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Gifts, hype and mathematics December 22, 2006

Posted by Sharath Rao in india, life, science.
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1.

Gift suggestions for Luddites, i.e. where luddites are the recipient. I am no luddite but looking at this list, I wouldnt mind giving/receiving gifts as if I am one. By the way, I think I just did it. The second item on that list is cookies. When Sadiq and I went to Chicago last weekend, we baked a cake for Asha. Eeeks, Asha isnt a luddite by any standards.

2. Hard to disagree.

3. Heard of the flaw of averages ( especially, you B-school guys ).

4. Quite an interesting physical interpretation of the Jensen’s inequality. Never thought of that –

E[U(w)] is less than or equal to U(E[w]) if U”(w) is less than 0: For a risk averse agent, the expected utility of wealth is less than the utility of expected wealth. The reason this is so: If wealth has diminishing marginal utility, losses cost more utility than equivalent monetary gains provide. Consequently, a risk averse agent is better of to receive a given amount of wealth with certainty than the same amount of wealth on average but with variance around this quantity

When mathematics makes sense !

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