Econ Ph.D. from Rochester. Primarily a microeconomist. Taught at University of Kansas in USA and in KIMEP Univ in Kazakhstan. Retired last year. Now back to India (where I grew up) after 45 years
Behind the first door, there are three dollar bills, behind the second door, there are five dollar bills, and behind the third door there are seven dollar bills. Players know about this.
Player 1 moves first. He can open any door and remove as many dollar bills as he likes from behind that door. Player 2 moves next. He can select any door, open it and remove as many dollar bills as he likes from behind that door.
The game continues, until there is only one dollar bill left. The player who picks up the last dollar bill gets zero, the other player gets all the money.
Remember, when it is your turn to play, you can open any door, but can not open two doors! After you open any door, you would have to remove at least one dollar bill from behind that door! And when it is your turn to play, you can not pass, which means you would have to open one of the doors! Of course, if there are no dollar bills left behind a door, you can not open that door!
Let’s play!
Hint: Try to solve this game for (1,2,3) instead of (3,5,7), and you will see that the player who moves first will lose!
To learn about subgame perfect equilibrium, try to explicitly write down the equilibrium strategies in the (1,23) game.
I I have taught game theory and related material for 25+ years and used this game as an example of extensive-form games and subgame perfect equilibrium.
The world has become a lot more affluent over our lifetime. Heck, India has 750,000 millionaires (Dollar millionaires, not rupee millionaires). No matter how you look at it, the stakeholders of large corporations are well-off, thank you. Even if they lose 80% of their annual income , they will still be very well off indeed. This was not the case at any time in history.
So we need to redefine criminal activity for the 21st century.
In the movie “Greed”, the obnoxious super-rich textile tycoon gets fatally mauled by a lion he rented for his own birthday festivities. Well , the mauling episode was facilitated by an young woman employee who “accidentally” pressed the button to open the cage door. It was also witnessed by a resident journalist who was so ” horrified” that he did not call for help , nor report the incident to the cops later.
Are these two people guilty of murder of a horrible human being? The answer is yes!
Since the Roman times where angry and hungry lions were released to prey on slaves for the enjoyment of the spectators, every society frowns on unleashing lions to prey on human beings, no matter how despicable the human being may be. Further , such acts are considered as heinous as first –degree murder and punishable as such.
Consider now a different act. You force a family of three (includes a small child) to live in a small windowless, stuffy room. They can only go outside for twelve hours of backbreaking manual labor every day. You make them eat small, inadequate portions of rice or bread and some basic veggies. The child gets sick but you forbid the parents to seek medical care –she eventually dies. The parents survive ten of fifteen years of your torture and succumb to some common disease because they are very weak.
Are you guilty of murder or abetment to murder? If you do this in USA or in Europe, then you will be guilty of forced labor, torture, imprisonment, child endangerment and a whole bunch of other crimes besides accessory to murder, and will be punished accordingly.
Then why would a multi-national corporation be allowed to pay wages that force people to live like the family described above? Oh yes, to maximize corporate profits! To keep the price of designer jeans and shoes competitive!
F**k that!
I would apply the same criterion as in advanced countries and declare these wages “criminal” wages.
How much wage is considered non-criminal? Well, I have an Econ Ph.D. , so do a lot of others, we will gladly calculate the minimum non-criminal wage for every country and share the information with others.
It is time to change the laws!
The fact that in poor countries employers pay low wages to local workers , does not matter in the 21st century! There are Masai tribes in Kenya who willingly live in areas infested by lions and sometimes get mauled by them, yet releasing a lion to maul humans in a developed society remains a capital offense.
What about labor economics 101 – one uniform wage in a competitive labor market! Well, violating that for a rise in social welfare is not such a big deal. Will this have a serious effect on indigenous enterprises? Since the number of multi-national factories is still relatively small in each Asian or African country, having a dual wage rate is not going to be seriously disruptive.
Yes it will increase the price of consumer goods in the Western societies by about 20 to 25% at the most, but it is a small price to pay to stop people from being murdered, isn’t it?
If anything, it will also shame some new millionaires in India into paying a non-criminal wage to their employees!!
Get a calculator. You are in the eighties (1980’s). A dollar is like 40 rupees! If you make $40,000 after taxes every year and spend the bare minimum on your living expenses, say about $8000 a year, then in ten years, you save up a tidy sum of about 350,000 + (including interest on the savings). In rupees, you make about 1.5 crores , which was a heck of a lot of money in the eighties (in real terms , about five/six crores of rupees in 2020). Then you can go back to India and live like a king!
