The Perils of Automatic Pricing
In response to our post about the Amazon.com price difference for Caucasian and African-American dollhouses comes this interesting e-mail from a reader named Stephen Fidele:
Read More »Back in the day, I used to work at CD-Now, which was the largest retailer of music on the internet right around 1999-2002. For some strange reason, I was placed in charge of “pricing.” Say our normal price for a CD was $17.99 … but if that CD hit the “Top 100” we reduced the price to $13.99. Now imagine that we have a CD by a rap artist that has some pretty strong lyrics in it. We also have a “toned down” version, so that parents can protect their children. Invariably, the hardcore version would hit the Top 100 and the price would automatically fall, and I would receive boatloads of complaints from parents asking why the “toned down” version cost more … just one of the problems when you automate a system. We had a similar problem when Joey Ramone (of the Ramones) died. All of their old stuff went back to the Top 100, and the system automatically lowered the price … I fixed that in a hurry! Anyhow, I am not sure if the “powers that be” at Amazon are aware of even the possibility of this situation. Again, it’s more of a systems problem than anything else.
What Makes a Rogue Trader Tick? A Q&A with FT Columnist John Gapper
The rogue trader is a recurring character in the story of finance over the last 20 years. This is the guy who makes secret, unauthorized bets with his bank’s money, driven by some seeming combination of inadequacy and a huge appetite for risk, and abetted at times by an amazing lack of internal controls.
The deeper he goes, the harder he has to work to conceal his deception until one day, it inevitably comes crashing down. The bank loses billions, the trader (sometimes) goes to jail. The story is repeated every several years. The latest version broke in September when UBS announced it had lost more than $2 billion as a result of rogue trader Kweku Adoboli.
In his new e-book, How to Be a Rogue Trader, Financial Times columnist John Gapper explains why this story has become so familiar over the years. As he puts it, the rogue trader is a species of sorts within the world of finance, a special breed with certain behaviors and characteristics that are consistent through time. Gapper delves into evolutionary biology and the research of Daniel Kahneman to better understand the nature of men like Nick Leeson, Joe Jett, and Jerome Kerviel. Read More »
“Death to Pennies”: Hear, Hear!
It pleases me to no longer be the only guy complaining about the penny.
This anti-penny rant was quite good.
But this one is even better: Read More »
Why Is It Easier to Copyright an Unhealthy Yoga Routine than a Healthy One?
You might wonder first how yoga, dating back thousands of years in India, can be copyrighted at all. (Not easily, as we will explain in a moment.) But the question we raise emerges from a very current dispute between two rival yoga studios.
Bikram Choudhury is the founder of Bikram Yoga, a popular chain of yoga studios frequented by celebrities such as Lady Gaga and David Beckham. In Bikram Yoga classes, students enter a room heated to 105 degrees Fahrenheit to perform a set of 26 traditional poses and two breathing exercises. While you might think demand for this would be low, “hot yoga” has made Choudhury very rich. He has a villa in Beverly Hills, and a collection of more than three dozen Rolls-Royces and Bentleys. Read More »
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