Interaction Effects

In the Movie "Focus", Will Smith has a series of bets with a supposed stranger while sitting in the stands of a football field, all of which is won by the stranger. He looks at the stranger in desperation and tells him to look for any player on or off the football field. If his friend (Margot Robbie) guesses the jersey number of the player picked by the stranger, the stranger would have to pay him  $2 million. Else, he loses $2 million.  After the stranger looked through his binoculars and picked a player, Margot does the same. To her surprise, she looks at someone she knows sitting on the bench and screams "The number 55". The stranger was shocked that he had lost the bet.   Although Margot guessed right, she picked the person on the field who she knew. She had no idea that the stranger would pick the same number. Will explains that he had been priming the stranger the entire day. The lift in the hotel of the stranger had a poster with the number 55. Thi...

I found this board in a cafeteria at the Indian Institute of Management, Bangalore.  The sign board mentions the wastage of food in weight (Kilograms) of the previous day and the number of people who could have been fed with that amount of food.  Although breakfast at the cafeteria is a limited serving, a considerable proportion of the people can't finish their meal. To know if the sign board indeed helps reduce wastage, there are several aspects that we need to consider. Firstly, the sign board can, as hoped, make people actively ask for the quantity of food that they think they can finish. This is troublesome for people who are new to the cafeteria. Regular customers, however,  would know exactly how much they would eat and would have no qualms in asking for a smaller quantity of food. Secondly, the sign board could also work as an incentive for people to try harder to finish all the food on their plate. Economists are probably the only ones wh...

The evolving technology has brought touch screen laptops to the market, but they are in general more expensive than the non-touch-screen laptops. Touch screen saves time but is more expensive. The amount you would save by not buying a touch screen laptop is clear but the time saved by buying a touchscreen laptop is rather obscure. The calculations that are about to follow will involve a prudent estimate, meant to identify the least possible time saved. The calculations are also a generalisation not backed by research. Let's assume you save one second per click by using the touchscreen interface rather than the mouse. Let's also assume you use the laptop for an hour a day making approximately 500 clicks per day. This means you would save 500 seconds per day. This implies that  you would save 3500 seconds a week, which is 58 minutes or about 1 hour a week. You would then save 4 hours a month and 36 hours a year. If you use your laptop for two hours a day all the above estim...