清大幫分享會：習慣力，4/7 Mon 19:00@活中101

這一次是我主辦，而且我也是講者之一。歡迎參加!

The Economics of Time Travel

This is an interesting blog post, and it is certainly entertaining to think through the implications. I love thinking about how this works:

If backward time travel is also somehow possible, maybe firms in the future will choose to outsource some of their operations to the past, locating their manufacturing and other services in lower-wage time periods.

Just to extend the analysis, if we applied comparative advantage to this analysis, we might think that certain time periods specializing in specific areas of production, which is what I thought initially. However, that might not be the case. The starkest case against this is that we bought wood from the past, and we sold them chain saws. This is reasonable, since we specialize in making chainsaws and our natural resources have depleted, and they have what we find valuable. Sounds good! But wait! The second they start preserving alot of trees, we might not be able to sell them chainsaws. That is if we bought natural resources from them, they would have less natural resources for R&D, which means technological progress might slow down in their time, which has an adverse effect on us. This is worth considering, but I think if we look at the margin, we can still get some trade going.

Thinking about this problem makes me think about technological progress. If we bought technology from the future, and in return, we sell them something (I can't think of anything), wouldn't every time period have the same production technology? In equilibrium, wouldn't technological advancements remain stagnant? As a result, a huge implication in cheap time travel is that the futre=past. The idea of time running, can be ignored.

Another, the implication of time travel is that the idea of uncertainty disappears. This may mean that money will indeed be neutral. However, the disappearance of uncertainty makes me more interested in the game theoretic aspects of competition and cooperation.

Repeated interactions make cooperation possible, whether it is infinite stages or finite stages (only needs a little bit of incomplete info on strategy space). However, the cooperation that appears in finitely repeated games may disappear, if both players knew about the type of strategy they have to work with. The player's type will most definitely reveal itself at the very end of the finite game, where a rational player will choose not to cooperate. As a result, cooperation might not occur in finitely repeated games, if both are rational. Also remember future=past, so the game we are playing in essense is a simultaneous game! So cooperation may never work in this case! Think about the prisoner's dilemma.

Imagine the US and USSR both had time machines, would the balance of terror work in this case? I imagine they would both have to be extremely nice people to avoid a war.

I don't know if I want to see that time machine built, to tell you the truth.

我阿扁錯了嗎 ? 我 阿扁錯了嗎 ?

If you are going to read this, please read the whole thing! Written by Anonymous

奉天承運，皇帝詔曰：

朕自千禧登基以來，挾政權轉移之威，立動搖國本之志，外拒三通，

內裂族群，期能千秋萬世，一統江湖。

無奈吾黨同儕未能同舟共濟，甚且黨同伐異，內鬥內行、外鬥外行，四人幫於是成焉，朕為之疾首！

頃又有三寶丟人於前、十一寇扯腿在後，為撫權力恐怖平衡，朕用心良苦：

宰相輪翻替換，唐、張、游、謝、蘇，除唐卿飛外，竟無一稱職！

惜唐卿非我族類、其心必異，哀哉！

加之內閣大學士遠哲，頭腦漿糊；
禮部尚書唐山，出言污穢；
刑部侍郎定南，不壽早夭；
監察御史岳生，年邁骨軟；
兵部光祿天羽，馬屁成精；
翰林院編修嘉文，尸位食祿；
澎湖金馬等邊關節度使，盡唱反調；
京畿之地九門提督，淪為藍營；
弘文館祭酒總監正勝，三隻小豬；
順耳府舍人志偉，獐頭鼠目；

正處燃眉之急，忽又蹦出一黃口楚子國榮，抱錯大腿信口雌黃。

嗚呼，天亡朕矣！

朕妻珍后，匱乏母儀，惹人生厭，然彼早年因朕成殘，朕愧之久矣。

及暮，彼愛金銀珠寶黃金美鈔，人之常情何能苛責？

事敗，彼拒不出庭，朕能奈何?

