Tulip Fever (in 3 paragraphs)

[August1991]

First of all, ignore the (male) critics, this is truly a movie made for women. If you're a guy, and know a woman, invite her to see this movie. If she has patience, she will understand what is going on. And she will love you for inviting her to see this movie. It manages to be, for a modern woman, both a tragedy and a comedy.

Second, the movie/script attempts but sadly misses the comparison of individual deception, and a financial bubble. A financial bubble is not based on deception; it is based on collective euphoria. But like A Beautiful Mind, I give space to "Hollywood" and its attempt at truth.

Third, the movie is all wrong. I didn't like the casting, in particular the lead woman;  IMHO, Waltz alone did well. Dutch auctions don't work that way; and  Africans in the 1600s - they didn't speak that way. So many errors. The end was atrocious.

[August1991]

Tulips and Bitcoin.

Collective irrationality? That's obvious, it happens often in life.

I'm more curious about individual irrationality. Why would an individual buy something obviously worth nothing?

I reckon that many ordinary Chinese/Indians, like ordinary Dutch in the 17th century, are discovering the marvels of the price mechanism.

 

[Argus]

14 hours ago, August1991 said:

Tulips and Bitcoin.

Collective irrationality? That's obvious, it happens often in life.

I'm more curious about individual irrationality. Why would an individual buy something obviously worth nothing?

I reckon that many ordinary Chinese/Indians, like ordinary Dutch in the 17th century, are discovering the marvels of the price mechanism.

 

The hope that someone dumber will come along and bid it up and thus give you a profit that you can cash in on before it all collapses in rubble. So far it seems to be working, but it could fall apart any day.

[August1991]

On 12/9/2017 at 1:16 PM, Argus said:

The hope that someone dumber will come along and bid it up and thus give you a profit that you can cash in on before it all collapses in rubble. So far it seems to be working, but it could fall apart any day.

When this bubble collapses, I hope the greedy Chinese/Indian losers don't blame the "price mechanism" for their loss.

=====

Prices are a wonderful way to achieve co-operation.

Edited December 11, 2017 by August1991

[Michael Hardner]

19 minutes ago, August1991 said:

Prices are a wonderful way to achieve co-operation.

A price is a metric of cooperation - it's the point at which two people agreed to do business.  We can increase the understanding of economics if we create a system of money with more information attached to it.

[August1991]

On 12/10/2017 at 8:57 PM, Michael Hardner said:

A price is a metric of cooperation - it's the point at which two people agreed to do business.  We can increase the understanding of economics if we create a system of money with more information attached to it.

Michael, well said.

A price (a number) is simply a clear method to co-operate - a number makes clear what I give to you and you give to me.

Except... in a universe of quantum mechanics, we can only hope for expected values.

Edited December 13, 2017 by August1991

[Bonam]

On 12/10/2017 at 5:57 PM, Michael Hardner said:

A price is a metric of cooperation - it's the point at which two people agreed to do business.  We can increase the understanding of economics if we create a system of money with more information attached to it.

Not sure about that. A single number as a transaction price is easy for most people to understand. On the other hand, if a lot of additional information is attached to any given unit of currency, then things become less clear to the average person. 

[Michael Hardner]

30 minutes ago, August1991 said:

 Except... in a universe of quantum mechanics, we can only hope for expected values.

Imagine if we did a transaction and the government ADDED money to one side of the transaction or the other without telling us !

[Michael Hardner]

7 minutes ago, Bonam said:

Not sure about that. A single number as a transaction price is easy for most people to understand. On the other hand, if a lot of additional information is attached to any given unit of currency, then things become less clear to the average person. 

They may not care about it, but others might.  Like ... how often does that $ move ? 

[Bonam]

11 minutes ago, Michael Hardner said:

They may not care about it, but others might.  Like ... how often does that $ move ? 

If others care about it, that would imply that some units of currency have greater value (at least to someone) than others. That means that they can't all be treated equally. Therefore someone not in the know could easily be scammed out of higher value units of currency or scammed into accepting lower value units. Keeping things simple and understandable to all has a lot of advantages, especially considering the ease of spreading misinformation these days. 

[Michael Hardner]

I don't think meta information adds value to the currency itself.

 

[August1991]

On 12/12/2017 at 9:32 PM, Bonam said:

Not sure about that. A single number as a transaction price is easy for most people to understand. On the other hand, if a lot of additional information is attached to any given unit of currency, then things become less clear to the average person. 

Bonam, nowadays, a single number is usually easy to understand - but imagine a world of 50,000 years ago.

While co-operation is obviously beneficial for all, arranging co-operation is very difficult. At least, a price (a number) makes one thing clear. While it is still confusing to many people, the price mechanism is a wonderful way to guide people to co-operation. Admittedly, the price mechanism doesn't always work.