Scientific American Ad from 1997, here is the link. I wonder how many people bought the product based on the Ad?
Monday, February 6, 2023
RA Jack Underwood trained ChatGPT using the first three chapters of Managerial Economics, and the blog, tests, and lectures.
The lecture was boring, too general, and the Amazon example misses the real story of the company, e.g., see post Why was Bezos such an extraordinary manager.
Some test questions were good, but others "borrowed" jargon I don't use, like "deadweight loss."
The blog post used jargon and ideas from standard textbooks, but not from ours. [ours: Costs are defined by decisions: when making a decision, consider all benefits and costs that vary with the consequence of a decision (if you miss some that is the hidden cost fallacy), but only benefits and costs that vary with the consequence of a decision (if you include those that don't, that is the fixed or sunk cost fallacy).]
A proposal in Tennessee would regulate "eyelash services"—defined as "applying and removing a semi-permanent, thread-like, natural or synthetic single fiber to an eyelash," requiring 300 hours of training.
Sunday, February 5, 2023
Economist: The correlation between a high management score and productivity is so strong that management seems to account for more of the difference between the most and least productive firms within countries than factors like research and development spending or use of it. Mr Van Reenen and Mr Bloom reckon that more than half of the productivity gap between Britain and America can be attributed to poor management.Chapter 1: incentive alignment!
Via Marginal Revolution:
The key purpose of corporate finance is to provide methods to compute the value of projects. The baseline textbook recommendation is to use the Present Value (PV) formula of expected cash flows, with a discount rate based on the CAPM.However:
We find that discounting based on expected returns (such as variants on the CAPM or multi-factor model), performs very poorly. Discounting with an Implied Cost of Capital (ICC), imputed from comparable firms, obtains much better results.
Saturday, February 4, 2023
When an economic shock causes our incomes to shrink, we become more risk-averse. And, in the authors’ words, we start to view the emotional or nonfinancial appeal of ESG investing as “costly” and “unsustainable” if it means forfeiting returns.
On average, our findings show, an ETF gives an extra 0.20 percentage point a year in posttax performance compared with mutual funds, and international-equity ETFs even more—upward of 0.33 percentage point on average.
Tuesday, January 31, 2023
A working paper from the National Bureau of Economic Research finds that ageing is the main cause: nearly 2m baby-boomers who tried early retirement over the past three years have taken a liking to it and arenot coming back.
Friday, January 27, 2023
Curiously, the price series (below) is much more slowly moving than the Activity series. And for the last three pricing cycles since 1968, it appears that the cycles are lengthening.
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Thursday, January 26, 2023
Wednesday, January 25, 2023
Turns out that inflation-adjusted airfares were 60 percent lower in 2020 than in 1980. Indeed, flying is no longer a luxury. It’s cheap enough to allow most Americans to fly — by 2020, 87 percent of the U.S. population had taken a commercial airline trip. And low fares have cost us nothing in terms of safety: no major airline has been involved in an accident in the United States since 2009. ...What about service reliability? Suppose policymakers force an airline that cancels a flight to immediately provide a cash reimbursement to all affected passengers – as the European Union requires in many circumstances. All airlines, not just Southwest, scratch thousands of flights every year, sometimes due to human or equipment error — but mostly because of bad weather. If airlines are forced to incur all the financial risks of delayed flights, something else must give — back to amenities and/or fares.
Friday, January 20, 2023
The theory is right out of chapter 1: voluntary transactions create wealth because they move goods and services to higher-valued uses. In a kinship society (no first-cousin marriage bans), there are fewer people with whom to transact, and this means that income is lower.
Sunday, January 15, 2023
Real incomes are growing and progressive taxes (which tax the rich at higher rates) and transfer payments (from richer to poorer) are responsible. (From The Economist)
Monday, January 9, 2023
“there is evidence that non-compete clauses increase employee training and other forms of investment,”they dismiss its importance.
Sunday, January 8, 2023
...[Pay Transparency law] shrank the gender pay gap by 13%, but only because it curbed the wages of male employees. Studies of Britain’s gender-pay-gap law, which was implemented in 2018, have reached similar conclusions.Of course, the term "gender-pay-gap" refers to a statistical difference betweden what men and women are paid. It does not mean that men are paid more for the same work as women. See earlier post When are between group differences evidence of discrimination?