Knowing and Making

It probably has not escaped your notice that the Game of Thrones TV series finished this week. If you use social media at all, I suspect you also saw some anguished squawks about how awful the ending was. How the incompetent writers screwed it all up. Maybe you even signed the petition, along with 1.5 million others, to have the last series remade with a different conclusion. Personally I thought it wasn't a bad outcome, but I seem to be in the minority. Either way, why does this have such significance? I read a counterargument a few days ago: You've had 70 hours of enjoyment already – it's in the bank. You enjoyed episode 1, 2, 3, …and you can't go back and "unenjoy" them now. One bad hour at the end can't rewind the clock and eliminate the last 8 years of pleasure? Yet this feels wrong. The ending can ruin the beginning. Why should this be? A model from cognitive economics may have the answer. The theory of " cognitive goods " says tha...

Another month, another inflation figure, and another short BBC interview. This time I managed to capture the video for your entertainment - sorry about the low quality. I will figure out how to improve it for next time. Assuming there is inflation again next month...

And that's the end of the show, of this year's series and this series of blog postings. Over these twelve episodes we've had several thousand people stop by to watch, and I hope you've enjoyed it. Thanks very much for reading and especially thanks to those who have commented or emailed me. If you found my thoughts on the Apprentice interesting, do subscribe to the blog (links at the top of the right-hand column) - one of the regular themes of this blog is tongue-in-cheek economic analysis of subjects that you might not think are about economics at all. You might like some of our other features. Congratulations to Yasmina and I look forward to talking further with you all about her - and next year's Apprentice candidates - in the future. Best wishes to you all.       Leigh. 10:57  And the credits roll. It's probably time to switch over to the European election results, but we have Michelle Hussain on the news first. I don't think a live blog of the next seven...

I can't stay for You're Fired  today - and anyway it would just be too painful to hear again about James's bodily fluids. So here are today's economics lessons: The two-second rule is really critical . A famous Harvard experiment  shows that the impressions we get in seeing two seconds of someone - without even any sound - correlate almost exactly with the impression we get from being taught by them for a whole semester. Signalling overcomes information asymmetry . The successful candidates were confident and this is our natural way of signalling that we're good at something - which is what people need to know when they're evaluating us. Figures are always approximate . Yasmina's 8% discrepancy in her turnover figures makes no difference at all to anyone in the real world. Claude tried to bring a hyper-rationality to the interview process which is counterproductive. And if you haven't seen the episode yet, please jump down to the bottom of the page and r...

Today's economic lessons? Market research and historical data of all kinds are of critical importance in certain sectors which are relatively high-volume and predictable - especially those where there is no arbitrage opportunity and therefore where predictability is a stable equilibrium. A range of different price options is necessary for maximising revenue. Frequent calls to action help combat  cognitive inertia , which stops people buying things even when they want them. It's hard to optimise for more than one goal at once: public image, winning the task, surviving the boardroom and winning the whole series are different - and often incompatible - objectives (and now that Newsnight's on, we can see Julie Kirkbride MP selling out her own husband to save her own political skin - Alan Sugar would be proud). Do join me next week - for five exciting and excruciating interviews with the remaining candidates. In the meantime, please subscribe by filling in your email address...

Economics lessons from this week's episode? Flexibility in pricing creates economic value. If something is worth less to a client than your cost base will bear, they (and you) won't benefit from it unless you can bring down the costs. And if you can also capture some of the higher value to clients who do derive more value, you can reduce overall costs by sharing the fixed costs. Being competitive on price is important, but not critical - even in a commodity market Operational problems can usually be solved if you have the right product and price point If you want a sustainable, predictable business you need to keep the granularity of your sales smaller than your measurement time horizon (or your working capital) The usual courtesy for later viewers: a blank space. Stop scrolling now if you haven't seen the show - jump down to the bottom and read upwards. 10:30  Another show over: and just three more until we know this year's apprentice. I would love  to see the story of...