Tag Archives: counterparty

Marriage

“I love you”, I told her over three years back.

“If you love me so much give me half your assets”, she replied, probably in jest.

“I’ll give you but in exchange for half your assets”.

“You know I’ve just started working so I don’t have too many assets. So I’ll happily exchange half my assets for half yours”.

A few months later we got married. And yes, this is a true and serious story. While it might  be devoid of all the romance that one associates with love and marriage, it illustrates what marriage is all about – it is a commercial contract where you pledge to share half your assets to the counterparty, and bequeath all your assets to him/her in case of your “unfortunate demise”.

One of the major points in the BJP’s manifesto over the years has been for a Uniform Civil Code. Currently, in India, people belonging to each religion have their own “civil codes” which governs their personal lives. According to the current Indian laws, a Christian girl has to wait until she is 21 years old to get married, while a Muslim girl can get married at 16. A Hindu man can have a maximum of one legally wedded wife, while a Muslim man can have four.

Now you can see why the BJP’s clamour for a Uniform Civil Code appears controversial – Muslims believe that this move will deprive them of the additional three wives that they are currently entitled to. However, I argue that by stripping marriage off all the emotional context and just sticking to its core commercial values, we can have a Uniform Civil Code without any controversy.

The basic argument is this: the Government of India (or any other government) has no business telling people who they should live with, sleep with or have children with. As long as two adults consent to stay together or share a bed , there should be no legal hassles to them doing so. If three adults consent to live with each other and agree on a conjugal arrangement, the government should have no problem with that either. So why do we need a civil code at all?

The only interest a Government has in the institution of marriage is in terms of property rights. Because of the basic principle that a person’s “next of kin” inherits its property, the government needs to know who a person’s next of kin is. For that purpose, you need a legal document – a purpose that is today served by a marriage certificate. Beyond this realm of property rights and inheritance, a secular government has no right to dictate who I’m sleeping with – as long as it’s consensual.

So I propose the following segment of the Uniform Civil Code: “any adult, at a particular point of time, can have exactly one legally wedded spouse” (notice that the gender neutral wording takes care of LGBTs also). Notice also that this code only talks about legally wedded spouses. What it doesn’t mention, or care to mention, that one can have as many “illegal” spouses as they want. With the caveat that because these people are not legally wedded to you they don’t have a claim on your property.

Currently there is too much drama in the courts about the “basic structure of the Indian family” and “family values” and more often than not they are being used to pass rather illiberal judgments. The multiple civil code structure that we have, which is based on a supposedly divine and romantic institution of marriage, is doing more harm than good to the citizens. Once the state (and all its arms) realizes that marriage is at the core a commercial contract a lot of social wrongs can be easily set right.

I didn’t need to marry the person who is now my wife only if I wanted to move in with her. As two consenting adults, no one could have prevented us. It was, however, a measure of mutual trust and love, that we decided that we should share assets also. And hence decided to get married (our marriage was registered according to the “Hindu Marriages Act”, for the record).

 

Sensitivity

This post is not about any statistical analysis. Neither is it about people’s sensitivity about others, which is associated with empathy. This post is about what I can, incorrectly but more specifically, call “self-sensitivity”. About people who are really thin-skinned and who are likely to “feel bad” at the drop of a hat. I argue that as far as social impact goes, it is no better than arrogance. For purposes of the rest of this post, the word “sensitivity” is to be read in this context – about sensitivity towards one’s own feelings.

A number of people see sensitivity as a positive trait. “Oh, she’s such a sensitive person” is usually bandied about as a compliment to the sensitive person. One is supposed to feel some sort of sympathy to the sensitive people, and remain sensitive (!) to their feelings while interacting with them. It somehow so happens that, more often than not, sensitive people also happen to be nice, and it is as if in return for this niceness you need to take extra care of them.

Thinking about it, sensitivity arises thanks to some deep-rooted insecurity, or some kind of inferior complex. This insecurity means that the person is more likely to associate some kind of malevolent intent to the counterparty’s words or actions, leading to much disagreement and tears and loss of trust. While it is okay for a sensitive person to expect counterparties to be sensitive to their sensitiveness (!), it needs to be understood that over the long run, this could cause friction and be counterproductive to the cause of the relationship.

The problem with both sensitivity and arrogance is that it increases the effort involved in talking to a person. If you talk to an arrogant person, you need to put up with his/her arrogance and the possibility that he/she might put you down for no fault of yours. You need to be always prepared for the conversation to go unpleasant, and thus overall your costs of conversation go up, which as a student of economics, you will understand, decreases the total amount of conversation.

