Ice-cream sandwiches


A History of College Grade Inflation

From Economix:

The researchers collected historical data on letter grades awarded by more than 200 four-year colleges and universities. Their analysis (published in the Teachers College Record) confirm that the share of A grades awarded has skyrocketed over the years. Take a look at the red line in the chart below, which refers to the share of grades given that are A’s:

Most recently, about 43 percent of all letter grades given were A’s, an increase of 28 percentage points since 1960 and 12 percentage points since 1988. The distribution of B’s has stayed relatively constant; the growing share of A’s instead comes at the expense of a shrinking share of C’s, D’s and F’s. In fact, only about 10 percent of grades awarded are D’s and F’s.

I wonder if there’s a similar trend in Singapore.

Golden Balls: Split or Steal?

A variant of the prisoner’s dilemma:

So this was the payoff matrix they faced:

Stealing is a weakly dominant strategy: regardless of whether Sarah splits or steals, stealing always gives Steve a payoff that’s at least as good as splitting. Orange and red indicate the three Nash equilibria, where neither player has an incentive to unilaterally change his or her action. What’s most interesting however, is the strategy of both stealing. In fact, “both get nothing” isn’t exactly representative of the payoff to the loser. After all, if you were Steve, wouldn’t you feel a little consoled if you managed to thwart her plans? At the same time, wouldn’t you be much more upset if you simply allowed her to get away like that?

Some payoff clearly needs to be added for revenge. Indeed this is an important finding in the ultimatum game, where people offered significantly less than a 50-50 split typically choose to punish the other person by rejecting the entire sum. Not economically rational, since getting a little is better than getting nothing; but this experiment shows the importance of emotions in decision making.

Steve wasn’t rational by any measure, but maybe he did it on the (mistaken?) belief that many wouldn’t be able to walk away with that kind of guilt. In her defense, Sarah can truly claim to be a rational economic agent.

Bill Gates Flabbergasted by Gmail

Interesting read on The Motley Fool:

“Have you played with Gmail?’ I asked [Gates in 2004].

“Oh sure, I play with everything,” he replied. “I play with A-Mail, B-Mail, C-Mail, I play with all of them.”

My editor and I explained that the IT department at Newsweek gave us barely enough storage to hold a few days’ mail, and we both forwarded everything to Gmail so we wouldn’t have to spend our time deciding what to delete. Only a few months after starting this, both of us had consumed more than half of Gmail’s 2-gigabyte free storage space.

Gates looked stunned, as if I offended him. “How could you need more than a gig?” he asked. “What’ve you got in there? Movies? PowerPoint presentations?”

No, just lots of mail.

He began firing questions. “How many messages are there?” he demanded. “Seriously, I’m trying to understand whether it’s the number of messages or the size of messages.” After doing the math in his head, he came to the conclusion that Google was doing something wrong …

Gates’ implicit criticism of Gmail was that it was wasteful in its means of storing each email. … Despite his currency with cutting-edge technologies, his mentality was anchored in the old paradigm of storage being a commodity that must be conserved.

A star in the making?

I came across this article today on NYT:

How do you help brick-and-mortar stores sell books? Throw in an e-book.

That is the idea of one publisher, Algonquin, which began a promotion in 300Barnes & Noble stores this month that gives a discounted e-book to customers who buy an Algonquin trade paperback. The publisher has planned a similar effort for October, giving customers who buy a hardcover copy of “When She Woke,” by Hillary Jordan, the digital version of the book free.

I’m not sure about others, but I’m not too keen on having both versions of the same book. One publisher concedes as much:

Several publishers have experimented with bundling, whether by grouping several e-books together for one price or selling a print book paired with an e-book. “Consumers are starting to feel like, ‘If I’m buying the book, why do I have to buy it several times to have multiple formats?’ ” said Robert S. Miller, the group publisher of Workman.

In fact, this practice is pervasive. Newspaper and magazine companies do that all the time – FT, The Economist, NYT, you name it – as long as you subscribe to the print edition, they throw in the digital edition. Do we really need two versions of the same thing? If not, why do they even bother?

Dan Ariely has an answer. In Predictably Irrational (yes, for the umpteenth time – I cannot recommend a better book), he discusses how The Economist uses this strategy to help potential customers make up their minds. Look at the following ad, and before you read on, try and decide which of the three you’d pick if you were planning to subscribe to the magazine.

Internet: $59; Print: $125

Can’t decide which is better? Look at the third option. Internet + Print: $125. Wait, are we missing something? $125 for Print AND Internet? The Internet version is free (gasp) with the bundle! What’s going on here?

Putting these three options side by side, we can guess what The Economist is up to. All of a sudden, the third option seems so much more attractive than the other two, both of which have probably been giving you a tough time. Marginal cost of throwing in the digital edition: Negligible. Marginal benefit: One additional Print + Internet customer, who thinks he’s gotten himself a bargain.

Ariely’s point is that we rarely think in absolute terms; more often than not, we “focus on the relative advantage of one thing over another, and estimate value accordingly.” And my point, is simply that this ostensibly strange strategy of throwing in a digital edition for free is not that strange after all.

All that talk about ebooks – how does the ebook compare with the print book? Here are some statistics:

For the wide range of free books that’s available online, I know I’ll hop onto the ebook bandwagon soonBut for me, it’ll never replace the print book.