Tag: finance

Telling people to leave finance

Telling people to leave finance

First, I want to say it’s frustrating how risk-averse the culture in finance is. I know, it’s strange to hear that, but compared to working in a start-up, I found the culture and people in finance to be way more risk-averse in the sense of personal risk, not in the sense of “putting other people’s money at risk”.

People in start-ups are optimistic about the future, ready for the big pay-out that may never come, whereas the people in finance are ready for the world to melt down and are trying to collect enough food before it happens. I don’t know which is more accurate but it’s definitely more fun to be around optimists. Young people get old quickly in finance.

Spending the last few years in a variety of forex companies, I have to agree.

Why Do All Movie Tickets Cost the Same?

This Slashdot thread raises an interesting question:

Like tens of millions of Americans, I have paid money to see Mission: Impossible, which made $130 million in the last two weeks, and I have not paid any money to see Young Adult, which has made less than $10 million over the same span. Nobody is surprised or impressed by the discrepancy. The real question is: If demand is supposed to move prices, why isn’t seeing Young Adult much cheaper than seeing Mission: Impossible?

For those of us not too versed in economics, the question does sound reasonable.  I am not too good with demand and supply nuances, but I do know that the costs for the movie theater are pretty much the same no matter how many people show up for the show.  This comment confirms that and also touches on the economics bit of the question:

If demand is supposed to move prices…

What a bad place to start your argument. In classical economics, demand shifts affect pricing if supply is a factor. When it comes to movie distribution, supply usually isn’t an issue.

Also, profits of Mission Impossible to to cover the losses of the gamble on Young Adult. Essentially, movie ticket prices are aggregated and normalized across movies to mitigate risk. Do you really want to spend $40/ticket on Mission Impossible so that Young Adult would cost only $3?

The actually hard-costs to the theaters (staff, electricity, rent, etc.) is pretty much the same regardless if 5 people are in the theater or 500, and is relatively minor in their overall operations. They pay back to the studios based on how many watchers they have, which where most of their expenses actually lie. They have to pay back the same amount to the studios regardless how how many tickets they sell, so why would they implement variable pricing?