While arrogance is a well-known cause of friction in conversation, less understood is that sensitivity can also have a similar impact. While dealing with a sensitive person, you may not be required to be prepared to be humiliated, or for the conversation to go really bad. However, at all points during your conversation, you will need to keep in your head that the counterparty is extra-sensitive, and that means you have a constant background process that censors your speech, and makes sure you don’t hurt the counterparty. This can again have an adverse impact on the conversation itself, and might tire you out quickly. Again, simple economics tells us that it affects quantum of conversation adversely.

While in the short run, it is okay for sensitive people to ask people around them to be aware of their sensitivity, expecting similar support in the longer run, while making no effort on one’s own part to get rid of one’s insecurities or inferiority complex, is not fair on the part of the sensitive person. Like arrogant people, sensitive people need to understand that their sensitivity is a cause of friction and it can affect their relationships in the longer run; and they need to work on it.

Unfortunately, sensitivity is seen as a largely positive trait, mostly by people who are unaware of the friction it can cause. More importantly, how do you tell a sensitive person that he/she should be less sensitive while at the same time not hurting him/her? In that sense, dealing with arrogant people is simpler – you can speak your mind to them without much long-term impact, and the general understanding of arrogance in society means that it is easier for you to at least make an attempt to tell an arrogant person to be less arrogant.

But how does one deal with sensitive people? Who will bell the cat?

 

Travel agents and investment bankers

The more I think about it, the more I’m convinced that travel agents perform a very similar role to investment bankers. In the olden days, not everyone had access to financial markets. In order to buy or sell stocks, one had to go through a brokerage company, who would be paid a hefty commission for his services. The markets weren’t that liquid, and they were definitely not transparent, so the brokers would make a killing on the spread. With the passage of time, advent of electronic trading and transparency in the markets brokers aren’t able to make the same spreads that they used to. Customers know the exact market price for the instruments they are trading, and this results in brokers not able to make too much out of these trades.

It is a similar case with travel agents. Vacation markets (flights, hotels, etc.) are nowhere as liquid as financial markets, and will never be. Sometimes, when you are booking holidays to a strange place, you know little about it, and hence commission a travel agent to find you a place to stay there. Given that you know little about that place, the agent can charge you hefty commissions, and make a nice spread. Of course, nowadays such opportunities are diminishing for agents, as you have websites such as Agoda which allow you to book hotels directly. Now, at one place you can compare the prices of different hotels, and have better information compared to what the agents traditionally offer you. The spread is on the downswing, I must think.

Then, don’t you think package tours are very similar to structured products? Structured products are nothing but a package of several risks packaged together. By acting as a counterparty on a structured product, a bank (even now ) can afford to charge fairly hefty fees. Structured products are illiquid,  and there is no publicly available “market price”, so it is easy for banks to make themselves good spreads on such products. However, all it takes to defeat this is an intelligent customer. All the customer needs to do is to try and understand the risks himself, and start “unbundling” them. Once he unbundles the risks, he can now trade each of them independently, on more liquid markets, and get a much better price than what bankers will offer him. The catch here is that he’ll need to put in that effort in unbundling.

It’s the same with package tours. Given the bundles, it is easy for the agents to make higher spreads. However, if you as a customer simply unbundle the package (hotels, transport, food, etc.), you can find out the price of each (available on sites like agoda and elsewhere) and find out for yourself the spread that the agent is making. And then you compare the agent’s premium with the “cost” of making all the bookings yourself and make an informed choice.

Apart from communication, among the greatest boons of the internet has to do with dismantling middleman monopolies. It is incredible how much use a little information can be of!

Methods of Negotiations

There are fundamentally two ways in which you can negotiate a price. You can either bargain or set a fixed price. Bargaining induces temporary transaction costs – you might end up fighting even, as you are trying to negotiate. But in the process you and the counterparty are giving each other complete information of what you are thinking, and at every step in the process, there is some new information that is going into the price. Finally, if you do manage to strike a deal, it will turn out to be one that both of you like (ok I guess that’s a tautology). Even when there is no deal, you know you at least tried.

In a fixed price environment, on the other hand, you need to take into consideration what the other person thinks the price should be. There’s a fair bit of game theory involved and you constantly need to be guessing, about what the other person might be thinking, and probably adjust your price accordingly. There is no information flow during the course of the deal, and that can severely affect the chances of a deal happening. The consequences in terms of mental strain could be enormous in case you are really keen that the deal goes through.

