Hillary DeathWatch

Human Misjudgments

Great blog entry summarizing Charlie Munger's (Warren Buffet's right hand man) speech "The Psychology of Human Misjudgment." The first two points are the most interesting: (1) people underestimate the power of incentives and (2) people like being liked which leads to bad decisions. I also like the brief take on curiosity, although i don't know why that is a negative.

Click Here for the blog entry.

Feist on the Colbert Report

At the beginning and the end of the video you can see Stephen wearing Feist's outfit from the Apple commercial.

Data Visualization and the 2008 Election

Who talks about whom in the political debates? I found a cool dynamic
diagram on the NY Times that shows you which candidates mention other candidates names and how often.

Data Visualization and Taxes

I have been reading more about data visualization tools and techniques recently and came across a very cool data "picture" created to show how the US government's budget breaks down. Thinking about the nitty gritty of the federal government's budget it seems fairly boring
but when the idea is presented in a visual way, it suddenly becomes a lot more interesting.

Jesse Bachman, a graphic designer, created the picture below. If you go to his website, you can see the poster in more detail.

The Purple Cow and Zappos

I recently read the Purple Cow by Seth Godin. This book came out a few years ago so I am a little late to the game on this one. That being said, the book was great. Godin's thesis is that to build a great business, you need to product something that is truly "remarkable." If you make something remarkable, your customers will do the marketing for you. A product or experience that is simply average is a loser; no one tells their friends about average experiences.

You can be remarkable in a number of different ways. It doesn't necessarily mean you need to invent the next ipod. A great example that I came across recently is Zappos. I have been a loyal customer of Zappos since 2003 when a friend told me about them. I always had great experiences with them and incesently told my friends about them. Little did I know, that was Zappos' exact strategy. Zappos CEO, Tony Hsieh, recently came and spoke at eBay's speaker series. In short, Zappos' strategy and culture are all centered around customer service. They think of customer service dollars the same way they think about marketing dollars. The no. 1 company value is to "Wow" customers. (This happened to me recently. I ordered shoes at 4pm on a Wednesday and based on past experiences, was expecting to get them Friday. I got the shoes at 10am on Thursday. I immediately told everyone around me.)

In fact, the way they allocate their resources is to figure out what operating profit they want to make, do everything they want do with customer service and then anything extra goes to either product or marketing.

As consumers, we can all think of MANY bad customer experiences. By going over the top and providing a great customer experience, Zappos is being truly remarkable.

Placebo Effect WIth a Financial Twist

I just read about a new study on one of my favorite blogs (Freakonomics), about the placebo effect with a financial twist.  Subjects were given electric shocks and asked to rate the pain.  The subjects were then given a sugar pill and asked to rate the pain after the shocks.  However,  unlike other studies, the subjects were separated into two groups, one group was told the pills were $2.50 and another group was told the pills were discounted to $0.10 a pill.  Not surprisingly the groups given the pills rated the pain lower than when they hadn't taken the pills even though the pill had no medical effect.  

However, there was a statistical difference between the two different price groups.  85 percent of subjects in the first group ($2.50 per pill) indicated that the pain lessened after taking the pill while 61 percent of the group in the second group ($0.10 per pill) said the pain lessened.    Perhaps pharmaceutical price their drugs with this in mind?

 

Everything You Ever Wanted to Know About Prostitution

Stephen Levitt, my favorite economist, is publishing a paper on the economics of prostitution. The paper is full of fun facts including:

--> 3% of sexual acts are given to police to avoid arrest

--> Sunday and Mondays are the slowest days of the week for business
and friday is the busiest

--> supply of prostitution is fairly elastic (july 4th a lot of temps
come in for the surplus business)


For those in the market, the paper is rich with information on pricing (a menu of sorts).

I emailed the paper to a friend of mine who found a very funny quote from the paper:

"Prostitutes who work with pimps have higher wages and better conditions (largely because pimps drum up supply).

Reflecting this, many of the prostitutes who didn't have pimps asked Levitt and Venkatesh (Levitt's coauthor) if they could please link them up with pimps. L&V planned a randomised experiment (randomly assigning prostitutes to pimps), but before they could carry it out, the pimps got angry at Venkatesh and told him that he would be killed if he returned. "

Data and Maps

I discovered a great new website called Understanding USA with my favorite internet channel surfer StumbleUpon. The site is full of interesting data presented in unique ways. My favorite is the distribution map, shown on the right, which depicts the areas of the United States are the most populated.