Category Archives: Economics

The Paradox of Voting (part 1)

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The choice to vote can be seen as a voluntary contribution mechanism.  This isn’t a perfect perspective, but it hold the basic concept. The payoff would be amount of democracy or a leader that accurately depicts their representatives.  From this perspective our voting system could be considered very successful. Convincing a little less than half a nation to contribute to a VCM game is impressive. clarification: the nash equilibrium isn’t zero.  As less and less people vote the more your vote matters, eventually surpassing the cost of going out and voting. Why do so many people vote?  In the recent Continue reading The Paradox of Voting (part 1)→

Na Trioblóidí “The Troubles” that come with Brexit

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With a little more than a month until the Brexit deadline, and without a British exit plan in place, the world has its eyes set on Britain, the European Union, and how this whole situation is going to play out come march 29th. Britain is historic for maintaining the largest banking sector in Europe, home to banks such as HSBC and Standard Chartered, which influence over 5 trillion pounds. Since Britain announced Brexit in 2014 nearly 1 trillion pounds have flowed from the banking headquarters in the UK to other countries in the EU for the purpose of spreading the Continue reading Na Trioblóidí “The Troubles” that come with Brexit→

The Eighth Wonder of the World

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On the fifth day of November in 1626, Native Americans sold the island of Manhattan to the Dutch for the equivalent of 24 dollars. The absurdity of this story has unsurprisingly compelled some historians to question its veracity, and others to try to approximate inflation. These things do not interest me. Like any normal person would, I see this as an economics lesson. Let’s suppose the legend is true, and suppose that following the sale, the Native Americans appointed a chief investment officer (CIO) of moderate intelligence to manage the 24 dollars. Said CIO achieves a respectable annual return of Continue reading The Eighth Wonder of the World→

Initial Coin Offerings and Herd Behavior

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The correlation between amount of capital raised in initial coin offerings (ICOs) and the price of bitcoin during 2017 and 2018 is a blatant displayal of herd behavior related to blockchain technologies like cryptocurrency. ICOs serve as a method of fundraising whereby the seeking project trades their underlying token for bitcoin or ether. Herd behavior is a widely accepted phenomenon where a group of people act collectively without a central source of direction. This means that the individual mimics group behavior, rational or not The first reason for such a behavior is linked to social pressure and the desire to Continue reading Initial Coin Offerings and Herd Behavior→

Network Externalities: Mom Jeans, Man Buns, and the Snob Effect

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Seattle boasts a thriving hipster culture. Its music venues, coffee shops, and small businesses provide alternatives to large-scale corporations. Hipsters generally reject mainstream culture in favor for the “underground”: small, up and coming businesses, musicians, and trends that have yet to gain considerable traction. This behavior is explained by network externalities, or additional effects on the utilities of goods that rely on the number of consumers. Network externalities can be both positive (bandwagon effect) and negative (snob effect). In the bandwagon effect, as the quantity of consumers increases, one’s utility increases. This effect appears when someone wants to fit in Continue reading Network Externalities: Mom Jeans, Man Buns, and the Snob Effect→

Amazon.com Continues to Expand into Europe Amidst Business and Legal Difficulties

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(Photo Made in Powerpoint) Amazon continues to dominate in the US with 50% of e-commerce going through its marketplace but, it is finding resistance abroad in Europe. The super-company retains 22% of Western Europe e-commerce and finds an even greater discrepancy between its clothing department with 35% of the US market and 8% in Europe. European companies have been successful in holding onto their market share through a combination of promoting their own online stores and producing high quality goods and customer service only single industry brick-and-mortar stores can provide. Amazon is not focusing on being a purveyor of specialty Continue reading Amazon.com Continues to Expand into Europe Amidst Business and Legal Difficulties→

Saving the World, One New Tax at a Time

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Everywhere you look there are inevitably headlines about the imminent threat of climate change. The oceans are rising, the ice caps are melting, and the forests are burning. The Green New Deal could be a game changer in helping to slow down some of these harmful impacts of climate change. That being said, rather than focus on how exactly policy will help address these issues, there is a much greater focus on the grand vision of what will be accomplished. This plan has lofty goals of both limiting climate change while also addressing social and economic concerns of the nation. These Continue reading Saving the World, One New Tax at a Time→

Does it Spark Utility?

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Since her Netflix show “Tidying Up,” Marie Kondo has become famous for her KonMari method.  Marie Kondo has helped tidy households through her technique which places a high value on showing a deep gratitude for all of your belongings.  She urges people to keep only those items which spark joy. Things which do not spark joy are then thanked and discarded. When thinking of this method in terms of economics instead of asking if an item sparks joy, we can ask “does it spark utility?”  Utility is the term economists use to label the satisfaction or benefits consumers get from consuming Continue reading Does it Spark Utility?→

Do Mathematicians do Economics Better?

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In my optimization class we were talking about maximin problems.  A maximin problem is a problem that maximizes the lowest outcome (maximize f when f(x1,x2,…xn) = min{x1,x2,…xn}.  Our professor made the claim that “… economics is focused on maximin problems or should be focused on”. I felt like this statement grossly understated my major and the range of economics.  Even the optimization problems we face in economics have a wide variety such as profit optimization, game theoretical optimization, utility optimization, etc. not to mention the other sectors of economics that don’t include optimization.  However, he does deserve some credit. Maximin Continue reading Do Mathematicians do Economics Better?→

Why Aren’t There Aliens? Why We Might Be Doomed

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At this point in human history, technology has advanced far enough for us to see far beyond our solar system. We have the ability to classify various different types of planets throughout the universe, and we have identified that there are trillions of earth-like planets in the portion of the universe we have observed so far, which could potentially sustain life. In fact, after observing such a large portion of our universe much of the scientific community believes that the conditions under which life on earth developed are so common in other solar systems that it is shocking that we Continue reading Why Aren’t There Aliens? Why We Might Be Doomed→