Author: SK

On the death of credit cards

An article that was recently recommended to me on Medium talks about the death of credit cards (among other things that are currently incumbent in the banking system). As someone who has worked a fair bit in “FinTech”, I broadly agree with what he says. As someone who has worked a fair bit in “FinTech”, I’m also not sure how easy it is to disrupt.

The article says:

The two primary use cases for a credit card today could be illustrated thus:

  1. I’m at the grocery store, swiped by debit card and the transaction was declined because my salary hasn’t yet hit my bank account. I need to buy these groceries for the family today, so I’ll use my credit card and worry about why my salary hasn’t hit the account later, or

  2. I really want this new iPad Pro, but I can’t afford it based on my current savings. If I use a credit card I can pay it off over the next few months

And proceeds to explain why each of the above situations can be unbundled to some kind of an instant credit scenario, rather than the bank having extended a lien to you through which you can borrow.

While the idea of instant credit (on the lines of Affirm) makes intuitive sense, the problem is with transaction costs. Irrespective of algorithms significantly slashing the time required and marginal cost of underwriting loans, the fact remains that the marginal cost of underwriting and extending new credit can never be brought down to zero.

There are costs to updating the information the bank knows about you. There are costs to creating any kind of legal documentation, and insuring that. If you were to list down all such costs, you would find that even if the cost of actual underwriting itself were to be zero, the marginal cost of issuing a loan is significant.

It is for this reason that banks have traditionally settled down on a model of “approve once, borrow multiple times”. For retail borrowers, this translates to a credit card, where they can borrow up to a predetermined limit, with no questions asked for each borrowing. For corporate borrowers, this translates to something like a “working capital lien” or “overdraft”.

The article I’d linked above talks about one of the solutions being an “overdraft”. In that sense, what it says is that the physical credit card might disappear, but not the fundamental principle, which is “approve once, borrow multiple times”.

In fact, as companies come up with new and innovative ways of slashing marginal cost of underwriting to enable “on-demand approval” (I’ve been involved in such efforts with a couple of companies), the question is whether such costs can actually be brought to zero, and if not, whether the model can be sustainable.

As long as the marginal cost of underwriting remains even mildly positive, it is not profitable for lenders to lend out small amounts with “on-demand approval”. How this problem can be solved will determine how well “FinTech” lenders can disrupt banks (on the lending side).

Cheap motivation

I’m reading this (so far – I’m blogging in the middle of reading) excellent piece by Charles Assisi in Mint On Sunday about motivation for careers. At the point where I’ve stopped reading his piece and started writing, I’m looking at this graph he has put on the source of motivation:

This reminds me of this conversation I had with a few classmates from business school a few months back. One of them is a successful brand manager for a large packaged goods company, and he was telling us that what gives him the thrills in his job is to see his product replace his rival companies’ products on store shelves.

It is a rather logical motivation – to see the share of the brand you manage improving. However, what was interesting was the way he put it (I’ve surely paraphrased here) – that the thrill came out of his brand doing well at the expense of a rival brand, and of watching the rival brand sink.

It got me thinking about what motivates us, and if motivations are as profound as we like to mention in either a statement of purpose or in an interview. When writing a cover letter for a job, for example, it is likely that you chart out your career path so far detailing motivations for each career move, and what motivates you to take up this job you are applying for.

With a few honourable exceptions, it is likely that it is all a lie, and that you have invented these motivations to retrofit your career progression thus far. Sometimes the real motivation could be as simple as money – you took up a certain job because it paid you well, but for whatever reason it isn’t politically correct to put this on a cover letter (it can work the other way also. I once interviewed for a proprietary trading position and the interviewer was surprised that money wasn’t my number one motivation).

For the most part, however, I argue that the real motivation for most things is something rather trivial – so trivial that nobody will trust you it can actually be a motivation. Like you join a hobby class because that allows you to stay out late. Or go for some other activity because it is near the house of someone you have taken a fancy for. Or you participate in an event because it allows you to travel to a particular city. I had once gone for a recruiting event because it was being held in a five star hotel and the agenda included lunch.

