Voting, anyone?

Alright, this is my first time trying to understand economics. I've been dealing with these guys in the Café and I've started to think that their way of looking at things is not that bad, despite all its nonsense. (Or, maybe I just want to have a posting title other than the boring "From the Manager").

What triggered me was a news from Jakartass. The Café is nominated in a so-called Asia Blog Awards. Not bad, I think for a not-so (social-) capital intensive café. So I was thinking: should I myself vote? I remember Aco once wrote that in a voting that involves many voters, it might not be rational to vote. So I called him up.

Me: Aco, do you know the Café is nominated for an Asian blogs award?
Aco: Yup, I heard that. Congratz, Manager!
Me: I remember you once said that voting might be irrational...
Aco: Yes. Freakonomics did, too. Only a year later.
Me: Now, do you think I should vote?
Aco: For whom?
Me: ??? for Amien Rais! Of course for the Café, you idiot!
Aco: ... Easy, Boss... OK, how many people do you think will participate in the voting? 200 million?
Me: No! Even 200 will be a surprise. Let's say a hundred... Or maybe 50 -- They only give us 3 days to vote, can you believe it?
Aco: Then, vote. Your voice might count.
Me: ... why?
Aco: The marginal value of one vote is higher when the participation rate is low. In a million-voter election, your vote contribution is negligible. In a 15-voter game, your vote is decisive.
Me: ... Makes sense... By the way, the system is such that, every voter should rank nine candidates. What should I do?
Aco: ... That's interesting. OK, tell me who do you think is your stronger competitor?
Me: ... (I named one blog)...
Aco: What? You think that blog is good? ... (I was ready to argue) ... OK, OK, calm down. I respect your judgement. Now here's a trick. That blog, the one you think might give you hard time in the race, rank it the last.
Me: Why? Shouldn't it be the second ... (of course I mean after the Café)
Aco: No, put the weakest one you think in the second place -- I assume you'll put yourself in the top. Next, put the second weakest in the third place and so on... I presume there will be some averaging in deciding the winner. Then you have to make sure that your strongest opponent gets low point.
Me: ... Got it. I'll do that. Thanks. .... Will you vote?
Aco: No.
Me: Why?
Aco: Only if you give me a raise...
Me: Go to hell...

Voting | Rationality

Dumpster-thy-neighbor policy

In the "Metropolitan" section, Kompas wrote an article about North Jakarta's failure to receive the Adipura award due to garbage and drainage problem in the city. (Adipura is an annual award given to 'clean' cities -- don't ask me how do they define 'clean').

The mayor said that the problem with North Jakarta is, being in the mouth of some 13 rivers, garbage from the other cities stopped and accummulated there. So, to solve the problem (and win the next Adipura), the mayor has already had a solution: the city will build water gates in the rivers... which will be located in North Jakarta's border with the other cities.

This sounds stupid, but I won't blame the mayor. He just made a rational decision. The incentive (Adipura) is for individual cities. So why should the bother to solve the others' problem?

Environment

Playboy should thank its haters

As so easily predicted, what the protesters have been doing to the Indonesian version of Playboy is actually good, not bad, for the magazine. The third issue has hit the road. How much? Rp 99,000 (Java area) or Rp 110,000 (off-Java)! And it might not even be the equilibrium price, yet. It's the nominal price printed on the cover! If you still remember, many people were willing to spend Rp 100,000 then to get the first and second issue, even though the nominal price was Rp 39,000. Now the price of the first edition in eBay is $60!

It's not even good. The models look so dumb, the articles are cheesy, and the translation are lousy. But, well, Rp 100,000 and counting...

Indonesian Playboy

From the Manager

Hi,

The Café is welcoming Ape back to Jakarta. That's why we were playing his requests last night.

And now we're gonna play other songs, requested by a frequent visitor. Here you go: 1) Long Ago and Far Away (Rod Stewart), and 2) I Wish You Love (Chrissie Hynde).

Enjoy.

If Looks Could Kill

Why does a country restrict the presence of foreign workers in its domestic labor market? Usually the reason would fall into one or two of these categories:

a. driving down the domestic wage (the case of US immigration law debate, not so long ago)
b. local customer protection against low services provided by foreigners
c. cream-skimming and creating inequity
d. crowding out the domestic worker's employment.

Okay, you may say, in the end, it is all about fear of competition.

But after reading a short article in The Jakarta Post 13/07/06 (alas, no link) on Malaysia's recent policy to lift the ban on Bangladeshi workers, you may want to add up one more reason. But let me quote part of the article first:

Malaysia restricted the number of Bangladeshi workers in the country in 1996 and banned them entirely two years ago, after it said they were creating social problems by entering into romantic liasions with local women.

Officials have said the Bangladeshis, who looked like Indian movie stars to some local women, had seduced and eloped with them.

Yes, it is love and good looks that prevent a country from gaining profit from international trade in services.

For me, it doesn't sound right for two things: First of all, it undermines fair competition both in labor market and, more importantly, love market. Second, it implies that foreign workers with good looks actually don't have as big an opportunity as those who are less fortunate in that area.

Talk about male chauvinist pigs. Come off it. Let the competition go on

Addendum:
A self-reflection on our profession, for university teacher, does looks matter? Yes, it does for having higher instructional rating, as Hamermesh and Parker (in pdf) say (via Greg Mankiw's blog), particularly, alas, for male teacher. Yet whether it reflects productivity gap or discrimination is probably impossible to judge. Gosh, somehow I feel relieved by this caveat.

p/s: From that paper, I like a punchline from supermodel Linda Evangelista: It was God who made me so beautiful. If I weren't, then I'd be a teacher. Yes, yes, we call it division of labour. It'd be more efficient this way.

economics of beauty | labor

Understanding foreign exchange market

Lest forget I am not a macroeconomist and always have a hard time understanding the foreign exchange market. The behavior of foreign exchange market -- especially US Dollar -- in Indonesia is even more puzzling for me. Yesterday I went to the money changer to convert my remaining US Dollar into Rupiah.