公主幸妤，性烈如母，嘗出言無狀，毀皇室形象！

然其尚能剛正自持，一幸也。

賊駙趙奴，攀龍附鳳，品德低劣，手腳骯髒，辱及皇室，朕已不認矣！

太子致中，寡言木訥，呆頭呆腦，不嗜國政，已遠走海外。

較之連逆、郝逆、宋逆、蔣逆等之後人，為父跨刀，克紹箕裘，朕深夜思之，一縷悽然、滿懷蕭瑟。

唉！生子當生孫仲謀！娶妻當娶‧‧‧，朕不願多言矣！

四年前子彈風波，幸賴奇美密醫遮掩在前，復靠昌鈺神探支吾於後，致使包圖龍再世，亦難斷矣！

此朕唯一堪足告慰於天者。

然朕之副舵秀蓮，極為難纏，斯時立朕身旁，知之甚詳，雖略遭魚池之殃，然早已無礙。
朕數度軟硬兼施欲杜其悠悠之口，然此刁婦視朕如無物，幾聲『嘿嘿嘿』，令朕如芒在背、毛骨悚然。

年前紅衫軍蟻聚於通衢，壞綱常、毀法紀、欺人心、凋經濟，朕恨之切齒！
其奪權之心可誅矣！

斯時也，朕懼通勤金鑾殿早朝，禍國者尤此為甚！

主其事者竟為本黨遺棄多年之敝屣，口口聲聲以創黨理想等言詞挑戰於朕，哼！

緣木求魚，目無國 君，朕對其惡之亟矣！

昔毛匪澤東大行之夕，病塌側呼小平告之曰： 『吾將去矣，惟黨內同志猶有不願隨君步伐而行者，吾憂之！』 小平曰：『東哥勿憂！凡不欲隨吾步伐者，吾令其隨你而行！』

嗚呼！朕亦將退矣，惟願隨朕而行者，疑僅蕭愛卿美琴一人耳，悲呼！

噫！吁！唏！

中原鼎沸、民不聊生，眾卿誤國，東倒西歪惟西瓜大邊是靠，彼等猶死不認錯，一意欲朕承擔，眾卿良心何在乎？公平乎？

昔杜卿正勝之先人曾云：『滅六國者，六國也，非秦也；族秦者，秦也，非天下也。』

此言繆矣！繆之極矣！

害朕者，眾卿也，非朕也；族朕者，天下也，非朕自己也！

嗟夫！

每念及此，思之悽哽，吾何罪之有、吾何罪之有？
(我阿扁錯了嗎 ? 我 阿扁錯了嗎 ?）欽此！」

Low Probability Event

P[我有勇氣跟一個完全陌生的女生(denote as A)說我覺得他很漂亮 given 我沒有喝醉]=0.03

P[我挑到A given A漂亮]=0.01

P[A不理我]=1

P[我去胖達喝飲料 given 我喜歡Starbucks!]= 0.005

P[有女生跟我一起喝飲料女生(denote as B)]=0.25 (我沒有故意 inflate 這個機率)

P[A在那個時候在胖達消費] <1

P[B認識A] < 0.5

=> max prob of all this happening = 0.0000001875

最牛逼博士論文

From PTT Econ:

1、最牛逼博士論文就是在還沒答辯之前已經發表在最好的期刊上，而且鑒於論文很長，該期刊必須像小說一樣連載。實例：張五常博士論文《佃農理論》，當年在JLE上連載四期。

2、最牛逼博士論文答辯就是答辯人一直在挑戰答辯委員會成員，直到問的這些教授們緊張到恍惚以為自己才是答辯人。實例：薩繆爾森的博士論文答辯結束後，答辯委員會成員之一的熊彼特（上世紀最偉大的經濟學家之一）轉過頭去問另一位成員里昂剔夫（諾獎得主）：“瓦西裡，我們通過了麼？”

3、最牛逼投稿論文就是讓編輯滿世界都找不到一個能看懂這篇論文的匿名審稿人，最後只能發表，根本不需要修改的。實例：SIMS1971年發表在《數理統計年鑒》上的論文《無窮維參數空間中的分佈滯後估計》。SIMS寫完這篇論文後沒投經濟學雜誌，因為他顯然知道沒人看的懂。於是投給了最牛逼的數理統計雜誌，結果編輯死活找不到審稿人，最後好不容易湊合拉來一個，審稿報告是這麼寫的：“我真的不明白這篇論文在說什麼，但是我檢驗了其中的幾個定理，好像是對的。所以我猜應該發表。”

Best Speech I have Heard in Years

A More Perfect Union

一橋大學

很多人問我我去日本哪裡。

我主要是去一橋大學。這一所學校只有四個領域: 商，法，經濟及社會科學。所以他非常小，但是整個校園走起來很舒服。他在經濟學領域也是表現得不錯。

下面是我在國立照的校園照片。

這條路到了四月初時，櫻花卉盛開，聽說許多日本人會跑來觀賞。

校內:

Day 2: Gibbons Lecture - Agency Theory in Organizations

The economics literature has long attributed the problems inside of firms to information asymmetry, more specifically ‘hidden actions.’ The principal can not observe the actions of the agent, but can only observe the output, which has noise. The agent proceeds to provide sub-optimal effort levels. This is the classic moral hazard problem. There are three caveats here. One, output production has noise, so our principal can not deduce with certainty the agent’s effort level from output. Second, our principal can contract perfectly on output, so our principal can do everything in his power to create enough incentives through contracts to preempt a shirking worker. Thirdly, our agent has to be risk averse. As a result, our principal’s problem is to write a contract that creates enough incentives for the agent to work hard, while still providing enough insurance for the agent.

However, with the concept of non-contractibles creeping into economics, we are provided with a new option in modeling agency problems. While moral hazard is a serious and authentic problem inside firms, we can not help but wonder how much managers or firm owners think about risks when drawing contracts. Instead, an agency problem can arise simply because the principal is paying for the wrong things. For example, let us assume that a firm is concerned with its output quantity and quality. However, quality is not contractible. As a result, the firm contracts solely on quantity, then the worker is provided with full incentives to boost quantity, all the while ignoring the products’ quality. This is the so called ‘getting what you pay for problem.’ In short, the principal can not align the interests of the agents with their own, simply because the things the principal care about can not be included in the contract. We shall call contracts of these types ‘formal contracts.’ Their key feature is that the firms choose to contract on objective and measurable aspects which are verifiable in court, but often a misalignment of interests arise. Such multi-task models where only a portion of those tasks are contractible were developed by Holmstrom and Milgrom (1991) and Baker (2002).

There is a solution to non-contractibles though. Continuing our example of quantity and quality, a firm can promise in advance to award the worker a bonus if he also produces high quality output. Since quality is not verifiable outside of the relationship, the principal has an incentive to back out of his initial promise. However, a contract such as this could be sustained in the long-run, where the worker chooses to produce high quality output and the principal pays a bonus in every period. In other words, such ‘relational contracts’ are strongly dependent on the likelihood of the principal and agent’s continuous cooperation. If the likelihood of continuous cooperation is high, then a relational contract is much more likely to be sustained. The concept of relational contract was formally introduced by Bull (1987) and then further advanced by Levin (2003).

As you can see, I did not summarize the models that Gibbons introduced. I have written them down somewhere though.

Day 2: Gibbons Lecture - Introduction

“Firms don’t have preferences, people do!” – Robert Gibbons

Before 1937, firms have long been treated as a black box in economics. Economists were well aware of the differences between a firm and a person. People consumed, firms produced. People maximized utility, while firms maximized profits. The standard theory in economics laid foundations, so that economists can build models representing intricate details in their interactions, between people, between firms, or between people and firms. However, the literature on firms ends there. There were no investigations on the interactions within firms, or on contracts. Economists didn’t even ask why there were firms in the first place! Firms looked like ordinary ‘individuals’, except they produce instead of consume, and maximized profits instead of maximizing utility. That changed until Coase’s seminal paper in 1937.

Coase asked a simple question, which would send a ripple through economics. I say ripple, because it would take a little more than 30 years before his ideas caught fire. He asked why were there firms to begin with? In a world where Adam Smith’s invisible hand automatically guided resource allocation to their most optimal use, it seemed curious that some (or most) production had to be conducted within a firm. Why not just organize production within the market? Coase offered us a simple, yet intriguing answer to this question, so intriguing was the answer that it took more than 30 years for economists to take a serious consideration in Coase’s ideas. Coase told us that using the market entails a cost, he called a ‘the cost of using the market.’ It would be 30 years later, when Stiglitz named this cost ‘transaction cost.’

It didn’t take long after the 1960’s for transaction cost economics to catch a momentous boost in economic literature. Economists such as Oliver Williamson, Benjamin Klein directed their research towards finding formalizable theories of the firm. It would not take long after that for economists to finally study the interaction within firms, thanks to the advent of game theory, agency problems could be analyzed and optimal incentive contracts could be formulated. However, something was missing. Our theories seemed so alien to real managers in real firms that every working economists knew that the field is still in search for a realistic theory of the firm. In this chapter, we will discuss the classical agency problem framed in terms of the incentive – insurance tradeoff, and the new method in explaining agency problems, non - contractibles.

