the magic of markets…
So, last night, masnick, grier and I went to a presentation, “The Magic of Markets, Market Efficiency and Informational Arbitrage” by Professor Charles Lee from the Johnson School of Business.. it was quite interesting, satisfying my hobbyist interest in economics that I’ve picked up lately..
In any case… also attendance were Andy Kessler (Cornell BSEE ‘80) and another smart Cornell banking dude with a big beard. I think the room was full of mostly MBAs and people who work in the finance district since that was the most ties I’ve seen in San Francisco since my friend Pang’s wedding.
So professor lee started off the talk with the “Guess 2/3 the average” game.. The idea is simple — write down an integer between 1 and 100 that you think 2/3 of the average guess will be… So.. if you think about it.. the answer HAS to be less than 66 (although, apparently one person did guess 80… yup.. we’re ivy leaguers…) — if you say that the average guess would be 50.. then 2/3 of that would be 33.. but that’s what everyone would guess… which would make 2/3 of THAT to be 22… and so forth… So.. theoretically, the average should actually settle at zero (according to the Nash Equilibrium) — but, since people are irrational (obviously, since one of them guessed 80) — it won’t get there..
I guessed 19.. and I won.. wahoo!! I was feeling quite proud of myself, having bested all of the MBAs and bankers in the room.. but i suppose it was just lucky. I’m the monkey whose stock picks beat the street.
Anyway.. the time allotted was way too short for the talk, and the panel discussion afterwards with Profressor Lee and Andy Kessler and the bearded guy only skirted some of the issues… Needless to say, I continue to be intrigued by this economics stuff and have re-started my reading of The Worldly Philosophers..
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