Sabi and Ikeda at the Foundation for Economic Education (FEE). I am sure that these two are not the first to compare that formidable network to a real-life phenomena but I find their comparison to the growth of cities really interesting. Going on a  limb, one could say that the linkages between people on Facebook would be parallel to how cities grew and that those links are in turn measures of prosperity in the way that cities represent dense networks for economic activity. 

Walmart Cashing Checks Now

Because of my enduring fascination with how retail markets generate value within economies, I am an unqualified admirer of businesses such as Amazon and Walmart. Indeed, my admiration of these two is most evident in the fact that they remain the most cited business institutions on this blog. Of the two, I am especially enamored with the creativity of the Walmart as mentioned here, among other spots on this blog. It has gone beyond its classical business model of low cost retail products and logistics to ensuring that it plays a role in competing against banks in reducing the banking charges that greatly irk many low-income earners.

Andrew Martin and Stephanie Clifford file a piece in the NYT detailing how Walmart utilized customer feedback on their real costs of banking charges. this information was directed towards ensuring that the check cashing costs offered by Walmart are sufficiently competitive to ensure that its share is growing in that area. In my view, the retailer has responded well in not only demonstrating that the fees are not close to the marginal costs as they should be, but also that the competition is adding value by saving money for clients who may save it or use it to acquire more groceries.

To my mind, the move by Walmart in providing an alternative avenue for check cashing is demonstrably useful but also highlights the inefficiencies in the banking charges. The high degree of automation in the financial services industry makes me to think that Walmart may still have a margin even after lowering the costs. Predictably, the banking institutions against whom this new move presents a rising threat respond in a manner that betrays their callousness by asking for Walmart to be regulated too. This posture is baffling to me because one would expect that they would instead ask to be released from regulations in order to be able to compete even further. instead, the argument for regulation in the piece is one that would raise Walmart's costs as opposed to a response that would reduce the banking institution's costs and ensure that costs would stay low. Walmart is beating these banks at their game.           

Umberto Eco on Simple Things

"Its only publishers and some journalists who believe that people want simple things. People are tired of simple things. They want to be challenged. " Umberto Eco

NBA and Players Reach Tentative Agreement

This has been a turbulent year for the sports franchises based in the United states because of negotiations regarding the sharing of revenue between players and the team owners. The NFL reached an agreement in which players ceded a portion of future revenues in order to end the lock-out. On the other hand the NBA season has been delayed by months and there was the remote possibility that the season would be cancelled altogether due to the great chasm that could not be bridged.

It seems now that the team owners and the players union have reached an agreement and the season is due to start with the first matches scheduled on Christmas day. As this article in the Guardian states, the full details of the settlement are not out yet but the detectable anxiety to get an agreement going in order to redeem the the season in shortened form is a major factor. To my mind, it is clear again that the brinkmanship on the part of the owners seems to have led to capitulation by the players. When the full details of the agreement are released, it is almost certain that it is the players who will have yielded more ground. 

Reviewing Rugby World Cup 2011

Many sports fans are today aware of the fact that statistical analysis of sports events has become common. This often manifests itself in the application of statistical techniques to purchase players and even in choice of play during set pieces during play. the one place in which the reasoning with data is more overt and subject to clear assessments is in the development of predictive models for ranking teams in a tournament.

A couple of articles written by Eoin O'Connell here and here in Significance Magazine presents a clear narrative on the author's reasoning about the pools, the form teams, and determinants of qualification towards the finals. This model is fascinating because his predictions correctly names seven of eight teams that qualify from the pool stages. While the predictor model is narrated, it is easy to see how the logic of the model worked and how it turned out where results did not go as predicted. Going towards the semi-finals and finals, the second piece states clearly that New Zealand team has the advantage of form and superior performance during the pool that makes the team less likely to lose. the model proves correct though the Wales replaced Ireland as the other finalist. The narrative is impressive as it highlights a systematic and approach to analysis of the games with data used to strengthen the stories. What one concludes is that home advantage and team form is a hugely powerful predictor of the outcome.

NBA Players Union in Good Hands

This year has seen some titanic battles and negotiations pitting players unions against team owners in the major sports franchises in the United States. It started with the NFL Players union against the owners which I blogged about here and here. I maintain my conclusion in this post that the players seem to have conceded far too much.

