Both in blogging, and pretty much in real life. One of the things they don’t tell you about being the continental United States is that everyone on the east side of them likes to punish everyone on the west side of them by starting teleconferencing calls at six in the morning. Meanwhile, I was also running to a Geneva morning deadline the night before. Then I went into work. Then I went to a kindergarten parents-meet-your-new-parent-friends thing. And then I went home, and closed my eyes for a few minutes. Fourteen hours later, I wake up, and it’s time for a GMT teleconferencing call with the ORG advisory board. Honestly, I feel like Sputnik.
Anyway, I missed a day, so I will try and reward you with an extra item some time this week.
Right now, I’m puzzling over my “future blog title ideas” notes. My favourite one just says:
“I Can’t Stand It I Know You Planned It — I’m Telling Y’all It’s Arbitrage”
I think this comes from me mulling about how poorly-distributed information continues to be. I recently spent a (for me) large amount of money on a dental crown done by a (fantastic) San Francisco dentist, even though I have a fair hunch that I’m a good candidate for dental tourism.
I was recently smart enough to avoid the used-car-salesman miasma of mattress shops (do not ask me why mattresses are crazy mark-up commission shyster heaven in the US: I imagine there’s some inspirational bed-bilionaire in the twenties who wrote something called “Bed bucks! How to take $$$ from other people’s mattresses!” that led to it all). But I didn’t go really low; at some point I ended up thinking “well, a bed should cost slightly higher than I think possible, otherwise why would everyone else spend this kind of money?”
Is it a false economy to be simply not be bothered to care enough to do arbitrage? The perfect model for this carefully-planned laziness is my friend Gilbert, whose sofa I am currently blogging from. Gilbert’s Heuristic of Product Purchasing states “always buy the second-most expensive version of the item you want”. Obviously, only mugs buy the most expensive item. But I think you can agree there’s something a bit wrong about the really cheap stuff?
Then, on the other hand, I will always spend at least three man-years searching for the cheapest airflight from SFO-LHR. And, I should say, probably blow the money saved on the Heathrow Express instead of riding the underground with all the other cheap-ass plebs when I get home.
I think many economists would view me as being fantastically irrational. But I like to poke them in the eye and say “revealed preferences”. And my revealed preference is that I put a lot of value on my sense of tedium. Hunting down bargains needs to be more fun before I’m going to ever be a streamlined monster of economic dynamism.
September 11th, 2008 at 6:03 am
The problem with the “buy the second-most expensive version” rule is that you end up with an Atari ST instead of an Amiga. Consequently, you spend the rest of your life feeling less connected with your uber-Geek friends who blather on about blitter chips and so suffer a permanent inferiority complex.
September 11th, 2008 at 7:13 am
The cheapskate version of that rule (always buy the second least expensive item) is why cheap Hi Fi vendors always do at least two models. They’re identical except for the fascia. Oh, and the price.
September 11th, 2008 at 8:13 pm
I did indeed have an Atari.
September 25th, 2008 at 3:50 pm
“Is it a false economy to be simply not be bothered to care enough to do arbitrage?”
No. What you’re engaging in there is ‘bounded rationality’ – the time it
takes to discover the 100% rational choice is typically not worth spending
when compared to making a quick-and-dirty near-rational choice and then getting
on with something else (see George Akerlof, Herbert Simon).
‘Near rational actor’ is probably a better model for real-world human behaviour
than the rational actor of classical economics. Unfortunately, the aggregate
effect of a bunch of individuals making near-rational choices can become quite
irrational on a macro level – eg during a time of falling house prices, individual
property vendors may all be waiting for others to reduce their asking price
before they do so themselves – a near-rational tactic, but if everyone does it
then no-one will ever sell their house. (see Boston housing slump of 1989, or parts of the UK, now)
FWIW, I too had an Atari. Could you Amiga people play 16-player MIDI Maze? Thought not.
September 26th, 2008 at 9:45 am
Yay for me! I’m satisficing!