I finally borrowed a copy of William Poundstone’s How Would You Move Mount Fuji from the library the other day and I was doing my little research on logical thinking puzzles and such when I stumbled upon the game of Petals Around the Rose. It is interesting how this puzzle is related to Bill Gates in his young, start-up days and that Bill have eventually gone on to make use of puzzles to decide whether to hire a person as described in Poundstone’s book.
The three little ‘rules’ is that the name of the game is ‘Petals Around the Rose’ (and this is significant), that the answer is always even, and that anyone who gets the logic of the game can only announce and answer and not try to verify his logic. Getting the answer 6 times in a row is a sign that one has become a Potentate of the Rose (the one who knows the solution).
The basics of the game as well as a computer programme to let you try figure out the answer to this little puzzle can be found here.
I initially wanted to work it out myself but then curiosity as to whether anyone would put up an answer online overwhelmed me and after I did a search, it appears that Wikipedia is indeed an amazing all purpose reference source. I shall not provide the link here lest you are like me. Try your best to figure out the answer!
I got this from a friend, who is passionate about Economics very much like me.
A hen and a pig are negotiating to solve the food shortage. The hen makes a suggestion: “I will supply the eggs if you will supply the bacon.” The pig ponders this for a moment and replies: “But yours is a contribution, mine is a total commitment.”
A man in London walked into the produce section of his local Tesco’s supermarket and asked to buy half a head of lettuce. The boy working in that department told him that they only sold whole heads of lettuce. The man was insistent that the boy ask the manager about the matter.
Walking into the back room, the boy said to the manager, “some old bastard wants to buy a half a head of lettuce.” As he finished his sentence, he turned around to find that the man was standing right behind him, so he quickly added, “and this gentleman kindly offered to buy the other half.”
The manager approved the deal and the man went on his way.
Later, the manager said to the boy,” I was impressed with the way you got yourself out of that situation earlier, we like people who can think on their feet here, where are you from son?”
“New Zealand, sir,” the boy replied.
“Why did you leave New Zealand ?” the manager asked.
The boy said “Sir, there’s nothing but whores and rugby players there.”
“Is that right?” replied the manager, “My wife is from New Zealand!”
As I was mentioning a couple of weeks back, I have been reading Thinking Strategically by Avinash Dixitt and Barry Nalebuff. This is a pretty old book, being first published in 1991 and the version I was reading is the 1993 paperback re-issue – there was no more revisits to this book by the authors since then but it’s been in print until now. I believe it’s largely used as readings for undergraduate economics students as well as students of business or management schools.
The 2 authors are great teachers of Game Theory in Princeton and Yale and have often adapted the principles this somewhat mathematical subject to the less mathematical real world. Thinking Strategically is a great attempt at discussing strategic thinking that follows from game theoretical analysis for the layman.
The good thing about ideas on strategic thinking is that their principles hold even when the examples they are attached to often become obsolete or arcane – that is not to say that Thinking Strategically features arcane examples. Most of the examples used to bring ideas across in the book are simple, often bordering trivia but they illustrate the essence of the concepts and can be used to explain the principles for similar but more complex issues. One of the case studies brought up that I particularly love is the one about a three-way duel where we have 3 shooters of varying abilities.
Each shooter fires at someone (or something) each round; there’s is fixed order as to who gets to shoot first. The one who’s allowed to shoot first is a poor shooter with an accuracy of only 30%, the second has an accuracy of 80% and the last is a sharp shooter who shoots with an accuracy of 100%. The question is that if you’re the first shooter and allowed to go first, who would you choose to shoot?
An analysis of this “game” gives us a surprising but convincing result. If you choose to shoot the average shooter, and succeed, you will definitely lose because the next in line would be the sharp shooter and he would shoot you. If you choose to shoot the sharp shooter and hit, the average shooter will shoot you, leaving you with a 20% chance of survival. And even if you survive, you only have 30% chance of hitting him later. You might say, this mediocre shooter is so lousy, he’ll probably have to lose anyways. But you can actually raise your chances of winning by choosing a more intelligent strategy: To fire into the air.
