A modern version of an old economists joke

You’ve all heard the joke about the Chicago economist who doesn’t pick up the $20 note on the pavement, as someone would have picked it up already.  All very good – it is discussed over at “Economist’s do it with models”.

The always brilliant SMBC has come up with a different take on this in his comic:

In both cases I think our problem stems from poorly defining the choice set – but that is sort of the point, it is an indication of how we can inadvertently misuse the EMH if we haven’t fully considered the types of expectations, the amount of competition involved, the existence of change from a steady state, and the general ideas of history dependent or emergent phenomenon.

Look, I didn’t say anything I said would be funny – but the comic is humorous ok!

 

Christmas cards from economists

Christmas is a time when economists are wheeled out to proclaim the benefits of giving cash. Of course, we’re not really that out of touch as a discipline and The Atlantic has sought to set the record straight. Drawing on the wealth of economists’ writing on gifts and relationships it has created some heart-warming cards that demonstrate our understanding. As it says,

In some cases, non-pecuniary values are important.

Merry Christmas!

H/T: agnitio

Subsidising mini-skirts

Shamubeel asked yesterday why the Government is asked to fix every perceived problem. As inspiration for his forthcoming post I present the latest initiative from a city councillor in Essex:

A council is considering urging taxi firms to provide cheaper cab fares for women who wear revealing clothes.
Brentwood Borough Council is considering the bizarre move in a bid to stop women wearing short skirts or low-cut tops becoming a target for sex attackers.
The council is considering discounted taxi prices so that ‘provocatively dressed’ women can be driven back home and have less of a problem getting a ride.

I have a feeling that he hasn’t really thought through the incentives it would provide.

Looking for stock advice? Buy a cat…

Via @NBR I came across this awesome article on the Guardian about a cat named Orlando that was pitted up against some investment professionals and students in a stock picking challenge. How did the cat pick stocks?

While the professionals used their decades of investment knowledge and traditional stock-picking methods, the cat selected stocks by throwing his favourite toy mouse on a grid of numbers allocated to different companies.

And the results? Orlando the cat unsurprisingly (to anyone who has studied finance and whose job isn’t giving investment advice) earned more money than the professionals.

At least the kids didn’t beat the pros, that would be embarrassing if they did….