An Example of Perfectly Competitive Market Condition

A market condition where no buyer/seller has market power - ability enough to influence the price at which a product/service/experience is sold, is called a perfect competition. Such conditions are not very common as there is a tendency for cartelization and the market condition usually becomes a oligopoly. But, I think there is one market which is a superb example of a perfect competiton example - the festival offerings market near Dadar Station in Mumbai!

The Ganesh Festival is currently underway and everyday as I walk to office walking amidst the bustling market which sells everything from flowers and incense sticks to toys and sweets, I cant help but be amazed at the number of buyers and sellers who throng these markets. There are many 'firms' which are selling 'homogeneous'- identical products and innumerous buyers. Also, anyone who wants to sell flower garlands or homemade wicker baskets can find a spot on the road and set up shop - very low entry barrier; well, there is a threat that some goons or a police guy might object to you sitting in that particular spot - but finding another spot nearby will not be difficult. All these conditions indicate towards a perfectly competitive environment.

I did a small dipstick survey to test this hypothesis the other day. I went around asking prices for one yard of a flower garland. The market can be classifed into three distinct geographical locations- as the sellers who are close to the entry of the rail station, those who have set up shop under the flyover and those who are on the pavements on the roadside. The price was uniformly in the range of Rs.6 to Rs. 6.50 for one foot of the flower. This price was probably on the lower side as I asked the questions in the evening and the quality of flowers was not as good as in the morning. Those under the flyover whose product was safe from the rain and sun during the day asked for Rs.6.50, but the number of people buying from them was much lower (This could also be because the area under the flyover is limited and the crowds feel suffocated). The ones near the station entry had poor quality products - dried out flowers. Probably because of the sheer number of people who move in that area during the day and the heat. The ones on the roadside pavements had the bulk of the business and uniformly charged Rs.6 for one foot. I asked quite a few people on the road for the price and all of them concurred with this amount.

I tried demanding, for a foot of flower, to be sold at Rs.4 and found nobody willing to sell. Market information is also high among the producers (another classic condition of a perfectly competitve environment) and they know that no other in that market would sell to me at Rs.4 and they are willing to forgo my business not offer an attractive price (Although, the quantity I was consuming was very small, I doubt if they would have budged from the price had I mentioned even a bigger volume of purchase). On the other hand, although there was no way for me to test it, the information of price and quality was high among the buyers also. Most of the people buying were women who are streetsmart and have an 'andaz' (right estimate) of what needs to be paid for the product.

This is an interesting market to study economics in. The dynamics of the market are purely competitive. I wish I could have spent a longer time in the market to see how the price transition from Rs.10 per foot in the morning (estimate), when the flowers are fresh to Rs.6 in the evening happens and where amongst the three geographical sections of the market does this happen. Is this price an equilibrium price which comes after fluctuations or is it a straight drop in price. This could be an interesting school assignment on economics if someone is willing to spend sometime in all the grime and brave both the rains and sunshine!

Some more interesting links!

Have been reading many different stuff these days. Some links are below, which I found worth commenting on.

1. The Dark Knight was a superb movie. I have blogged previously about Heath Ledger's superb performance in the movie. This link discusses the concept of Game Theory through the medium of the plot in the movie. Those who have seen the movie would agree that the opening scene of the robbery is simply brilliant. The author of this article has described the concept of game theory that is prevalent in that scene.

2. Usain Bolt. This man is a genius. He has set the world record in the 100m and 200m atheletics events at the Olympics. A small survey of the world records shows the magnitude of his achievement. He ran the 100m in 9.69 seconds, an amazing 37 km/hr. Donald Lippincott in 1912 covered the same 100m in 10.6 seconds. So, it basically means that to remove around 0.9 seconds of the world record, it has taken mankind 98 years! This shows the magnitude of competiton that exists in the event and the intensity of physical and mental preparation the athelete needs to go through to acheive this. But, the IOC chairman Jacques Rogge, a 'sports functinary' and a kind of person who spends his time admiring modern art and literature, doesnt seem to care too much about this. Sample this,

“I have no problem with him doing a show,” Rogge said in an interview with three international news agency reporters. “I think he should show more respect for his competitors and shake hands, give a tap on the shoulder to the other ones immediately after the finish and not make gestures like the one he made in the 100 meters.”