However, a miser makes others miserable!
I was a houseguest in Swapan’s uncle’s house in New Jersey. All I was asking was how to get back in the house after I return from a trip to nearby NYC. The conversation with Swapan went like This:
Swapan: “After you ring the doorbell, jump !”
Me: “What? Why jump?”
Swapan: “Then Chachi can see the top of your head, or even your face if you jump high enough. Try to jump vertically as high as possible, so that she can recognize you. Then she will ring the buzzer to the outside door. Run, because the buzzer keeps the door open for a few seconds only.”
Me: “Then…?”
Swapan : “After you open the outside door, ring the buzzer next to Apt. 1A. Oh, that switch is kind of broken, so make sure you don’t get a shock. Chachi then would ring the buzzer for the inside door. After you open the inside door, come to Apt 1A and there is a final doorbell on our front door. Ring that and you are in my friend!”
Me : “Just saying, can’t Govinda chacha install a security system with a camera and such? Other houses have those!
Swapan laughed heartily at this. He knew his uncle inside out.
Chacha didn’t have any extra beds so we put down blankets and bed sheets on the living room carpet.
Me, my friend Swapan and his wife, and their baby slept on the floor.
We woke up at the noise of scurrying insects.
We turned the light on. About fifteen rats scattered away in fright! These were no squirming bugs,
Swapan’s wife sat on the couch, wide awake, holding the baby all night. The rest of us slept off and on, wary of the rodents’ return.
In the morning, Swapan was furious. “Why doesn’t he get rid of the rats, Chachi? This is America, after all, you don’t have to live like this.”
Well, any improvement in Chacha’s lifestyle would have exceeded his annual maintenance budget of $8000 (for a family of three), so the answer was a no!
We could have gone to a cheap motel, but we didn’t. We suffered for two nights.
Govinda chacha attained his savings target . Quit his permanent job in USA and returned to India with the money.
Did he live like a king?
Did his American born daughter rebel in her teen years?
Did he invest his crores in the Indian stock market and lose most of it?
Did his wife finally become crazy after living with the miser for twenty-five years?
Well, all of the above!!!!
Is this a true story? Yes, actually the truth is even more bizarre, so I am not sharing it with you. Cheers
There are countries that are seriously corrupt, but the way corruption works is substantially different in different societies. I have first hand experience of North America, the Indian subcontinent , Cambodia, and Central Asia. There is also corruption in other countries of the world, but I will not directly discuss them
I will only write about what I have seen and what I think.
Academic research on corruption is misleading, inadequate and unreliable. So don’t pay attention to those corruption indices and corruption experiments.
Let’s start with Central Asian Countries, which were all part of Soviet Russia, controlled by the big Brother in Moscow for eighty years or so. Several things made the Soviet countries dysfunctional.
Equality , not attainable in a truly capitalistic economy, was pervasive, but it totally destroyed any incentive to work hard. If the man who swept the streets got paid 50 dollars a month , the manager of a major state enterprise (comparable to the CEO of a large company in the West) would get paid about 500 dollars a month, not 500,000 every month! Everyone had pretty much the same lifestyle . The major output in factories and offices was gossip.
The government was highly politicalized but clueless about Economics 101 (not kidding). Useless investments sprouted up everywhere, highly profitable projects were canceled at the whim of the party leaders, there were hardly any proper accounting of revenue and expenditure – and the government owned everything that needed proper accounting!! A lot has been written about this elsewhere!!
Come 1991, and there was independence of the “Stans” in Central Asia (Kazakhstan, Tajikistan, Kyrgyzstan,Uzbekistan, Turkmenistan and Azerbaijan -not a “stan” but very similar) . Along with political instability, there was anarchy during the first few years. Some individuals expropriated a lot of assets – both assets belonging to the state and assets belonging to other private citizens. . Around the middle to end of 90’s the government struck a truce with these criminals and restored order in day to day lives of the citizens. (There are six “Stans” – so the exact sequence of events will, of course, differ among them)
And a Network society was born. Who is in the Network? Top government officials, their families and a handful of ex-criminal families. They control all major capitalistic activities, and they appropriate most of the surplus. Any new capitalist venture, once it reaches a noticeable size, will have to be compromised with the Network or will be destroyed. The common people run kiosks and small markets and ply taxis and own small restaurants. Kazakhstan has been fortunate enough to discover a lot of oil. Alas, the ownership of oil , property of the Kazakh people, has been transferred to a handful of private companies , who appropriate most of the oil money.
