Today, the worst franchise in the NBA took back the former name from the team who bolted from Charlotte to New Orleans back in 2002. With the New Orleans changing their name to the Pelicans for the 2013-2014 season, the opportunity for Charlotte to reclaim their name was right in their palms. Or wings.
Either way, Michael Jordan, majority owner of the former Bobcats, recognized an opportunity to rebrand the team and potentially ditch the negative vibes of the worst team in the league. On the other hand, the past Hornets have failed to achieve higher bragging rights over the past few years themselves. But change is good. Change cannot hurt.
The small market teams in the NBA hang tight to the revenue sharing that is mandated by the league. These teams, including Charlotte and Cleveland, have had trouble sustaining high levels of interest in their teams. For a few, winning has been a formidable solution (Memphis). These standards, do not hold up throughout the Big 4 sports (Tampa Bay Rays) and are always questions of what will draw crowds to games.
All in all, this is by far the right move for the Bobcats. The team is definitely rising (take note they are not "on the rise"), but proper rebranding may help bring national interest to a team that has been nothing but an eyesore since 2004.
Evan Amano
From Economic Analysis to Everything Else...
Monday, May 20, 2013
Sunday, May 19, 2013
Revisiting Predictably Irrational: Beauty and the (Slightly Less Attractive) Beast
Dan Ariely's Predictably Irrational is one of my favorite books that I have ever read. The topic combination of economics and the truth behind human nature was a match made in heaven. Today, I recall one study that Ariely specifically discusses: relativity.
The understanding that humans are bound to act against the rational decision making is tough for many stiff minded scholars to grasp. Sure, we can assume that all competitors will reach economies of scale, allowing the customer the lowest price at all times. In reality, the key for any goods and services does not matter in the grand scale of things, but more so what is going between you and the competitor in the vicinity. This delves into matters of recognizing the differences between Comparative and Absolute advantages.
Ariely's best relativity example in my opinion was the relativity of beauty. The main argument is that if you were to go out with one of your friends (preferably one who looks more or less alike), whoever is naturally more "attractive" will ultimately have an easier time finding a mate. Reasoning? Yes, justification exists.
Say you are set to compare 3 subjects. A and B would be both you and your closely (yet less attractive) looking friend. C, on the other hand, will be a person similar attractiveness to A, yet will look completely different (blonde hair and blue eyes, or vice versa to your own traits). Your admirer will look at all 3 of the potential mates, but find a natural base of relativity when judging A and B. Because there is a benchmark for A to be judged, the ability to recognize attractiveness is likely to ensue, allowing a higher probable victory over C.
While this will never be a 100% sure thing, I can state that the relativity theory will up the probability higher than a standalone challenge between A and C. For more information, purchase Predictably Irrational and enjoy the rest of the fun, exciting tests that Ariely runs on the guinea pig undergrads of Duke University!
Note: Ariely advises to never let your less attractive friend know your actions. I advise the same.
The understanding that humans are bound to act against the rational decision making is tough for many stiff minded scholars to grasp. Sure, we can assume that all competitors will reach economies of scale, allowing the customer the lowest price at all times. In reality, the key for any goods and services does not matter in the grand scale of things, but more so what is going between you and the competitor in the vicinity. This delves into matters of recognizing the differences between Comparative and Absolute advantages.
Ariely's best relativity example in my opinion was the relativity of beauty. The main argument is that if you were to go out with one of your friends (preferably one who looks more or less alike), whoever is naturally more "attractive" will ultimately have an easier time finding a mate. Reasoning? Yes, justification exists.
Say you are set to compare 3 subjects. A and B would be both you and your closely (yet less attractive) looking friend. C, on the other hand, will be a person similar attractiveness to A, yet will look completely different (blonde hair and blue eyes, or vice versa to your own traits). Your admirer will look at all 3 of the potential mates, but find a natural base of relativity when judging A and B. Because there is a benchmark for A to be judged, the ability to recognize attractiveness is likely to ensue, allowing a higher probable victory over C.
While this will never be a 100% sure thing, I can state that the relativity theory will up the probability higher than a standalone challenge between A and C. For more information, purchase Predictably Irrational and enjoy the rest of the fun, exciting tests that Ariely runs on the guinea pig undergrads of Duke University!
