Friday, May 09, 2003

Also from Prof. Dierickx, the cultural perception of risk in different countries: "A bird in hand is better than two in the bush."  (UK, France, USA) "A bird in hand is better than 10 in the bush."  (Dutch) "A bird in hand is better than 100 flying."  (Spanish) "A bird in hand is better than two in the bush."  (Portugal)  When a Portuguese was asked about this difference between the two neighboring countries, he replied, "I think the Spanish are just not that good at catching birds." "A small bird in hand is better than a large one in the bush."  (Russia.)  Note the qualitative aspect of risk. If you're from another country, let me know your common wisdom! 4:39:14 PM    comment []

I hereby announce the Period Three professor whose wisdom, insight, and humor will supply you with selfsame for the next two months.  We've had two classes and my hand already hurts from recording all of the quotes.  Without further adieu, let's welcome: Ingemar Dierickx's Quotes of the Day from Negotiation Analysis "This course is for people who looooove money.  It's real good stuff." "Some people will tell you that money is not that important.  This is ludicrous." "In this course, we will also discuss how to destabilize existing coalitions... what levers do you have to use?" (on grading)  "How do we grade process [as opposed to result]?  This would be very easy if we had a direct telephone line to God, or the close equivalent, an Insead professor." "Any Germans in the room?  No?  Good, then we can ignore the Germans."  [ed. - Prof. Dierickx is an equal opportunity employer of country criticism.] (when discussing rationality and why expected value is not a sufficient basis on which to make decisions)  "Finance professors have studied their own navel and discovered that it was 'rational'." "Engineers, after all, are only second-class mathematicians... so what does that make economists?  Second-class engineers."  (ed. - Prof. Dierickx has a string of letters after his name: LLM, MBA, PhD all from Harvard, Lic. Jur. from Rijksuniversiteit Ghent.  He is frighteningly intelligent, especially when hazing a student, which he did with gusto today)   All quotes aside, Prof. Dierickx is an incredible professor.  Good thing, because my other professors this period are not exactly world-class.  Competent for the most part, they don't give one the urge to hang on their every word, on the receiving end of wisdom.  But Negotiation Analysis is a very interesting course: spiced by the fact that 30% of your grade depends on the outcomes of ten negotiations with randomly-selected students. Each of these statements deserves time for discussion, but to give you a flavor of the teaching, here is a sample: People are not risk-neutral Expected value is not predictive of human behavior Expected value is a good reference benchmark How to manipulate frames of reference?  Change the benchmarks. Use Prospect Theory Risk averse when winning Risk seeking (loss averse) when losing When using decision trees, show all nodes, don't make shortcuts Others can check your work Your assumptions will be explicitly detailed Finally: "The biggest mistake made by most people is to estimate outcome distributions using a point estimate."   4:34:41 PM    comment []