One of the highlights of my childhood were the dozens of Disney videotapes purchased by my parents over the years, as I was too young to buy such masterpieces on my own. I had (almost) all of them: The Lion King, Mulan, Dumbo, Cinderella, The Sword in the Stone, The Aristocats, The Jungle Book, you name it. I loved these movies, as most (Western) children of my age did too. However, I am not a particularly nostalgic person. Today I treat these films with moderate sympathy, the kind of sympathy you reserve for an old friend from elementary school with whom you totally lost touch. Regarding nostalgia, there are many who disagree with me, most notably the heads of the studio that created these movies. Simply put, Disney is doing it all over again. The studio has more than 20 remakes planned or in the making for the upcoming years, some of which are sequels or based on existing films. A live-action version of the movie Mulan is expected to be released in 2018, as well as a Mary Poppins sequel; we can also expect remakes of films such as The Lion King (directed by Jon Favreau, who also directed the 2016 version of The Jungle Book), Dumbo (reportedly to be directed by Tim Burton), The Sword in the Stone, A spin-off for the Genie from Aladdin, and also a remake for Aladdin (Guy Ritchie is supposed to direct, that one actually sounds cool), and Emma Stone is to portray Cruella de Vil in a live-action spin-off Cruella. But perhaps the most talked-about film of the past few weeks is the live-action remake of Beauty and the Beast, released in March. Very talked-about, though it all seems a bit familiar. It was around 1989 when The Little Mermaid marked the beginning of what is known as the Disney Renaissance. The studio returned to making animated, more musical films that became trademarks for the studio and box-office successes. It was a creative resurgence that gave rise to some of Disney’s most notable products. One of these movies was Beauty and the Beast, directed by Gary Trousdale and Kirke Wise, released in 1991. It is the musical tale of a young woman, considered strange by the villagers for reading books (what?), enchanted by a prince trapped in the body of a giant bison. With a budget of $25 million, the 1991 version grossed about $425 million. Besides the critical acclaim, this was an important commercial milestone for the studio: at the time, it was the most successful Disney movie ever made, and the first film to cross the $100 million threshold in North America. The latest version, starring Emma Watson as Belle, had a budget of $160 million, and as to mid-April 2017 grossed more than a billion dollars. Yes, you are reading that correctly. A Disney remake of a movie from 1991 grossed more than a billion dollars, the highest grossing live-action musical to date. It is somewhat odd when a remake of an iconic classic manages to sell more tickets than the original, but remakes answer an immediate demand by audiences for further supply of their favourite movies. One of the reasons for the success of a remake lies in the nostalgic tendencies of its viewers – which is especially true for a Disney remake, whose older viewers wish to share the experience of a childhood classic with their own children, 20 years later. Remakes are successful because they have a ready-made fan base with strong loyalty to the brand. It is important to note that Hollywood has been re-making its own creations for decades, sometimes with the same directors: Alfred Hitchcock’s 1956 The Man Who Knew Too Much is a remake of his own movie of the same name from 1934. Golden-age Hollywood producers understood immediately that remakes are less risky in terms of production and investment. They may be called “industrial products”[1], for their ability to provide financial guarantees based on tested formulae. Re-telling a story relies on the fact that tickets are sold even before the movie is released, or at least that its narrative is well known. Real people portraying animated characters is a no-risk investment for Disney, and no-risk investment seems to be the business plan for upcoming years. It is also clear that the audiences are hungry for remakes, although we must not disregard the massive Disney marketing apparatus, drawing in the crowds. Disney spent around $140 million dollars on marketing for the new Beauty and the Beast in addition to the film’s budget, while capitalizing on social media, as exemplified by the teaser trailer of the movie being shared millions of times. But the masses filling the cinemas are captivated for an additional reason; technology. The modern take on the classic story is combined with higher production value, providing the innovative cherry on a familiar sundae. As technology improves, filmmakers are able to incorporate advanced and truly exciting techniques to express their artistic visions. George Miller, the creator of the Mad Max franchise, had created the latest movie in the series, Fury Road from 2015, out of sheer admiration to what filmmaking technology has become. He praised the modern camera, the number of shots possible, the sophistication of the visual effects, all of which allowed him to bring to life a new vision. “We never dreamed we could do that,” he told TechRadar, regarding the special effects and techniques that simply did not exist during the 1980’s. Indeed, modern technology amazes filmmakers and audiences alike with its accuracy and imaginative force. The new Beauty and the Beast was made with a complex mixture of CGI and motion-capture, and the effects are indeed mesmerizing. Director Bill Condon has said, “It is 25 years later and technology has caught up to the ideas that were introduced in the animated movie” and that says it all[2]. As technology evolves so quickly, the gap between the classic and the remake diminishes: the Beauty and the Beast version from 1991 seems almost anachronistic in its style although it was made only 26 years ago. It is as if the rapid improvement in computer imaging technologies is forcing the studios to speed up the pace of their own remakes. Imagine this: every time there is a new technology in the market, film studios will create a more persuasive, engaging and real-life version of a “classic”. Could we be expecting a new Beauty and the Beast in 5 years, introducing holograms of actual bisons? Managers and producers at Disney are obviously contented with where things are going: in the age of multi-billion-dollar grossing superhero movies, Disney needs to redefine its niche and solidify its position among film studios. The numbers align: over the past five years, the Disney stock has gone up by 160.87%. Appealing to a captured audience, motivated by nostalgia and cutting-edge technology, is a safe move in an industry where no one bails you out if you fail. The result is a refined product with a reliable story and some technological innovation. Remakes remind us of our childhood, and in such troublesome times, even grown-ups look for some comfort in singing teapots. I would even dare to claim that Disney remakes appeal to our current fears of a changing and divided world. People are not looking for something new when they engage with nostalgia. And what does all of this mean for creativity? Originality is a tricky concept when it comes to Disney: most of its classics are based on popular children’s books and fairy-tales into which the studio brought animated life. In the past years Disney had come up with some original stories turned into highly successful films, such as Frozen, but not as part of a larger trend. The Disney Renaissance in the 1990’s is called so for a reason: a burst of creativity and clever storylines that defined the cultural references of a whole generation. Whether such a burst is possible in the remake climate of financial safety nets is doubtful, and when the vast majority of resources are directed towards the re-making of classics, creative potential may be overlooked. In other words, we might not be seeing a new Disney renaissance of movies in the near future. No worries children, at least we have remakes! [1] Verevis, C. (2006). Film remakes. 1st ed. Edinburgh: Edinburgh Univ. Press. [2] http://www.wdsmediafile.com/media/BeautyAndTheBeast/writen-material/BeautyAndTheBeast58b624ab24380.pdf

There’s a good chance that you don’t know who I am, and that probably makes perfect sense; after all, I haven’t been hanging around at the faculty all that much in the past few years. Instead, my life has been dominated by a disorder that’s more tiresome than you can begin to understand. This is my personal story. Life is a capricious business When I started studying at the University of Amsterdam at the tender age of 16 (having skipped two grades in primary school), I couldn’t possibly have imagined where I’d find myself today, and I don’t mean that in an overly positive way. I don’t necessarily mean it in a very negative way either; it’s just that an unexpected medical setback towards the end of the first year put me in hospital for much longer than I could’ve foreseen, thus forcing me to quit studying — temporarily, of course, or at least that was the idea. However, to this day I still haven’t resumed my study programme, and that has almost everything to do with the increasingly complex thought patterns that seem to have emerged from that same event. I didn’t think of these thoughts as terribly unsettling at first, but now that I’ve been diagnosed with obsessive-compulsive disorder (OCD), I know for a fact that they’re not exactly normal. For those of you who aren’t familiar with the term, OCD is a mental disorder that’s characterised by recurring obsessions and corresponding compulsions, which are supposed to ease some of the discomfort that a sufferer experiences as long as the obsessions aren’t carried out. In reality, however, it’s these very compulsions that reinforce the vicious circle that should instead be broken, since giving in to the obsessions only feeds the thoughts that caused them to begin with. As such, patients should fight the obsessions themselves. That might sound like a straightworward task to you, but it can be (and usually is) a mentally exhausting process that triggers anxiety — far from straightforward. Rules, rules, rules I can hardly believe the extent to which OCD has disrupted my life. What seemed like fairly innocent automatisms at first have turned into strict rules that must be adhered to at all times. Since I’ve become this meticulous, I haven’t been able to finish a single task without scrupulous attention to detail. Even while writing this article, I’m bound to strict rules that must be followed. To