Author: SK

Axioms and fear

So it is around the time when I’m taking part in religious ceremonies that I question my religion, or lack of it. That’s when I need to interact with priests regularly, and sometimes talking to them is frightening. What is most frightening is their level of belief in certain things that I find absurd.

Lemma:
Every major religion is founded on a basic set of axioms. These axioms are designed in a way that they cannot be disproved scientifically.

Sure, there is no way to prove these axioms either, but then given that religion is the “defending champion” it has fallen upon the atheist to disprove the religious axioms. But the way these axioms are stated makes it extremely hard to disprove them. The best that most rational people can do is to call the axioms “absurd” and leave it at that, but that does nothing to convert people on the fence.

For example, take this concept of rebirth and reincarnation which forms the basis of a lot of Hindu thoughts. I find it absurd, and there is no scientific way to prove it (especially since the “universe” is so large since you could be reborn as any species). But there is no scientific way to disprove it either, which is what gives the proponents of this axiom more mileage.

The other thing I observe is that the easiest way to propagate religious thoughts is to create a sense of fear. Stuff like “say your prayers daily else god will punish you”. And then there are some selective examples (with heavy bias in selection) given of people who didn’t make the right religious noises and hence had to suffer. When faced with all this, the young child has no option but to comply with what the religious elders are telling him.

Then I realize that the way you are “taught” religion is extremely absurd. Growing up, you are simply taught a set of processes that you need to go through, without ever going to the significance of any of them. Even the axioms that form the basis of the religion are not exactly taught. In some cases, even the parents would have simply “mugged up the religious practices” and are in no position answer when kids ask them questions about these practices.

For example, when I read Dawkins’s book a couple of years back, I was shocked that there are people that actually believe that there was some “god” who created the universe. I’d always taken evolution as a given. Similarly while talking to priests yesterday (my mother’s first year death anniversary ceremonies are going on) I was shocked to find they actually believe in rebirth, and life after death. Of course, I do believe in Live After Death and think it’s an awesome album.

I just hope I’ll be able to inculcate a sense of questioning and rational reasoning in my kids, and help them protect themselves from blind faith.

Teaching Sustainability

So I was at an aunt’s place last night to celebrate Diwali, and we were celebrating with fireworks. Don’t raise a stink about my carbon footprint here since that’s besides the point. Also besides the point is that I spent a long time playing on the swing in my aunt’s house and thoroughly enjoyed himself.

So the deal is that most “night fireworks” are lit with sparklers (sursurbatti in Kannada). So in order to keep the fireworks going, it is important that there is at least one burning sparkler at any point in time. Now, it is a big pain to light a sparkler directly, using something like a matchstick or a candle. The easiest way to light a sparkler is from another sparkler. I’m reminded of the technical definition of a chain-smoker, who is defined as a smoker who uses only one matchstick a day – the rest of his cigarettes being lit from other cigarettes.

Anyways the point is that in order to light fireworks “sustainably” it’s important to keep a chain of sparklers going. It is important that before a sparkler burns out, you use it to light another, and so forth. That way you end up wasting little time in terms of lighting new sparklers from candles. So it is usually the duty of an “elder” (a role that I took upon myself last night) to keep the chain of sparklers going, so that the rest can have uninterrupted fun.

So what I found last night was that my niece and nephew, in their eagerness to play with fireworks, would end up taking sparklers from my hand faster than I could build the chain. It happened way too frequently. I would have just lit a sparkler when they would take it from my hands and not return it, thus preventing me from keeping the chain going. Clearly, they didn’t know how to light fireworks “sustainably”. They prioritized immediate gain to the “loss” in terms of time wasted in lighting new sparklers.

So it was down to incentives. Whenever the chain of sparklers was broken, it was up to either me or one of my cousins to make the effort to light a new sparkler “from scratch” and start a new chain. The kids weren’t involved in this, and were oblivious of the pain that their unsustainable practices caused. And got me thinking about how I could “safely” align the kids’ incentives with sustainability.