Hundreds of millions of dollars in oil money , and profits from other enterprises are appropriated by a few families and their lackeys every year. Much of the money is sent abroad to secret bank accounts or is used to buy foreign assets.
How long will this bleeding go on? My guess is at least for the next fifty years, until and unless this regime falls apart and replaced by more democratic institutions .
The post -Soviet regime has been manna from heaven to the Network, but for the common people, things have not changed much. Their average income is still abysmally low- a college graduate may start working at $200 a month- but there are certain redeeming features of the post-Soviet capitalist regimes:
People can buy, sell, own and rent real estate- not possible during the Soviet regime- and improve their financial condition this way – once their net worth reaches a million dollars, the Network may take notice, but otherwise they are left alone!
Thanks to modern technology, they can invest in stocks, bonds or foreign exchange , all over the world. Financial capital is usually anonymous, and hence under the radar!
People can own and run small businesses which can be quite profitable, as long as they stay under the radar!
People can and do go abroad for work or even migrate to other countries. One outstanding legacy of the Soviet regime is an excellent secondary education system everywhere in the country, even in remote villages. Anyone with a working knowledge of English or Arabic and a college degree is usually more skilled and productive than an average college graduate in the West
Opportunities also exist to excel in Sports or entertainment or arts or IT – success in any of these fields can be very lucrative. And finally, sometimes the Network notices you and decides to use your services, which will change your life forever.
So, an utterly despotic regime bleeds the country year after year, while the people suffer silently , hoping for better times. The people have been subdued and terrorized enough, so there are very few instances of organized protest. Like children in a family of a brutally violent and abusive father, they are well-behaved and (at least in public) full of praise for their parents.
I worked in Almaty, Kazakhstan for five years – met a lot of students and colleagues and local people whose memory I will cherish for the rest of my life!!
The other “stans” have regimes that are very similar, except Uzbeks and Tajiks do not have oil , Kyrgyzstan has more democratic institutions, Azerbaijan is like Kazakhstan except it is a lot smaller, and Turkmenistan has oil but an extremely paranoid, schizoid government ! I was fortunate enough to have students from all these countries in Almaty !
The following pic is from my last Industrial Organization class from Spring 2019
A bizarre consequence of this regime is a few hundred high-end retail “ghost” stores in Almaty. The stores sell a pair of gloves for $400, bed sheets for $200, and winter jackets for $ 800 in a country where the average worker makes about 200 per month! They are usually staffed by well-dressed young women (many of them very attractive), and they get zero customers everyday of the month. Obviously they are tax ploys for changing the color of money! I leave you with a few pics of empty stores – they look like this everyday, all day!!
I have no literary talent whatsoever, just a lifetime of strange stuff, some not so pleasant, some unexpectedly delightful.
I have lived in USA for about forty years. I visited many states, some numerous times over the years. Memories fade, photos get lost. I reveal my thoughts, my vices , and my personal life contemporaneously in these blogs. I will only use limited amounts of profanity, and will post no pics of naked or semi-naked women !! Everything else here is real and honest.
ALASKA: Of course this one comes first! During my years at USA, I could never afford to go to Alaska. Did not have the time or the money. I watched in awe all the travel videos, the magnificent mountains, the icebergs, the wildlife.
My last years as a professor in the university of Kansas were depressing, to say the least. Fortunately I was offered a job at an university in Kazakhstan, of all places, that I accepted in 2014. Suddenly, my financial problems were gone, I actually became relatively affluent!!
Every year, I started taking long vacations during the summer months. By 2017, I had enough money to splurge. I could not go to Alaska and drive through the state by myself. It is a huge state, I will have to drive alone several thousand miles to visit the sights. I opted for an eight day cruise. Went all in, a deluxe cabin with a balcony all for myself. Cost a ton of money but I could finally afford it.
I went from Almaty to Frankfurt. Rested there for two nights. Unlike other cities is Germany, Frankfurt is brand new, most of it anyway. I found it to be rather boring. You get some German flavor near the train station – there were lots of streetside cafes and bars. I stayed in a hotel near the station. German food was disappointing, but I had the best baby squid in my life at a Turkish place near the train station. A little bit of herbs and some butter, and it was heavenly!
