Tag Archives: psychology

Dynamic cost-benefit analysis

One of the most power tools that economics have brought to the world is cost-benefit analysis and really assessing what is the constitution of cost or benefits at various levels: individuals, firms, regional government, national government, countries.

Where it fails is the ability to properly ascribe who cares about what. The assumption around rational, selfish agents cannot possibly hold in reality. On the other hand, there is radical inconsistencies when you perform such optimisation on behalf of “government” which is staffed by human agents and with politicians have their own agenda. Over the years, these poor assumptions have made room for more colourful, richer analysis of agents, decision-making units at different levels.

Now if we move our attention to the dimension of time rather than perspective of our agents, we realise another issue. We can assess somehow the cost and benefits of today if we use our imaginations but to stretch it to the future would require even more manipulations. And the uncertainty make render the exercise less fruitful than one may expect.

Alas, we continue to use these tools expecting them to work while not having proper assessment of whether they work or not when the outcomes play out in reality. It is not the issue of calculating those figures but how we incorporate them into our judgment that matters. Yet with limited budgets and resources, most have chosen to opt for a semblance of the exercise, paying a smaller cost but getting almost none of the benefits.

Serving the user

Following my observations on Google’s mutated identity, there’s more news of the company’s “decay”. The focus here this time is something else; about the shift in the company culture that results in a bureacracy that plays it safe. There’s a common strand around the fact that Google has changed. And part of the change involves becoming removed from the needs of the user and a bit less grounded on realities.

Indeed, reality is about what the market wants when your company is small and just leading parts of a large market – usually a small part. Yet when a company grows, the insides of the company and the decisions of the management often can be more real than the user. In fact, your boss is likely going to have way more influence over your fate than the users have over the fate of the company. At least in the short term.

So should we have a cultural metric that is about how much a company revolves around serving the user? Maybe. But it is only possible from the top-down. The management have to model and lead that. Yet the management is usually selected by shareholders and at some point when the company grows big. At some point, the short term interests of the shareholders can conflict with that of the user. Moreover, the business model of Internet companies like Google is “ads” – which means users don’t even contribute directly to the revenues of the company!

Being entertained

After sharing David Foster Wallace’s speech, I looked a bit more into the things he said about the kind of themes he tend to think and write about. One of the really big theme is some kind of cultural addiction to entertainment, and in some sense, the growing feebleness of the mind – especially the part that deals with deeper thinking and autonomy.

We have in some sense, replaced that powerful autonomy that Victor Frankl described about the choice of our response to external environment/circumstances, with a kind of superficial sense of choice: which shampoo to buy, what clothes to wear, the jobs to desire, etc. We become weaker at assessing which politician deserves our vote, which friends deserve more of our attention, what character and values we want to truly establish for ourselves and kids.

The sheer noise and pervasiveness of entertainment, and the values of banal, basic type of stuff that gains our attention comes to dominate our lives. Intellectual domains becomes devolved to just what is considered professional and sophisticated at work, or some kind of aristocratic indulgences. Ordinary lives, which is often much more transcendental than we care to recognise, becomes just ordinary for the lack of exercising that deeper bits of our minds.

What is waste?

What constitutes waste for you? Is it when you decide something is useless for you? Or when you throw out something? Where you dispose of them matters because it defines where it goes and it determines what happen to the materials or matter and if it is classified as waste. The overall psyche of our current populace is mostly driven by the out of sight, out of mind approach to waste.

We could change the very idea of waste so that there is better recognition of the value of the material. This helps reduce the waste and encourage reusing.

Or we can make it way easier to recycle. But recycling will have to be different from disposal. And the recycling activity needs to be valued differently.

Who does the market serve?

For a government, it makes sense to periodically step back, figure out who and what the market is not serving that it should really be serving and create interventions to redirect the market.