Soon the lamps in the garden ran out of oil, and that changed the whole ball game. Now, every time the chain got broken, someone had to go into the house to light a new sparkler and restart the chain. And being one of the younger ones around, it fell to my niece to go in each time the chain was broken and get her mother to light a sparkler. The incentives had changed.

Suddenly there was change in my niece’s behaviour. She suddenly became active in terms of keeping the sparkler chain going. She never took sparklers from me when I didn’t have a spare that would keep the chain going. When she saw sparklers in my hand burning out, she would bring new sparklers to me so that I continued the chain. Her change in behaviour was sudden, and significant. Her brother, who was deemed to be too young to run in to get new sparklers lit to start new chains, however continued in his profligate ways.

So this is like one of those posts that I call as “management guru” posts. Where I tell a long-winded story to describe a simple concept. The concept here being one of sustainability, and aligning incentives. So the point is that if you want to encourage sustainable use of natural resources, users’ interests should be aligned to sustainability. They need to be punished in the short run for drawing too much.

Gift List

So over the last few days there have been several people who have met or called me and asked what gift Pinky and I want for our wedding. Hari the kid, one such caller, even suggested that we need to make a wedding wish list and put it up on our wedding website or something.

Now the thing is that gifting is a hard business. Economic research shows that the average value to the gifted is much less than the average cost to the gifter, and thus gifts create a dead weight economic loss. This, however, is compensated by the good will that the gifter earns from the gifted (if it is a good gift, that is).

When the potential gifter asks the gifted what he/she wants, the intangible value (value of a pleasant surprise minus value of unpleasant surprise, appropriately weighted by respective probabilities) is substituted by the tangible value of greater value for the gifted per rupee spent by the gifter. Also, the fact that the gifter cared to ask what the gifted wanted goes some way in compensating for the intangible value.

Anyway the question is if we should put up a gift wish list on our website. Now, one problem with that is that people might perceive us to be arrogant. After all, in this era of “no gifts/bouquets please ” (we haven’t put that on our invite cards) people might get offended at our audacity of not just asking for gifts, but also telling people what to give us. Thus there is reputational risk involved, but we can explain on the same page the collective economic benefits of the wish list, so this might be taken care of.

The bigger problem is that if we were to put up a gift list the onus is on us to come up with a list of things that we want. We need to come up with a range of things such that it fits people’s varying budgets. There should be something in the list for someone who is willing to spend a hundred rupees on our gift, and also something for someone who is willing to spend ten thousand.  So in the middle of all the other wedding work for us, we also need to decide on what we want, what we don’t want, what kind of stuff we want, and so on.

Then there is quality control. We could well put up on the wish list that we want a LCD TV, but it would sure sound too audacious to be much more specific than that. And if the gifters were to get us some LCD TV that we would ultimately end up not liking, the dead weight economic loss to all of us is huge. So we need to be specific without being arrogant, which is even more work for us.

But I think we will end up making all the effort and put up a wish list, and hopefully that will improve the collective economic condition of us and our gifters.

Shoe Shopping

I went with the significant other last weekend while she bought shoes. And realized that the way girls buy shoes is completely different from boys’ decision process. Yeah, I know you’ll be thinking I’m just stating the obvious, and I might be doing that. And again, this post is based on two data points – myself and the significant other. I conveniently extrapolate.

Fundamental theorem of shoes: The number of pairs of shoes a boy owns is small compared to the number of pairs of shoes a girl of the similar age/socio-economic stratum owns.

I don’t think I need to give any explanation for that. The rest of this post is a corollary.

Corollary 1: The amount of time a boy spends in buying one pair of shoes is significantly larger than the corresponding amount of time a girl spends.