put it simply, everything must be worded perfectly, and even the smallest typo can cause a nagging feeling that won’t go away until it has been corrected. Needless to say, there are many different types of obsessive behaviours, but most of mine concern order, perfection, or symmetry in one way or another. (Oh, and Oxford commas — don’t you dare leave one out!) An extreme example that springs to mind is when I once rebought a brand new chess theory book that I had spilled a few drops of tea onto. You don’t have to say anything — I’m still embarrassed by it. Treatment options OCD — much like practically every other mental disorder — can be difficult to treat. It often comprises a form of cognitive behavioural therapy (CBT) — a psychosocial intervention that’s the most widely used evidence-based practice for treating mental disorders. CBT focuses on the development of personal coping strategies that target solving current problems and changing unhelpful patterns. Exposure response prevention (ERP) is often used in this context as well. This comes down to nothing more than gradually opening yourself up to your fears. In my case, it comprised composing a list of obsessive behaviours that I found myself doing on a daily basis, then ordering them to the amount of distress that they caused, and finally working my way up the list, doing increasingly distressing tasks over time. It’s quite torturing, but as soon as you start noticing some improvement, it’s also really rewarding. Needless to say, there’s more to it than that; you also want to find out what might have caused this behaviour. That’s where the talking comes in. It typically turns out to be a combination of several different factors, the result being a preoccupation in some shape or form with the things that I mentioned in the previous paragraph. Personally, I’m inclined to think that OCD is a learned behaviour, possibly strengthened by living in an increasingly digital world, wherein things tend to be quite linear. Think about it: we all grew up into a world that’s dominated by computers, which can organise documents quite neatly. The icons on your desktop are nicely ordered. As I’m writing this article, every letter looks identical to every other letter of the same kind. Despite not being aware of all those things at an early age, I presume that this has played an important role in the development of my own OCD. However, this is an unconfirmed hypothesis, and with the relatively small amount of research that’s being done into the cause of OCD, it seems unlikely that we’ll have it tested one day soon. Back to school I’m still very much in the the process of fighting my own brain right now, so I’m not sure when I’ll get back to studying. At the time of writing, the most probable option is September of 2018, which still seems like an awfully long time away from now. That’s a slightly depressing thought, but on the other hand, I’m far less obsessed by time than I was after skipping those grades in primary school anyway. Back then, I always wanted to stay ahead of schedule, and I considered grade retention — even if I had already skipped two grades at that point — to be the worst thing that could ever happen to you. None of that anymore. I’ve also become much more relaxed about whatever it is that I’ll end up achieving in my life — or not. That’s a funny thing to realise to me, especially given the considerable amount of time that I’ve ‘lost’ in the process of my recovery. Given that fact, you would’ve expected the opposite to happen, but that hasn’t come true at all, which stands in stark contrast to the incredible amount of pressure that I always put on myself. Finally, I’d just like to say that I speak from experience when I say that skipping grades is a double-edged thing to happen to you at such an early age. It certainly affected my youth and the social life — or lack thereof — that I had back then. It’s okay, but should you ever find yourself having to make that decision yourself, be advised: the pros might not always outweigh the cons. If you want to learn more about the disorder central to this article, google ‘obsessive-compulsive personality disorder’ (‘OCPD’) rather than ‘OCD’. There’s a subtle difference between the two, but I’ve decided to use the latter term for the reason that its abbreviation is much more common. Bewaren Bewaren

The benefits of diversification are well known among finance and investment pundits, and they can be best summarized in the old adage “never put all of your eggs in one basket”: you should always spread your investment risk out as much as possible. However, sometimes some opportunities just seem too inviting in the short run, and many impatient investors fall into the temptation of going all-in in the most profitable asset. This usually turns out to be a very poor decision in the long run, and while die-hard Keynesians might not mind too much about that, the welfare of an entire country can be severely hindered by myopic trade policies. According to the World Bank, crude oil constituted about 96% of Venezuelan exports and about half of its tax revenues as of 2012, through the state-owned company PVSDA, which sends its revenues directly to the government. This means that even the slightest swing in the price of oil could significantly affect the country’s economic performance at any time. And it is more or less what has been happening since 2013. Back then, a falling demand for oil, consequence of the Great Recession, combined with the decision of OPEC (an association of oil-producing countries) to keep supply stable, led to a steady decline in world oil prices, and therefore crippled Venezuela’s main life source. Unlike many other oil-exporting countries, though, the very peculiar social and political order of Venezuela made the repercussions of this shock much harder. Venezuela is a presidential republic, but it wasn’t always one. The current democratic order was only established in 1958, after a coup led by general Wolfgang Larrazábal overthrew the last of the military juntas that had pretty much ruled the country since its very foundation. Since then, Venezuelan politics have become increasingly democratic, and the country has evolved into a more modern welfare state. But let’s flash-forward a few decades, to 1999, when Hugo Chávez was elected to office as President of Venezuela. He served three terms, briefly interrupted by a coup that was later reversed, during which he basically kicked the country into the new century by all means necessary: he implemented a new Constitution via a referendum, eradicated illiteracy, founded the Banco del Sur with Argentina and Brazil and even provided universal healthcare for his citizens. He was an old-fashioned socialist, perhaps inspired by Ernesto Guevara and Simon Bolivar, who never hid his hatred for imperialism and globalization, and used his country’s resources to finance his reforms and build up consensus. He died of cancer in 2013 and was replaced by his designated successor, Nicolás Maduro. Under Maduro’s rule, many of the issues that had been edulcorated by Chávez’s propaganda finally came into the spotlight. To begin with, the country’s finances have been drained by the many social programs run by the Socialist party to redistribute wealth and land among the poorest classes: this investment didn’t prove very fruitful, as the new land owners lacked the skills and capital needed to put those lands to profitable use; in addition, the nationalization of the food industry, typical of socialist regimes, didn’t help create a healthy and productive competition. Furthermore, corruption is running rampant among Venezuelan leadership, which means that a significant share of government revenues just “disappears”. Finally, the country’s economy ended up relying solely on the fate of its oil exports, or in other words, putting all of its eggs in one basket. And we know how that turned out. As a result of the fall in oil prices, the Venezuelan economy simply crashed: the government ran out of liquidity, and responded by printing more money. Inflation spiked, and is still on the rise at an alarming rate, reaching 800% in December 2016 and threatening to turn the country into the new Zimbabwe. The national currency, the bolivar, depreciated dramatically, and the credit rating of Venezuela’s sovereign debt was downgraded to junk status by Standard’s & Poor’s. The consumer price index in bolivars is so high that most people have resorted to the black market to buy consumer goods in foreign currencies, fostering the informal economy and thus depriving the government of even more revenues, in a vicious circle that is causing whatever was left of the welfare state to fail too. Little did the decision to raise the minimum wage by 60% help the new government gain consensus. Maduro now faces the lowest historical approval rate among Venezuelan presidents, and in a country built on coups and revolutions that is not a sign to be taken light-heartedly. The decision, on March 29, to revoke the powers of the National Assembly in favor of the Supreme Court, de facto centralizing legislative power, finally triggered the protests, that have been ravaging the streets of Caracas throughout the month of April, calling for the abrogation of the March 29 ruling, immediate elections, and the creation of a humanitarian channel to help those left behind by the crippled welfare state. The government responded as expected, by deploying its over-maintained military to the field, and even providing weapons to militia groups to support the establishment. There are 33 confirmed deaths so far in the riots, and the conflict seems nowhere near a resolution. Venezuela may very well be a case of the infamous “Dutch disease”: overconfidence in the country’s natural resources resulted in an underdeveloped industry and an insufficient agricultural production, combined with an increased conflict of interest between the government and the oil industry. Unfortunately, the longer the crisis continues, the harder it will be to find alternatives. Many argue that at this stage the only solution might be for Maduro to step down and finally end Chavismo, going to immediate elections to restore confidence among the population. To fight hyperinflation, Venezuela is going to have to invest in a more credible financial system, like Germany did in the 30s, or give up on its currency, like Zimbabwe did: measures that are neither popular, nor easy to accomplish. And there is no way of predicting when the military might see fit to step in once more and pull the plug on Venezuelan democracy. Bewaren

