Okay, I’m overstating it a bit. Plenty of people understand risk, but they don’t appear on “Deal or No Deal”. The rational thing for a contestant is to take the first deal that the banker offers. It’s usually close to the average value or all of the cases, and the contestant walked on stage with… [Read More]
Blog
Category: Teaching Finance
In which I attempted to use linear programming and was thwarted
Recently, I attended a family get-together at Geneva-on-the-Lake, Ohio. It’s an old-fashioned resort town on Lake Erie, and one of the many attractions is the annual Monster Bar Crawl. You buy a drink at each participating bar, have the bar crawl card stamped, and receive a t-shirt after collecting all of the stamps. It’s a… [Read More]
Felix Salmon, Thomas Friedman, and 401(k) plans
Last week, Thomas Friedman wrote a breathy column for the New York Times about how it’s a 401(k) world. The idea being that just as we have responsibility for our own retirement funds – which is good for some people – we have responsibility for more of our careers – which is also good for… [Read More]
Money Smart Week: Cash flow versus return
I know about finance from several perspectives. I have a traditional academic background and teach traditional corporate finance (efficient markets, rational actors, time value of money). I worked for an investment company and two investment bank, so I have a real-world perspective (people are irrational, bubbles and crises are more common that you might think.)… [Read More]