This is why carbon regulations, carbon pricing and systems of disclosure is so important. And all of these entails the government and the people making a choice to take away that false liberty of choice that the market creates. This decision is driven by seeking to serve the people who otherwise would not be served by the market.

For example, in the case of people who are hard-to-insure. The market-based insurance approach makes things harder and harder for them as the companies are able to discriminate against them and pool only customers with better risk profiles.

The invisible hand is invisible but it is still guiding and directing. Better for us to articulate as a society how we want the market to serve us and get it to do just that.

Fraud and shortcuts to success

Maybe I’m writing this too early given the case just surfaced. I’m talking about JP Morgan’s allegation that Javice Charlie fabricated customers in order to inflate the price that she could sell her startup, Frank. It’s ironic to some extent that the fintech startup was supposed to help students cut through opacity with the college financial aid system in the US.

It reminded me of Theranos of course, if you looked at Charlie Javice’s profile, everything suggests she was incredibly intelligent and could certainly be very successful on her on merits without committing fraud. But yes she seem to have taken the position not so different from Liz Holmes or Sam Bankman-Fried.

Why is the culture making us so desperate for success or to go down the slippery slope of misrepresentation? Why are our young people believing that the whole startup and venture space is about faking it till you make it? Is there nothing wrong with that? What should we look into fixing?

So close yet so far

If you’re so near to success but then at the last point it failed, what does it mean about your effort and all the time spent on it? It can be for a business, a project, a single deal, or even a relationship. If you had known, would you have gone for it anyways? Or maybe that’s not a fair question to ask; the better question is how you’d value all the progress up to that point. Before the failure.

Would you just walk away and try to forget? Or simmer in anger? Or start gathering the pieces and see what they can be used for next?

I think the last point is particularly interesting because news just came out that Suncable entered into voluntary administration due to the shareholders not being aligned. It was a big and ambitious project. There are people concerned with Singapore not getting enough green electricity. But even if Suncable really failed, there had been expertise built up, teams familiar with the system and processes, plans or ideas that can be refashioned.

Better to think that what brought you close to success but did not get you there has already brought you closer to other successes you’ve yet to see.

So much work to be done

For those who are already beginning to be overwhelmed by the year, I’d like to confess I’m experiencing the same. There is so much to do, to accomplish and to change or improve. There’s work, family, relationships and the work on myself as well. It seems that I need them all right now! How do we prioritise this all?

Often we want to snap our fingers and have the world as we like it. We fantasise about how the world should be and the changes we could or should make. And then we stop there, frozen simultaneously by the possibilities and the overwhelming amount of work it entails. We then go back into fantasy world and imagine more work to be done instead of doing them.

We then make excuses why the world is fine to be as it is, because we want to get back to doing our own thing, to be in our comfortable patterns. It’s strange how we never fantasise about the status quo and dwell on what it takes to keep things the way they are. But we instinctively resist change, and stop ourselves from making them. So despite the sense of overwhelm, most things are likely going to stay the same.

Better to be selective and careful about the areas we target to change, and then punch hard in those areas. Hit the targets or decide it’s not worthwhile and then go on to the next.

Making excuses for yourself

Barely 10 hours before we were slated to meet for a trek, they messaged, “Had a late night today and just got home so we’ll sleep in and skip the trek tomorrow”. We learnt from young to steer our lives using excuses in order to align it with our periodic whims and fancies, but also to ensure we stay on course in our long-term goals when we find ourselves inconsistent. So they are a double-edged sword depending on how you wield it.

Using excuses that comes out of trying to steer towards long-term goals such as having a policy of sleeping 7.5 hours each night, not signing petitions, eating low-carb, etc can be great. And at times, you might just need to give yourself some wriggle room from low-stake commitments.

But the kind of excuses you need to catch yourself on, is when you’re bailing yourself out of the future you were committing to create for yourself or others. Especially so out of whims and fancies. When you make excuses not to do the work, or to deplete the trust people have in you, or to belittle the cultivation of small positive habits.