@rgumental @dvisor

John Nash died last week. Someone asked me about the significance of his work and the so-called Nash Equilibrium & Game Theory which won him the Nobel Prize. It made me think a while.  Lot of economic theories are just theories with very little practical applications. Is this game theory like that ?  Much of the geo-political situations , competitive decisions in many industries can be modeled by applying game theory principles. If you model the problem correctly, this can give you pretty good insights into your competitor's strategy & give a lot of structure & logic to your decision making . I could think of no better example than the looming possibility of Greek default & subsequent exit that media has labelled as the Grexit question But before that, how do you translate / model a problem into a Game Theory situation where we can apply the Nash Equilibrium principles . I stumbled upon a structured approach  illustrated very well here   ...

 I'm a great fan of Carrefour Loyalty programs scheme here in UAE. I think Indian retailers ought to learn a thing or two from the way they have designed it, purely from a perspective of maximizing long term profit .. I haven't seen anything close-by to the way this operates - may be its there in the developed markets of West. Carrefour operates this loyalty points scheme - for every purchase, you accumulate varying number of points depending on the items that you buy. Once you reach 500 points, you get a 50 AED voucher.  There are two kinds of underlying point boosting schemes -  on certain days there are things like extra points / double points thats available to anyone who buys certain products  . These are presumably linked to Inventory clearing items.  So, sometimes, you get extra points for buying washing liquid , sometimes for biscuits etc.  Why I feel this is linked to inventory clearing  -  These items are usually set at the start of t...

The chorus of 'open' , 'neutral' and 'free'  tend to capture the imagination of social media quite quickly. Back during my school and college days, there was this enormous campaign for 'free software' , without realizing what was 'free' in that context. Likewise , over the last month, the Net-Neutrality campaign has caught up the attention everyone . Much of this is misunderstood  & misinterpreted by the media. The basic underlying question in this whole debate is - 'Can an internet service provider prioritize / de-prioritize certain content over the rest' ?  It is not easy to answer that unless you understand the underlying realities & implications. There is this concept called price discrimination in Economics. It is all about pricing different consumers differently for the same service. In airline world, there are a number of different fare classes for the same sector. So, it is quite likely that the passenger sitting ne...

Hardly did the aircraft touchdown, people started standing up and pulling down luggage from the overhead lockers, started ringing up their friends & relatives. ..Wow - I'm finally travelling in a sector just like my hometown Calicut where this happens on a regular basis. Welcome to Africa !!! . Finally I set my foot on the erstwhile dark continent & the  'untapped economic potential' of 21st century. The one hour taxi drive from Airport to Novotel hotel in central Cairo was so convincing that I don't think I'll ever dare to drive a car here . Driving here needs a different set of skills altogether. You zig-zag, you maneuver, yet you maintain the speed . The chaos in Cairo just reminded me of Mumbai. A city with an ever increasing influx of people, Everyone struggling to make ends meet .  The drive next morning to Giza was just like driving through a Mumbai suburb. The imposing pyramids took our breath away. The important thing about Egypt & Cai...

“You can get a car of any make done here. Half of the city drives a BMW”  - remarked our guide Ahmed, as he wriggled us through the narrow lanes outside Alexandria railway station. It was an exaggeration.. However, for those who wonder where the second-hand / third-hand vehicles of the developed world end-up, the answer is Africa.  An average car-workshop guy here should be much more skilled than a car-mechanic in the West. Here to succeed he needs to mix and match. Body of a Benz, engine of a Chevy, I guess you can find any combination here. We reached Alexandria after a three-hour train ride from Cairo. Though I did harbor expectations of capturing at-least fleeting images of the Nile Delta, those were quashed quickly. The feeling that you get while the train approaches ‘Misr’ station is exactly the same as that of train approaches to Mumbai or Delhi. Cramped & incomplete houses, people struggling to make ends meet, it is as good as any metro city in developing ...

A Swiss watch or vacation in Zurich is going to cost you much much more.. The more I read, more I feel like I should have taken a Swiss trip before the this  float decision Much has been written about this. For a good introductory read, you can check the  Mint article  . Most of the literature of this decision has focused on the macro underpinnings. While it is true that the macro factors forced SNB to take this decision, I think it is important to understand the micro-economic implications of currency pegging & its aftermath Switzerland is a country known for its political stability. It stood insulated from even the world-wars. Such a place , coupled with its banking laws naturally has an appeal for black & white money from risk averse people across the world. The currency pegging was introduced by SNB to protect the economy from the global financial crisis. For a country, preventing appreciation of currency is quite easy -- Just print more money. Th...

One of the electives that I took while in IIMK was this less fancied course - Complementary Products & Competitive Advantage  . The fundamental message in that course was in applying 'Platform Thinking' concept into a lot of situations . A platform could be thought of as an area where two or more types of consumers / producers join for their mutual benefit.  And the value of the platform grows as more and more consumers / producers join it.  Typical example of this is Card Payment networks - Visa & Mastercard.  So, if you are a card network provider,  merchants are forced to give that as a payment mechanism because consumers want that. And, more consumers joining the platform results in more merchants adopting it.  Like a domino / network effect. If executed well, it soon reaches a tipping point from where more consumers & merchants just adopt it. This concept could be extended to a lot of situations - Currency is a platform  ( explai...