A trivial motivation need not always lead to results – the sheer triviality of the motivation means that you are less likely to generate good results from such processes. However, what trivial motivations allow is to expand the range of activities and opportunities you take part in, and the sheer volume of such expansion can take you to places you had never imagined you would get to. In other words, while at some point in time, you do use serious motivations, it is likely that the seed for such activities or pursuits had been set in more trivial settings.

So when you want to do something purely for the cheap thrills it gives you, go ahead – it might help you learn something about yourself that you’d not known before. And might motivate you to an extent well beyond what motivation you can get from profound sources.

The Economics of Shakespeare and Company

During my vacation, I finished reading Salil Tripathi’s Detours, an enhanced collection of his columns in Mint Lounge of the same name. I quite liked the book. In fact, I liked it much more than his columns in Mint Lounge. I think the lack of word limit constraints meant he could add depth when necessary making it a steady and pleasing read (read Sarah Farooqui’s formal review of the book here).

In one of the chapters, he describes Paris in the way Hemingway saw it (literature and art are constant figures in this book, and the fact that I could connect to it (the book) despite my general lack of interest in these topics speaks volumes about the quality of the book). More specifically, this is about the Shakespeare and Company bookshop in Paris where Hemingway occasionally lived, and wrote his books.

George Whitman, a US army veteran who settled down in Paris after the Second World War, bought the store and ran it until his death. During these years, he hosted writers who wanted to visit Paris in an upstairs room, allowing them to basically live in the store as they wrote. There were frequent readings organised in the store where writers could connect with their readers, and writers and other regular patrons were frequently allowed to use the bookshop as a library – to simply read rather than buy books.

There was an occasion when Whitman’s store license ran out and he got into a dispute with the municipal authorities who refused to renew it, to which he responded by stopping the sale of books and running the shop as a library until the license was ultimately renewed.

While Salil describes this as a measure of Whitman’s commitment to good literature and helping authors, it was hard for me to read this chapter without wondering about Whitman’s finances, for none of the above is cheap. One of the biggest costs to running a bookshop is the cost of real estate, and if Whitman had an upstairs room for writers to live and write in, and could redeploy his shop as a library, it came at a significant cost of real estate. While readings might help sell additional books (most readers who attend buy at least a copy of the book that is being discussed), it can disrupt the regular flow of business in the store, and affect sales. The question that I couldn’t escape while reading the book was about the store’s finances and how Whitman managed all these activities.

One hypothesis is that he had alternate sources of funding (patrons of literature’s contributions, or family funds, for example) that allowed him to spend in writer welfare. The other is that margins from the book selling business were fat enough to allow Whitman to spend on writer welfare, and this spending paid him back by way of improving overall sales from his store. Back in the day when you could only buy books from shops, shops that curated well or stocked rare books could afford to charge a premium, and make significant margins which could go into activities such as writer promotion and welfare.

If this hypothesis is correct, it could explain why the traditional literature industry, including authors, are so incensed by Amazon’s rise, even if it leads to significantly better revenues. What Amazon allowed, by its initial print book mailing model, was for readers to access the “long tail” of books which they could purchase at a reasonable cost (they weren’t beholden to curator-bookseller any more). While the more passionate readers remained loyal to their curator-bookseller, the mass moved to the cheaper option.

While this created value for readers (in terms of lower prices for their books), it had the effect of cutting retail margins for books by a significant amount. Several bookshops became unprofitable under this new regime, and with the new margins not compensating for increasing real estate costs, many of them (including chains such as Borders) closed down. Writers weren’t directly affected economically – for readers who would have earlier purchased in such shops could now simply purchase the same books at Amazon for a lower price, but the dropping profitability of conventional bookstores affected them in other ways.

As Salil’s chapter on Shakespeare & Co illustrates, independent bookshops performed a social function far higher than curating and selling books – they provided an author a platform to connect with readers and enabled authors to meet and exchange ideas. They organised events for authors which raised their profile, and helped sell more books.

Their replacement by low-cost retailing models has cut out this additional social function they performed (without direct rewards). Without independent bookshops organising readings and offering writing spaces, writers have lost something they had access to earlier (though they’ve been monetarily compensated for this by means of higher sales driven by lower prices on Amazon). Hence it’s no surprise that writers have taken sides with their publishers in the battle against Amazon, online retailing and e-books.