People are reminded how influential negative news can damage organisations from time to time with dramatic company public relations crises. In a global economy where hard-to-assess intangible assets, such as brand equity plays important roles when determining the companies’ market value, they are especially vulnerable to anything that damages their reputations. Take a recent case for example, in which United Airline not only handled an overbooked flight situation terribly but also provoked a great deal of public outcry with extremely inappropriate CEO responses to the situation. In brief, the United Airline flight attendants ruthlessly removed a passenger who had already boarded the flight and was unwilling to accept the compensation of a later flight since he, a doctor, already had surgeries scheduled that required him to return on time. After refusing to get off the flight, he was severely injured after the securities dragged him off the aeroplane, and the video went viral which gave rise to the public outcry regarding how the airline tackles situation like this. People were outraged by the fact that the airline kicked the passenger out, because it could not manage to accommodate four more crew members, and the fact that the CEO “apologised” uncaringly via social media, addressing that he is sorry for “re-accommodating” the passenger. When the senior leaders, even the CEO, responded to a PR crisis that poorly, it is worth doubting that the company is fundamentally in a mess. The influences on its profitability in the short run might not be as striking as the public reactions toward this PR disaster since travellers do not switch that easily and most of the bookings were made in advance. However, from a long-term perspective, bad company reputations can have far-reaching negative impacts on the company’s market share, and thus reduce its profitability as a result. Judging from the consequences of damaged firm reputations, we can tell that it is vital for companies to proactively manage their reputations — not simply after the crisis emerged. In other words, instead of concentrating on crisis management, the organisations should actively manage the reputational risk. A positive reputation facilitates the firm to ensure its long-term profitability in various ways: it brings customer loyalty which improves sales and enables the firm to charge higher price premium, and it enables the company to obtain lower costs of capital since the stock PE ratio for brands with a good image is usually relatively high. Furthermore, a strong reputation helps firms to attract better talent, which is crucial for the firms’ profitability and growth without a doubt. It takes a long time for a company to build up its reputation, but it can be destroyed just overnight. Some above-mentioned concepts might be common-sense for some of you, however, it is likely that you have little idea about the meaning of reputational risk management — since it tends to be ignored in risk management, according to a report develop by Deloitte and RiiЯ Ltd., due to its difficulty to explicitly define and factor it into risk management model. According to the report mentioned previously, by understanding and incorporating external risks and opportunities into the organisation’s risk Intelligence, “the goal is to end up with a program that puts the board and senior executives on the leading edge of knowing what might inhibit —or advance—the company strategy and then be prepared to act accordingly”. What is also important is the measures that companies should take so that it will continue to benefit from positive reputation and avoid a disastrous PR crisis like the United Airline just did. There are various dimensions that are essential to take into account. The first step to effectively manage reputational risk is to reevaluate the company’s current risk management programme and integrate the risk to reputation into it. This includes establishing a standard, utilising consistent definition of reputational risk throughout the organisation, and assess the current reputation. It can be evaluated from different aspects, such as how customers and investors perceive the company, and this results should be quantified – if possible. The evaluation process can be done by using methods such as structured media analysis, and survey studies on stakeholders. What the media say about the company is especially worth noting since most of the time they shape public opinions and therefore the expectations of the stakeholders. This leads to the next point: the quality of public relation management matters. It can be complicated especially for multinational cooperations, since you have to take into account the cultural differences and the variation of society values and beliefs. Some perceptions that are recognised by citizens in one region do not imply it will be the case somewhere else. An article written by Cameron Craig, former PR man at Apple, provides some guidelines to effectively and successfully manage relations with the media. First of all, keep it simple with the press release. “Mere mortal” should be able to read it, since the easier the press release, the broader the audience it is going to reach. Secondly, contact the reporters or influencers only when you have something important to offer, making noise in the market won’t help a company building up a long-lasting positive reputation. Thirdly, set the tone and shape the news story by only working with a small amount of media influencers that the company trusts. It is not only cost efficient but also helps an organisation to establish a better bond with the journalists and influencers. Considering that it is fairly inexpensive to proactively manage reputational risk and that reputation can have such significant effects on an organisation, it is not too much to say that companies should all take action to protect and enhance their reputations and values.

My nephew, Paul, works for a sandwich shop chain. Recently, he was promoted to the chain’s management team. Paul and I celebrated his promotion over a couple of beers. While chatting about the chain’s business model, Paul asked: “Any idea how to optimally set the price of a sandwich?” An Economics 101 question, so it was not hard for me to give the answer: “Simply equate the marginal cost to marginal revenue to find the profit-maximizing price.” Paul looked at me as if I had tried to explain the fourth-order Runge-Kutta method to approximate solutions of differential equations. The following conversation unfolded. Paul: “Marginal revenue? Marginal cost? Equate? Maybe I should have some of what you’re drinking!” Me: “Let me try and explain this econ lingo in plain words. The marginal cost of a sandwich is what it costs for the sandwich shop to produce one extra sandwich.” Paul: “Ah. So, when determining the marginal cost, I guess I should ignore fixed costs like the rent the shop pays to the landlord, equipment costs, and personnel costs.” Me: “Absolutely.” Paul: “Well, in that case, the marginal cost of a typical sandwich is around 50 cents, which is mainly the cost of the bread and the spreads.” Me: “What about the marginal revenue?” Paul: “The price of most sandwiches are €2. Is that what you’re looking for?” Me: “Nope. That would be the average revenue, not the marginal revenue. To determine marginal revenue, imagine that you have decreased the price in such a way that you sell one more sandwich. The additional revenue that you gain over all sandwiches that you sell is the marginal revenue.” Paul: “I see. Let’s say that if I decrease the price by one cent, the shop sells 100 sandwiches an hour instead of 99 sandwiches at the current price of €2. Revenue increases from 99x€2=€198 to 100x€1.99=€199. So, the marginal revenue is €1.” Me: “Yes, indeed. In fact, it is higher than the marginal cost of 50 cents, which suggests that it may be profitable to decrease the price. By selling more sandwiches the shop will increase its profits because the gains on the additional sandwiches sold (marginal revenue) are greater than the costs.” On the back of a beer mat, I drew the following figure: Me: “You see. Just find the quantity (Q*) where marginal costs and marginal revenue are equal and then find the corresponding price (P*).” Paul: “Wait a minute. You seem to forget that Broodje Bart and Subway, our main competitors, will decrease their price as a response to our price decrease.” Me: “Not quite. The demand curve that I sketched does not represent the total demand for sandwiches in the neighborhood but the demand for your firm’s sandwiches… taking competitors’ responses into account.” Paul: “All very well. But is there some way I can find out whether the marginal revenue is indeed €1? It seems to be much harder to determine than the marginal cost.” Paul had a point, making my advice based on Econ 101 insights pretty worthless. And I’m afraid that follow-up courses in the economics programs are not very helpful either. Luckily, Paul made an illuminating remark: “I guess we can learn a bit from price variations in the past. A couple of months ago, we raised the price by 10 cents. And last week we sold sandwiches for €1 as part of a marketing campaign to attract consumers’ attention to a recently opened shop. The shop almost exploded!” Indeed, firms can learn a lot from price variations about the structure of demand and so about marginal revenue and optimal pricing. In fact, many large retailers, like supermarket chains, record all individual transactions. The resulting huge data sets contain loads of information about the demand for a large range of products. At the same time, ‘big data’ may be of limited value if it is not obtained using randomized experiments. A location manager might decide to give temporary discounts on some products just to get rid of excess inventory. If this excess inventory is caused by unforeseen random events, the revenue effect of the price decrease is not very informative. Suppose the supermarket sells little ice cream in a particular month because of unforeseen bad weather. A price decrease might then boost demand in the next sunny month by more than it would have compared to a situation where the location manager kept the same price. Randomized experiments may be much more informative about consumers’ price responses than big data. Barron et al. (2008) conducted such an experiment varying retail prices at 54 gasoline stations of a major retailer in California. Randomly selected petrol stations increased or decreased the price by two cents. The beauty of their experiment is that the price changes were effective for an entire week so that nearby competitors could respond to the price changes. At the end of the week, the researchers obtained a convincing measure of the effect of the price changes on the petrol stations’ demand. Sometimes price experiments produce surprising results. Gneezy et al. (2014) varied prices of bottles of Cabernet Sauvignon at a small Californian winery on different days over the course of several weeks. Customers typically visit the winery as part of a wine trip through California. As a result, the vast majority of winery customers were one-time visitors who were unaware that they were taking part in an experiment. This is important because otherwise customers may be inclined to postpone their purchase in the hope of getting a better deal later. In any case, the surprising observation was that demand increased when the price was increased from a low price to an intermediate price. An upward sloping demand curve! Rare like a unicorn in an Econ 101 course. And very useful information for the winery. My face broadened into a smile. I felt I had convinced Paul that two steps are essential in determining the optimal price: (1) ignoring fixed costs, and (2) experimentation. And when experimenting, to make sure that (1) consumers are unaware of this so that they behave as they usually would, and (2) the experiment takes place over a sufficiently long time span to allow competitors to react to the price changes. We ordered another imperial stout and started to chat about football. Bewaren