I took a sightseeing tour mainly through modern Frankfurt, all steel and glass
A terrible cough ensued , aggravated by my smoking which stayed with me for months to come. I was Ok for the seven hour flight to NYC, but really miserable on the five hour flight to Seattle from NY.
Next morning I boarded the Celebrity Solstice. The ship is huge, more than a thousand passengers , six floors. Almost everyone was paired up, mainly senior citizens. There were a few couples on honeymoon or on fun trips. Most were white Americans, with a smattering of rich Mexican families taking family vacations. The passengers were old and mostly fat, the crew came from different parts of the world and were very lively.
The restaurants had formal seating, but it was pointless for a single person to sit down for a meal. I chose the buffet and what a great choice it was! Unlike the cruise I took way back in 1990 in Florida, food choices have become spectacular in international cruises! There were numerous food stations in the buffet – continental food, American food, salads, chinese food, Japanese food, Mexican food, Indian food, Middle Eastern food – and of course Indian food was being cooked by Indian chefs, Chinese food by Chinese chefs and so on! It was essentially a food heaven! I had fun mixing and matching, like beef stroganoff with naan bread, oxtail soup with chinese noodles – you get the idea. I should have taken more pics, but here is one fourth of the dessert station for your perusal. In case you are not satisfied, there were fifteen kinds of icecream right next to it. I suggest if you go on these cruises, fast for one month prior to departure! Everything in the buffet was free except alcohol.
Breakfast was healthy (haha), I had three types of fish every morning – salmon, herring and mackerel, along with rolls. The amount fish I scarfed down every morning will probably cost about $25 in US restaurants. I finished off with puri and sabji of course!
This was my breakfast every morning. Did not go for eggs and pancakes
My cabin was fantastic. Every morning I woke up to something like this
Two seal pups on ice
Oh yes, it was cold! A few degrees above freezing even in June! And constant rain, and heavy winds! The swimming pool on the top deck was closed, the second deck had an unheated covered swimming area, that’s where one of the few smoking sections were. In order to smoke, we had to wear a winter coat and brave some chilly wind! The third deck had a small heated swimming area, that was packed with people at all times.
As I said before, the ship was huge – filled up with lounges and restaurants and gift shops everywhere. The cruise line makes extra money by selling specialty drinks and beverages all over the ship. I did not fall for that except an occasional beer. On the third day, the sun came out and the top deck was open, it was still cold. I succumbed to having a huge crab fest that cost some extra money.
As you can see, the crab leg was huge, about the size of my arm, and there were crab cakes and crab chowder and hush puppies and some bread – everything was soaked with butter – that was an ordeal for my poor arteries. They used no spices whatsoever, my Indian soul craved some masala on the beautiful crab meat!
The top deck is practically empty because it was cold. I was one the brave souls to try the crab fest.
Two people on the deck besides meHuge crab leg
Oh yes, I was lonely as hell, like for most of my life. I was probably the only single person on the boat with about a thousand people! I managed to speak with some people in the smoking area. Many were senior citizens, some were continuously drunk with blurred speech and meaningless jabber. There was the bald fat guy carrying a big bottle of vodka with his wife in tow, there were several elderly ladies with the ever present cocktails in their hands. The lives they led were rather depressing. With enough money to their names, and the children grown, they did not have anything to keep them intellectually alive. They drifted from one cruise to another, drinking, eating and just hanging around. There were some middle aged men who appeared to be interesting ,but they were taking smoke breaks away from their families – they did not talk much.
On the ship, internet did not work very well, my internet package was a waste of money. Phone calls were expensive even with the package deals offered. It was surprising to see some people constantly talking on the phone spending hundreds of dollars for conversations that I think did not involve lucrative business deals !
The crew consisted of young people, some very attractive, from all over the world. I had fun startling the Indian guys with my Hindi (most people think I am Hispanic ), and startling the East Europeans with my poor Russian that I learned in Kazakhstan. Once, I got into a singing lounge which had a smattering of old overweight retirees. A striking blonde in a gorgeous outfit was sitting on a stool in the middle, obviously she was going to sing a little later. As I entered she smiled at me which I thought initially was just an artificial greeting smile. But no, she was giving me the eyelash batting seductive deal !! I looked behind me, there was no one! Apparently I was the only decent looking man in the room (which really is sad). I went up and talked to her. She was a country music singer from Georgia, possibly famous in her own circle. Her voice was melodic, I listened to her for a while. Later I saw her in the buffet because the crew members also dined there. I was tempted but she was way way above my league, and I was prudent enough not to make a fool of myself!
