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Calculating Consumer Happiness at Any Price

by Erik on December 13, 2009

in Economy, Interesting, Markets, Philosophy

If technology and systems didn’t come so naturally, I really believe that I would have become an economist. I just find it fascinating. The “business information systems” major was such a perfect fit for my abilities, that I didn’t really think twice about selecting it when I was choosing my major at Lehigh. But, as I continue to read up on the current economic climate, work in an industry where consumer confidence greatly matters to our offerings, and I uncover little gems like this article by John Tierney, I realize that my interests run far deeper than technology and design. I wonder if I should have studied more micro and macro economic principles than the 4 semesters I ended up with…

“Maybe, sometimes, old-fashioned economics is just about right,” Dr. Shayo says. “Maybe when it comes to food, people do have reasonably stable preferences. Some people like shrimp and some don’t, even if it’s worth a lot of money.” [via NY Times]

Check out the article. It’s a rather interesting read about consumer preferences and how price affects those preferences. Oh, how I fondly remember those indifference curves and plotting consumer preferences…

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The Life Cycle of a Business

by Erik on July 25, 2009

in Interesting, Philosophy

What is a business - anyway?  As usual, Wikipedia offers a pretty good definition:  “In economics, business is the social science of managing people to organize and maintain collective productivity toward accomplishing particular creative and productive goals, usually to generate profit.”  Not surprisingly, as is the case for any highly complex system or entity, this is just one of multiple definitions.

In quantum mechanics we learn that questions like “what is an electron?” are meaningless unless one also asks “what is your purpose in asking this question?”

An electron is sometimes best thought of as a particle, and sometimes best thought of as a wave depending on what models or measurements one is after. Similarly, one cannot separate asking what a business is from how one wants to use the answer. But I am actually most satisfied with the people-centric definition Wikipedia gives, because I truly believe it is the most important one.

[via Irving Wladawsky-Berger]

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