Some people find the fixed price environment romantic. They think it’s romantic that one can think exactly on behalf of the counterparty and offer them a fair deal. What they fail to discount is the amount of thought process and guessing that actually goes in to the process of determining the “fair deal”. What they discount is the disappointment that has occurred in the past when they’ve been offered an unfair deal, and can do nothing about it because the price is fixed. But I guess that’s the deal about romance – you remember all the nice parts and ignore that similar conditions could lead to not-so-nice outcomes.

Bargaining, on the other hand has none of this romance. It involves short-term costs, fights even. But that’s the best way to go about it if you are keen on striking a deal. Unfortunately the romantics think it’s too unromantic (guess it’s because it’s too practical) and think that if you want a high probability of a deal, you should be willing to offer a fixed price. And the fight continues.. Or maybe not – it could even be a “take it or leave it” thing.

Why I don’t blog about her

The sweetheart has one fundamental problem with my blogging. That I have hardly written about her on my blog. Being the girlfriend of a celebrity blogger she deserves better, she argues. And she pulls up the reams of posts that have been written here about my old crushes and accuses me of not loving her as much, given I don’t write about her.

While I agree that I haven’t written much about her, I believe there are several important reasons behind that. I don’t know if she’ll buy into this reasoning but I believe these points need to be made.

Firstly it must be recognised that angst is a major fuel for writing. When what you thought was a great “deal” (in terms of relationship) falls through, it creates immense angst which needs to be channelled somewhere. And writing about the subject that causes the angst is one of the ways of channelling the angst. There have been occasions where I’ve managed to channelize the angst in other productive ways but in the last few years writing about the source has been a good source of getting rid of it.

Then, there is the time and effort factor ( I think this is the reason she is least likely to buy). Running a successful relationship takes up a large amount of your time and effort, and that’s not necessarily bad. I’m not talking only about tackling fights, misunderstandings, etc. here. When you have found someone to share your life with, there is suddenly so much more to do. Your life changes in ways that you had never imagined. Your life becomes so awesome that trivial pursuits like writing get the short shrift. You might have noticed that my general quantity of output has diminished in the last year.

Lastly but most importantly, there is the issue of not wanting to rock the boat. When a deal falls through, you have nothing to lose from it. You don’t care what the counterparty of the fallen deal thinks about you anymore. And that lets you unleash. When things are good, though, there is a relationship to protect. You just do not want to rock the boat. Every time you write about her, you want to make sure you’re not writing something that might offend her. Or something that will take a great deal of effort to defend.

Every time you sit down to write about her, every line you write, you end up thinking four times what she might think of it. And that disturbs the flow in which you are usually used to writing your posts. And once that flow is disturbed, you don’t want to write anymore. You would rather write about something which you can write “in flow” than thinking four times about every line you write.

On a similar vein, you might have noticed that I hardly blog about my work nowadays. The number of work-related posts since I joined this job would be comfortably in single figures. And that doesn’t compare favourably at all given the volume of work-related posts in my earlier jobs. I love my current job and have settled down nicely into it, and intend to put gaaji here. There is little angst that this job creates. And because I like this, I spend that much more effort doing my job than writing about it.

Head, heart, phallus and arranged louvvu

In response to my arranged scissors series, my stalker has started her own thing called the “karabath series“. In the first (and so far, only) post in that series, she talks about this concept that she describes as “arranged louvvu”. It is a bit convoluted but the essence is that in “arranged louvvu” you don’t blindly get into it. Instead, you put on a rational approach to decide if the counterparty is best for you and if the cost of giving  up on all the other women in the world is covered by the joy this woman brings you, and then make sure that the counterparty satisfies all CMP constraints and only then, in a phased manner, do you fall in louvvu with the person.

It is a nice concept but unfortunately I think the way the stalker has explained it is extremely convoluted, and I think using the head-heart-phallus framework (Kunal Sawardekar, you can abuse me for this also) I can explain this a lot better. So basically the idea is that the phallus is the quickest to react, followed by the head and the heart takes the longest to react.

The way most louvvu happens, the way they show it in the movies is that phallus reacts first (it’s a purely biological reaction, so it’s quick and trustworthy). And then, quickly enough, the heart gets involved. And the thing with heart involvement is tthat it is an extremely illiquid investment – it is really tough to liquidate the “heart investment” without booking significant losses. And since the heart entered the scene before the head also gave its verdict, when the head finally comes into the picture, it finds the whole thing irrational, and thus it goes “love is blind”.

The typical arranged scissors process, however, doesn’t leave you with enough time for the heart to enter the process. And since relatives can’t help you with the phallus process (and since that’s anyway instantaneous) it’s the head that gets involved. It’s the head, the rational head that takes all the decisions there. The heart enters only later, in most cases after marriage.