Two weeks or so ago, there was a referendum in Turkey. A referendum so significant in its items, that it could literally turn the country into a one-man dictatorship. I did not vote in it because it was too expensive to travel to the consulate in Rotterdam and get registered as a voter. I simply did not believe in the power of my vote enough to spare thirty or so euros—primarily because of its statistical insignificance. …and as you may know, the referendum passed with an ‘Evet’ (Yes) vote, effectively making the parliament meaningless and introducing an executive presidency. You may find it odd, but I do not feel guilty. Set aside the probability theory and predictive analytics, as someone from a country with a past as troubled as Turkey, I cannot get myself to believe in the power of the people. I knew, deep down since the referendum date was announced, that the leading party would do absolutely anything in its power to get the proposed constitutional changes through—yet I still had some hope that the results would be such that the secular and democratic Turkey saw another day. Seems not. My girlfriend studies political science in Germany, and she deeply believes that it is every citizen’s duty to vote, whatever the odds, and cites various social and political uprisings as evidence for the power of the people. After the referendum, she was not furious at me for not voting because it was expensive, but she was furious at me because I did not trust the idea that my vote would have changed something. I thought that maybe I was being very irrational and dramatic, dismissing the idea that democratic choices can really empower people. To rationalise what I thought was irrational, I got down to reading articles and journal papers… Initially, in a very straightforward manner, I tried googling ‘does your vote matter’ and the variations thereof, which led me to a lot of articles talking about what my girlfriend was telling me; your duty to vote, signalling your position, voting for independents is not a waste of ink… I agree, those are all very important, under certain circumstances—although not exactly applicable when you country becomes a dictatorship whether you want it or not. Most of the investigative analysis I found online were focused heavily on the United States’ presidential elections. Because the US political system is effectively a two-party system—due to Duverger’s law, and the fact that the two polarised parties are in such positions that they can integrate the agenda items of the smaller parties—the papers were concerning the electoral college, and how certain states were ‘settled’ on a specific party. This sort of research is not directly applicable to Turkey, because even though most provinces can be classified as ‘Evet’ or ‘Hayır’ (No), their votes count individually, instead of being lumped into one party or the other as it is the case in with the electoral college. Fruitless as my search was in trying to put my beliefs into numbers, I started digging through the university’s journal database, and found quite a few useful papers on the matter. The Turkish elections are notorious for having very high turnouts. The referendum had a turnout of 85.32%, the November 2015 general election had 85.18%, the June 2015 general election, which produced a hung parliament, had 83.92%, the 2011 one had 83.16%, and so on. The turnout basically never goes below 80%, and mostly hovers at about 85%. This is incredibly high according to the data from the Institute for Democracy and Electoral Assistance, which puts most European countries in the 40-70% range. It is said that high turnout is very important for the functioning of a democracy, or in this case, the overthrowing thereof. The question of why these people did not vote is rather ambiguous in the case of Turkey. There are a lot of conflicting studies in the US that disagree on the reason why people do not vote, and the primary disagreement is based on satisfaction or dissatisfaction in the status quo. Certain studies note that non-voters are often dissatisfied in the way the government works, and others argue that a significantly low turnout may mean an overall satisfaction. These results are not particularly applicable, because Turkey is a country that, again, has very high turnouts. One reason to think that the non-voters could be ‘Hayır’-leaning is the likelihood that they were discouraged, like me. Although people may be afraid to express their opinions, given the attempts at actively suppressing ‘Hayır’ campaigns and the mass-purge after the coup, being discouraged from voting is likely not a significant problem. After all, the most important thing to note is the fact that Turkey, since 2001, has been voting in favour of the same party, with consistent turnouts. If we were to assume that the non-voters would be a ‘Hayır’ majority, they would have been pushed to vote to express their dissatisfaction. ‘Evet’ voters are already the group that is effectively in charge of the country, so they are not as roused to vote as the ‘Hayır’ demographic. A study I found by Highton and Wolfinger, titled The Political Implications of Higher Turnout, was focusing solely on the voter characteristics of non-voters, and try to extrapolate from thereon. They found out that, by using a simulated population constructed with a political view survey, the difference in the outcome would have been very little in general if the entire population voted. They also found that ‘those at the top end of the income scale turn out in far larger numbers than those at the bottom end,’ which is rather unsurprising. Although the study focused heavily on the United States, it would not surprise me if Turkey had similar characteristics in the non-voter population. Most developed provinces of Turkey, such as İstanbul, İzmir, and Ankara, have all voted ‘Hayır.’ Looking at the provinces who voted ‘Hayır’ in majority, I found out that they contributed to 69.71% of the GDP in 2014, as only 32 out of 81 provinces of Turkey. Seeing also that these provinces have turnouts higher than the overall, it would have been more difficult for them to contribute to a greater shift. In the referendum, out of 49,799,163 votes counted, only 48,934,116 were valid. Of those valid, 25,157,025 were ‘Evet’ and 23,777,091 were ‘Hayır.’ This gives us a 51.41% to 48.59% ‘Evet’-‘Hayır’ ratio. These results are not finalised, but they are good enough to move on. So, over the 58,366,647 eligible voters, I will be analysing the amount of votes required to turn the balance to 50-50 and 51-49 splits, where the first one is the bare minimum to tilt the outcome, and the second one is to move the result beyond a reasonable doubt, and perform these analyses over 100%, 95% and 90% turnouts; in order to figure out how the vote could have been turned into a ‘Hayır.’ The formula to solve for the necessary ratio of ‘Hayır’ in the remaining valid votes for any given turnout here is: (23,777,091 + (P × T − 48,934,116) × H) / (P × T) > {0.5, 0.51}, where: P is the eligible voters, T is the turnout, as a member of {1, 0.95, 0.9}, H is the percentage of voters who voted ‘Hayır.’ The idea is that, the sum of all ‘Hayır’ votes in the results and all ‘Hayır’ votes in the remaining votes over all votes should be higher than 50% or 51%. This is a simple linear equation where P and T are already defined, so it is solved for H. In parenthesis are the nominal number of people for the respective ratio. As you can see, the ratios from the people who did not vote are exceptionally high. Even at the best case scenario, where only 57.3% of the people have to vote 'Hayır' to take the vote to 50% in a full turnout, is impossible to achieve. I performed the statistical test for proportion difference between two populations for the value in this, to receive p-values that are consistently lower than about 10-1000. For scale, 1080 is the estimated number of atoms in the universe. You can still argue that there can be variations in the group who did not vote, but referring back to my previous points, I doubt that you can ever achieve such ratios: The difference between 48.59% and 57.31% alone is almost nine percent, and that is the best possible case. There is not even the slightest guarantee that the people who did not vote would have voted for a higher percentage of 'Hayır' than 'Evet.' I guess I should conclude by making sure it is understood that I am not telling you not to vote. There are elections and referendums in which a single vote can really change things. However, the way democracies function make it such that sometimes you just do not win. It may be the best way we have to decide on things, but that does not at all mean that you cannot be unhappy with the results. We saw that happen in the latest US presidential, where the unexpected Trump victory against all public polls, caused a massive outcry from the Democrat voters. Realising that feeling myself is truly bitter, and so is having to deal with the consequences of this referendum. Statistically, however, I am not surprised. At least now I know the answer to my question; it would not have mattered even if I had gone and voted.