What a load of Cr*p. I think the chairman needs to focus on being a sports functionary and not worry about how world champions react. I think he is no better than our Indian Politicians who claim that they are responsible for helping our Indian Atheletes win medals!

3. Always wanted to have your own shop? If you wanted to become a Dukaandar here is your opportunity. This is the Dukaan of the web kind, but still its kinda interesting. This website offers you a chance to create your own web store, where you can sell products from other websites and also make money in the process. What will you be selling you ask? Anything for that matter. Even Lemonade maybe!

4. Imagine sitting with your headphones on, disconnected from the world listening to your favorite music. Is it pretty much a solitary experience which helps you zone out? Does music helps you get a high? Yes. And it can get you rather stoned apparently! These are called Digital Drugs and they supposedly synchronize your brain waves with sound and move them to altered states of relaxation and alertness. Hmm, I wonder if all the musicians are getting high on dope or music, actually!

Assorted Links I Find Interseting!

Below you will find a list of assorted links which I think are interesting. I have made a small summary of each of these topics also which you might preview before you click on the link and read/view the original articles/website. Hope you find it interesting!

• New way of searching on the internet - "Searchme Visual Search": You think Google is the ultimate search engine? Think again. What do you think contributes to the cult brand status which Mac enjoys over Windows? Its the visual superiority. I have blogged about the Cuil search engine before and the way it presents data to the searcher. I came across this Visual Search engine. Human civilization and communication in the stone age was all visual - hand signals, pictorial. Then slowly language developed and 'text' which is an abstraction of the visual communication gained precedence. But with the advent of electronics in the early 20th century, the visual medium (television, cinema etc) is making a resurgence. This is one of the reasons why print medium is facing a decline around the world. This trend is also prevalent in the web world. First it was text, then came images and now the most popular sites are video and flash sites. Hence why should'nt the search engine medium be 'Visual' too? Nice website...
• Will the tall man dominate the world? So thinks this article which actually suggests toungue in cheek that "Short People Got No Reason to Live"! When the 6"5' Usain Bolt 'bolted' in the track field in Beijing and set a world record of running 100 m in just 9.69 seconds, the author claims that short people lost their final stronghold - ability to run fast!
• Here is another giant of a man! Micheal Phelps! Eight gold medals... Individually! India as a nation in 108 years of Olympic history has won ONE individual gold medal. I know about all the debates which talk about the lack of infrastructure and all that. But this man Phelps is on a different dimension! He is defenitely a super human! Check out these cartoons about this man! Awesome... Really!

• And finally, what do people on Indiatimes.com read most and email? not surprisingly its about Sex! I remember Khushwant Singh saying what a sex-crazed, voyueristic nation India was, and this I think is more proof of this. Compare what is read most and emailed most. This seems to indicate that we read all genres of news, but the most emailed topics are concerning the happening in the bedroom! I can imagine these emailers who find it interesting to 'share' these topics, hitting the email button while gleefully with dazed eyes drooling over the saucy content! Hey, afterall - even I am blogging about it!

More soon!

Hey, Stop Stealing My Jokes!

Remember those moments back in college or at work when your friend or colleague 'stole your thunder' by quoting your joke? You had come up with this brilliant funny piece about the new lady professor's dressing sense and had done a small dry run with your friend, but the rascal upstaged you by telling the joke when both of you are in a larger group of peers? Or when you came up about a good imitation of the client's reaction and wanted to score some brownie points with the boss, but your cubicle mate overheard you and mentioned it in the review meeting before you. Now that we know that humor is a great way to attract the opposite sex, this kind of 'humor piracy' just got costlier.

