Live blogging the Apprentice series 5: episode 4

And we're done. Good to see you all again and hope to hear from you next week. And if you want to get a bit of slightly more serious economic analysis each day, subscribe using the form on the right - there are articles on here almost every day, with a focus on behavioural economics.

Anyone who hasn't yet seen the episode would be advised to stop here before reading on... and if you want to watch alongside the commentary, scroll to the bottom and then work backwards.

10:30 And a bit of preview of next week - looks like one of those judgment shows, which is always annoying. Who has the best ad campaign? You can't really tell until you put both of them on TV and look at the sales figures. But instead we'll have "experts" judging it. Well, that always leaves room for a bit of ridiculousness, which might be light relief at this point.

10:29 For once, the 'best of' sequence seems to show Paula as a really nice person. That hasn't happened yet this series.

10:28 Second time this series that the whole panel thinks AS got it wrong. Never happened before series 5, apparently...

10:26 And a little analysis of Philip, who uses hair straighteners and wears makeup. I would be stretching to put an economic interpretation on that, but maybe something from Thomas Schelling...

10:24 Like the panel, I'm looking forward to hearing more from Kim. Maybe she will go up against Yasmina as team leader next time. Visibility is getting to be valuable at this point in the series.

10:23 I also got a clue to a spoiler earlier in this interview. The dangers of liveness.

10:22 James is being touted as a potential winner. I saw a hint of that earlier in this show.

10:18 Ben has kept himself alive by becoming the hate figure of the show. A good short-term investment but it cannot possibly sustain him to the end of episode 12.

10:16 "I'll bite their bloody teeth out" from Sandhurst man. What an amazing phrase. Again.

10:15 Nooral surely is due to be fired next week. He was just awful. But, he won. I'm still surprised.

10:14 But Yasmina and Ben don't come off too well either. Yasmina's made herself very popular by promising to stab everyone in the back as soon as she can. Ben couldn't have redeemed himself in the audience's eyes if he tried.

10:13 Looks like I was slightly harsh to Yasmina - Paula was a little more involved in the costs than I remembered.

10:04 Thanks for watching, everyone. I'll post a couple of comments during You're Fired but give me a few minutes because I need a drink. Do subscribe (boxes on the top right) and come back next week for the economic analysis of episode 5.

10:00 Irrationality count: 3. One big one from the big man. One small one from Yasmina - mixing up two different types of oil. And one medium error from Nooral - creating a low value perception for his product by underpricing it.

9:59 That was quite exciting for once. I would quite like to hear the You're Fired opinion of Paula, because I think we need a market corrective for the irrational opinion of Alan Sugar.

9:57 Should I offer Paula a job? She is a good salesperson, a good leader and has good judgment. The only thing she doesn't have is straight black hair or designer stubble. Oh, and the arrogance to survive to episode 10 (which is about as far as Ben will get) or 11 (Yasmina).

9:56 And Paula is out! A big surprise and I think one of the worst decisions he's made. It can only be based on Yasmina and Ben being better telly than Paula. Tragic.

9:56 But she is saved!

9:55 Alan's little summary: Paula comes off well, Ben not so well, Yasmina badly. She's in danger.

9:54 Economics - at least rational economics - is based on accurate information available to market participants. In reality of course, information is not always accurate.

9:53 How can he make Paula responsible for the costs? She was directly given false data. How could she act differently?

9:52 Ben is a nasty piece of work.

9:51 "Whatever way you look at it, it's going to be down to you to slice it, to find the Achilles' heel". Has Nick gone mad this week?

9:50 If ever the project manager is not at fault, this is the episode.

9:49 I was wrong - she chose Yasmina and Ben.

9:49 Boardroom time - my prediction - Ben and Yasmina.

9:48 Paula has found a way to keep herself safe - take the credit for the bit that Alan likes - the product.

9:44 Ben could be in the Anita role in this episode - he was made responsible for the costs but avoided all participation.

9:43 Ben has predicted - I think quite accurately - that he'll be in the boardroom. He is planning to go down with guns blazing.

9:41 So Empire has lost! I am astonished. Nooral's team are much better salespeople than they look. The trap of tricky editing.

9:40 Empire sold only £1080 and spent about £1150.

9:39 Ignite sold £900 and spent about £400.

9:39 The blame has already started on Paula's team - but I am convinced they have won.

9:37 In the boardroom, and the figures are about to come out - but not until Alan's had a go at all the problems we've already seen. I think this is a flaw in the format - Alan is meant to be the guru but he doesn't get to reveal anything new to us. He just harps on the problems we've already seen.

