Are you planning on watching the Mayweather Pacquiao fight tomorrow? I hope you are prepared to shell out some serious cash. My recommended strategy is to try to free ride off of someone else’s purchase, but we know how this usually turns out. This fight is already setting records for pay-per-view costs ($100) and the fighters are going to be paid pretty well for the evening: $120 million and $80 million respectively. Both of these fighters are said to be past their prime (I have no authority to judge this for myself) but Floyd is 38 and Manny is 36, Continue reading The Monopoly of Boxing
This past week I heard some talk on the radio about the issue we are having with rhino poaching. These animals have a significant value on the black market, at least for some of their parts (such as their tusks). It is interesting to think of this issue in an economic sense, as it is illegal to hunt these animals. Even with the illegality of this market, the demand, and price of rhino tusks have been increasing as the number of rhinos decrease. It seems that people value the idea of owning such a scarce item. The growing market for these tusks Continue reading Poaching Markets
Everyone has become infatuated with the use of data in business. This trend started with Billy Beane with the Oakland A’s, using simple statistics to govern strategic decision making about how to assemble a team. The idea of using statistics in more aspects of life has become popularized with movies like Moneyball and websites like Fivethirtyeight. The use of analytics or big data is now spreading across businesses and industries. If you are a fan of basketball, you have seen NBA franchises begin to invest millions in departments dedicated solely to using math to give their team an advantage. These types of Continue reading Where is ‘Big Data’ Going?
In my last post I talked about for-profit schools, but failed to mention Division I athletics in this conversation. Although these obviously aren’t technically for-profit, I would argue that the structure of these programs seems to go against the non-profit nature of the schools. The reason I say this is that these programs themselves seem to be almost treated as for-profit entities by the school where they are attempting to maximize the profits made by athletic programs every year. Money drives many of the decisions made by colleges and major athletic conferences to the point where things like television networks are Continue reading Problem with College Athletics
First and foremost, Go Badgers. Now that I got that off my chest, I want to get into for-profit education. We see these commercials constantly for DeVry University, and University of Phoenix and I never really understand who goes to these strip mall universities, and what purpose they serve. It is interesting to consider why a school would choose to be for-profit rather than the more traditional and popular non-profit structure. In theory, these schools could be very effective at offering efficient education because it would be their profit-maximizing strategy to offer the best and cheapest education. This, I think, Continue reading For-Profit Schools
Collective bargaining agreements are three words sports fans never want to hear. When these agreements expire and the door is opened for more negotiations during the offseason, the outcome never seems to turn out well. We generally see negotiations stall over a few key points, and the owners threaten a lockout of the players, and the players threaten to strike, and the outcome generally comes out in favor of the owners. There are a few reasons for the owners’ advanced bargaining position over the players. One, when a lockout or strike occurs, the players are out their salary for that Continue reading NBAPA’s New Bargaining Ploy
Twitch.com is a website where people watch other people play video games, which apparently has a large market. The reason why I am writing about Twitch.com is because of an experiment they are currently running on their public forums. A group of users has started a crowd sourced stock portfolio over the website. The portfolio strategy essentially is determined by a voting system over the forum. The mechanism for stock purchases is a random selection of the suggestions from the group on what stock to buy. A stock-picking robot will randomly select one stock that was voted for in the past 5 minutes and spend $10,000 Continue reading Crowd Sourced Stock Portfolio
Seeing as I just presented my thesis findings at the UPS Economics Poster Session, I thought it would be relevant to post about an aspect of my thesis that I found myself explaining to a few people over the course of the evening. My thesis was centered on ethnicity, and how a person’s ethnicity impacts their earnings capacity. This measure of wealth is different than the more widely used measures, like their income in relation to the rest of the nation. Earnings capacity is essentially the potential earnings an individual could make through their lifetime if they leverage their personal capital Continue reading Earnings Capacity: A better indicator of poverty than income.
I thought Connor’s post yesterday was interesting in the way it took a game theoretic approach to the last play of Sunday’s Super Bowl. So, sorry if you were looking for something other than football, but you will have to give us a break just for this week. I wanted to look at the strategy choices of the team that won the game on the last play rather than the team who has been scrutinized so heavily this entire week. Every play in football is an instance of game theory. Teams are trying to keep their opponents off guard by changing and Continue reading Bill Belichick Knows Game Theory
How much of our success is determined by randomness? I would bet that it is more than most people would like to think. In light of the hotly approaching Super Bowl, I want to start by looking at The Seattle Seahawks over the past few years to demonstrate how success can sometimes be so dependent on chance and randomness. Note: I am not trying to say their entire two-year run has been based on luck and chance, although, my Packer fandom might explain my motivation for this… I am simply trying to point out how their recent success has been influenced Continue reading The Randomness of Success