In this context, this old piece by Matthew Yglesias in Vox is worth reading, where it talks about why Amazon is performing a socially useful function by curtailing the book publishing industry. Yglesias writes:

My best guess is that this is too pessimistic about the financial logic behind giving advances. It is not, after all, just a loan that you may or may not pay back. An advance is bundled with a royalty agreement in which a majority of the sales revenue is allocated to someone other than the author of the book. In its role as venture capitalist, the publisher is effectively issuing what’s called convertible debt in corporate finance circles — a risky loan that becomes an ownership stake in the project if it succeeds.

 

Twitter and negativity

One of the reasons that sparked my departure from social media platforms such as Facebook and Twitter two weeks back was an argument with my wife where she claimed that Twitter had made me too negative, and highly prone to trolling (even in “real life”). Accepting a challenge from her, I offered to go through my tweets over the last few months, and identify those that were negative. I also offered to perform a similar exercise with my blog.

I started off with the intention to go through tweets in the last one year and delete anything that was negative or “troll-y”. I allocated myself an hour to accomplish this, along with a similar exercise for my blog.

I must have spent fifty minutes going through my twitter feed, and didn’t manage to go back more than two months. I was surprised by my own sheer volume of tweeting. What was more surprising was the amazing lack of insight in most of those tweets – there were horrible PJs that I’d cracked just because I could, there were random replies to other people which didn’t add any kind of value, there was outrage about the lack of outrage and some plain banal life stuff (apart from some downright trolly stuff which I deleted).

It made for extremely painful reading, and I could hardly recognise myself from my own tweets. Apart from some personal markers, I would find it hard to recognise most of these tweets as my own if they were to be presented to me a few months later. It was a clear indication that it was time to exit twitter (though since I have a rather kickass username there I’m not deleting my account).

The ten minutes I spent that day going through this blog, however, was a sheer delight. I did end up deleting a couple of outragey posts (both of which were essentially collections of tweets which I’d collated for posterity), but most of my posts were mostly sheer delight! There was some kind of insight in each of my posts, and I’d lie if I were to say that I’m not proud of what I’ve written.

It’s not that I’ve not written shit on this blog (or its predecessor), having written posts as late as 2008 which I’m definitely not proud of. What I’ve noticed, however, is that I’ve evolved over time, and my writing style has been refined, and I think I continue to add significant value to my readers.

Twitter’s constant engagement feature, however, meant that it was hard to evolve there and hard to escape from the cycle of banal and negative tweets. My tweets from this February are unlikely to be qualitatively very different from those 5 years back, and that’s not a positive thing to say.

The thing with Twitter is that its short format encourages a “shoot first ask questions later” kind of thinking. You end up posting shit without thinking through it, and without having to construct a reasonable argument. This encourages outrage, and posting banal stuff. Spending one minute typing out a banal tweet is far lower cost than spending 20 minutes typing out a banal blog post – the latter is unlikely to be written unless there’s some kind of insight in it.

Outrage is one thing, but what’s really got to me with respect to twitter is its sheer ordinariness, and temporality (most tweets lose value a short period of time after they’re posted). It’s insane that it’s taken me so long (and three longish sabbaticals from twitter) to find out!

The land above the tracks

Almost exactly a year ago, we were on our way from Vienna to Budapest and ended up reading the Vienna Hauptbahnhof Railway Station some three hours early. It had been snowing that morning in Vienna (it was April 1st, and supposed to be spring), and not wanting to go anywhere in that shit weather, we simply got to the railway station. It didn’t help matters that our train (which was coming from Munich) had been delayed by a further hour.

We were not short of options for entertainment in at the railway station, though. In fact, it hardly looked like a railway station, and looked more like a mall – for there were no tracks to be seen anywhere. We spent the four hour wait shopping at the mall (it was just before Easter, so there were some good deals) and having breakfast and lunch at what could be considered to be the mall food court. And when it was time for our train to arrive, we simply took one of the escalators that went down from the mall, which deposited us at our platform.