So the funda is that the stalker is confusing “head involvement” for “arranged process”. What she calls as “arranged louvvu” is a case where one holds back the heart (yeah, it takes effort to do that after phallus has said yes) in order to allow for the head to take a rational decision, and then go ahead with “heart investment” only after head has said yes. This way, the head always has buy-in on any relationship that the heart has gotten into, so irrationality gets minimized to a large extent. And some of the problems of “pure louvvu” are hedged off.

Yeah, it takes effort. It takes effort to hold back the heart once the phallus has given go-ahead. But getting the right amount of head involved at the right time helps in preventing much disaster. It’s the logical way to go about things. “Arranged louvvu” is only a fancy name people give it. And now I don’t really know if the head-heart-phallus framework has made it any easier for you to understand this.

Arranged Scissors 12 – Rejection Sharing Agreements

This is similar to the Klose-Podolski corollary to the Goalkeeper Theory. To refresh your memory, or to fresh it in case I haven’t mentioned this earlier, the Klose-Podolski corollary refers to a case of two close friends who decide to hit on the same person. The implicit understanding is that they don’t regard each other as rivals but blade together, and first get rid of all the other suitors before they engage in one last showdown so that the bladee picks one of them.

We came up with this corollary to the Goalkeeper Theory shortly after the 2006 Football World Cup, during which Klose and Podolki formed a cracking strike partnership for Germany. Later on, they were to play together for Bayerrn Munchen, but like most Klose-Podolski arrangements, they too ended up in bitterness with Poodolski (who scored the lesser number of goals among the two) publicly voicing his bitterness and finally transferring to his “native” Koln.

Now that the crazy digression is out of the way, let me get to the point. Today is the first day of Navaratri, and with the inauspicious “Mahalaya Paksha” having gotten out of the way, arranged scissors is back in full earnest. This also means that I re-enter the market, though I’m still yet to list myself (don’t plan to for a while at least. OTC is said to give superior valuations). And some casual conversation and some not-so-casual phone calls this morning, I have been thinking of the arranged marriage equivalent of the Klose-Podolski arrangement.

So basically, as part of this arrangements, two parties who are looking to hit the same side of the deal strike a deal to share “rejection information” with each other. “Rejection information” can be of the following two types:

  • Today I found out about this girl. She seems to be really good in most respects – good looking, rich, good family background, virgin and all that. But for some (usually random) reason, my son doesn’t want to marry her. Why don’t you try her for your son?
  • Today I found out about this girl. Talked to her, her parents, etc. Doesn’t seem like a good prospect at all. She is either ugly or too “forward” or her family background is bad. I think the chances of her getting along with your son is quite low. Don’t waste your time with her.

Note that both of this is extremely useful information, especially in an illiquid market. What is important here is the nature of people with whom you strike such agreements. The basic thing is that your correlation with them should neither be too low nor too high. Ideally, they should belong to the same/similar caste, should have a fairly similar family background, etc. but the boys shouldn’t be too similar. Yeah, I think that is a fair criterion – they should be as similar as possible in terms of “arranged criteria” but as different as possible in terms of “louvvu criteria”.

Basically if the correlation is too low, then you can’t really trust their judgment on counterparties. On the other hand, if the correlation is too high, then it is extremely likely that they turn out to be “rivals” and that if one party rejects a girl, it’s unlikely that the other party will like the girl. I supppose you get what I’m talking about.

One downside to such agreements that I can think of – it might cause bitterness later on in life, long after the goal has been scored. The feeling that “this guy married a girl that I rejected” or the other way round might come back to haunt you later on in life.

Bilateral Crib Arrangements and Correlation

People say that cribbing is in general good for health, and I heartily agree. I love to crib. Occasionally I bore the hell out of my listener with my cribbing. And I’m sure the readers of this blog have also been on the receiving end of this on more than one occasion. There have been occasions when I’ve been specifically asked not to crib, and others when people have tried to subtly indicate to me that they are not comfortable with my cribbing.

In order to prevent the latter problem (of boring someone with my cribs and them not being able to directly tell me to shut up), over the last few years, I’ve entered into several informal “Bilateral crib arrangements”. Ok – I’ve never used that term before – in fact, I invented that term only some two or three days back. But that doesn’t take anything away from the nature of the arrangements.