Note: Ariely advises to never let your less attractive friend know your actions. I advise the same.
Saturday, May 18, 2013
A Return to the Blog
Tomorrow will embark my return to the blognation. For many reasons, I have decided that I need to continue working on my writing abilities, while also keeping up with today's current events. Instead of my previous economics-only posts, I hope to diversify the blog out to matters related to anything that surrounds everything.
So, in essence, I will cover all that I feel like covering. Tomorrow is a new day. A new blog day indeed.
So, in essence, I will cover all that I feel like covering. Tomorrow is a new day. A new blog day indeed.
Thursday, May 10, 2012
The Way of the Future? Self-Driving Cars
The
self-driving car may have seen as a futuristic joke in the 90’s, but in 2012,
we can see the cars as a reality. CNN
Money reports on Google’s progress in creating a self-driving car, where the “driver”
can be the passenger.
While
the driver must remain in front of the steering wheel, Google uses GPS, wheel
motion sensors, and radar in order to properly maneuver on surface streets and
freeways. The car has the ability to
recognize objects (people or cars) that are within striking range, and properly
adjust to avoid any accidents.
Peter
Valdes-Dapena believes that these cars will help save lives in the future. As of right now, some of the technology has
already been put into effect on normal cars for better safety measurement. As long as the product is fully tested,
Valdes-Dapena believes that wreckless driving may be a thing of the past.
I
believe that the self-driving car can protect lives, avoid speeding tickets,
and overall create a better environment on the road. But these thoughts go with some concern. First, what will be the cost of the
self-driving car? There seems to be no
doubt that having the ability to not have to drive will be invaluable, but will
customers be interested in paying a premium for driving? Many believe that they are qualified drivers
who can man the wheel, but there are always will be accidents with this
inherent mindset. Sure the person next
to us has gotten into an accident, but that will never happen to us. So why pay that premium for the self-driving
car?
Next,
we should consider the art of driving.
There are those out there who love to drive. I personally enjoy getting behind the wheel and
cruising on the highway. Will people
really care that much about safety to give up an activity they thoroughly enjoy
doing? I can’t see that happening. As long as people are manually driving, accidents
will still occur at alarming rates.
Another
note on personally driving can be seen in the sports industry. Formula One, NASCAR, and any other driving
sports can’t be happy about the self-driving car movement. NASCAR, a dying sport for numerous reasons,
can’t afford to tack on the fact that more and more people could be pushed away
from manually driving their car. The
reactions of the auto racing industry will be interesting to view as the
self-driving car continues to develop.
Lastly,
there is going to be some debate over safe driving in a self-driving car. Will the same rules apply to drinking and
driving? While the car may be able to
drive it, as stated in the article, a person still needs to be in the front
seat overseeing the actions of the vehicle.
How will law enforcement be able to determine the state of a person
driving a car that may seem to be driving rationally? There are so many variables that make me
nervous about levels of intoxication and the appropriate times to get into a
self-driving car. Only time will tell on
whether being able to distinguish intoxicated drivers and intoxicated drivers
in a self-driving car is actually different (or better).
Reference:
- Valdes-Dapena, Peter. “Why Google’s Self Driving Car May Save Lives”. CNN Money.
Monday, March 12, 2012
Pensions in California Go Wild...
Pensions incentivize people to stay employed with
companies for the long haul. Pensions
avoid relocation loss in efficiencies.
But what happens when pensions lead to the destruction of entire cities?
Steven Greenhut writes a piece about the current
status of Stockton and its near bankruptcy run due largely to the heavy amounts
of money due to government pension plans.
In the article, Greenhut states that there are 94 people who are
currently receiving over $100,000 a year in their pension plan in Stockton. That number is double the amount of a
relatively similar sized city in California.
There are also 15,000 total Californians receiving $100,000+ pension
plans, which take away a big question mark to where government money could be
better off spent.
Now, this is all within Greenhut’s opinion. It is true that these people who are
receiving these luxurious pension plans have worked hard and deserve a solid
foundation heading into retirement; however, the problem exists when we see the
state of the economy. It would seem
logical that these numbers would be adjusted when times have changed in order to
benefit the entire economy. Instead,
California is stuck with a few wealthy government retirees and tons of troubled
civilians in the rest of the state. Balance
within the economy is the crux to a successful state, and unfortunately, this
isn’t benefiting anyone in the long run.