Yeah, this might sound counterintuitive, which is why I’m writing this post. So I think there are several reasons for this, but they all follow from the fundamental theorem of shoes
1. If you have one pair of shoes of a certain kind, you can’t afford to make a mistake buying them. You need to go through a careful decision process, evaluating various pros and cons, before deciding on your perfect shoe.
2. Boys’ shoes need to multitask. For example, you will wear the same pair of black leather shoes to office, and to that random wedding reception. The same sneakers you wear to play football might be worn for a casual evening out. So each pair of shoes needs to serve several different purposes, so the search space comes down accordingly
3. The cost of going wrong is too high – if you have a policy to own a limited number of shoes, and you buy an ill-fitting shoe, you have to live with that (or throw with extreme guilt) for a very long time.  This happened with my earlier pair of sneakers, with the unintended consequence that I went to the gym much less often than I’d planned to
4. The amount of time a boy spends in a particular shoe is much more than the amount of time a girl spends in a particular shoe. So it is important for boys that each and every shoe is absolutely comfortable and fits perfectly. Again increases search time.

Recently when I had to buy a pair of formal shoes for my engagement I drove Priyanka mad with the amount of time I took to decide. I visited several shops, tried out lots of shoes, walked around, walked out, visited more shops and so forth. And all this after I had decided I wanted a pair of brown shoes without laces.

Corollary 2: The average cost of a boy’s shoe “wardrobe” is comparable to the average cost of a girl’s shoe “wardrobe”

Yeah, unintuitive again I guess. But backed up by data. My shoes, on average, cost well over a thousand rupees. Priyanka’s shoes, on average, cost well under that. It’s a vicious cycle, and I don’t know where it starts. I want my shoes to last longer, so I want to buy shoes of better quality, so I end up spending more on them. Or it could be like I wanted my shoes to last longer precisely because they are expensive. But I’ll stick my neck out and say that all this stems from the fundamental decision of not wanting to wear too many pairs of shoes.

For a girl, the cost of going wrong with a shoe purchase is low, given the frequency with which she wears a particular shoe. Also her shoes don’t multitask, so she can afford to have a few pairs which are not exactly perfect fits, as long as they serve the purpose. She has this urge to shop for shoes, and with her monthly budget in mind she is naturally conditioned to not splurge on them.

So I was kinda horrified (not exactly, since this had happened a couple of times before) last weekend when Priyanka walked into a shop, picked up a pair of chappals from the shelf, dropped them to the floor, stepped into them for a few seconds and decided to buy them. They didn’t cost too much, so I guess the cost of going wrong was small, but I would’ve never done something like that.

Medical Insurance Subsidy

Exactly a year back my mother was in hospital. She was there for three weeks before she died. The bill for the three weeks came to close to four hundred thousand rupees. She was covered under my corporate medical insurance so I passed on the cost to the insurer, who paid most of it. I didn’t really complain, the insurer was obliged to pay, and the hospital was more than happy to receive the fee.

The hospital follows an interesting business model. On one hand it dons the garb of a corporate hospital while on the other it is a charitable hospital. A large section of the patients are treated at extremely low cost, or even for free. The rest of the patients have insurance coverage. Those that have coverage are fleeced, and this money effectively cross-subsidizes the treatment of the poor. All works out well for the hospital. Except..

Do you realize that when you (or, in most cases, your employer) pay your premium for medical insurance you’re not insuring just yourself? That because of hospitals like I just mentioned, your insurance is also effectively paying for the treatment of a larger population? That the cost of treating some random patient in the hospital you were admitted to is paid for by you, as part of your medical insurance premium?

Changing tracks, I think the best thing about India’s healthcare industry is the diversity. You have government hospitals. There are university hospitals. There are large corporate hospitals you wouldn’t think of stepping into unless you had insurance. There are charitable hospitals which treat you for next to no cost. There are the neighbourhood nursing homes which essentially cater to the uninsured middle class. Reasonable facilities but not too expensive. And so forth.

There is no formal system of medical insurance in the country. There is no single large government system. If the current state of healthcare in the country is one of not having evolved much, I really wouldn’t mind it remaining this way. I hope we never get into the kind of equilibria that the US and the UK have gotten themselves into, which appear efficient but which ultimately prove expensive for people.

It is the diversity in the system that keeps the healthcare industry here competitive, and keeps costs low. And of course, you pay for other people too when you pay your medical insurance premium.