Each platform had its own escalator going down from the mall, which had been built on top of the railway tracks. It can be considered that the entire Vienna Hbf station was built on the “first floor”, making use of the land above the railway tracks. Land that would otherwise be wasted was being put to good use by building commercial space, which apart from generating revenues for the Austrian Railways, also made life significantly better for passengers such as us who happened to reach the station insanely early.

This is a possible source of revenues that Indian Railways would do well to consider, especially in large cities. The Railways sit on large swathes of land above and around the rail tracks, especially at stations (where such tracks diverge). Currently, the quality of experience in Indian railway stations is rather poor. If a swanky mall (and maybe other commercial space) were to come up above the tracks, it could completely transform the railway experience.

There will be considerable investment required, of course, but given the quality of real estate on which most Indian railway stations sit, it is quite likely that private developers can be found who will be willing to invest in constructing these “railway station malls” in return for a share of subsequent rent realisation. There is serious possibility for a win-win here.

As the Vienna Hbf website puts it,

The BahnhofCity Wien Hauptbahnhof features 90 shops and restaurants occupying 20,000 m² of floor space. A fresh food market, textile shops, bakeries and cafés are designed to make BahnhofCity a meeting place. During the week, it will be opened until 21:00 and many shops will also open on Sundays. Excellent public transport links and 600 parking spaces complement the offer.

An idea well worth considering for the Indian Railway Ministry.

Pricing season tickets

One observation about the crowd when I attended my first game at the Camp Nou (in October 2014, against Ajax in the 2014-15 Champions League) was how people around me all seemed to know each other. There were friendly nods and handshakes, and it was evident that these men and women were familiar with each other. They all arrived and departed independently, though, and there wasn’t much conversation during the game, suggesting they were acquaintances rather than friends.

On my second visit to the Camp Nou (ten days ago, for the 2015-16 Champions League game against Arsenal), I noticed hordes of empty seats. I was in a stand two tiers higher than where I had sat for the Ajax game, and despite that stand being priced at a princely €150, there were plenty of empty seats (my wife sat next to me for the duration of the game despite her assigned seat being one rank and a few files away). It was a cold and rainy day, but not so rainy that €150 be treated as “sunk cost”!

The common feature that explains both these phenomena is the “season ticket”. As the official club website explains,

The complete season ticket gives members the right to attend, always from the same seat, games played at the Camp Nou in official competitions: Spanish League, Champions League, Copa de Rey and UEFA Cup (emphasis added)

The reason people seated around me at the Ajax game were acquainted with each other was because they were season ticket holders, and would watch every game seated in close proximity to one another. And the empty seats for the Arsenal game were a result of season ticket holders, for whom the marginal cost of not attending the game was far less than €150, not attending the game (there is a “free seat” program that lets season ticket holders sell their ticket through official channels, but considering that the decision to not go would have been made in the last minute (given the rain) many season ticket holders may not have exercised this option.

Football clubs (and other performance venues) sell season tickets in order to create a “base load” of demand for their tickets. While these season tickets are sold at a deep discount (relative to what it costs to buy a ticket for each game), the fact that they are sold at once and at the beginning of the season means that the club can be sure of a certain amount of revenue from ticket sales, and can be assured to fill a certain proportion of seats at the stadium in every round.

Season tickets are also important because they help create a sense of loyalty among the fans, and the same fans sitting in the same spaces week after week can bond and help create a better viewing atmosphere at the club. In other words, season tickets seems like a no-brainer. Except that Hull City, which plays in the English Championship, has decided to do away with season tickets starting next season.

The official statements related to this move seem like sanitised PR (refer link above), but the linked article gives away an important piece of information that suggests why this new ticket scheme might have been brought into play:

The club said the Upper Stand would be closed, meaning 1,800 fans must be relocated, but would be opened for high-profile matches

While the club doesn’t want to admit it, the reason it is doing away with season tickets is that attendance at the KC Stadium has been falling, and it appears that there have been lots of empty seats in the stadium.

As I had noted in my earlier piece on pricing Liverpool FC tickets, there are network effects to watching a football game in the stadium. You gain value not only from what happens on the pitch, but also from the atmosphere that fans at the stadium (including you) build up. And while there are many ways in which fans can affect the watching experience of co-fans, it shouldn’t be hard to understand that empty seats do not add to the stadium atmosphere in any way.