So some people have decided that this needs to be dealt with. This article studies "The Emergence of Intellectual Property Norms in Stand-Up Comedy". And before you think that it is all a big laugh, sample this;

Copyright law does not provide effective protection to stand up comedians, a fact made clear by close look at the business of stand-up. Despite what appears to be a persistent practice of joke stealing among stand up comedians, there have been few lawsuits asserting copyright infringement in jokes, and there is little evidence of threatened litigation, settlements, or indeed public dissatisfaction among comics regarding the weakness of IP protection.

This is very true. The only instances which comes to my mind are Sienfeld's irritation that Banya (a stand up comic character in the hit comedy sitcom) is stealing Seinfeld's thunder by working the crowds right after Seinfeld's bit or Russel Peters 'making a joke' about the many 'Bast**ds who are sitting at home downloading' his comedy routines. Both these are instances of preventing the 'piracy' of content by mooching of another's popularity. But these are not instances where the comic is worried about somebody else using his or her content. In fact, humor is something which we never seem to associate very much with the comic, apart from the way each person delivers the humorous routine; I would for instance find a Yo! Mama joke just as funny if I read it on some comic's internet website or if a friend had it as his gTalk tagline!

This brings us to the crux of the issue. Should 'humor intellectual property' be protected? While this is similar to a situation in the music industry where the creative content is being pirated and the creators of this content are not able to reap its full benefit, the humorous intellectual property arguement at first glance seems funny! Now, don't get me wrong; I am sure the comic needs to be protected from just as many negative externalities so that there is incentive for him to remain funny, but maybe the humor industry is more similar to the fashion industry (And no, I do not mean that the fashion industry is a joke). Going by Tyler Cowen's arguement that fashion is a status good, and the 'rip offs' syndrome in fashion is a stimulus (or incentive) for creating new fashion, the Humor 'industry' can also be a status good. Humor afterall is an indication of physical and mental wellbeing (hence attracting the opposite sex to the one one who possesses good humor). Hence, the more humor is ripped off or 'stolen' the more the incentive for the comic to come up with a better joke.

But there might be a catch in this line of reasoning; if I go and buy a Gucci rip off at a much lower price, I (the consumer) still aspiring to be seen in designs which have a likeness to a Gucci design and thereby gain a positive aura. At the same time Gucci's brand grows in my mind. But when a comic steals another's routine, the original comic does not get the recognition from the consumer for his intellectual creation. And this is not funny at all!

The Sunset...

Ah! The euphoria of young love is very well documented indeed. The excitement, the fascination, the need to explore and above all the need to be in each other's company are all the things associated with this. The need to be in each other's company and experience the beauty of the world in the presence of the other, is such a compulsion that many a hitherto difficult things become passe! Afterall, what could be better than being able to watch the orange Sun set, sitting at some quaint cafe on the beach, sipping cool ice tea all the while clasping onto his or her hands! Even if this means that one needs to brave the rush hour traffic and make it across the congested city roads from opposite ends of town, through the grime, the dust and sweltering humid heat.

Ah! Such is young love, indeed! Where all things external are forgotten, except for that one moment when one can experience the beautiful Sun rise in the company of one's lover. The experience is always even more maginficent if the sweat and grime of the sun set can be avoided and it is the cold early morning breeze that makes the eyes water, instead of the smog filled pollution. Even if this means that one needs to make elaborate plans to get to the beach early in the morning, sneaking out of hostel rooms, helping one's lady sneak out of windows to avoid being caught by fathers about to take the dog for its early morning walk!

Ah! What euphoria one such couple recently must have felt as they managed to sneak out of their respective abodes early one morning in Mumbai, without being noticed by any nosy third party, with evil accusing eyes; or without being chased by the house pet, let loose by the enraged father at the sight of his eloping daughter. Ah! What ecstasy to be with each other on the waterfront on the vast Arabian Sea, eager to spend the few treasured moments, waiting breathless, to watch the magnificent Sun Rise!