Since then, the comparable parties in the National Basketball Association have also been in discussions that have led to the cancellation of the first twenty games of the season. I was pleasantly surprised to find that the NBA Players Union have added Kevin Murphy of University of Chicago to their team as an advisor. Reading this perceptive interview on the issue shows that the players are really in good hands. To start with, the guy understands the economics of the teams and understands that his duty is not to push for any result but rather to help the negotiating teams to understand the implications of any position that they take. Whatever the outcomes, I am certain that the players will receive exceptional advice.      

What Do Governments Need Most?

I have often engaged in intense discussions about the value of entrepreneurship skills and whether these can apply in diverse industries and sectors. To my mind, a very capable entrepreneur could run other institutions in either the public or third sector. In spite of that, it is clear that people with such diverse skills are few and far between. 

Looking at the story about Andrew Flanagan who runs a children's charity in the UK leads me to the view that it is indeed possible to find people who can cross from private sector firms and into social and policy entrepreneurship.  As Randeep Ramesh of the Guardian states, there are universal principles and good sense that allow for managerial efficiency to lead to improvements. These changes may include staffing, operational issues and financial management. The most profound one though is the very perceptive reasoning that charities should not seek to supplant or supplement government in provision of public services. Flanagan argues correctly that instead, these charities should see themselves as think tanks that generate and test new ideas that may be recommended for wider implementation. 

Implicit in that profound and correct finding is the fact that citizens should require that failure in the provision of public services is sometimes as much a failure of good ideas than the absence of material resources. 

How Real Capitalists See the World

While a disproportionate number of people are occupied with the Occupy Wall Street protests, it is amazing that the numerous good things that come from principled capitalism are altogether ignored. Leaving aside the predictable views of some of those supporting and opposed to the Occupy Wall Street protests in New York and the rest of the world, I came across this short but really good NYT story about what real capitalists can and often do to benefit society.

Worthy of reading for oneself, I find it profound for the reason that it highlights the exceptional degree of generosity from Robert and Dorothy King. Having built their own enterprise and made substantial sums, they have opted to make a donation of US$ 150 million to Stanford University to establish the Stanford Institute for Innovation in Developing Economies. Its purpose is to study the creation of programmes and businesses through which a large difference could be made.

To my mind, this gift is profound for a couple of reasons, including the fact that it is an expression of generosity at a particularly difficult moment when many people may be anxious about the possibility of a second recession and its possible effects on further erosion of their wealth. Equally important is the fact that as the political hacks are looking for people to blame and make some political mileage from the ongoing controversy, this family has demonstrated that real capitalists go ahead with their work, support what hey can and leave everyone to judge the result. there's no better way to defend capitalism. As I said in an earlier post, this couple makes me shout, "Capitalism Rocks".    


  

Rolex Dials Tiger's Number

Tiger Woods has been a subject in this blog post in two related ways. The first is when I questioned whether endorsements by celebrities really do improve sales while the second was the belief expressed here and here that Tiger Woods would regain his high ranking and be a dominant player again. At the time when the conventional wisdom holds that Tiger's days are all gone, a sponsor no less prestigious than Rolex has appointed Tiger Woods as a spokesman.

In addition to relating the story behind the creation of the unique brand, Slate magazine's Seth Davidson interrogates this decision and concludes that this firm is sure that Tiger is momentarily at a disadvantage but will regain his form in the future. Trust a corporation that is organized in a different way to understand that Tiger is still a class act in his game. A good bet that will pay off.  

Polemics of Demography and Fear

I stated in this last blog post  that I would not put up a link to all those lamentations that the world is overcrowded o account of unverified claim that the there are now 7 billion living souls. One must accept that in the same world where the costs of circulating ideas has fallen much more than the population has risen, people are bound to find all sorts of preposterous connections and cause alarm. Reading this piece in the NYT, I had to renege on my light promise not to link to these pieces. 

Taking without question that the human population has reached a new record, a number of institutions are trying to tie their neo-Malthusian argument to environmental conservation. Among the arguments is that the levels of greenhouse gases being produced on a per person are so high that every new birth adds to the warming of the planet and therefore to almost certain environmental catastrophe.   

Such campaigns may be well-timed but that does not imply that the claims are sensible. As contrarian voices quoted in the piece mention, family size reduction cannot be the solution to global warming and environmental conservation.fertility rates are higher among poorer populations in South Asia and sub-Saharan Africa but it is these populations that also generate the lowest levels of carbon pollution per person.So yes, I want spotted owls and polar bears to survive but it makes no sense to me to claim that birthing families are responsible for my never seeing a live one. That is not the real trade-off.