Also, in this chapter, we will discuss the existing theories on the boundary of the firm. This area is budding with research literature, which started with Oliver Williamson and Benjamin Klein, later advanced by Gene Grossman, Oliver Hart, and John Moore. We will discuss the similarities and the differences surrounding their theories, and briefly discuss the empirical work.

1.1 What are Firms?

Firm behavior can not be dissected until we can fully appreciate the complex relationship inside firms. Economists used to share the view that firms are ‘clean,’ ‘well organized,’ ‘powerful’ production entities. Decision and its relevant information will be gathered, analyzed, processed and finally utilized to their utmost value, producing output that can fully capture the firm’s underlying potential and maximize profits without any complications. However, this view of firms and organizations is wrong.

The description we gave above can certainly describe a single person. On the other hand firms are made of numerous employees, managers and owners. In other words, there are political games that go on inside firms. These potentially damaging behaviors inside and between firms will determine the boundary of firms, and the incentive contracts inside firms. Agency theory equips us with the knowledge to tackle and explain a wide ranging phenomenon exhibited by firms. But before we move on to the agency problem, we have to answer this question: If there are dirty politics and inefficient behavior within firms, why are there firms in the first place?

Coase introduced to us the concept of transaction costs. If transaction costs are high, the market system fails to allocate resources efficiently. In other words, the price system fails, as transaction difficulty rises. As a result, firms exist because operation with in an organization, in some cases, is less costly than operating in the market system. So even though empirical evidence shows us that firms are ‘systematically stupid,’ performing worse than markets efficiency wise, we could be merely witnessing a case of selection bias.

From the graph above, we can see that the firms we observe, operate in an environment where the transaction difficulty is greater than While the markets we observe, operate in an environment where the transaction difficulty is less than . More interestingly, we would find the markets operating on a higher efficiency level than the markets. But this is in no means evidence against the effectiveness of firms or organizations in general. Theory suggests a difficulty in comparing these two in an empirical setting since we would encounter a selection bias problem. To sum it up, firms deal with hard problems that the markets couldn’t handle. We are now ready to discuss the workings inside a firm.


As you can see, I'm trying to organize my summary into maybe a small book.

Day 4: Moving Around

第四天在日本，今天不上課，所以表示我可以到處逛一逛。我的日本朋友 Ryo Kawasaki 跟 Shin Kishimoto 帶我逛東京。買一張710日圓的東京地鐵通一日票，就開始當觀光客了。我很討厭當觀光客，尤其是一直照相，看起來很蠢。但是這一次旅行，我照了很多照片，因為我的忠實讀者想看。所以，我現在就跟各位分享一些照片，及簡單介紹他的內容跟故事。

Senso-ji Temple (浅草寺)
我們第一站到 Asakusa Station，去淺草寺。首先跟各位介紹一下日本的宗教信仰。日本有兩種盛行的宗教: "佛教" 及 "Shinto (神道)"。淺草寺是佛教的，而我星期天去的明治神宮是神道的。當初，唐朝我們中國人將佛教引入日本，引起當時的日本人熱烈的迴響。原因很簡單，日本的神道沒有講關於人死後的事情 (after-life)。然而，佛教裡的 after-life 描繪得相當清楚，所以最後日本將兩個叫互相結合。因此你在路上隨便抓一個日本人問他是什麼教，90%會跟你講神道，而85%會跟你講佛教，所以很多是兩者都信的。然而，還是有許多不同處。例如，一般的佛教的廟會拜神像，但是神道多半會拜大自然，因此明治神宮的周圍的樹木就是人工林。


我和 Shin Kishimoto。


我和 Ryo Kawasaki。


個位有沒有發現，這有五層，每一層代表了日本深受佛教影響的五個元素: 地，風，火，水，空。


我抽了籤，上面寫 "凶"。最差的籤。奇怪的事我當時籤筒怎麼倒都倒不出籤，後來到初 "83" 一看這張紙條寫的，我趕緊去買護身符。希望運是可以改善。期實，把籤綁在那裏應該就可以將壞運給留在那。(最後得知: 淺草寺有60%是最壞的籤)