The buying rate at that time was Rp9,010/US$. However, the rate was only for new, clean, unfolded and unmarked Dollar bills. If we are to exchange US$100 bills, there are additional rules: the bills should be new (printed in 2003 or after) with serial number beginning with the letter F. It turned out that my US$100 bills were new and unmarked, but either folded or do not have the F- serial number. The exchange rate for such bills was almost 100 points lower, RP8,925/US$.

My wife and I asked for an explanation. The guys in the money changer explained that they do so -- discriminating the exchange rate -- because the banks do so as well. OK, I understand that in the money changer's perspective, the banks are the demand for the foreign currency. The banks do so because the parties to whom they are supplying Dollar bills, people who are travelling to or importing goods, demand new and clean Dollar bills. But at the end, the end consumer would be US banks (or individuals). And for sure, in the US they don't care about the quality or the serial number of the Dollar bills.

Well, avoiding forged Dollar bills should be the best reason for such behavior. But I was thinking of another explanation: in Indonesia, US Dollar bills as it is seem to give direct utility for customers. So customers gain benefit from Dollar bills not only from its traditional role -- medium of exchange and store of wealth.

(Somehow, this behavior remains me of Immannuel Kant's das ding an sich philosophy).

Consumer behavior Utility Foreign exchange

Moving out and the end of the world cup

Dear visitors,
As my love affairs with Cambridge, MA has come to an end, I am now moving back to Jakarta, Indonesia. Well, actually I am already in Jakarta. As you may guess, the moving business is a hectic one. That, hopefully, can explain my absence.

For now, I'd like to request the manager to play 'Massachusetts' by the Bee Gees:

... and the light all went down in Massachusetts...

followed by Koes Plus' 'Kembali ke Jakarta':

... ke Jakarta aku kan kembali
walaupun apa yang kan terjadi...

Please note how the two songs are similar in their composition. See how the former influenced the latter.

On the World Cup thing -- Italy won it. Yes, whatever. For me, the World Cup has finished when England uncharacteristically lost to Portugal. (For Ujang, it ended even earlier). The English public liked to put the blame on Christiano Ronaldo. But I'd prefer to tell Sven Eriksson "I told you so...!" Now, do you agree that Gerrard and Lampard are at least non-complentary, Beckham's too slow, and Rooney can't play as a lone striker?

Overall, it was not the best competition I've ever seen. No thrills, low average goals per match, unimpressive display by supposedly star players. Even the top scorer only scored five goals, lower than the past few Cups.

So bring on club football -- domestic league, Champions League, UEFA Cup, Copa Libertadores, Toyota Cup etc.

Academic Life World Cup

From the Manager

Hi,

Treespotter just reminded us to write. Yes, I think we're getting lazy. Or I might have been too easy on the hosts. Aco was in Kyoto and now is back in Jakarta -- without even getting me some Japanese jazz CDs! Sjamsu is busy with something in DC, Rizal is doing a study in Medan, and Ujang and Ape are still having their heart attack from the silly World Cup.

Yeah, World Cup. Why do people love football (I mean soccer, no football, argh whatever) so much? Probably because it is good. Even my mom called me at 4am telling how sad she was that Zizou got kicked out.

As for me, I guess I'm more interested in Michelle Wie.

GSM-ing Japan or 3G/CDMA-ing your phones?

One thing that always amazes me from Japan is its love-hate relationship with globalization. Sure, Japan is in the front row of the wave of globalization. But it also the one country struggling against the globalization so stubbornly. I've been trying to find the answer whenever I visit Japan. This morning, on the way from Narita airport to Tokyo, I chatted with a senior Japanese citizen. He told me an interesting thing. He said, Japanese elders are worried with the future of Japan. Why so, I asked. He pointed at a bunch of youngters on a train station platform. "You see those kids? They are our future. But look at them. What on earth do they think they are doing with their hair? (each of the kids had colored hair, I noticed). And see what they're reading? Manga! When I was their age, I read history every day. I know by heart all the details of Japanese ups and downs. But those kids. They worry me. They can make us loose our national identity...".

I felt sorry for the old man. But I think such perspective is not unique. You can hear it everywhere: older generations hate the younger ones just because the latter don't like what the former did good (or so they thought). We have that species too in Indonesia. If they were good (or if they liked) mathematics for example, they think everyone who doesn't is dangerous to the country.

But that's not what interested me, frankly speaking.

I was more curious why my mobile is not working here in Japan. I have been using it in other countries. But it is useless here. Simply because my mobile (and so are many of yours) works with GSM system. Unfortunately, Japan refuses to use GSM as its cellular technology. Somebody told me that to get around this problem I should have bought a mobile with 3G technology, or at least a W-CDMA. That way, I can still use it when I am in Japan or other countries that are not GSM subsribers (any other? I thought more than 200 countries use GSM).

So I was thinking. If the world is moving toward more efficient technology, the most usable one would win at the end. Let's see some years from now. Whether Japan is changing to GSM or, people (non-Japan residents) are switching to 3G/W-CDMA mobiles.

Unlike my travel mate this morning, I wouldn't relate the Japanese cellular policy to any sort of nationalism (I think he would). I guess it's just pure business: DoCoMo is too strong an influence to the Japanese Ministry of Internal Affairs and Communications. It needs competition.

Globalization | Competition