tag:blogger.com,1999:blog-1930103235934641180.post1624536873918232174..comments2024-03-27T15:28:15.632+00:00Comments on FREEKY BUSINESS: Should we stop saying that the market is efficient?Unknownnoreply@blogger.comBlogger11125tag:blogger.com,1999:blog-1930103235934641180.post-38342190492631502912011-04-12T06:01:56.719+01:002011-04-12T06:01:56.719+01:00What you are actually saying isn't that the Da...What you are actually saying isn't that the Darwinian view of organisations is wrong, but simply that the level of analysis is wrong (the practice rather than the organisation) and that the effect of the practice can be negative as well as positive. As I wrote in the JMS paper I send you, this actually makes the theory more Darwinian rather than less.Indian T.v Serialshttp://www.meratvforum.comnoreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-45017852236372507472010-06-25T17:17:35.567+01:002010-06-25T17:17:35.567+01:00this is an awesome blog, keep it up, it gets me th...this is an awesome blog, keep it up, it gets me through long days studying at <a rel="nofollow" href="http://www.bppbusiness.com">business school</a>...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-71843485013612349982010-06-18T08:16:53.748+01:002010-06-18T08:16:53.748+01:00Thanks for the information you shared that should ...Thanks for the information you shared that should be a useful and quite informative and i have taken those into consideration....Writing services for custom essayshttp://www.buyacademicessays.comnoreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-91952693862525293772010-05-01T16:07:43.922+01:002010-05-01T16:07:43.922+01:00Really good characterization of the ceo. How many...Really good characterization of the ceo. How many huge mergers have caused companies to wallow? I think such aggressive behavior suits the entrepreneur well but perhaps large firms should reassess who should be ceo.An Insurance Coverage Thoughthttp://insurancecoverage.menoreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-21616624127633726732009-08-17T16:06:47.364+01:002009-08-17T16:06:47.364+01:00I am really glad that you touched towards the end ...I am really glad that you touched towards the end of your post something that I hold against all economists. In fact this is the only thing I remember out of all of Keynes' writings. He also thought a simplified equation is far better than a complicated explanation about why recession happens.<br /><br />I wish the economists also accepted a similar approach from their physicians and surgeons. It is easier to cut off organs than heal them for specific malaise.<br /><br />I am not at all against markets. I am only against relying on markets to do things that they really cannot. I still remember the days when I learned statistics. I was repeatedly told that parsimony is central to all statistical methods. As a result, we have mostly measures of similarity and hardly any to analyse differences. <br /><br />In my view, with the advancements that have taken place in IT, we need to move away from such constricting simplicity that tells us to shun reality. We can actually census methods to calculate GDP than go for sample surveys. We can now understand multidimensional problems better with the help of IT.<br /><br />I believe it is time we replaced the the two dimensional x, y graphs from our vocabulary and opted for something that is closer to realities on the groundM A J Jeyaseelanhttps://www.blogger.com/profile/05323281300313037800noreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-53232753228487020992009-08-14T09:05:01.146+01:002009-08-14T09:05:01.146+01:00I have never claimed that markets are perfectly ef...I have never claimed that markets are perfectly efficient. The strongest claim I'd make is that where real competition can exists, markets are more efficient in price discovery and transparency than any other mechanism we invented so far. <br />This of course can be disrupted in a number of ways - from "natural" (such as insider information in health insurance, the fact that short-sellers int he markets don't have access to infinite money supply so irrational markets can kill them off more easily than bubble-riders etc. etc.), to crooking the markets intentionaly by special interest groups. <br /><br />The former can be dealt with, the latter is much bigger problem, because when we tie it together with democracy as practiced now, it is not that hard for special interest groups (be they left or right or whatever) to gain disproportionate power and as a result distort the playing field. IMO, effectively the only way to dislodge a well entrenched SIG is some sort of revolution - not necessarily political and violent, but technological, social etc. (fortunately for us, the more entrenched a SIG is, the less flexible it becomes. Although Chinese communist party is experimenting in that direction too :) ).<br /><br />That is why I agree that "free market" as such is a nonsense, and we have never had it - there must be some laws and regulations (at the very minimum personal property must be legaly defensible and contracts enforceable). Of course, the problem with it is what ones, and there I personally would go for laws which restrict the ability to create mono/oligopolies. If we had (a global) regulation that no bank can have assets (off or on balance sheet) of more than say 50bn dollars, growing with GDP deflator, I dare to say that the financial crisis we had wouldn't have been that severe. <br /><br />It's getting a bit off topic, but IMO large complicated systems work better if made up of a large number of simple relatively idependent parts than few very complicated ones with high degree of interdependency. And that is I believe situation when the markets work best too.<br />Unfortunately, this is directly against interest of just about any SIG in existence.vladenoreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-29797566242805055082009-08-12T17:30:08.717+01:002009-08-12T17:30:08.717+01:00If markets are truly efficient then we should not ...If markets are truly efficient then we should not be having such devastating business cycles in the first place. Secondly, there are no transparent markets. There are intermediaries that manipulate it willfully or distort it like what most governments do deliberately. Perfect demand supply equilibration might have been possible if all markets were auction oriented where the highest bidder always gets the goods. Nothing could be more wishful than to dream of transparent markets. <br /><br />What I would like to say in summary is that the failure of communism alone is no guarantee for the success of capitalism. If left to the markets entirely capitalist economies would plunge themselves in to deeper recession. Why are not all those who believe the efficiency of markets opposing government bail outs using tax money. Real markets are multidimensional and involve many more parameters than just the price. It is a pity that economists still want to view markets within the limited perspective two dimensional x,y graphsM A J Jeyaseelanhttps://www.blogger.com/profile/05323281300313037800noreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-47437647102676730342009-08-12T13:57:52.169+01:002009-08-12T13:57:52.169+01:00I beg to differ from the last poster.