This way, the average shooter will get his turn and attempt to shoot the sharp shooter since shooting you and succeeding mean he’ll have to die when the sharp shooter’s turn comes. If he succeeds, the mediocre shooter gets to try his hands at killing the average shooter. If he fails, the sharp shooter will immediately kill him and that once again, leaves the mediocre shooter with a chance of 30% to kill the sharp shooter. The somewhat counter-intuitive strategy of shooting at no one raise the chances of the mediocre shooter winning substantially.
The principle alluded by this example is that if you’re a weak player; it is wise to allow the stronger players to make their moves and get rid of all each other before making a move and fire your best shot at the one left standing. Now that we surface the principle, the logic of such a choice becomes more intuitive.
Thinking Strategically is a great read for students who likes to think and don’t mind re-reading some of the statements in the book a couple of times to understand the explanation behind some strategic moves. It teaches an important skill of looking forward and reasoning backwards and shows you the power of its application in all sorts of “games”. The book might make you feel like you’ll become smarter but trust me, it’s not that easy to apply strategic thinking that quickly in real life and often, we need a degree of foresight that we would almost definitely lack.
ERPZ explores quite a lot of stuff; from matters about studying smart to the huge issues surrounding economics and the environment. This are the efforts to cover what students need to learn about and know (true to our objective of ‘Educating students about being students’), but we seem to have missed out something really important in today’s world and that’s “Leadership”.
I started out reading a recent issue of Fortune Magazine, which featured an article on How to build great leaders, uncovering the different MNCs methods of identifying and grooming leaders for their organzation. A second article on leadership discusses the leadership during a crisis or recession. Talent on Tap, an article from The Economist talks about the increasing trend of getting temporary big bosses to sit in the autonomous firms and thus helping to tide the firm over a crisis or avert one.
Finally, an article from Knowledge @ SMU discusses the implication for leadership in individuals with different degree of self-monitoring. They suggested how high self-monitor individuals stand out as informal leaders although the low self-monitors are the ones who ends up in position of authority. I like to think that high self-monitors are suitable for ad-hoc leadership roles or to lead during special circumstances, perhaps why firms need temp bosses. In long run, during ordinary day to day management and leadership, the consistency of low self-monitors probably stand out and will become more important. If you’re interested to find out whether you score high on the self-monitoring scale, you can check out this test.
We begin this week’s reads with an interview with Paul Samuelson by John Cassidy from The New Yorker. John Cassidy recently published a new book, How Markets Fail, which I’ll read some time soon. It won’t be that soon though – I’m still reading Thinking Strategically and moving on to Art of Strategy after that.
Eric Morris shared something about the cab industry in New York, which eventually concluded with urging for less regulation (ie. raising the supply of cab licenses or “medallions” as they’re called). One of the comments revealed a really humourous story of how the cabbie’s industry in Ireland got deregulated overnight; I shall reproduce it here:
A similar sitution existed in Ireland up to a few years ago. Change was brought about when the government went to issue more wheel chair accessable taxi licenses. The Taxi driver / owners group foolishly sued the government. They claimed that the government didn’t have the right to issue new licenses. They won but the court ruled that the government didn’t have the power to issue any licenses. The taxi ma[r]ket was deregulated overnight.
The current complaint from taxi drivers is that there are too many taxis etc etc. There were clear winners, the consumer and those new taxi drivers who are now free to ply their trade in a vastly increased taxi market.
The fact that GPS navigation on-board cars/cabs are widely available means that the tacit barrier to entry for the cab business have been significantly lowered. Anyone who can drive and have a car with on-board GPS navigation (and perhaps a meter) can technically offer good taxi services. Knowledge of the city and the different landmarks have become less of an advantage or requirement.