Religion and culture

Normally I don’t consider myself to be too religious. Apart from wearing the sacred thread (janavaara / pooNal) there is nothing religious that I do on a day-to-day basis. I visit temples only to look at the architecture (and look at my offering to the temple as my support to maintenance of the temple), don’t do sandhyavandanam, hate rituals and all that. But then I figured today that irrespective of all the irreligious things that I do, a part of religion has been ingrained in my personal “culture”.

So my car had a freak accident today. I had parked it in the basement parking lot of my office and this electric powered golf cart that my office has recently bought smashed into it. Rear bumper is actually broken. A couple of dents around the sides. The corporate services people have promised to get it repaired for me and stuff, but I’m still mighty depressed about the damage (and I don’t normally take my car to work).

So initially when I saw it smashed, and was told that it would be repaired by next Tuesday, I didn’t think much. I mentally made plans to roam town by auto this weekend and reasoned that I could easily manage the weekdays in office cab. All way peace with the world.

Until I realized that Saturday is Ayudha Pooja, when you worship your tools, especially vehicles. As I mentioned earlier, I’m not the religious types but celebrating Ayudha Pooja is a done thing. I’ve been doing it every year and want to continue doing it. Probably because I think it’s fun, but also because it’s a “done thing”. Washing and cleaning the vehicle, applying turmeric and vermillion, putting flowers and (most fun of all) smashing lemons under the wheels of the vehicle!

I’ll still celebrate Ayudha Pooja this year. Worship my dabba bike, my computer, my violin, my guitar and other sundry implements. But it greatly saddens me that I won’t be able to worship the car. And again it’s nothing religious about it. But just wanted to mention how something that starts out as a religious thing becomes a “done thing” and becomes part of you.

Just like how I’m vegetarian!

Making guest list

So last night I sat down to do the presumably fun task of preparing my wedding guest list. This was just the first cut, where I just put down the names of people I want to invite in an excel sheet. In the second cut, I’ll parse the sheet and figure out how each person on the list should be invited – personally, or on phone, or email, and so on.

So there can be two kinds of error while making such a list – errors of omission and errors of commission. The probability of error or commission is quite low. After all there aren’t too many people who you explicitly don’t want at your wedding. And if there exist any such people, you will remember that only too well while putting their names down in the invite sheet.

Errors of omission is what I’m concerned about. There have been times in the past when people have gotten married, and I haven’t had a clue. It’s a different matter about whether I’d’ve gone or not, but I know that there is scope for hurt feelings if certain people are left out of the list. So one must be careful.

The problem is that I’m currently not in touch with a lot of these people. I would’ve been good enough friends with them at some point of time in life that I’d want to invite them to my wedding. But the fact that I haven’t kept in touch means I may not remember their existence, but when eventually they see my wedding pics on facebook it might result in a kinda hurtful “congrats” message.

The other question I must ask is that if I’m prone to forgetting about someone’s existence, if they are worth being invited at all. That I’ve forgotten about them means that obviously they are quite low in my list of people I want at my wedding. So am I generally paining myself by trying to remember people who I wouldn’t normally remember?

So far the easiest list I’ve made is from my batch of people from IIMB. We have a google doc with everyone’s names and personal details. So one parse through that meant I wouldn’t forget anyone’s existence. Much peace ensued. The problem is similar lists don’t exist for my other social networks. Anyway I’ll try my best.

Tangentially, another issue is about how “forcefully” I invite certain people who don’t live in Bangalore and have to fly down for my wedding. For a variety of reasons I happened to bunk their weddings, and now it’s a little embarrassing to insist that they be there.

PS: This old post of mine, I think, is pertinent.

The Trouble With Analyst Reports

The only time I watch CNBC is in the morning when I’m at the gym. For reasons not known to me, my floor in office lacks televisions (every other floor has them) and the last thing I want to do when I’m home is to watch TV, that too a business channel, hence the reservation for the gym. I don’t recollect what programme I was watching but there were some important looking people (they were in suits) talking and on the screen “Target 1200” flashed (TVs in my gym are muted).