Markets pr...I beg to differ from the last poster. <br /><br />Markets provide exactly what they are supposed to provide (assuming we let them), which is price discovery and transparency. <br /><br />Note that I use "price" - that's because more or less we <b>can</b> put a price everything by comparing it with something else. Is a genuine smile worth enough to you to sell your house? No? Then we have an upper monetary limit on how much the smile is worth to you - it's not worth more than your house, which is worth to you X. <br />If it is, then I'm still sure I can find something with monetary value which would be more worth to you (say a cancer treatment for someone in your family, if I were to pick a drastic example). <br />We all have values, we all make choices based on those values, and most of them happens in real world where we transact. <br />Again, market is just a mechanism to make those values obvious and transparent. <br /><br />The problem is, that once we get the transparency, as often as not we don't like what it exposes - such as that quite a lot of people values cheap flights over future of their children.<br /><br />I'd also like to point out that more of societal prosperity has been delivered by markets than by any other mechanism we have invented so far in our few thousands years of history.vladenoreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-44948984197235482262009-08-11T09:02:23.887+01:002009-08-11T09:02:23.887+01:00Business cycles that haunt economies around the wo...Business cycles that haunt economies around the world every now and then are clear proofs of the inadequacy of the market mechanism. ( I am not using the word 'inefficient' deliberately.) Frequent corrections in the stock markets indicate the same. What economists forget is that market is a tool that is supposed to serve the society. It is in this context markets fail. First of all market is not an inclusive societal mechanism. There is an entry barrier everywhere in terms of purchasing power, education, social networks, political affiliations, corporate patronage, etc. The list is endless. The second most inadequacy of the market is its inability to deal with societal values as opposed to prices. There is still no way of putting a correct price on a genuine smile, loyalty, compassion, and even on qualities like risk taking. By equating everything to money, markets have managed to produce money hungry monsters. I can go on and on. My simple point is that it is important for all intelligent people to acknowledge the inadequacies of the market and make it more and more humane. It would be foolhardy to rely only on the market mechanism to deliver societal prosperity. While a market correction could bring about equilibration in stock prices, it has noway of taking care of the losses that an individual might have incurred during correction. Such losses at times can be devastating for the individual or their dependents.M A J Jeyaseelanhttps://www.blogger.com/profile/05323281300313037800noreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-68152939505308387782009-08-06T06:13:57.577+01:002009-08-06T06:13:57.577+01:00I share the same views. Liked your blog very much....I share the same views. Liked your blog very much.Johnhttp://www.rnbresearch.comnoreply@blogger.comtag:blogger.com,1999:blog-1930103235934641180.post-62250523957076245952009-08-04T14:05:42.030+01:002009-08-04T14:05:42.030+01:00Ultimately, we're a society, and a company is ...Ultimately, we're a society, and a company is only other social organization. We all have an agenda and pursue it, and as often as not it's not really aligned with the organization's one.<br /><br />That's one of the reasons why I believe that management should be the owners or at least majority owners, as otherwise the "shareholder value alignement" just cannot exist.<br />Assuming that humans will behave the way that someone thinks they should is I think the most common failing. The first rule of making rules should be "people will find their way around this rule" :)vladenoreply@blogger.com