Apr

30

Prom king and queen1. It is absurd to contemplate the ¼% movements in the S&P these days within a two minute period and to realize without looking at the news or having any outside contact that one can predict exactly what it was. A man was spotted at an airport in a polyester suit with a briefcase labeled S&P, Moody's, or Fitch depending on how South the airport was and the extent of the move.

2. A very interesting article in the Economist of Feb 2010 says that "the market makes the manners." The gist was that during the height of the economy tailspin everyone was nicer. A merger specialist says that when he went to tout a deal to a bank CEO, the bank CEO in the past would have his secretary usher him out after five minutes as he walked past 50 of his competitors. Now he says he gets an hour interview, the bank CEO tells him what the strategy is, and then walks him out to his car. Similarly with venture capital firms taking a few hours to tell management consultant how they see things. What is the economic explanation for this? The Freakonomics explanation? Or the Landsburgian explanation? And what is the market significance of this? How can it be used in romance and money-making?

Alston Mabry comments:

One thinks of the difference between the girl who has ten boys asking her to the prom, and the girl who has only one. Maybe there is an optimal number of suitors to maximize humility and minimize bitterness — say, two.

But the idea of manners, and the recent televised Capitol prom to which the former partners were invited (and surely there will be more dances this season), brings to mind Tullock and his insights about productive versus unproductive competition. How much greater is the aggregate cost than the illusory benefit?

Tyler Cowen suggests: 

More "marketing" because companies are more desperate for new business.

Also, high unemployment means that higher IQ people are in lower-tier service jobs and higher IQ people are in general more cooperative.
 


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