9:36 Clearly devaluing the product - and nobody wants to buy it even at the cut price. While Paula's team have managed to offload their remaining stock to a dealer for £400.

9:34 Nooral refused to let his team cut below £1.50 before he got there. Now that he's arrived, the product's obviously worth less. It's being flogged off at 50p.

9:33 The sandalwood is selling like hot cakes. No wonder it's so expensive.

9:32 Kim and Phil have sold a product to every soap user in Camden and now need to cut prices to clear. Signalling that their product is no good does not seem a strategy calculated to make people buy.

9:31 Some interesting pricing experiments. Paula has put the prices up even further - and seem to be doing OK. Still clever!

9:29 I guess I was wrong about Ben - I thought he'd be a natural on this, but I guess a tendency to bodybuilding doesn't necessarily go with habitual use of soap. The danger of assuming correlations that don't exist.

9:28 Nooral's team is also dressed up in beekeeper outfits, which are not getting much attention. At least Nooral himself is not selling anything. But his female colleagues are managing okay.

9:26 Nooral's team is selling in Camden - at cheap rates. The other team are in Bond Street and Portobello - and seem to be selling the same volume at double the price. They might just save themselves.

9:25 The other team have a production problem: their soap is falling apart. But they only need to sell it once, not get repeat business.

9:24 Clever idea - Paula has doubled the prices on her product. She is doing it because the costs are high, but if she did it because it enhances perceived value, it would be a genius move. Either way, it might just save them from sandalwood disaster.

9:22 Nick is taking so much pleasure out of telling Paula's team they are £600 over budget. Of course only after it's far too late. He has never been this nasty before. I think there's a proactive director this year.

9:21 Nooral's team is at least loyal to him - Margaret is happy to criticise though.

9:19 Phil has worked out how to beat Nooral and Kim in the boardroom - get the blame in early.

9:18 Ooh, they have discovered a problem. Nearly. Debra knows there's a cost trap in this and looks at the price of sandalwood. But disaster is averted...disaster for the viewer that is, as it would have been dreadfully boring if they had figured it out.

9:17 Nick knows what's going on. One of the key messages of successful capitalism is to get swift course corrections as you go. Watching Nick's face would be one of the best ways to achieve this.

9:16 But they are about to spend 40 times their budget on sandalwood instead of cedarwood...and have mixed up 3% with 3 grams. The music has stopped and they are about to lose £500.

9:14 Paula's team (I have forgotten which one it is) don't seem to be having major organisational problems - you can tell by the funny music in the background.

9:13 Welcome to any Guardian readers joining us. For those who want to get an alternative view of proceedings, Anna Pickard is back at the Organgrinder blog with her live commentary on the episode.

9:12 Production is a potential problem - back to the challenge of the catering episode. Nooral's team don't know how much honey to collect. So they're just going to get as much as possible. Cost alert...

9:11 Seaweed and mint, versus apple, honey and hawthorn. What's the betting that this task doesn't pivot on the choice of ingredients?

9:10 James has spotted the cost issue (or the editors have made sure to fit it in) and team leader Paula has admitted she's weak on this area. Red flag - and possibly clever game theory on the leader's account.

9:09 The last two weeks, expertise and understanding of the industry sector has been critical. It seems to be starting out that way this week... but Nooral is already being presented as an indecisive leader. That creates lots of room for agency problem - that conflict between individual and team.

9:08 A bit of outsourcing - the teams are off to Poole (a good 150 miles from London) to make their product. No market testing on this one I guess.

9:07 Alan hints at the business principle behind this task: make the product for pennies, sell it for pounds.

9:06 More switching of contestants between teams - highlighting the distinction between individual and corporate interests. One of the key tasks of company management is to align the incentives of employees and company, so that employees can be free to make their own decisions and use their initiative and creativity while the company still succeeds.

9:05 Is the setting (Kew Gardens) a clue? Apparently so...the beauty products business is relying heavily on organic or natural materials - to the tune of £3.5 billion in the UK each year.

9:02 Ben leads the teams out towards the cars. I can see him flourishing in this task.

9:01 In previous years reviewers have pointed out the slightly threadbare appeal of the "six-figure salary" first prize. In the middle of a credit crunch, recession, and the City's biggest job losses in twenty years, it doesn't sound so bad.

9:00 Welcome to Knowing and Making's coverage of The Apprentice. Tonight - starting a beauty business. Should be a good choice for the bunch of narcissists on this show.

As usual, I'll be live blogging The Apprentice tonight and on the lookout for irrationality and other illustrations of - or counterexamples to - economic law.

See you at 9pm UK time.


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