Monthly Archives: July 2010

For the past year I’ve been looking for a new job in banking. No matter what I did or to whom I talked, there were no opportunities and I received nothing but rejections.

One month ago, it began to turn. As of this week, I have five job offers – as well as one internal opportunity. How could this happen? Yes, the economic situation has improved, but can that explain the leap from zero to six offers? If so, aren’t employers completely irrational in their hiring policies? As my supply is completely inelastic, their increased demand means that they now have to pay a significant mark-up compared with six months ago. Are employers just bad at planning or is there another reason why my dry spell has come to such a sudden and inflationary end?

In Demand

The answer to this question can be read here. Please post comments below.

Tom Ellis, author of the puzzle that is even harder than the hardest logic puzzle ever, writes with another problem:

Alice and Bob are at a party and Alice says to Bob “Mrs Smith over there has two children.  At least one is a boy.” What is the probability that both her children are boys?

The first trick is that the naive puzzler will answer “one half”, whereas his mathematical challenger will explain that the correct answer is one third.

There are three ways that Mrs Smith can have at least one boy: her elder a boy and her younger a boy; her elder a boy and her younger a girl; her elder a girl and her younger a boy.  These are all equally likely, so the probability that both are boys is one third.

The naive puzzler will smile at the correct answer, pleased that he now understands the application of conditional probability theory.

But there’s a second trick.  The second trick is that the answer is not “one third”.  The answer is “it depends”; what it depends upon is how Alice reached her decision to tell Bob about Mrs Smith’s children.

Suppose that Alice has met exactly one of Mrs Smith’s children, a boy.  Then she can quite truthfully say “At least one is a boy.” But now there are only two possibilities, equally likely: the child Alice hasn’t met is a boy; and the child Alice hasn’t met is a girl.  Thus the probability that both are boys is one half.

It’s actually *harder* to construct a realistic motivation for Alice in which the probability of two boys is one third.  Perhaps whilst checking her e-mail on Mrs Smith’s computer she saw an icon for the GI Joe website.

Political correctness aside, she might take that as a cast iron indicator that one of the following three possibilities holds: Mrs Smith’s eldest is a boy; her youngest is a boy; both her children are boys.  In this case the chance that both are boys *is* one third.

Mathematics is an indispensable means of understanding the world, but if someone says to you “At least one of my children is a boy” then the reason that they said it and the precise meaning of what they said are far more important than the probabilistic content.  The mathmatical form of reasoning should not trump the psychological and the linguistic.

Deep waters. For a discussion of the even-harder “Tuesday Boy” problem, check this out.

From 11th March, 2006:

Ann Marie Rogers is in a tough spot. She has an aggressive form of breast cancer, albeit at an early stage. It may kill her, and so she has been through surgery, radiotherapy, chemotherapy and a legal battle which, so far, she is losing. The battle is to get the National Health Service to pay for the cancer treatment her doctor has prescribed, the drug Herceptin. Last month the High Court ruled that the local NHS trust was within its rights to refuse to pay for the drug.

These are uncomfortable cases, but they can’t be avoided in a system where the government pays for healthcare. The NHS has limited funds and someone has to decide the most effective way of spending them. The buck stops with the National Institute for Health and Clinical Excellence (Nice), which regularly makes the headlines after refusing to recommend some treatment or other, most recently for brain tumours. (Nice will issue guidelines for Herceptin only after the drug is licensed for early-stage breast cancer by the European Medicines Agency.)

Continued at timharford.com.

I announce the General Theory of Affection Monopoly, and, like Keynes, I place the emphasis on the prefix “general”. Individual producers can collude and earn monopoly profits; Opec is the popular example. On a microeconomic level, individuals can collude to enhance “profits”. The General Theory of Affection Monopoly explains that women collude in an attempt to maximise profits.

In a monopoly, the producer restricts supply to maximise profit. By far, women in aggregate are the largest producers of affection for men. Therefore, women collude and restrict the supply of their affection to extract profit.

Are men hopeless consumers, like the western world with its oil requirement? How do we engage in a productive counter-policy to mitigate this threat?

Mike, New York

The answer to this question can be read here. Please post comments below.

Thanks to everyone who sent good wishes after my last “cancer scan” column, which described the year-long process of waiting for a precautionary test. I think that all is well with me, although it is hard to be sure: as I write, the scan still hasn’t happened.

This time the fault was with the paperwork. I showed up, having carefully followed the preparatory instructions I’d been sent, only to be told rather sniffily that I’d followed the wrong ones. “I’ve followed the instructions you sent!” “I didn’t send them.” “Well, I certainly didn’t send them.” Back to square one.

Under the circumstances, I hope you’ll forgive me if I have become strangely obsessed with NHS management.

The remainder of this article can be read here. Please post comments below.

The Undercover Economist: a guide

Publishing schedule: Excerpts from "The Undercover Economist" and "Dear Economist", Tim's weekly columns for the FT Magazine, are published on this blog on Saturday mornings.
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