Last Thursday, a lot of children woke up really early to sell their old toys and clothes on the street, while others ate orange tompouces, and everyone was dressed in the national Dutch colour. Admittedly, it may seem a bit strange to foreigners. On the 27th of April, the Dutch celebrate the birthday of King Willem-Alexander. This national tradition is comparable to the French Quatorze juillet (14th of July), the American Independence Day (4th of July), the Norwegian Grunnlovsdag (17th of May), and the Chinese New Year. What these days have in common is the fact that everyone has a day off and celebrates the same thing, which is something that is mostly derived from the national history. On these public holidays, almost everyone is having a good time, while most companies are closed. Although in some sectors revenues are really peaking on these kind of days (hospitality and leisure business), bank holidays do have some downsides in other sectors. What are these downsides, and do the economic benefits outweigh the costs? The economic benefits of public holidays seem pretty obvious. Besides the peak revenues in for example the catering industry, the events that take place on these days also generate a lot of money. But not only do these events generate a lot of money; they also generate social cohesion and unity, which are of great importance to a country. Ask any Dutch citizen about typical Dutch traditions, and they will most probably name King’s Day alongside Sinterklaas. These public holidays serve the purpose of reminding people of the country they live in and the values that are respected within it. For example, Independence Day in the United States is a day to remind people of the freedom they have, which is respected in the States. So public holidays provide the people with a sort of nationalistic feeling that is needed for the unity of the nation. Next to the social cohesion and unity, bank holidays are also beneficial to interpersonal relations. A study by Joachim Merz and Lars Osberg (2006) proves that one benefit of national holidays is that people all have a day off and are thus able to meet with family and friends. They found that people in countries with more public holidays turn out to value and rate their social relationships higher than people in countries with fewer national celebrations. These holidays solve the coordination problem of social gatherings, since nobody has to work – unless one works in one of the sectors that benefits from these kind of days. However, one of their most remarkable findings was that an extra day off also strengthens social ties during normal weekdays and weekends. This effect will in turn lead to an overall happier feeling and therefore to higher motivation and productivity on the workfloor. Yes, Merz and Osberg are indeed arguing that an indirect effect of public holidays is a generally higher level of satisfaction, motivation, and productivity! Although it is stated that public holidays improve productivity and motivation among workers, these results are ambiguous. It may be the case that people are happier due to the prospect of a pleasant day off, but they do not work harder on the days just before and after the public holiday. When the public holiday takes place on a Thursday, people are also more likely to extend the holiday into a long weekend. Last Friday, for example, the department where I work was as good as empty the day after King’s Day – we were with two people, while usually we are with around 35. The most obvious disadvantage of this type of holidays is thus the enormous decrease in productivity in many areas of society. While the catering business flourishes on the holiday itself, as stated earlier, this is not the case on the days right after. Look at the clubs and cafes after a public holiday, and one can see that the peak revenues from the holiday are directly being compensated for by the day after. Moreover, The Telegraph reported that 45 percent of businesses suffer from bank holidays, and estimate a loss of productivity of 2.3 billion pounds per bank holiday in the UK. All in all, we could say that public holidays are beneficial to some industries, although the peaks in revenues in these particular industries are compensated for by a dip during the days after. Whether these days result in a higher productivity and higher motivation is unclear, but they certainly result in a greater feeling of unity and nationalism. Social ties become stronger because of the national days off, and this is of course invaluable. However, the amount of public holidays per year differs from country to country, so it would be interesting to study the influence of the quantity of public holidays on the people. For policymakers it could be interesting to know what the optimal amount of national holidays could be, in order to increase the productivity so that it will actually outweigh the costs of having a nationwide day off. Although companies are currently making a loss on these bank holidays, I think that every employee will agree on the fact that this loss is compensated for by social benefits of that day. Or at least, this holds for me.

We have this popular myth back in my country that says: ‘A lightning never hits the same place twice’. Now, with the few I was able to absorb from my interpretation classes, this popular expression clearly refers to the fact that really improbable things, such as being struck by a lightning – during normal conditions your chances are 1 to 1 million – won’t happen twice. Funny enough – or not – this year this expression might be put into test: yet again, another presidential candidate, with nationalist and protectionist ideas, which was regarded out of the presidential run, reaches the second round of the dispute. Marine Le Pen is the leader of the Front Nationale or National Front. Marine is the daughter of Jean-Marie Le Pen, the leader of the National Front, and a far right politician. He once said in one of his rallies that gas chambers used in the Second World War by Nazis was merely a “detail in history”. Even though Jean-Marie Le Pen reached the second round of the French elections in 2002, but ended up losing for the Republicans, the French popular opinion about him isn’t good: FN was seen as a fascist party because of Jean-Marie’s presence on the leadership, and after the loss in the elections, the party decreased their seats in the lower and higher chamber of the French Parliament houses, until 2011, when Marine’s father decided to retire from the leadership of the party. At that moment, backed by her father, Marine won the elections for leadership of the party, and started a complete reconstruction of the party. Marine decided to push away the image of xenophobes and fascists that the party had acquired under her father’s leadership, to a more subtle, centre right approach. In the latest slogans published by her campaign, Le Pen even took her last name out of the slogans, leaving only “Marine 2017” written on her new advertising campaign. She clearly wants to separate herself from the image of her father, as well as show France that FN is now a new type of conservatism, less radical nationalism, and more sophisticated. But much like our orange friend seating in the oval office of the White House watching Fox News right now, Marine has a dubious speech. While she does take stronger stands then Trump in some subjects, she often seems to be softening it up to attract more voters. Marine calls for the comeback of the golden age of France. Where the motto Liberty, Equality and Fraternity was written outside Parisian houses; where all French were employed and could sustain their family with their income. Many voters are being alluded with these promises, without realizing the consequences of it, because Marine’s campaign also preaches for anti-globalism, zero immigration, no tolerance with religious diversity and protectionists economic measures. The only good thing about Marine’s campaign so far is that by the time this article was being written, the latest polls published by Bloomberg showed her behind the other candidate, Emmanuel Macron, by 19,5% points. Macron is another surprise in this French presidential election. He is the frontman of a new independent party called En Marche!, never held a public office before, besides being appointed in 2014 as Minister of Economy and Finance, and he married his French teacher who is 20 years older than him. Jokes aside, but never the truth, Macron seems like a moderate, progressive option to the old socialist and republican parties that have been switching power in France over the last years. At first glance, Macron seems like the Justin Trudeau who never crossed the Atlantic, and his policy’s resemblance is remarkable: he both advocates for diversity, liberal economic measures with social entanglements and pro-globalization measures. It would seem like the French elections are a “what if” version of the American elections: what if instead of Hillary Clinton, who even constantly trying to seem progressive couldn’t disconnect herself from the image of conservative politics, another more progressive and forward thinking candidate would go to the second round, such as Bernie Sanders? Would all the voters who voted for Trump in the United States, because they were tired of old politics, have voted for Sanders instead, if they would have had the opportunity? Even though polls have been showing Macron leading, more than a ⅓ of the French population is estimated not to go voting next Sunday 7th of May. This could mean a totally different result, as explained by Michael Van Rhee in this article about the predictive power of pools in the American Elections. And the biggest problem about common sense, and public opinion, is that sometimes it is based on polls such as these, or just misinformation, which in the end leads to misunderstandings, which by consequence are propagated to everyone, without one single check. Remember the public saying that a lightning doesn’t strike the same place twice? Well, actually this myth was debunked recently. Even though the probability of it happening is low, a lightning can strike the same place even more than twice. And on this Sunday we will confirm if it does.

When you walk in the Red Light District, have you ever seen a male prostitute? I haven’t. There are only females. O wait! There are males, but ones that are dressed as females and try to act as feminine as possible to attract male customers, so I would still consider them females (with penises).  Let’s take a look at common male-female interactions: isn’t it considered harassment if a male directly asks a female for sexual interaction, while if the opposite happens, it is a lucky moment for the guy? If a girl has slept with many men, she is considered a slut, while a man who has slept with many women, is considered fortunate. We see males lustfully looking at females all the time, cat calling them and sometimes sexually harassing them. We rarely hear the story the other way around. Why is it like that? Because heterosexual pleasure appears to be a female resource, and male sexuality has little or no value. Sex is a commodity, where females are suppliers and males constitute demand, and according to economics, there is a market clearing price which equates quantity demanded to quantity supplied. The scarcity of sex comes from the fact that a female is not willing to give sex indefinitely because if females do so, that increases the supply of sex, and the value of the commodity will be driven down, hurting females’ interests, while for males, it does not really matter. Digging deeper to figure out why the sex market mechanism is as described, leads to finding a biological explanation. For example, it is proven that males (in almost all species that reproduce sexually) have a higher drive to be sexually active than females. Most males can have sex at almost any time, while females have sex on discrete times, when it feels right to them. It is often very easy to turn a male on, while it is always tricky to get the sexual attention of a female. The biological reason is that males have sex to increase their chances of having progeny, while females are picky and choose the best candidate to make sure their babies will have a significant chance of survival. As for any other commodity, there are two factors affecting the price of sex; one is availability, two is quality. Demand and supply are mainly dictated by sex ratios. A city or a town with a high female to male ratio is likely to be offering sex with a relatively lower ‘price’ to males, and vice versa. Sex is not a homogeneous product; it is differentiated primarily according to the level of female’s attractiveness, which is determined mainly by; physical attributes, personality, intelligence, playfulness, social status, and perceived or known sexual history (quality depreciates as the number of past sex partners of a female increases, because exclusivity that can be given to any future male partner is diminished). The more attractive a female is, the higher the price she asks for sex, so as in any given market, sex has different prices according to ‘quality’, which reflects males’ expectations of the pleasure received from the sexual interaction. Another factor affecting the price of sex is social norms regarding sex. In a society that offers permissive sexual norms, the ‘price’ of sex is lower than in a sexually conservative society. Aside from these factors that render an individual female a price taker in a given sex market, individual female preferences may apply. A female with a higher than average sex drive, for example, may offer a slightly lower price than the perceived market price. Or a female tourist to some exotic area that wants to explore native males in that area, may simply give it for “only the fun of it”. So these are the determinants of the volume of the price, but what is actually this price males pay for sex?  The price males pay to females for sex is not only an economic one. The price can be one or a combination of economic support, affection, companionship, pleasure, respect, prestige, security provision, a promise of short term or long term commitment to a relationship, marriage and other goods. In prostitution, which is a tiny segment, but the most explicit form of the aggregate sex market, it is simply a well-defined economic value. Thus, the lowest price is some money as in prostitution, or pleasure (and a few drinks) as for a female that has liberated herself from the pressures of the market that pushes her to ask for more. The highest price is a state enforced marriage contract. Recent Trends in the Sex Market Price of sex has gone down recently from long term commitment, to a short term fun. This is due to a number of reasons, mainly; female liberation, female economic independence, and increase in the supply of sex with the availability of porn, toys, sex robots, etc. This downward pressure on prices can be seen on marriage rates (marriage is the highest price paid for sex), which are declining everywhere. For example, in the European Union, the annual marriage rate was around 8 out of 1000 in 1970. In 2011, it is around 4 out of 1000. The annual divorce rate (divorce is driven by the availability of other sex options) was approximately 1 out of 1000 in 1970. In 2011, it doubled to 2 out of 1000. Dating apps revenues and the number of users have skyrocketed in the last few years. Dating apps are mostly used for hook ups and short term fun, or in other words; to get ‘cheap’, or uncommitted, sex. The trend is obvious. Changes in attitudes towards sex along with technological developments in the sex/mating industry led to an increase in supply of sexual pleasure, and that has driven the overall price of sex down.

