Corruption in Brazil

May 18, 2015

Bloomberg has a great piece on Brazil’s massive corruption scandal [lightly edited for continuity]:

Prosecutors have named 16 companies that allegedly formed a cartel to fix [government-owned oil company] Petrobras contracts between 2006 and 2014. The list includes some of Brazil’s largest construction and engineering firms. [They] say the builders got away with it by paying kickbacks, usually 3 percent, on every contract. Petrobras estimates that the graft added up to at least 6.2 billion reais, much of which, prosecutors say, was funneled to [political] parties.

The authors argue that corruption has hurt Brazil’s economy, which is going through its “worst four-year slump in twenty-five years,” but they trace the system back to the 1960s:

Read the rest of this entry »

Justice in Egypt

May 17, 2015

My attorney points out: Egypt clears a former leader (Mubarak) who stole $70 billion, but sentences to death its first freely elected president (Morsi). I’m not saying he was a good president, but still.

Acemoglu and Robinson nailed this a couple years ago [lightly edited for continuity]:   Read the rest of this entry »

Doing business in Argentina

April 6, 2015

Linette Lopez put it this way in Business Insider:

After suspending Citibank’s access to Argentine capital markets and sacking the bank’s CEO in the country, Argentine authorities will perform an “integral inspection” [on the bank].  Read the rest of this entry »

Law and Order NYU

March 29, 2015

From the ancient history of NYU, the story of distinguished anthropologist John Buettner-Janusch:

He served as chairman of the New York University anthropology department before 1980, when he was sent to prison for turning his laboratory into a drug manufacturing operation. After his release, he attempted to poison the judge who presided over his first trial and was sent to prison a second time.

Wow, hard to beat that one.

Be careful what you wish for

March 28, 2015

The New York Times has a classic example of incentives not working as intended. Bernie Ebbers had an incentive to keep WorldCom’s stock price up, but he did it by cooking the books. Sears (this is an even older one) paid commissions for auto repairs, until the people doing the repairs realized they could make more money doing repairs that didn’t need doing. Now a Times op ed by Katherine Bouton notes that policies inflicting retirement on police officers who use hearing aids tend to “discourage officers with hearing loss from coming forward, with the result that we have many police officers with uncorrected hearing loss.” Yup, that’s how it would work.

PS: Richie Freedman, our resident management guru, tells us this is all in Steve Kerr’s classic, “On the folly of rewarding A, while hoping for B.” The title pretty much tells you the story.

Learn SQL at Stern

March 24, 2015

Want to learn SQL?  Some of our students tell us it’s becoming a must-have business tool. If you’re interested, check out our SQL Bootcamp, a non-credit elective course organized by Professors David Backus and Glenn Okun and taught by MBA student Sarah Beckett-Hile. The course is endorsed by Amazon for its new staffers and begins Friday, March 27 in KMC 5-90 at 1:30 PM. No registration required, all skill levels welcome.

More at

Deflation mini-case

January 23, 2015

Kim Ruhl writes:

The goal of this case study is to understand how inflation targeting works, and why deflation is so problematic for the NFL.  Read the rest of this entry »

News from Argentina

January 21, 2015

Murder and a shortage of tampons.

Surge pricing in two markets

December 19, 2014

Larry White writes:

People get worked up when Uber charges more at peak times (New Years Eve) or gas stations raise their prices (remember Sandy?). Why don’t we see the same in business markets? The price of transporting oil in super tankers has gone up by a factor of eight since the summer, but we don’t see any complaints.

In economic terms, both situations show supply and demand at work — and working pretty well, I’d say. So why the different reactions? Why no accusations of “unfairness” or “gouging” when businesses are on both sides of the market? Are businesses simply more experienced in dealing with fluctuations? Less appealing as victims? More likely to understand how supply and demand work?

Please submit your answers to Larry.

Holiday songs

December 15, 2014

The down side of business analytics?


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