In my experimental economics class 2 years ago (wow, it’s been that long?) we studied something called the Winner’s Curse. Essentially, what happens is when the winner of an auction (of a common value type) typically overpays for the auction. In some sense it’s a phyrric victory. Of course, the extreme form is by overpaying. [...]

I will be first to admit I first fell in love with economics thanks to Levitt and Dubner. The first Freakonomics book transformed my view of economics, from a drab and dull (and dry) subject, to something far more interesting. I guess my career path wouldn’t have been as an economist, if I had never [...]

A Pareto Optimal Choice
Wait, wait, wait!! Before you go “again, Chewxy blogging about his groceries pattern”, this is not about MY groceries. But yes, you’d guess right, I’m going to talk about some economics in this one.
The reason for this blog is because I read Dan Meyer’s blog article about optimizing queues in, well, a [...]

In keeping up with my fetish of blogging about my groceries, I went groceries shopping yesterday and was rather alarmed with a relatively large groceries receipt. It was more than twice what I usually spent per week, and the food I bought won’t even last me for a week. Alarmed, I went through my receipt, [...]

Note to self: I don’t think self-promotion in an exam paper is a good idea. I’ve done it twice already O_o. I don’t think I should do it in the next exam.
I’m quite glad I blogged about this. It came out in the exam. I don’t think I did a good job explaining it though [...]

I am not a mathematician. I can point you to one, though – Kurt Godel. He is dead, so I guess you gotta wait till the End Times or the scientists at Umbrella Corp to perfect the zombie creating virus. Kurt will tell you that any consistent set (such as the [censored, exam topic] set) [...]

This is Fehr and Schmidt (1999)’s inequality aversion model (I really should install LaTeX):

alpha represents the coefficient of envy, and beta represents the coefficient of guilt.
Now this model assumes that one is indifferent towards people who have the same payoff as one. Why am I bringing this up? I dunno, actually. I’ve been doing some [...]