SCREEEEEECH!

Ah! What the Hell! Such is the buzz of young love, that one tends to forget that the sun rises in the east and that the vast Arabian Sea is where the Sun would rather set in a magnificient orange blaze of glory!

Ah! What tragedy the Sun demands these young lovers to toil again in the smog filled evening to view him subside?

Ah! What ... are you sure this time......

Where and what I have been eating!

Blogs about food and eating joints are very common and usually written by true foodies. I am not someone who claims to be gastronomically inclined, and infact most of my friends disqualify my culinary existence as being irrelevant - as I am a vegetarian. But this does not mean that I do not enjoy my food. The variety, the tastes, the experience, the presentation, the ambience of the surroundings and ofcourse the company, do hold a lot of importance in my eating.

Having experienced a bit of both Singapore and Dubai, but having tasted very little of what they have to offer the foodie, as a consequence of being a vegetarian, living in Mumbai now, has been an explosion on the taste buds. Mumbai has, amongst the best restaurants in India which showcase a variety of cuisines from around the World. But what Mumbai also has, is a unique culinary charm of its own. From eating the famous Jumbo Vada Pav for Rs.7/- at Dadar Station or the sweet, sour and spicy Papdi Chaat at Kilash Parbat near Juhu, the city is a haven for people who enjoy street food.

Tyler Cowen from Marginal Revolution recently rated Paris and Buenos Aires as the best places in the World to be explored by walking; and I am sure if a poll was taken about the best places in the World for street food, Mumbai would rank at the top.

Apart from the street food, what Mumbai also offers is a dining experience which is steeped in popular culture. Like any bustling metropolitan, its restaurants and cafes are unique to the city and have a bunch of loyal customers who are both influenced by and contribute to the building up of popular culture around these places. Over the last few weeks I have been ‘eating around’ the city at some of these unique places and savouring the delights they offer.

First up, Leopold Café in South Bombay. This café is on the famous Colaba Causeway, a bustling alleyway in the southern sections of Mumbai. A bustling little place with its unique ambience, dim lighting and the whole Shantaram hustle. Even without its newly acquired importance among foreign tourists who come to soak up the experience from the book, Leopold nevertheless serves good grub. I had a superb cheese omelette and some cold ice tea, and was nostalgically reminded of Koshy’s in my home town of Bangalore. Both these places cater to our Indian hangover from the British Raj and I, for one am not complaining.

Next, I recently had lunch with colleagues from office at The Sports Bar in Lower Parel. Located in the Phoenix Mills shopping complex in South Central Mumbai, this hangout is a good place to chill out with friends on a lazy evening. It is made up in the likenesss of famous European sports bars, where rowdy crowds drink lager beer and cheer for their soccer teams. With televisions showing cricket matches, sports memorabilia in shelves on the walls and a worn out pool table, this is also a place for the advertising crowd from nearby offices to hang around. I went there on a Friday around lunch time and found the place bustling with activity, mainly an office going crowd who were celebrating promotions and discussing business over a beer. They have a good buffet served at lunch time and the pasta chef insists on sprinkling a whole lot of grated cheese on your pasta, instantly giving the place my thumbs up!

Lastly, the famous Chowpatty area in Mumbai is know for its eating hangouts. I haven’t been to most, and I intend to do so very soon. But I did hang out with a few friends at the New Yorkers restaurant in this area recently. Getting to Chowpatty from the Grant Road station, one does come across a Café New York on the way and some of us mistook this as the designated meeting point. But once we all made it to the place on Chowpatty we had a good time. To be frank I wasn’t very keen when my friend had suggested this place, as the New Yorkers in Bangalore had failed and closed down. But, a purely vegetarian restaurant on Church Street in Bangalore was not a good idea to begin with. I was not disappointed by the Mumbai version. Mexican food was the order of the day amongst us friends and we ordered stuff which had names like Tostedoes Ole and waited for it to be good when it arrived, and it was. Achar (pickle) Pizza, a fusion food on the menu also turned out to be something really worth trying. But what finally took me to sheer eating pleasure was the Sizzling Chocolate Brownie we had for dessert. Chocolate Brownie with Vanilla ice cream, on top of which a sizzling, smouldering chocolate sauce is poured is hardly something a chocoholic like me can withstand, and I greedily dug in.