The problem with season tickets is that even with programs such as “free seat” (where the season ticket holder can get paid for giving up their seat), the cost for a season ticket holder to not attend a game is extremely low. And when several season ticket holders decide to not attend certain games, it can lead to rather low attendances, and diminished stadium experience for the fans who do end up attending.

This network effect – of fans helping shape experience of fellow fans – makes the sale of football season tickets different from that of long term cargo contracts, for example. You not only seek to assure yourself of revenues by selling season tickets, but also seek to fill a certain portion of the seats for every game through such a program, and help create the experience.

And when your fans are being delinquent (by purchasing season tickets but not attending), your first action would be to increase the price of such season tickets so that only “serious fans” will buy it and the (sunk) cost of not attending a game is higher. It seems Hull City has already gone through one such exercise, and raised its season ticket prices, which hasn’t helped drive overall attendances.

Hence, the club has decided to do away with season tickets altogether. With the new rolling monthly ticket program, fans will purchase if and only if they are confident of attending a certain number of games. On the one hand, this pushes up the cost of not going for a game, and on the other, allows the club to manage its revenues on a larger portion of the tickets.

From a revenue point of view, this is a risky strategy, as the club foregoes assured revenues from season tickets in favour of more volatile monthly ticket revenues, and greater tickets to sell in the open market before every game. However, considering the network effects of watching football in a stadium, what the club is banking on is that this measure will help them fill up their stadium more than before, and that the improved atmosphere that comes out of that can be monetised in the long run.

It’s a bold move by Hull City to improve football attendances. If it works out, it offers a way out for other clubs that are currently unable to fill their stadiums. But you must remember that optimisation here takes place on two axes – revenues and crowds!

Holy Week and Ganesha Chaturthi

Over the last one week, ever since I stepped foot in Còrdoba last Friday, I’ve been exposed to Semana Santa (Holy Week) processions of different sorts, shapes, and sizes. Most of these have been observed in Sevilla and Malaga, which I visited for three days each earlier this week, and one small one in Còrdoba.

Based on my reading about this phenomenon (sometimes when stuck in traffic jams caused due to such processions), I understand that each such procession is undertaken by a “fraternity” and goes through the city before ending up at the fraternity’s church.

There are basically two floats that are carried – one depicting the Passion of Christ (with a statue of Christ carrying a cross, and a few others. The first such float I saw I wasn’t sure if it was a statue of Christ or an actor playing the role) and a more sober one with Mary and some candles. Then there is a bunch of people wearing some conical caps that cover their heads (with holes for eyes) who march along with the floats. And there is also a marching band (which played fairly robust tunes in Malaga, though the tunes I heard in Sevilla were more sober) according to which the float marches.

Walking just ahead of one such procession in Malaga (which finally ended up close to the apartment where we were staying), the similarities between these processions and the Ganesha Chaturthi processions back in India were hard to miss.

There were a few important differences – the Ganesha Chaturthi processions happen AFTER the festival, as the idols are immersed in water bodies, while the Semana Santa processions happen in the lead-up to Easter. More importantly, most Ganesha Chaturthi processions use motorised means (such as tractors and trucks) to move the idols, while Semana Santa floats are actually carried by large groups of volunteers (thus necessitating the band, to whose tunes they march).

The similarities are hard to miss – in both cases, there are large numbers of fraternities or groups that organise their own processions, and different groups organise their processions on different days. The processions go along predetermined routes through residential localities, whose residents come out to pay obeisance to the processions.

Most fascinatingly, as the Semana Santa made slow progress (given that floats are heavy and carried by humans, frequent stops are imperative) behind us, we noticed something markedly similar to what would happen with processions in India. Each time the procession stopped, some incense would be lit (like camphor in India), and bells would be rung (identical to the Indian case). And then a short rest and the procession would move on.

It is incredible how different religions in different locations have co-evolved and come to influence each other over time. In a way, this reinforces my belief that religion and religious practices are memes.