Economics General Economics – Yana Chernysh The US dollar has been rising constantly, as a result of the country’s strong economy and with the other countries in the world facing economic problems. The current exchange rate is 1.07$/1€. Economists predict that euro can even go below 1 dollar in the future years. Over the last month, the US imports price has fallen by 0.2%, and the exports price has risen by the same amount. In the UK the unemployment has been decreasing and weekly earnings have been increasing in the past few months. In general, the labor market was becoming stronger. However, due to the high inflation rate of 2.3%, the real wage growth is very close to 0, which is the slowest growth the UK experienced since 2014. The French economy is becoming much weaker. The predicted GDP growth is only 1.4%, which is the lowest in Europe. Government debt is now at the 90% of GDP, whereas only 10 years ago it was 58%. The unemployment rate is high, especially for the youth (24%). These topics are highly discussed now, due to the French elections. Global financial stability has continued to improve, according to the IMF April report. Several reasons for that are: increased interest rates in many countries, which lead to increased earnings of banks and insurance companies, and oil prices are recovering from its recent low levels. Still, IMF points out several risks to the global financial stability. One of them is an increasing debt level in some countries. Is the U.S. Dollar a bargain? – Mostafa Al Shikh Right after the Trump’s inauguration day, analysts of several investment banks foresaw a positive outlook for the U.S. Economy.  Expectations were that the dollar would gain strength after long periods of a stabilized Euro-Dollar exchange rate. The Banks thought that the Dollar would appreciate versus the major currencies such as the Euro, Renminbi and the Pound. After a few months of speculation and a more expensive dollar, the currency began to show signs of recovery towards its intrinsic value. There could be several reasons why this is happening. Firstly, the growth rates in America are slightly shadowed after positive changes in European macro-economic indicators. A minor example is the significant Dutch budget surplus which could have led to an decrease of the Euro-Dollar exchange rate. Secondly, in contrast to the expansive fiscal policy of Donald Trump, the Federal Reserve tries to keep a hold on this policy with hikes in the interest rate through government bond sales. However after minor adjustments to U.S. GDP growth, this might cause some hesitation at the FED and could postpone its interest rate adjustments. Politics French Elections – Tsz-Tian Lu By the time you are reading this text, the result of the first round of the 2017 French presidential election will be already released. It took place on 23 April 2017, and if no candidate wins 50% of the votes, the two candidates with the most votes will go into a run-off on 5 May 2017. The result of this election is very significant for the following reasons: It will determine whether France is going to vote to leave the EU, and also determine the policies on immigration restrictions as well as how the new government is going to deal with refugees. Among the four candidates with the highest supports in the opinion polls, which are Marine Le Pen, Emmanuel Macron, Francois Fillon and Jean-Luc Melenchon, two of them are hostile to the European Union and NATO. Marine Le Pen, who is often said to be the French Trump, is very likely to make it to the second round. She is known for promoting protectionism and populism, and stated that once she is elected, she will embark on negotiation with the Brussels on a new EU, followed by a referendum if the negotiations may fail. Meanwhile, the poll suggested that the biggest rivalry for Marine Le Pen is Emmanuel Macron, who represented a party that is “neither left nor right”. Macron has a high chance of defeating Marine Le Pen if he reaches the run-off. Thus, it is not difficult to see why this election is worth keeping an eye one — the financial and societal stability of the EU are at stake. According to the latest exit polls, Marine Le Pen and Emmanuel Macron gathered enough votes to make it to the run-off. British Snap Elections – Raffaele Di Carlo British Prime Minister Theresa May surprised everyone on the 18th of April by announcing her plan to lead the United Kingdom to a sudden general election by the 8th of June, despite her reiterated claims of aiming at elections by 2020. The Parliament is likely to be dismissed on May 3, allowing for a one-month electoral campaign. Many consider this decision a risky gamble that might throw the country in a period of further instability in such a delicate period of its history, others see it as an inevitable turn of events, especially considering that the Tories are lately enjoying an extremely favorable electoral environment: the division and weakness of the Labour party, combined with the sudden step-down of the campaign leaders, left the moderate right-wing to reap the consensus of a vast majority of the population, as the opinion polls seem to suggest. It only seems logical then that Mrs. May would press this advantage to try and consolidate her now limited majority in the Parliament. The Fixed-term Parliaments Act 2011 states that two-thirds of MPs must vote in favor, for early elections to be approved. Mrs. May indeed presented the motion to the House of Commons on April 19, and a striking majority was reached, as the Labour party also seems to be favorable to early elections. A Day Without Coal in the UK- Omar Osman On Friday April 21st, Britain went a full day without using coal to generate electric power for the first time since the industrial revolution. The national decision of a coal-free day is to remark the intended transition towards cutting coal use for power generation, for the sake of environmental protection. The UK government plans to phase out Britain’s last plants by 2025 in order to cut carbon emissions. Coal powered Britain for more than a century, and it has remained the dominant energy source until the early 90’s. However, in the past several decades, power sources were diversified and reliance on coal was diminishing. Currently, around half of British energy came from natural gas, with about a quarter coming from nuclear plants. Coal and other fossil fuels are considered to be among the main air pollutants and major sources of greenhouse gases. 80% of world energy still comes from fossil fuels.  However, as Britain’s “one day without coal” symbolizes, there is a strong world movement to shift towards clean energy dependency, for the preservation and sustainability of the environment. Turkish Referendum – Evrim Öztamur The Turkish constitutional referendum ended with an ‘Evet’ vote last Sunday with a 51.4% to 48.6% ratio. Reminiscent of the close margins of the British vote to leave the European Union, the nation voted to abolish the position of the Prime Minister and replace the entire political system with an executive presidency. In other words, the current President of the Turkish Republic, Recep Tayyip Erdoğan, acquired complete control of the country’s affairs, both foreign and domestic. The Republic is still in a state of emergency that was enacted after the 15th of July coup attempt last year, which likely contributed to the success of Erdoğan’s campaign in favour of the constitutional changes. With several videos of voting directors stamping ‘Evet’ votes on unmarked ballots surfacing on social media, voters against the changes are currently working towards litigation to account for these irregularities. However, it is not certain if these irregularities account for more than 1.4% of the votes to cause a shift in the results. Reactions from sovereign states has been mixed so far, ranging from the United States and Russia congratulating the Turkish peoples and Mr. Erdoğan, to several European Union countries making note of the irregularities in the results. Austrian Foreign Minister Sebastian Kurz expressed that he is opposed to Turkey’s EU accession talks; which had effectively stopped after the purges of military divisions and civil servants began following the coup attempt. US Foreign Affairs: How Trump handles China and North Korea – Hải Đăng Vũ This edition of our news recap marked the 95th day of Donald’s Trump presidency of the United States. During his first months, domestic issues were his primary concerns – which some have sparked much controversy that expanded its remarked influence in other countries. Conversely, his handling of his first jobs in foreign affairs were tested against its two closest allies, the United Kingdom and Canada. His cabinet was well-prepared enough not to leave these meetings out of control. The bar was raised higher this time when in the previous month, President Donald Trump received a welcoming visit of their most powerful political and economic counterpart, China. Prior to the meeting, the relationship between the two administrations has not been particularly well – Trump’s phone call to Taiwan earlier this year angered Beijing and left them guessing on what approach they should take to the meeting. Asides from bilateral economic trade deals that were brought to the table, the summit was centered around their discussion on the prevention of military threat of North Korea ahead of the birthday celebration of its founder, Kim Il-sung. Previously believed to financially supporting North Korea, China is now concerned about unnecessary rising tension in the region. Despite information indicating that a missile test failed last week, Pyongyang is still determined to conduct weekly weaponry tests to answer Trump’s allegedly over-aggression on military activities around the area. In other related developments, Russia has reportedly believed to have responded by sending mass of troops to establish their military presence in North Korea, preemptively taking actions to prevent heightened pressure in the Korean Peninsula. Pandamonium – Michael van Rhee April saw part of our country get obsessed with a bit of a hype. It might not be of the