Learn more about personaldevelopment with this collection
Why happiness is the ultimate goal
The importance of creating value
How to create wealth in the modern era
An externality is where there’s an additional cost imposed by whatever product is being produced or consumed, that’s not accounted for in the price of the product.
The environment is finite and precious, so we have to price the product properly and fold that back into the cost of products.
If people are wasting water, or polluting in other ways, society should charge them what it costs to clean up the pollution and return the environment to a pristine state.
But if you raise the price high enough, you’ll knock out pollution. That’s much better than feel-good measures like banning plastic bags.
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MORE IDEAS ON THIS
Negotiations are won by whoever cares less. Negotiation is about not wanting it too badly. If you want something too badly, the other person can extract more value from you.
If someone is taking advantage of you in a negotiation, your best option is to turn it from a short-term game into a ...
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476 reads
Once you’ve been in a good relationship with somebody for a while whether it’s business or romantic life gets a lot easier because you know that person’s got your back.
The most under-recognized reason startups fail is because the founders fall apart.
A startup is so difficult to pul...
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429 reads
Consumer surplus is the excess value you get from something when you pay less than you were willing to pay.
I’ve made some money and get a lot of joy from my Starbucks coffee. So if my coffee cost $20, I would pay it.
But Starbucks can’t price the coffee at $20 just for me, because ...
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400 reads
Price discrimination means you can charge people based on their propensity to pay.
You can’t charge people different amounts just because you don’t like them. You have to offer them something extra. Something rich people care about.
It works because rich people are willing to pay more...
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423 reads
You’re joining a startup and getting stock options, and the founder says, “This company is going to be worth $1 billion, and I’m giving you 0.1% of the company; therefore, you’re getting $1 million worth of stock.”
The founder is negotiating based on what it’s going to be worth in the futur...
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376 reads
The Kelly criterion is a popularized mathematical formulation of a simple concept: Don’t risk everything. Stay out of jail. Don’t bet everything on one big gamble. Be careful how much you bet each time, so you don’t lose the whole kitty.
The number one way people get ruined in modern busine...
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642 reads
It is a game theory by Thomas Schelling. It’s about multiplayer games where people respond based on what they think the other person’s response will be.
How do you get people who cannot communicate with each other to coordinate?
Seems impossible, but you can use social norms to conve...
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509 reads
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