Mix-Tape of Good Findings
Today’s Newsletter is a mix-tape of things I learnt this week.
Reading Time - 3 min
On Revealed Preferences
I’ll start with a joke. The first time I read it, I struggled to get the joke.
Here is the joke.
Two Economists walked into a Porsche showroom. One of them pointed at a shiny car in the window and said. "I want that". Obviously not, the other replied.
Pause. And 2 seconds of reflection.
Let me explain. This is about revealed preference in which decisions followed by actions reveal true preference, not just verbal intent. In other words, judge by actions and not by words. In the case of a startup evaluating if customers would pay, one can’t establish through verbal preference alone, one needs to have actual proof. One needs to give people an option to pay and see their actual responses. This is useful for evaluating the outcomes of a verbal choice.
Another example would be your sister telling she likes steamed broccoli for dinner but quietly skips if it is ever served on the table.
On Cycling
Moving back home during this pandemic, I rediscovered cycling. Bicycle is a uniquely human invention. Utilizing the strong thigh muscles to roll a wheel ahead, the pedalling motion is harmonious with the human body. If plotted on a chart of energy vs efficiency, cycling is an outlier. Also, it’s one of the activities with a positive externality. The activity of cycling has positive effects on others. Every new cyclist brings sensitivity to the car-driver that a cyclist needs to be considered on the road. And maybe over time, we get bike-lanes everywhere.
Here is a read on the history of why Bicycle was not invented earlier?
In History- Carthage
When Google launched a social networking rival, Google Plus in 2012, Mark Zuckerberg put Facebook in a state of "lockdown" and informed employees that "Carthage must be destroyed.”
The term “Carthago delenda est” or Carthage must be destroyed is often used as a reference to a core belief by repeatedly emphasizing it. Cato took 40 years, with each speech ending with “Carthage Must be destroyed” to finally convince Rome to attack Carthage. Today Carthage would be in modern-day Tunisia, North Africa. What made Carthage prosperous was their efficiency in making ships. In fact, they numbered their ship components like IKEA furniture. Once Romans captured a ship, by just looking at the numbers they were able to reverse-engineer 220 ships in 45 days. By the end of three wars, known as the Punic Wars, Carthage was completely destroyed. In a matter of 17 days, the great civilization was burned in a planned inferno by the Romans.
On Consistency
This is an absolute feel-good of a chart.
If you are feeling low or lost, have this chart saved up on your phone.
https://blog.stephsmith.io/how-to-be-great/
Additional Reading Links
https://medium.com/incerto/how-to-be-rational-about-rationality-432e96dd4d1a
Have a nice weekend:)
Write to me for any feedback. Would appreciate.