same scale as Pokemon Go last summer, but still… You see, we’ve been given two giant pandas by the Chinese government, and their reception has been nothing less than spectacular. Would you expect anything less for these superstars? In terms of their names, one’s called ‘Wu Wen’, which means ‘beautiful, powerful cloud’, and the other’s called ‘Xing Ya’, which means ‘elegant star’ — obviously. It actually took more than 15 years of lobbying to finally get these pandas here, and some negotiations even saw past Prime Ministers get involved in the whole process — time very well spent, as you can tell. All jokes aside though, we’ve been given these pandas as a gesture. It’s a sign of trust whenever the Chinese government lends rare animals, such as these giant pandas, to other countries. Just don’t think that any of this is free, for the price tag of these cute little pandas runs into the millions. Ouch! (For those of you who are curious: you can see the pandas in Ouwehands Dierenpark, a zoo nearby Utrecht.) The South African Downgrade – Leonie Ernst The 31st of March, Jacob Zuma, president of South-Africa, fired nine of his 35 ministers. Among them was Pravin Gordhan, the minister of Finance. Gordhan was known for his stable policy, and predicted significant economic growth for the country that is still recovering from the 2009 recession. Zuma stated that the dismissal of the ministers was meant ‘to achieve a radical socioeconomic transformation’ in order to improve the lives of the poor. However, the dismissal of the ministers is certainly not providing a better life for the poor on the short-term, since it led to the downgrade of the country by credit rating agency Standard & Poor’s. Due to political instability, the country was downgraded to junk status. Investors are pulling back their investments from the country and this led to a severe decrease in economic activity, which is driving up the interest rates, and is weakening the South African Rand. In Johannesburg and Cape Town, the people started to protest against the controversial president. They want the president to step down, something the opposition has also called for quite some time. The political instability in the country is now also leading to economic instability. Some financial experts fear the country is going to face stagflation, which will harm the economy as a whole. One of the biggest fears is that the already high unemployment rate (±25%) will become even higher. In search of World War III – Alma Rottem The past weeks seemed to be filled with potential calamities, and a few actual ones. A worldwide sense of panic emerged as tensions soared up in volatile regions such as North Korea and Syria. Last week, Google revealed that the search term “World War Three” has never been more popular among users. It seems that people are preparing themselves for the scenario of a global war, or at least they are interested in the implications of the term. It is hard to forget the images of the suffocating children from the Syrian city of Idlib, where a suspected regime-ordered gas attack killed dozens. The Syrian military denied any responsibility for the deaths as world leaders were shocked and outraged. So outraged, that a few days later the US launched an airstrike on a Syrian airfield in response to the chemical attack. Although lacking any strategic prospect, President Trump was commended for his quick response, while Russia, an ally of the Syrian president Assad, expressed its strong discontent with the intervention. Later, tensions rose between the US and North Korea regarding the latter’s nuclear program. A failed missile test and overt threats against South Korea, Japan and the US have reached an unprecedented boiling point. The Americans are no longer ruling out the possibility of a limited nuclear conflict. A few days later, the US dropped “The Mother of All Bombs”, the biggest American non-nuclear bomb, on a reported ISIS branch in Afghanistan. It was a showcase of American power, sending a clear message to the North Koreans. Nervous speculations continue to mount as the actual threat of a renewed global conflict has reached a point of near realization. Or at least that is what Google users think. Business Dortmund football team attack – Atma Jyoti Mahapatra In a shocking revelation, the terrifying attack on the Borussia Dortmund football team was carried out by a market trader, refuting links with radical Islamic terrorism. This comes after three letters claimed responsibility for the attacks, which also included far-right motivations. Sergej W, a Russian-German national, has been accused of murder, explosion and causing serious injury. He was found in Tuebingen, 450 kms from Dortmund and 30 kms from Stuttgart. According to reports, he stayed in the same hotel as the football team. He later carried out the attack, on the 11th of April, in which footballer Marc Bartra was seriously injured. Two bystanders were rushed to a nearby hospital and a police officer was treated for the shock following the three consecutive blasts. Sergej bought 15,000 put options, priced at 78,000 euros. He bet that share prices would collapse, and would have made almost 4 million euros. The dynamics of this plot have been likened to sophisticated insider trading, where information asymmetry is used to expeditiously make money. General Business – Nando Slijkerman According to Bloomberg, Trump is coming with his tax plan in the last week of April. President Donald Trump’s tax plan next week will most likely not include the border-adjusted tax that House Speaker Paul Ryan has proposed, a senior administration official said. The plan – which Trump said will be released Wednesday – will contain the administration’s priorities, according to one of the officials. Both asked not to be identified because discussions of the plan are private. Tensions between the U.S. and Russia became noticeable since Exxon Mobil Corp. will not be allowed to bypass U.S. sanctions against Russia to resume drilling for oil in a joint venture that seeks to tap billions of barrels of that country’s crude. Treasury Secretary Steven Mnuchin said the decision was made after consultation with President Donald Trump, according to a statement on Friday. Exxon initially requested the drilling waiver in 2015 and pushed for approval every few months since then, according to a person with knowledge of the matter who wasn’t authorized to speak publicly Markets are underpricing the prospect of Marine Le Pen emerging victorious in the French elections as a sea of undecided voters throws into sharp relief pronounced apathy for center-leftist Emmanuel Macron – the front-runner by a whisker – and the backlash against the European Union project. That’s the conclusion drawn by Charles Gave, founder of Hong-Kong based asset-allocation consultancy GaveKal Research, who predicted the triumph of Donald Trump in the U.S. election, and is now betting on a win for the anti-euro National Front candidate. Let’s have a look at the numbers. Growth continues for Europe in April; AEX rose with a small 0.52% this month, and our German neighbors (DAX) increased 1.21%. S&P remained constant by increasing as much as 0.01%, and the Dow Jones decreased by 0.55%. Let’s monitor the developments with respect to the elections closely, and see you on the markets next month! Tesla Over Ford – Brunno Fontanetti Elon Musk. If you haven’t heard this name until now, you either don’t have internet or just don’t care much about technology. Why is he so important you may ask, well, Musk is the CEO of multiple tech companies. In the past years Musk has dedicated his life into investing in alternative energy sources, space traveling and electric cars, and last week one of this company’s surprised the world by surpassing Ford and becoming the most valuable car company in the United States. That’s right, Tesla, the electric car companies ran by Musk, has a bigger stock market value than Ford. Why is this so surprising? For starters, Tesla is not even close to being the biggest retailer of cars in the USA. With reported 83,922 cars sold in 2016, Tesla is far from the 6,396,369 cars sold by Ford in 2015. What makes it’s value so high, even with such a lower production? Its future value. Tesla invests most of its profits in R&D, and because of that, they have one of the most innovative cars in the market. Moreover, Tesla not only produces cars, but also energy. On April of 2015, Tesla announced that it would start selling its own production battery, the Powerwall. They also announce, in the beginning of 2012, that they would start producing charging stations for electrical cars, and by the end of 2016, more than 600 stations were spread out around the world. Tesla is the proof that not always monetary profits run over social profits. And what’s even better: Tesla might be showing us that investors are starting to realize that. What a win for the future. UvA Sefa Lustrum – Daphne Sweers As students of Economics & Business and Sefa members, you probably have noticed that we are celebrating this year; Sefa exists for 95 years! This is a great opportunity to have some festive activities, which we of course did not let unexploited. We are proud to present you a great program of two weeks from the 8th of May until the 21st of May. As attending a Sefa Lustrum is a once in a study-lifetime experience, I can recommend you to join during one of our events! Check out the amazing programme below: We kickstart the Lustrum with an opening party on the 8th of May in the E-hal starting at 12:00. Everyone is welcome to join! Feel more like going outside and enjoying the May weather? We have the boat tour planned on the 17th of May. Do you want to have an amazing dining experience with unlimited wine and the best company you can imagine? We have a grand dinner on the 19th of May at Cafe de Paris. Do you consider a tour boat too small? The closing party on the Supperclub Cruise is the party for you! Don’t forget to invite all your FEB friends! Get your tickets now here. We look forward to welcoming you during this Lustrum and hope it will be an event that you will even remember when you turn 95 yourself!