話說這個煙可以治病，你希望變聰明就讓煙薰一下頭。照理來講，煙是要花錢買的，但是他有嚴重的 free rider 問題，所以我猛薰免費的煙。(記住，我剛剛才抽到一張說我會病一整年的籤)



這裡可以清洗你的靈魂。先用右手將瓢子裡的水洗左手，再用左手洗右手，最後再用水清洗嘴。很多人喝下去了，我沒有，但是現在回想抽到那籤後，應該喝下去的。

在 Asakusa 站外面，可以看到 Asahi 飲料的公司總部:

當時設計是讓那金黃色的東西站立的，但是因為擔心會有安全問題，所以現在看起來像 "金子"。

我們還去了 Akihabara，但是因為星期三 Cosplay 那一些人還沒有出沒，所以沒有特別好玩。我們到是有去一家咖啡館，裡面的服務生都打扮成傭人，裙子很短，女生也蠻可愛的。不好意思，我沒照相。我星期天又去了一次 Akihabara，照了一些 cosplay 的。

Tokyo Tower (東京鐵塔)
很多人說，日本人很會模仿跟抄襲，東京鐵塔是一個很好的例子。他看起來就像巴黎的 Eiffel Tower，那是因為他的靈感就是從那裏來的。而他又比 Eiffel Tower 更高，又更輕。他們真的鰻會模仿的，但是最後弄得比你好。他是橘白相間的是因為飛安的考量。

從東京鐵塔看到的 Rainbow Bridge。他連結到了 Odaibo。若天氣好的話可以從東京鐵塔看到富士山，但是當天雲層太低。

我下一篇在跟各位分享我星期六去新宿玩的一些照片跟感想。

Day 3: Ominous Meeting

我先聲明，我到時候會開始整理上課的東西，但是先寫一些有趣的事。

我星期二晚上，在上野逛街，走到一個小巷裡，小巷似乎很多小館可以吃東西，但是更引起我注意的事一群穿著黑色的大衣及西裝，髮型挺酷的，站在小巷的兩旁，每走四步就有一個。他們也是我第一次發現日本人在街上吐痰。我走一走發現，跟我一起走進巷子裡的人都不見了，所以我也就趕快轉到另一個地方。過不久後，我就發現一群警察往那邊跑。

我回到房間問我的日本朋友，那一些人是誰? 他說極有可能是 Yakuza。

才第三天就看到日本世界有名的黑幫。

Day 1: Arrival

這我第一次自己出國。

我去過很多地方，但是這一次是我第一次自己出國。幸好我的第一次是在日本! 因為日本所有東西都標示的很清楚，所以做車轉車都沒有問題。但是，若沒有來過，一定會很緊張，因為那鐵路線簡直就像蜘蛛網，密密麻麻的。又怕語言不通，什麼事都做不了，但是還好寫中文他們看得懂，所以一覺得開始雞同鴨講實，馬上拿紙筆出來寫中文，他們就開始: "Ah! sodesgane!" 更重要的是他們都很熱心。

我從成田機場出來時，有兩種車可以到上野: skyliner 或 limited express。兩個都是同一個線上

的，skyliner 要將近 2000 yen，而 limited express 只要1000 yen。但是limited express 大約慢個 20~30分鐘。因此我選擇了便宜的，但是這是對的選擇也是錯的選擇。錯是因為 skyliner 有指定座位，而limited express 沒有。我在terminal 2上車，所以車 上已經坐滿了人，但是沒有關係，因為過了兩站就有兩個人下車。正當我要做下去的時候，有三個婆婆上車，我發現都沒有人讓位，我就站起來讓位給他們 。(我發現，好像都只有我再讓位置給老人，每一天做都只有我。)

這一讓就不妙了，因為之後的站都沒有人下車。上野剛剛好是最後一站，而我就在那邊站了將近一個小時。直到做到接近倒數幾站時，才有人開始下車，我才有位置坐。

那為何坐對車呢? 因為同一個車廂上有一位很漂亮的女生。後來我終於有位置坐時，他就坐我旁邊，而坐我們對面有一個男的一直在打PSP，打得目不轉睛，他後來偷看了那個女的一眼，之後就沒有專心打PSP了，每打五秒就偷看一眼。

日本東西真的很貴! 想吃一頓好東西就要花一點錢，而當你看到便宜的東西時，你就會發現被騙，因為實際的東西比圖片上來的小太多!

Destination: Japan

Leaving for Japan tomorrow.