Economics – On The 8 Spot

December 22, 2009

rePost::7 lies we tell ourselves about money | I Will Teach You To Be Rich

1. “I want to make passive income”
I love when people say this because you can tell they have no idea what they’re talking about. It’s kind of like trying to identify people with bad taste: Just go to the local Hometown Buffett. They’re all there.
I hate to say it but most of us don’t need to focus on passive income, we need to focus on improving our active income — our jobs. How? By becoming more skilled, solving more problems for our bosses, and basically out-hustling co-workers.
A lot of people don’t like to hear this because it means that instead of reaching for some dream of $500/day in passive income, they actually have to do some work right now at their jobs. But your job is the most likely place you can significantly increase your income.
via 7 lies we tell ourselves about money | I Will Teach You To Be Rich.

This is an excellent list and should be read !

June 16, 2009

True Fans::Offsetting Behaviour: Economics of Scalping: Trent Reznor edition

NIN gets 10% of the available seats for our own pre-sale. We won a tough (and I mean TOUGH) battle to get the best seats. We require you to sign up at our site (for free) to get tickets. We limit the amount you can buy, we print your name on the tickets and we have our own person let you in a separate entrance where we check your ID to match the ticket. We charge you a surcharge that has been less than TicketMaster‘s or Live Nation‘s in all cases so far to pay for the costs of doing this – it’s not a profit center for us. We have essentially stopped scalping by doing these things – because we want true fans to be able to get great seats and not get ripped off by these parasites.
I assure you nobody in the NIN camp supplies or supports the practice of supplying tickets to these re-sellers because it’s not something we morally feel is the right thing to do. We are leaving money on the table here but it’s not always about money.
Being completely honest, it IS something I’ve had to consider. If people are willing to pay a lot of money to sit up front AND ARE GOING TO ANYWAY thanks to the rigged system, why let that money go into the hands of the scalpers? I’m the one busting my ass up there every night. The conclusion really came down to it not feeling like the right thing to do – simple as that.
via Offsetting Behaviour: Economics of Scalping: Trent Reznor edition.

I’ve been mulling what I like to call as the “great service coalition”. Basically it’s like a club for people who crave great service, who are willing to pay to be served great! It’s about being an extremely shy person and people serving you knowing that. Simply put tips just don’t work most of the time. Still thinking about how to implement this, hope I find a way.

October 19, 2008

getting paid to study (incentives for exams)

A father writes Tim Harford (author of the book Undercover Economist) to inquire on how to divvy up a stash of cash as incentives for his son to pass his exams. Harford answers:

Start by promising more than you can deliver. If you offer €10,000 for a perfect score, you will only need to apologise after your scheme has succeeded. That may seem to undermine your credibility, but the real risk lies the other way: your son may expect to get the money from his doting dad anyway. Discourage this view or your plan will be in vain.
You must also pitch the stakes just right. Research in behavioural economics suggests that trivial rewards are worse than no rewards, but also that performance suffers when too much is at stake.
Finally, focus on the early exams, because success breeds success. Promise your son €200 for every excellent result in these: that should engage his interest without throwing him into a panic. If things go well, the money will run out before the high-pressure exams. But by then he will have mastered his subjects anyway.
Link

Now, the question here is can we develop an insurance scheme that will fund the incentives (drawing from the insurance policy)? In the payment term, parents would be pressed to help their child (via tutoring). In the long run, (in the ideal case) the child will have enough study habits and have high enough grades to qualify for college scholarships.
On the other hand, the child may be put off by the hard work involved with studying which will increase the lure of those ‘get-rich-quick’ schemes when he gets older.

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