While it seems largely unfair to strip retired
government officials from their golden parachutes (to some degree), our
government should be reevaluating the way that pension plans are structured in
the future. If we are giving the same
rates that have been offered in the past, we will never be able to dig
ourselves out of this crisis in the future.
Yes, creating flexibility in pension plans would be violating the exact reasoning
the plans themselves are typically established, but in times of uncertainty, it
is difficult not to readjust.
Take for example quantitative easing. If we hadn’t been able to print more money to
try and stimulate our economy, the United States would have crashed and burned
so hard that we would still remain in a recession.
There is always a need to reevaluate
situations and adjust to the surrounding environment. Sometimes this occurs at huge costs, but as
long as the benefits are higher, especially for the long run, we must be
willing to sacrifice for the greater good of the country.
Reference:
- Greenhut, Steven. “If Stockton is Broke, Then Why Isn’t San Diego?” Bloomberg. http://www.bloomberg.com/news/2012-03-02/if-stockton-is-broke-then-why-isn-t-san-diego-steven-greenhut.html
More on Education, Krugman's Logic
Here
is a further pursuit on the effects of policy on the US education system. Paul Krugman wrote a piece about the current
state of our education system, and Krugman specifically targets the right wing
for impeding on the growth of youthful minds.
The whole argument surrounds religion, and how colleges in the south
have even parted away from certain majors that may contest what the bible has
stated.
This
question really sparks what I believe is a greater problem beyond the point of
hindering human capital in America. The
standards that have been set by each party is something that I have had a
problem with.
Especially
in the recent election, the GOP has reached out to focus on social hot button topics
that ultimately ruin the opportunity for the fiscal policy to be implemented. The economy should come first in the
government system with the struggles of current times.
Another
point to note is the final argument in Krugman’s piece. If colleges are taking away certain majors in
science departments, we are seriously crippling diversity in college
education. As of today, science majors
have some of the highest growth potential, with innovation continuously occurring
in the fields of science.
The
consequences of fewer schools offering science courses could cause a heavier
flow of other majors to become impacted, including business and economics majors
(two of the higher impacted majors already).
My
opinion is that it is likely that students going to colleges that aren’t
offering these majors are schools with religious backgrounds. Because of this, students aren’t going to be
likely to partake in the same beliefs, hence little effect to the development
in major diversification. Even though it
may not be the best for human capital growth in America, everyone should have a
choice in what they want to pursue as a career.
In this case, Professor Krugman may be overlooking this matter, and
should respect people’s decisions to follow their beliefs in their careers.
Reference:
- Krugman, Paul. “Ignorance is Strength”. NY Times. http://www.nytimes.com/2012/03/09/opinion/krugman-ignorance-is-strength.html
The Retail Numbers Should Be Marching
As
we see growth in the US job market, we can only hope that we begin to see growth
in the retail market as well. Reuters
reports that currently, the United States economy hasn’t quite built up to the
proper level of retail sales since the growth of the economy has started to
climb back over the past months. Stella
Dawson insists that because retail is responsible for 2/3 of the economic
activity in the US, the stability of the economy will eventually rely on
consumers continuing to buy products.
Dawson
points out that not only has the job market improved, but more people are
starting to buy cars in 2012. As
historical data can explain, people choose to save more during tougher
times. In the past few months, more
Americans are feeling confident with the state of the economy. In the next few months, it would be safe to
bet that people are going to continue to trust more in the economy.
The Personal Savings Rate in the United States shows that people are saving less of their money as the US has started to climb out of the Great Recession. Hopefully this is a sign that the tougher times are behind us.
The
growth in the United States economy has come at a time when most of the other
major countries are struggling. China
has forecasted slower growth in the GDP.
Europe is still dealing with the constant threat of default by
Greece. But among all of this, the US
still has a chance to benefit and bounce back.
Dawson,
Stella. “US Retail Therapy Needed”.
Reuters. http://www.reuters.com/article/2012/03/11/us-economy-global-weekahead-idUSBRE82A0BT20120311
“Personal
Savings Rate”. FRED. http://research.stlouisfed.org/fred2/series/PSAVERT
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