Based on some past pattern recognition, I realized that the guy in the suit was peddling the said stock (he was a research analyst) and asking people to buy it. According to him, the stock price would reach 1200 (I have no clue what company this is and how much it trades for now). However, there were two important pieces of information he didn’t give me, because of which I’ll probably never take advice from him or someone else of his ilk.

Firstly, he doesn’t tell me when the stock price will reach 1200. For example, if it is 1150 today, and it is expected to reach 1200 in 12 years, I’d probably be better off putting my money in the bank, and watching it grow risk-free. Even if the current price were lower, I would want a date by which the stock is supposed to reach the target price. Good finance implies tenure matching, so I should invest accordingly. If the stock is expected to give good returns in a year, then I should put only that money into it which I would want to invest for around that much time. And so forth.

Then he doesn’t tell me how long it will stay at 1200. I’m not an active investor. I might check prices of stocks that I own maybe once in a week (I currently don’t own any stock). So it’s of no use to me if the price hits 1200 some time during some intraday trade. i would want the price to remain at 1200 or higher for a longer period so that I can get out.

Thirdly and most importantly, he doesn’t tell me anything about volatility. He doesn’t give me any statistics. He doesn’t tell me if 1200 is the expected value of the stock, or the median, or the maximum, or minimum, at whatever point of time (we’ve discussed this time bit before). He doesn’t tell me what are the chances that I’ll get that 1200 that he professes. He doesn’t tell me what I can expect out of the stock if things don’t go well. And as a quant, I refuse to touch anything that doesn’t come attached with a distribution.

Life in general becomes so much better when you realize and recognize volatility (maybe I’ll save that for another discourse). It helps you set your expectations accordingly; it helps you plan for situations you may not have thought of; most importantly it allows you to recognize the value of options (not talking about financial options here; talking of everyday life situations). And so forth.

So that is yet another reason I don’t generally watch business TV. I have absolutely no use for their stock prediction and tips. And I think you too need to take these tips and predictions with a bit of salt. And not spend a fortune buying expensive reports. Just use your head. Use common sense. Recognize volatility. And risk. And you’ll do well.

Crowding out with public transport

This is an idea that’s been in my head for a while. About whether it is possible to nudge people who normally travel in cars to use public transport by simply flooding the roads with buses. The motivation for this comes from the hassles associated with marking and enforcing bus lanes, a form of public transport that is generally considered superior to subway trains in terms of cost of implementation and effectiveness.

So the idea is that as the number of buses on the road increases, the average speed of cars comes down. And after a point, the number of buses on the road means there’s enough supply that one can travel comfortably in them. And there will come a point when people will give up their cars in favour of buses since they can now spend the time more usefully rather than waste it by concentrating on the road.

Of course, this point is still far away for a city like Bangalore, though the BMTC has been making efforts, with initiatives such as the Bus Day. Still, now I’ve begun to have my doubts about it. About whether just increasing bus connectivity and frequency and quality will be enough to take cars off the road. I’ve begun to think if the comfort of not having to drive but travel at the same speed is enough to compensate for the cost of walking to and from bus stops and waiting for buses. The other cost of traveling by bus is that once you get into a bus you travel by a fixed route rather than adapting to daily traffic flows.

The important thing here is the distribution of waiting time for catching a bus. If a passenger is convinced that he is very likely to get a bus within a certain span of time with a very high probability (using vague words to avoid putting random numbers) he is likely to wait for a bus. However, if there are no such bounds, then the passenger might choose to travel by an alternate means of transport.

Still it needs to be seen. From what I know, all cities that currently boast of great public transport actually built a lot of the basic public transport infrastructure before the boom of cars in the place. I can’t recall off the top of my head any city that has actually nudged passengers from personal cars to public transport after cars had become default mode of transport (if you know of such cases, please let me know). In that sense, this nudging towards public transport is still a hard problem to solve. Nevertheless, I still think it might still be a good idea to try crowd out private transport by public transport.