This hardly qualifies as a blog post on the variety of culinary experiences one can have in Mumbai, but rather just a small appetizer. As and when I try out more, I shall definitely write frequently on this topic because I have realized as I write this piece, that writing about food lets me experience the same pleasure I had while eating! And then again, maybe not SO good after all…

Scrabulously Wrong!

The Open Source revolution is here to stay, say most internet and computer experts. The open source revolution which has spiralled from writing operating system programms like Linux to application ‘widgets’ for various we based applications is currently in vougue with most programming savvy people indulging in. The advantage of the open source revolution is volunatry sharing of user generated ‘open’ source codes for the applications which can be sold at a price if the developer so intends, but essentially is a free to be upgraged, modified and marketed by any user if he or she is also into coding. This is a tremendous opportuity for millions of computer programmers around the world who are able to use thier coding knowledge to build better models of a basic functional tool and market it for profits.
But there are many, for lack of a better word, discrepancies in the open source revolution. Take for instance a situation when an open source program creates an application which replicates a patented real world product, service or an experience in the virtual world. What are the rules which govern this? Is it in violation of the patent rules? This is exactly what is happening in the case of Hasbro vs Scrabulous. Scrabulous, developed by two Kolkata residents, Jayant and Rajat Agarwalla is the virtual version of the hit word game Scrabble which is a patented product owned by Hasbro.

Read On...

Whats in a name?

Today, I tried the new search engine which is being positioned as a competitor to Google. Its called ‘Cuil‘ and is supposed to be a word which sounds like ‘Cool’ or more so ‘Kewl’. I was disappointed. The first thing I tried searching on Cuil was my name; ‘Anand V Rao’ and unlike Google which shows search results which lead to my blogs, Cuil came up with links about somebody’s husband who had a name like mine. I am still very much single. You can call me a narcissist that the first thing I searched for was my name and when I did not find it, found the website disappointing. But hey, I am not the only one. Others also have seem to have done the same thing and have had the same results.
Read On...

"Joker arrested trying to steal Batman" (and he succeeded!)

I came across this headline "Joker Arrested Trying to Steal Batman", on an Internet news website and for an instant thought that someone had written a movie review! I saw The Dark Knight this weekend and was amongst the many who was left spellbound. It is a good movie for all comic book superhero buffs like me; and it is also a good movie for other general audiences who want see a good entertaining flick. Christian Bale reprises his role of the caped crusader, Batman from the movie batman begins. But, the true Dark Knight of the movie is the character of the Joker played by late Heath Ledger.

This post is another one among the numerous blogs about which think that the Joker, and Heath Ledger have literally stolen the show from Batman. Ledger's portrayal of the psychopathic maniac who is least interested in anything other than destroying the very fabric of society is superlative, and I am not saying this to be sympathetic towards Ledger's untimely demise. The character is truly a villian and the kind which cannot be negotiated with. The painted face and constant lisp which the Joker has are but comic book rendering of a facade behind which the maniac thrives, and Ledger does superb justice portraying all this.

There has been speculation in the movie press that Heath Ledger deserves a posthumous nomination atleast if not an Academy Award win for his portrayal of the Joker. Irrespective of whether this happens or not, one thing that is certain is that the Joker has defenitely stolen Batman, and incredulously the actor's life was arrested!

Olympic Mascots...