India has the highest number of domesticated bovine animals, approximately 294 million, making it the largest country in this regard. The husbandry of bovine animals has been the topic of multiple studies, many of which focus on the economic aspects of it. In a landmark study conducted in 1971, Alan Heston showed that there were 30 million excess cows at the time in India; in current day figures, it is at 117 million. This results in an inefficient allocation of resources, but religious sentiments play such a vital role that they cannot be overlooked. It can be argued that using biogas lowers fossil fuel and chemical fertilizer usage by more than 50% (Agoramoorthy, 2012, p. 9); but the truth is, the same quantity of milk, biogas and everything else can be produced with fewer cattle. This results in lower costs to farmers and higher marginal productivity for cattle. It also frees up arable land for more productive purposes. So why is it that the excess still persists? Recently, there has been some controversy regarding the slaughter of cows and the sale of beef in India. I will not be going into state regulations and government intervention regarding this. This will be an overview of the history of the cow’s symbolism in Indian society. Cows are a symbol of sacredness in Hinduism. As a young Hindu boy, I grew up seeing this in real life. Cars would stop moving and streets would be jammed because a cow would not get up, and it is bad karma to displace a cow from its restful nap, apparently. Indian myths incorporate cows in many different ways. Shiva, one of the most important deities in Hinduism, uses a bull called Nandi as his mode of transport. Kamadhenu, the cow goddess, helps sages and gurus with their penances; and Lord Krishna, a major Hindu deity and one of the most veneered gods in Hinduism, is depicted as a cowherd in mythological stories. The cow is also respected as a mother figure in society as well. This begs the question, where does this reverence stem from, and why? The answer, of course, lies in economics—well, more like common sense, but you’ll see… The Indus Valley civilization, which originated in modern day North-West India, was one of the first civilizations in the world. The sacred Hindu texts called the Vedas originate from this era; they are to Hinduism what the Bible is to Christianity. Nowhere in the Vedas is it mentioned that slaughtering a cow is a sinful deed. In fact, early Indians used to sacrifice oxen and cows, and consume their meat. As it was a predominantly pastoral community, similar to the Maasai people in Kenya, cows and oxen were highly valued. They were the main source of power for agricultural work, transport and milk. Cow dung was, and still is, used as fuel for fire and fertilizer for fields. Even transactions were held with these animals as “currency.” With the passage of time the population increased, and accordingly, consumption of beef increased. With a scarcity of cows, society would not have functioned efficiently because they were pivotal in its functioning. Thus, it was decreed by the Brahmins around 200 AD that cow slaughter is a criminal offence in order to curb consumption. For a little context, the Brahmins are Hindu priests who teach the religious texts and are the supreme religious authority. Around the turn of the millennium, in the 12th century, Islamic emperors tried to conquer India. That is when the cow as a symbol of Hinduism took a political turn. Islam as a religion does not ban beef consumption or cow slaughter. Consequently, beef was sold openly in territories occupied by Islamic rulers. Hindus were appalled by this and this has been the main cause of many a riot. As the Mughal Empire gained a strong foothold in India and conquered much of it, a few selective restrictions on cow slaughter were enacted by Akbar the Great. Other Mughal emperors were generally lenient regarding this. However, the Maratha Empire, which ended the Mughal rule and was primarily a Hindu empire, was very strict about these issues. While its rulers were very accommodating and encouraged diversity, cow slaughter and beef consumption were absolutely prohibited, more so in territories they acquired newly. This was viewed as a subtle way of establishing power and instilling fear and order in newly occupied territories, where ruling would have been chaotic otherwise. A small wonder in this context is the fact that according to data of the U.S. Department of Agriculture, India is the world largest exporter of beef, accounting for almost of quarter of the global beef exports and valued at almost $5 billion in 2014. Also, given that cow dung also harbors psilocybin mushrooms, it is up to you, my dear reader, to understand why cows are so important in Indian society. If you ever go to India, don’t complain about the cows everywhere—it’s bad for your karma.

It is 1 PM on the second Wednesday of the month. I step out of the elevator continuing my day after a well-deserved lunch break. It is time for the Fixed Income Meeting. Together with my colleague, I am walking through the dealing room to the fixed income desk. While routing to the fixed income desk, we are discussing the last details before we start the fixed income meeting. As an Investment Analyst, I am involved with constructing the presentation for a senior associate, so most of the time, I also have a seat at the table during the meeting with our fund managers. Those meetings are meant to discuss past performance of our funds and markets and to explain some investment decisions. Those meetings are one of the coolest things I have ever seen. It is toe-to-toe, due to the extreme sharpness of our fund managers. Due to my work as an Investment Analyst and my experience of own risk investing, I have some knowledge about investing equities or fixed income securities. This article is about the fundamentals of investing into equities and some basic techniques to analyze your options. For most students, real investing is hard due to a lack of money. But it is more reachable than most of you think. Of course, theoretically, there is no minimum amount to invest, but practically there is. When you are thinking about opening an investors account, you should consider the transactions fees, as well as the monthly fee to the broker. For example, if you have an investors account at ING, your variable transaction fee is 4 EUR plus 0.04% over the total transaction made. Besides, you must pay a fixed yearly fee of 16 EUR plus 0.24% over the total value of your portfolio. So, if you have a portfolio of 1000 EUR and make eight transactions of 500 EUR in a year, your total transaction costs will be 32 EUR (8*4=32) plus 1.60 EUR (0,04%*500*8=1.60) is 33.60 EUR. Then you have your fixed fee, which will be 16 EUR plus 2.40 (0.24%*1000) is 18.40 EUR. Your total costs will be 52 EUR for that year. That’s already 5.2% of your total portfolio. Given a year-to-date return of the S&P 500 of 15.2% (Index at 11th of April), that is, roughly speaking, one-third of your return. Imagine what will happen when you make a lot more transactions per year (which is quite common because eight transactions per year is very little). Therefore, it is very important to decide whether you are going to make a lot of small transactions or a few big transactions per year when choosing a broker. In other words, are you going to invest actively of passively? After you have decided which broker to take into arms, you should determine your own risk aversion. You can do this by doing some online risk aversion quizzes, or just by asking yourself some questions. What amount of risk are you willing to take? What is your goal? How much do I mind when I lose this money? Etcetera. When you have determined this, you are ready to setup an investment strategy. An investment strategy is what will either make or break you. This is a crucial part in early-stage investing. Once you have determined whether a stock is under- or overvalued, you should make some agreements with yourself. How much loss am I willing to take on this stock? One of your options is to place a stop-loss order when you have a long position. A stop-loss order is an order which executes automatically when the price of a stock falls below the stop-loss price of your order. For example, when you are investing in Unilever, which is currently trading for 40 EUR per share, you could place a stop-loss order for 36 EUR immediately after buying the stock. If the stock price of Unilever falls below 36 EUR, your order will be executed automatically and will sell for 36 EUR the moment the stock price hits the 36 EUR. This could limit your loss. For a rising stock price, it is also important to decide when you are satisfied with your profit. Investing is all about rationality, so do not let your emotions control your investment behavior because of some good or bad days. For the first moments, I would recommend to practice your investment skills and get used to placing buy and sell orders in a financial markets simulator. In most of the simulators, you will get a starting capital of 100,000 EUR what you can invest in a limited amount of markets. Most of the time, you have the main commodities, derivatives, options, and equities to invest in, but that is enough to get a feeling with financial markets and to practice before you start investing in real life. You can learn how markets react on different information, and how macro-economic and political events influence sectors. I will discuss this in more detail during the next part of this column. Most of the simulators are free to use. You could even sign up with Facebook. For the Dutch readers, you can use “RTLZBeursspel” or just google “online investment simulator” to find a proper one. Next time, I will discuss how to fundamentally and technically analyze investment opportunities, and how, in my experience, markets react on macro-economic and political events. #FinancialMarkets #Investing #investment