Sunday, July 08, 2018

An Appraisal of Two Magical Artifacts

I was recently tasked to appraise two magical artifacts. In particular, I was requested to make the assessment purely on the economic benefits and effects of the items, without taking into consideration any innate value (for example, as a curiosity or object of study) the items could possess. In other words, I was asked whether these magical artifacts would serve as good investments capable of reaping decent monetary dividends.

The first item was a small cloth purse with exotic runes woven into the fabric. It was not difficult to cross-reference the runes and thus to identify the artifact; this was a pouch of lesser reward, and it had the wondrous ability of conjuring a single silver coin, weighing about an ounce, each day.

The second item was a refined necromantic ritual which was capable of reanimating a skeleton from a corpse. The skeleton, once magically animated, would be able to execute simple commands autonomously without the need for food, drink, or rest. Based on the text of the tome, the skeleton would be free of decay without requiring further maintenance of any sort. Unfortunately, the ritual depended on several rare components, but it was possible to source for them. The question was simply whether it was economic to do so.

Both magical artifacts attracted much interest. Both promised to generate income forever, and thus seemed to be attractive investments. In particular, the necromantic ritual could potentially be used to replace all simple human labor! These seemed like no-brainers.

I remained unconvinced. The important consideration was the return on investment, which depended on the pricing of the magical items. While it was true that given enough time, both artifacts would generate a positive return, this ignored the opportunity cost of investment. In order words, it might be more profitable to invest in other financial instruments if the magic artifacts were simply too expensive. 

I proceeded to make an assessment on a fair pricing for both the items. First, to be competitive with other investments, the artifacts would have to yield at least an annual return of 3%, otherwise I would easily be better off parking my money in, for example, government securities. The next step would be to estimate the annual return each artifact would generate.

For the pouch of lesser reward, this calculation was simple. A single silver coin a day would fetch about 15 USD, give or take. Thus, over a year the pouch would generate 5475 USD. Based on this, the pouch could cost at most 182,500 USD; if it were any more expensive, it would be a poor investment.

For the necromantic ritual, the annual return would have to be based on the cost of simple labor which the skeleton would replace. A conservative estimate for a sweatshop worker's wages is 1 USD an hour. Compounded over a year, a skeleton would replace 8760 USD worth of wages. At this rate, each ritual could not cost more than 292,000 USD, otherwise foreign labor would be more competitive.

Saturday, June 16, 2018

Two Heads are Better than One

Here's a little bit of wisdom for today- Two heads are better than one.

And here's another- there are no two-headed giants in the world. Not anywhere outside of natural history museums, anyway. Two-headedness simply did not provide any evolutionary advantage over one-headedness. What is interesting is that the adage originates from the village of Triskelion, where three-headed ogres reside.

Rather than describing the benefits of cooperating, the original meaning of the saying instead alludes to the unique advantages of three-headedness (and indirectly, why two-headedness does not). For those unfamiliar with three-headed ogres, three-headed ogres are large humanoids with three heads, but otherwise have one body (if oversized) and the same pairs of appendages as any other humanoid. Each head of the ogre sustains an individual mind thinking independently of the other two. The question everyone is asking is, with three heads and one body, what dictates how the body acts?

The answer is somewhat complicated, but it goes like this: Each day, two of the three heads are randomly selected to serve as proposers, where the selected heads would individually propose actions to undertake. The remaining head would act as an arbiter, and would choose which action to adopt at any point of time. In this fashion, the actions of the three-headed ogre evolve from a fused consensus of its three heads.

The advantage of this three-headed decision process is a moderation of excessive or reckless behaviors. Implicitly, any action must be supported by at least two heads. Indeed, two heads prove to be better than one.

What about our now extinct two-headed giants? We might speculate that with only two heads, it would be impossible to resolve disagreement between the two, or that one head would naturally be dominant. Without any surviving members of the species, it is difficult to make any supported conclusions.

Monday, May 28, 2018

A Story of Happily Ever After

However long ago it happened, we all know the ending, simply because we're living in it. Ever after is the strongest magic there is, casting an absolute ray of happiness onto all of posterity.

Their posterity, that is. Almost always is it "they" rather than "everyone", for the simple reason that it is almost impossible to satisfy everyone all at once. Of course, in some tales it does read "everyone" rather than "they", this being achieved by horrific means. Whether it is better to be rendered extinct or to be merely subject to eternal misery is, quite frankly, an academic question.

While their descendants of royal stock wallow in unearned merry, an unfortunate few are cursed with bitter misfortune for the crime of having the wrong ancestors. The inequity of the situation is obvious.

Now, I ask you, my fellows of ill adversity, how can the situation be salvaged, if not reversed? Again, I repeat, ever after is the strongest magic there is. Greater forces have tried and succeeded only in adding to the ranks of the miserable. But perhaps the ending is not set in stone. Perhaps the threads of fate cannot be cut with brute force, but must instead rewoven with guile?

I offer this hypothesis: We know that magic cannot conjure something out of nothing. Thus, their happiness must come from somewhere- our misery. The exact amounts of each are perfectly balanced on some mystic scale invisible to us.

Now, there is a limit to how happy a person can be, and similarly a limit to how unhappy a person can be. Herein lies my proposal: to change the numbers on both sides of the scale. Of course, it will be difficult to limit their numbers. In any case, the other approach is more feasible.

Yes, I do not deny it. Misery loves company.

Saturday, March 31, 2018

Thoughts on the Uber-Grab Merger

Anyone who was under the impression that the pre-merger situation was the norm must have been painfully unaware of how unsustainable the situation was. In the first place, both Uber and Grab have been running prodigious losses (to the order of hundreds of millions per year), obviously as part of a strategy for acquiring market dominance. The endgame was always to become a monopoly, and then to extract profits.

It's far too late to cry of monopoly now. The public didn't when the prices where low, even as Uber-Grab used investor money to subsidize drivers and riders. Nobody cares about anti-competitive behavior when it makes fares cheaper.

Halting the merger or other steps to impose competition might prevent price gorging, but the inevitable fact is that prices will rise. Eventually, at least. Nobody will like it, but no company is in the business of losing money.