My own selfish altruism

I went out for dinner with some out of town friends. There was leftover pizza, so I took it home since they couldn't keep it. Outside of CVS I saw the guy that usually begs there and gave him the pizza. A casual reader would call this altruistic. However, there are some other important facts. First of all, I did not have gloves so whatever hand I was carrying the pizza with would freeze after 5 seconds out of my jacket pocket. Secondly, I was about to go into CVS and it would have been awkward to carry the pizza in. Third, I had not paid for the pizza (as evidenced by the fact that it wasn't consumed at the restaurant) so my attachment to it was less than if I had a sunk cost in it. Lastly, the guy was pretty obese, so deep dish pizza probably wasn't what a benevolent social planner would have given him.

Quote of the week

"The obvious thing about macro models is that they're wrong."
-my Macroeconomics professor during the first class this quarter

My budget, aerial acrobatics

As I mentioned in my last budget post, December was not a very informative month in terms of whether my budget is reasonable. Below are my aggregates.

I saved a lot of money because I was home at my parents house for over half of the month, unfortunately I still had to pay rent for a full month. The one good sign I see is from the clothing budget. I don't think being at my parents house prevented me from spending money on clothing, so the fact that it was under budget was a good sign given that I have been over budget in the previous months.

The only overspent category was entertainment. That was all from one item, a groupon for an aerial acrobatic flight. I have not cashed it in yet, but I am really excited about it, particularly the prospect of piloting my own tricks. There was a groupon later for skydiving, but I couldn't find anyone that wanted to go with me. The guy I know that is doing the aerial acrobatics already went skydiving.

Shout out

I'd like to give a shout out to my friend "a player to his left" who is featured in the 7:40pm post in this blog.

Quote of the week

I heard this conversation on my bus ride from O'hare back to my house:

Amateur conspiracy theorist 1: You know who owns Phillip Morris?

Amateur conspiracy theorist 2: The cigarette company?

ACT1: Phillip Morris the cigarette company.

ACT2: Nah

ACT1: Kraft

ACT2: Kraft cheese?

ACT1: Kraft macaroni and cheese! That's why it's so addictive, they put the same stuff in it.

This was all said in complete seriousness. I don't know where to start in analyzing this so I won't.

Innovative marketing

Recently at my parents house an advertisement for Genaurdi's came in the mail with two coupon codes for online grocery shopping. The first coupon is for $10 off and expires 12/31. The second coupon is for $5 off and expires 10 days later.

I have frequently seen ads for some discount on your first grocery delivery order and I have never taken advantage of them. I think a lot of the reason I have not is that there is a large effort cost in making an online grocery purchase when you are used to real life grocery shopping. Choosing items from a list online is a lot harder than choosing them in a store, at least when you are used to choosing them in a store. The effort cost difference between online grocery shopping and real life grocery shopping presumably stabilizes over time, but the initial additional cost for online grocery shopping does act as a barrier of entry for the consumer.

The Genaurdi's coupons go further in trying to transfer the consumer entry cost to the producer than the coupons which offer only a discount on the first order. The first online order is probably the most costly absent of coupons, but the second probably also has greater effort cost than the steady state online grocery order. Genaurdi's compensates consumers for the greater effort cost of the second online purchase as well, but compensates them less than for the first purchase.

From a marketing perspective, these coupons also make sense. Someone that makes just one online purchase of groceries and finds it difficult because of the large effort cost of that first online order is likely not to return to make another without additional incentives. However, someone that returns to make a second purchase and finds it much easier than the first purchase seems much more likely to continue purchasing online groceries without coupons than someone who only receives a coupon for the first order. Thus, marketers should not only be focused on getting consumers to make a first purchase of online groceries, but also a second.

Religion, Science, Fear, Reason, and Turbulence

I was reading The Extended Phenotype, a book about evolution, by Richard Dawkins, a near militant atheist, on the plane ride to Philly. The guy next to me was reading the bible. At one point there was some turbulence, and it felt like near free fall for a second or two. I had my head down at the time, and noticed him jolt and grab the arm rests. I looked up and sort of grinned and he asked if I knew that was going to happen. I said no, it’s just turbulence.

I did not have a natural fear reaction like he did. My natural reaction was there must be some reason and everything will be ok. I think it may be because my conscious mind when it goes on a plane somehow turns off fear signals from the unconscious, but I’m not sure. But given our choices of reading material for the flight, I thought about a more interesting question: Are religious people more fearful than scientifically minded people? Is there causation in either direction? One purpose of religion seems to be to relieve people of fears about uncertainty in life (“God has a plan for me”, etc.). Are fearful people then drawn more to religion? My reaction of “there must be a reason for this” could certainly come from scientifically minded indoctrination, but also maybe I’m drawn to scientific thinking because I’m drawn to reason.