In an entry with the same title on my blog, I detailed my experience at The Coffee Bean recently that didn’t quite start nicely but ended off pretty intellectually. I’m quoting the gist here:
I approached the counter with a maths worksheet in my hand (I was planning to work out some problems there while I sipped on the tea since I had some spare time on my hand and needed to exercise my mind) and made my order. The young man serving me immediately asked if I intended to sit around to study.
I commented that I’ll probably be around for half an hour and asked if it’ll be a problem. He replied that there’s an event downstairs and they anticipate a crowd so they discourage people from studying at the cafe. I kept quiet and took my receipt. I thought that the Large Chai Latte should at least buy me 30 minutes of time at the cafe.
This post is a discussion seeks to answer the question: “If a cafe wants to maximize their profits from a crowd and yet is limited by their available seats, how do they discourage people from studying there besides using attitude (which I assume is something I experienced)?” So before answering that question, we list out the factors that would encourage one to study at the cafe and see if there’s anything we can do to manipulate them:
Things that encourage one to study at a cafe
Good lighting; makes reading comfortable
Extremely hot or cold drink; takes you longer to drink and the taste of the drink don’t change that rapidly over time which means more excuse to stay at the cafe longer
Quality drinks; makes for nice beverage while you study and you probably won’t mind ordering one more and staying longer
Comfortable seats; allows you to study comfortably and sit at the cafe for longer time without feeling discomfort physically.
Technically speaking, removing any of these would help to reduce the time people stay around the cafe and also discourage studying. On the other hand, attitude (on part of the service staff) won’t help to reduce the determination of people studying at the cafe. In fact, it turns off people who genuinely just want to chill at the cafe for a while without discouraging the studying students. When one plans to stay at the cafe for a long time to study and sip on drinks, service at the counter makes up only a small part of the experience, whereas for customers who are interested to get a good drink and sit for a while, the service at the counter makes up half of the experience. In other words, giving people attitude is the worst possible solution compared to removing any of the above.
I strongly recommend the dimming of lighting, which doesn’t harm people out to relax but makes studying tedious and difficult. But this is not always possible since The Coffee Bean that I went to utilizes the in-building lighting that they probably have no control over. It’s not wise to compromise the quality of the drinks since it sends out the wrong messages and is disastrously difficult to control. That leaves us with modifying the seats.
I got this idea when I was at Saizeriya Restaurant at Liang Court; they feature a drinks bar where you pay about $6 bucks or so and get to drink lots of different drinks and it’s free flow – literally a drinks buffet. At first, I wondered why the seats there were so narrow and small; the cushion were thin and not exactly comfortable with prolonged sitting. Later I rationalized it as a means to get people out of the restaurant as soon as they’re done with the food. Of course it’s not going to put off people determined to try all the drinks, but at least they’ll finish with their affair and get out fast.
So here’s some prescription for cafes who hopes to attract people there for a drink and to sit around for a while (after all, if the cafe was empty you might think the drinks suck) but discourage students from spending their entire day studying there, the best move would be to adjust lighting according to your needs to adjust demand. Where this is not possible, modify the seats to make prolonged sitting uncomfortable.
The book itself was recently published and praised by The Economist for its educational value. To be frank I’ve never read Richard Dawkins but from his readings of The Greatest Show on Earth in the video, I reckon I’d enjoy his style of demonstrating his arguments using long analogies that are probably closer to the heart of readers (rather reminiscent of Abraham Lincoln’s speeches).
He compares Creationist to Holocaust Deniers, those who argues that Evolution is full of gaps to a stubborn lawyer who declares that more evidence is less. He questions the plausibility of Marsupials engaged is some sort of migration programme where they emigrate en masse from Mount Ararat to Australia – such was the witty humour that Dawkins use to entertain readers and frustrate those who believed in the literalism of Noah’s Ark. Dawkins is critical and knows clearly what exactly he is out defend in the book.
Next, some readings on the fertility decline around the world in The Economist, something I wrote about previously as well as an article on price wars on The New Yorker by James Surowiecki. There’s a video accompanying the article from The Economist about population.