Al-Andalus

If you were to visit Granada, in the South of Spain, you might believe that the Reconquista never happened. Granada was the last Islamic kingdom in al-Andalus (the Muslim name for their Caliphate in Spain) to fall, with Boabdil, the last Moorish Sultan of Granada, uttering his last sigh in 1492.

The Moor’s Last Sigh. Source: Wikimedia Commons

While the Reconquista and subsequent Inquisition succeeded in pretty much wiping Islam and Judaism off the Spanish map, the town of Granada seems to be making a conscious attempt to reclaim its Islamic past.

The town’s most famous monument, Alhambra (was about to type “the Alhambra” but realised that would be a redundancy since “Al” is Arabic for “the”) is from Islamic times, despite a King Carlos (V) constructing his own palace right in the middle of the complex. After Christian occupation, the town withered, going from a capital city to a neglected provincial town.

With its most glorious time having come during Islamic times, it is no surprise that the town seeks to look back to that part of its past. For example, the Vishwaroopam font is ubiquitous in signboards across town, with even public buses using an Arabesque font to write “Granada”. Then, Shawarma restaurants dot the city, and unlike in Barcelona (where most “Turkish” stalls are run by Pakistanis), these are mostly run by Turks.

There is even a nod to the Gypsy/Roma influence to the city in the markets, which distinctly reminded me of Jaisalmer (that the city is built next to a hill contributed to this comparison). The most common class of items in the market was leather goods, and it was also possible to buy FabIndia style kurtas and harem pants in some stalls (of course we stayed far away from them). Of course, there is a massive Granada Cathedral (built on the site of an old Mosque – this is a recurring theme in Andalusia), but it was clear which period in history this city’s pride lies in.

It was a rather unusual itinerary that we chose for this trip (a kind of parallelogram starting from Granada, successively moving to Còrdoba, Sevilla and Malaga), but it was almost as if we had planned our trip to places in decreasing order of Islamic influence (to an extent).

Còrdoba, for example, is known for its Mesquita, or Mosque-Cathedral, and the Mosque’s arches are a recurring theme through the city. It was less easy there (compared to Granada) to find Arab/Turkish food, and “Califa”, where we had dinner, was actually a a hardcore Spanish restaurant with a Matador theme.

It was Semana Santa (Holy Week) by the time we got to Sevilla and we were greeted by massive processions celebrating the week of Jesus Christ’s death (more on that in another post). During the three days we spent there, it was easy to forget that this had once been an Islamic city (long lines and after effects of excess walking in Granada and Còrdoba meant we skipped the Alcazar). As a fairly religious (the number of men in suits on Palm Sunday wasn’t funny) regional capital, it seemed as if the city had completely gotten over its Islamic past, and now presented itself to us as a completely Christian city! It is possible, though, that parts of Sevilla we didn’t visit still have a nod to the Islamic past.

Malaga retained more of its Islamic past, though. The Reconquista there again happened fairly late, just before Granada, and the most spectacular monuments are the Islamic fort and castle (Alcazaba and Gibralforo). We had two meals at Arab restaurants (one good, one bad). The city was littered with “Arab baths”. Motifs from the Còrdoba Mesquita were common across the city.

And most delightfully for us, the Islamic influence in the city included stalls selling Patatas Asadas (known as “Kumpir” in Turkish), which we had been familiar with from our trip to Turkey five years ago. That sorted my dinner on two evenings in Malaga!

Football in the rain

The weather in Barcelona had been excellent for the last couple of weeks. While it wasn’t warm (most days had required me to wear a rather heavy jacket), it was pleasant and sunny, with hardly any rain. For whatever reason, the rain gods had to choose today, when we had tickets to watch Barcelona play Arsenal in the Champions League, to pour down.

I had made a dash to a nearby supermarket to pick up light raincoats earlier this evening. In hindsight, I can attest that Quechua Rain Cut is a brilliant product and does its job. Among the best raincoats I’ve used. Very effective and light, and can be worn over other warm clothes!

Rain meant we had to take the bus to the stadium rather than walk (it’s 2km from home), and rain also meant that bus made painful and slow progress, dropping us near the Camp Nou some 15 minutes before kickoff. And then there was the lack of queueing at security check outside the stadium (made worse by the pouring rain).