Romance on an Alaska cruise is unlikely, I heard that if you want to party hard, you need to go to Caribbean short cruises. There were teenage girls presumably granddaughters of senior citizens, all attractive young women were with partners, and there were spinsters roaming about in groups that I did not care for at all. There was actually an Emergency Room nurse that I met, she said she gets stressed out form working with trauma patients, and takes a cruise every couple of years to smoke and drink heavily. She was kind of attractive, but appeared to be looking for a serious relationship. I had a mistress in Kazakhstan (until 2019) who I think is stunning, I was not into the nurse at all. In any case, I was not looking for romance on this ship.
This was in Almaty where I was working in 2017!
I met three young men from a rich Mexican family that was taking a family vacation. Two were brothers and the other one was the husband of their sister. I hung out with them whenever I could. Their pics will come later.
The highlight of the trip was on the fourth day where the ship went inside a fjord barely wide enough for the ship to sail through. This was the famous Inside Passage! There were towering snow covered mountains right next to the ship and glaciers and waterfalls. Everyone was on the deck, transfixed by the scenery. A charming Southern lady took some photos of me.
Photos of the fjord:
This is it for now. Part 2 is coming up covering the ports of call
I like cats! No, I am not a cat person with 27 cats in my house, but I had cats as pets in America for a long time. Apart from domestic cats, I also like stray cats. I like the way they survive, fierce little independent creatures! They look upon humans with an amused disdain and indifference, they handle stray dogs and other animals with ease, and they hunt, beg and steal food everyday. They are tough little creatures.
But the harsh lives they live and exposure to the brutal winters in North America have an impact on their bodies – many are skinny, battle-scarred , their coats lack luster and shine. The domestic cats look good but as you may have noticed, almost all of them are fat, many are obese.
One of my calico cats in USA, up to the age of about two and a half years, was gorgeous – shining coat, sparkly eyes, and a muscular physique. Soon enough, he started getting fat, although he never became obese unlike his orange brother. It was partly my fault for not providing enough stimulus for him to exercise, partly his fault – he liked to lounge around and groom himself a lot.
Anyways, after retiring in India, I found most cats are strays or semi-strays – Indian houses are open access all year and cats come and go as they please. Most of them, again, don’t look very healthy.
Imagine my surprise when I noticed a cache of cats around the local fish stalls. These hang out at the roadside fish sellers in the morning. Their sole diet is fish guts and occasionally small pieces of fish. This is possibly the best diet for cats!
They get enough exercise because they get chased around by stray dogs everyday!
They look really healthy, shiny coat, sparkly eyes and very cute. Take a look!
smartsmartsmartsmart
The cats are patient, they never try to steal from the seller, and they defend their territory fiercely!
left India in 1975, came back to live here after retirement in 2019. As I settled down, a lot of things shocked me. No, it is not noisy streets, or religious zealots – I already knew about these.
Read on for a sample of what I found shocking
Many of my friends (age 60+) in India have become affluent, and some of them and their children have become really rich! How did it happen?
Real-estate deals – some people became rich by doing nothing. They inherited a house from their parents – sold it to a promoter who gave them cash and and new apartments. The original house has been demolished and replaced by a multi-story apartment building. Some people had several properties ( husband’s father’s apartment in Kolkata, wife’s father’s house in Delhi, her grandma’s house in the suburbs of Kolkata that has become part of the city now). These people have become seriously affluent.
How affluent? The range goes from an Asset value of 20 lakhs to 5 or 8 crores of rupees or even more in some cases (which is from a modest 30K to about one million dollars) and sometimes an additional income stream or monthly cash flow of 25000 to 1 lakh rupees (from $350 to $1500). This now provides a solid cushion to middle-class and lower middle class people that never existed in India before. In USA, the median net worth of a household today is about 73 lakhs of rupees (about $100K). So most of those people in India are better off, asset-wise, than the median household in USA (cost of living in India is much lower than in USA!). Please note that most of these people are debt-free, so they can spend their entire income on their living expenses, whereas in USA where most households pay a high percentage of their income in mortgage or consumer debts.
This was beyond imagination in the 1970’s, 80’s or 90’s.
Please keep in mind that India is still a very poor country, with 75% of the rural population (which is 70% of the country’s population) has an annual income of about $1000 or less!
So the real estate deals have been shockingly beneficial to people in big cities!!
I liked this shock although this has some unfavorable consequences in the cities!!