Finally, find out more about Vincent van Gogh’s life from The Economist’s Editor Highlights Audio.
Team of Rivals is one of the rare books I left at camp to be read consistently and then finished within plan. I brought it into camp two weeks ago and planned to have it finish exactly today; I knew that if I was reading it consistently I would finish about 2 chapters per day, which means it’ll take me 13 days for the 26 chapters that Doris Kearns Goodwin penned. I initially thought I might bring home to read over the weekends but resolved to leave it in camp as a material to be read in camp.
The book turned out to be incredibly entertaining and while I could put it down for a drink, a chat or some other minor distractions, I’d be happy to resume reading wherever I left. The prose flows smoothly and easily for me and I love Goodwin’s narration. She makes history seem alive and playing in front of you with the thoughtfully embedded quotes in the narration that is carefully credited at the end notes. The pictures, diagrams and maps included made the experience even more wonderful.
The most important part about Team of Rivals that I enjoyed was the little bits scattered all over the book where Abraham Lincoln related his little anecdotes and jokes to others. From our frame of reference, these all are anecdotes themselves demonstrating the character and personality of Lincoln. One that I liked in particular involves Lincoln telling someone about his dream:
In his dream, Lincoln was at a party where he overheard a guest commenting on him, “He is a very common-looking man.” Lincoln joined the conversation immediately, suggesting “The Lord must prefer common-looking men, that is the reason He made so many of them”. Lincoln was positively amused by the response he gave in his dream.
And having read the book and gotten to know more about Abraham Lincoln, I came to realised that the response in his dream was very real; it was something so characteristically Father Abe. I was naturally drawn to the many other jokes and stories he shared – some I understood, others were perhaps closer to the hearts and minds of those who were audience of his time.
Months ago I bought a little selection of speeches by Abraham Lincoln and I haven’t gone beyond reading his Gettysburg Address and wondering what so great about it. Now that I’m more familiar with the course of his political life and the circumstances in which he made those speeches, I shall revisit the book and appreciate the wonders and influence of his oratory prowess as well as his ability to weave issues into stories for the layman. And perhaps, I’d learn something out of all that.
I was randomly visiting those blogs of authors, journalists, economists ERPZ link to. It is a good way to find inspiration for things to write about or to hunt for stuff to read. I stumbled upon Harford’s column article on Financial Times a week back. He discusses briefly on the importance of feedbacks and how they mess things up sometimes.
Save on that...
From Harford’s blog, I also learnt about this new book, Scroogenomics by Joel Waldfogel. It looks like a pretty interesting short read but I probably would be spending on it and I’m not too confident that it’ll be available in Singapore. Harford presented a short take on the concept that Professor Waldfogel conceived in 2005.
Professor Waldfogel believes that:
We make less-informed choices [when we buy gifts], max out on credit to buy gifts worth less than the money spent, and leave recipients less than satisfied, creating [… a] “deadweight loss” [much like when there is an externality present in the market].
In some way, when we perceive the giver and receiver as a single entity (the consumer) and the seller of the gift as the producer and explore this consumer-producer relationship, the deadweight loss is quite evident. It is like having a weird syndrome where you confuse your preferences and lose the ability to put a value on the goods you purchase. That would mean you might be willing to pay $30 for a Large Fries at MacDonalds and try to haggle for a bed at IKEA for $6 – both of which results in losses if the transactions succeed (you lose in the first case and IKEA loses in the second).
Tyler Cowen’s Discover Your Inner Economist, however, argues that gifts are signaling tools for the giver to create certain impression in the receiver of himself/herself. That suggests that the losses are probably compensated in the market through the creation of this impression, through any changes in the chemistry of the relationship between the receiver and the giver of the gift. Perhaps given that the consumer from this perspective is just the giver, as long as the receiver gives him/her enough face by feigning joy (when there isn’t any) upon receiving the gift, there’ll be no deadweight loss. Actually there is, borne by the receiver for the effort.