Before the game I’d checked if backpacks would be allowed at the stadium and various forums had mentioned in the affirmative. As it turned out, they weren’t allowing them in today, which meant we had to drop my wife’s (fairly expensive) backpack at the gate before we got in. It was just before kickoff that we took our seats.

Rather, I took my assigned seat while my wife randomly occupied the empty seat next to mine, hoping to exchange it with her seat (which was one row in front) when the rightful occupant arrived. As it transpired, the rightful occupant never arrived (perhaps he was a season ticket holder deterred by the rain, else I can’t imagine someone letting go of a €150 ticket. I plan to do a post on season ticket pricing when back from vacation. Context is Hull City revamping their season ticket system. Interestingly the other seat adjacent to mine was also vacant! In fact, there were quite a few empty seats at the stadium).

There was this nice anecdote which can be used in economics classes on externalities – given that it was raining, it meant that people had an incentive to hold up an umbrella while sitting, but that would mean those in the rows behind would be inconvenienced – a negative externality. Usually, nudges and shouts did the trick to lower the umbrellas, but some umbrella men were steadfast.

Anyway, despite being in the third tier of stands, the view of the pitch was top class (apart from the occasional intrusive umbrella) and we soon got adjusted to the drizzle. The players weren’t that well adjusted, though, for they constantly kept slipping on the turf.

Photo taken at half time
Photo taken at half time. The messy hair can be explained by the hood of the raincoat

Interestingly, the noise levels weren’t too high – when Barcelona scored, celebration was rather muted. There were no shouts of Vis?a Catalunya at 17 minutes 14 seconds (this had been rather vociferous the last time I was at the Camp Nou, but that was in the run up to the (later cancelled) secession referendum) – but that could be because that was exactly around the time Neymar scored.

Though there is another possible reason people didn’t celebrate too loudly – I belive people had gotten into certain positions that helped them beat the rain (like I’d pulled my raincoat forward and over my knees to protect my thighs from getting wet), and heavy celebration would disturb these positions. There was the usual drum band behind the south goal, but the crowd was otherwise rather quiet (the away stand directly behind us was an exception, though!).

Anticipating an exodus, we had decided to leave as soon as the clock opposite us struck 42 in the second half. As it happened, Barcelona scored their third goal just as we were about to disappear into the stands. The early exit helped – there was a bus right outside the stadium that would drop us next to home, and we managed to find seats on that.

Oh, and the backpack that we had abruptly discarded near the gate when we went in was still in the exact position where we’d left it, and we gleefully picked it up on our way out. Quite impressive for a city that is known for its high rate of petty crime (which I’ve been victim to. I lost my spare phone on the day I landed last month, between getting off the cab from the airport and getting into my apartment building!)!

 

Airline pricing is strange

While planning our holiday to al-Andalus during my wife’s Easter break (starting later this week), we explored different options for flights from different destinations in al-Andalus to Barcelona before we confirmed our itinerary.

As it turned out, it was cheapest (by a long way) to take a flight back from Malaga to Barcelona on Good Friday (meaning we were “wasting” three days of Priyanka’s vacation – which we were okay with), and so we’ve booked that.

Now, Vueling (Iberia’s low cost version where we’ve booked our tickets) sends me an email offering credits of €40 per passenger if we could change our flight from Friday to Saturday (one day later). In other words, it turns out now that the demand for Friday flights is so much more than that for the Saturday flight that Vueling is willing to refund more than half the fare we’ve paid so that we can make the change!

I don’t know what kind of models Vueling uses to predict demand but it seems to me now that their forecasts at the time we made our booking (3 weeks back) were a long way off – that they significantly underestimated their demand for Friday and overestimated demand for Saturday! If this is due to an unexpected bulk booking I wouldn’t blame them, else they have some explaining to do!

And “special occasions” such as long weekends, and especially festivals such as Good Friday, are a bitch when it comes to modelling, since you might need to hard code some presets for this, since normal demand patterns will be upset for the entire period surrounding that.

PS: Super excited about the upcoming holiday. We’re starting off touristy, with a day each in Granada and Cordoba. Then some days in Sevilla and some in Malaga. If you have any recommendations of things to do/see/eat in these places, please let me know! Thanks in advance.