Why do the mascots for the Olympic Games suck? Most of the the mascots for the summer Olympic games fail to impress me. As a hobby, I follow mascots for various sporting events around the world. The mascots for the 2008 Beijing Olympics are called ‘Fuwa’ - five mascots which represent traditional Chinese elements of fire, wood, water, gold and earth. But I just don’t find these five interesting or cute enough. Read On

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Singh is King! The throne is his too!

So the UPA government has survived the no confidence motion. Whether the Nuclear deal is good for the country or not, is not something the common man can easily decipher. Many magazine editors, notably Vinod Mehta of Outlook has been strongly against the deal, saying that the deal ties India’s hands despite not being among the countries which have signed the Non Proliferation Treaty (NPT).

But for the common man, I think all that matters are issues like increasing fuel prices due to the inflation. I for one am happy that Dr. Manmohan Singh’s government survived and we did not have a mid term election. Or even worse some Third Front had come to the forefront and India had a Prime Minister from one of the many ingreidient parties!

So, Singh is King!
Read On...
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It lands, creates a buzz... then disappears!

I have been doing a study on the outdoor advertising industry in India recently as a part of a consultancy assignment at work, and one of the catch phrases which people in this industry use to describe their business is

In outdoor, the medium is the message!

Interestingly today, I came across this article about a 7500 square foot ad which has been commisioned for Chanel. It is a whole mobile art pavilion which looks something like this...

Designed by a London based designer, this futuristic looking building has been commissioned by Chanel. And voila! amongst one of the many description of the building, one of them goes as follows,

The most important piece of art is the container itself!

Autorickshaw vs The Free Market!

Again, the autorickshaw driver refused to give me conveyance from the suburban railway station back home. I was late in the evening and maybe he was winding up for the day and the direction he wished to go was opposite to where I wanted to. So, I was stranded at the railway station, tired after a long day at work, with a daunting task of having to walk 5km back home. Should I curse the free market system? After all, it is this system which allows these autorickshaw drivers to decide if they are going to accept taking me as their passenger, based on the overall benefit they see in the transaction. Right?
I think not... Read on

StumbleUpon a pot of Gold!

I have recently installed the now famous Stumbleupon toolbar on my internet explorer, and man! is it addictive! All I have to do is indicate what my preferences are and voila! I can be directed to very interesting websites I never knew existed! This works very well when you have sometime to kill; you have finished reading all the updates on the regular sites you usually visit and don’t know what to find on the internet. (Ofcourse, Stumbleupon is not a substitute for going outdoors or reading a book, when one has time to kill; but it defenitely makes sense when its pouring cats and dogs, especially in Mumbai, where one dares not venture far from home, during the rainy season)
Stumbleupon is a very powerful tool according to me. Google currently makes money by... Continue

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Smaller State? No, Smaller Government is Better...

The American magazine has an interesting article on the topic of Geopolitics and how maps are being redrawn. The article titled “Map Quest” talks about the continual flux in the way the various nations of the world keep changing in their ideaologies and with it the economic conditions leading to different postures in foreign policy. Economic changes and the ambitions of the people of a nation always seems to have some kind of correlation. What seems to be interesting is the fact that this economic upswing and downswing seems to be of a cyclical nature.

Take for example the case of India and China; some three hundred years ago, the Indian and Chinese economies were the dominant economies in the world. America and Japan were nothing more that third world countries. During this period, most products that originated in the subcontinent and China were held in very high esteem. And true to the famous saying that ‘imitation is the best form of flattery’ the western businessmen actually copied the articles from the oppulent orient and sold it in their countries for a premium. Ceramic is a classic example of this kind of a situation. It was a product of China and some European entrepreneurs perfected a process to make cheap imitation ceramic and sold it to the western nations. Today, when the US is the dominant economy, we see a reverse situation. Chinese and Indian entrepreneurs are the one becoming competitive by manufacturing western products in a cheaper and better way! Continue...

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