So a bilateral crib arrangement is an informal arrangement you get into where you agree to listen to someone’s cribs and lend a friendly shoulder wiht the implicit agreement that they return the favour. The terms of the arrangement are never really described in that many words but that is essentially what it is. It usually has a component where one party says “ok let’s change the subject now” or something to that effect, and the counterparty replies “no no it’s ok you can crib on”.

Occasionally I’ve also gotten into one-way arrangements – where I either only put or receive cribs, but dont’ do the opposite action. Basically this happens when one of the two parties is more comfortable with the ohter than the opposite relationship, or if one of the parties alreeady has enough crib-receivers and doesn’t need one more, but is happy to receive cribs. Though some of them have lasted, occasionally I’ve felt uncomfortable in those – assymetric relationships create mental obligations.

So coming to bilateral crib arrangements – the biggest threat to these arrangements that I’ve observed is what I call as correlation. For a bilateral crib arrangement to work effectively, it is useful if one party is in the position to receive cribs while the other wants to crib. The situation when both don’t need to crib is also good. The problem occurs if both parties want to crib and want to crib to each other.

I’ve been through this several times and it hasn’t really been pleasant. On a number of occasions, I’ve had to back down and somehow bring my cribs under control while lending a friendly shoulder to my crib-partner. On others, I’ve visibly noticed crib-partners putting up with my cribs just so as to not create conflict. Such situations are suboptimal for both parties involved, and need to be avoided.

In this regard, it is important to choose a crib partner whose correlation with you is low. That way, the chances that both of you will want to crib at the same time to each other is low, and the awkward situation of competitive cribbing or backing out can be avoided. I don’t really know how you can choose people with low correlation with you, but I supopse you’ll have to take a few data points and extrapolate. Also avoid people whose correlation with you is obviously high – such as collagues.

Another effective tool in cribpartner management is to be diversified. You need not have several bilateral crib arrangements, but with a judicious combination of unidirectional and bidirectional crib arrangements, keeping in mind various time zones, you can ensure that there is a receiver to listen to you whenever you want to crib.

MBA specializations

During some casual conversation earlier this evening, I realized that I get irritated when people talk about ‘MBA finance’ or ‘MBA marketing’. I realized that I feel like not continuing the conversation when someone asks me my MBA specialization. Later I spoke to Baada about this, and he too agreed about the lack of respect for the counterparty when this topic gets mentioned.

I think it has to do with a lot of people assuming that “MBA” is just a set of courses that one does in order to become a manager. Maybe they assume that one can become a manager in a particular domain by reading a set of books. Maybe they think that an MBA is just like any other course where you get “knowledge” rather than change your way of thinking (ok a lot of people say MBA is useless and suchlike but my MBA certainly changed the way I think).

Or maybe it’s just that people find it easier to classify. Sometimes people overdo it, to the point of stereotyping. I’m reminded of my last company which worked on two kinds of products (let’s call them Product A and Product B – details are, er, classified). I started off doing a bit of A and soon I became “Associate for A”. Soon, I started doing some other stuff, which would easily fall under B. Yet, the CEO kept referring to me as “Associate for A”. It was ridiculous, but somehow he couldn’t get this classification out of his head – even when most of my time was spent doing B.

Anyways, point I’m trying to make is that people are used to classifications in education. For example, in engineering you have electrical, mechanical, etc. – all very easy. Similarly in postgrad for medicine – you can easily classify as ‘eye’, ‘bone’, etc. So isn’t it the duty of “management” also to get duly classified? And it did help the classifiers that there were three or four major areas in which most MBAs sought employment, and this made classification convenient.

Most local MBA colleges use this “specialization” funda to optimize on the number of electives that they need to offer. From a couple of interactions  with people from local MBA colleges, I found that they had very few electives – the major choice that they had was in specialization. And once you picked your specialization, your set of courses would get more or less frozen which made it easy for the college to organize.

Some local MBA colleges seem to have taken this specialization thing to ridiculous levels. The other day, one of my cousins had come to me for career gyaan and he said “I’m wondering whether to do an MBA in Aviation or an MBA in media”. I completely lost it at that point and blasted him and asked him to work before thinking of an MBA. Hopefully the current bust will take care of such ridiculousness that exists in the colleges.

Even a large number of good colleges had this “specialization” funda. I’m told that IIMC had this funda of “major” where if you took five electives in a particular area, that would go on your degree certi as a “major”. However, I’ve never heard anyone from IIMC (even from those days when this classification existed) describing themselves as a “MBA in XXX”.

Anyway, the next time you ask me what my specialization was during my MBA, you’ll make sure that I lose all respect for you.

Arranged Scissors 10 – Modern Channels Protocol

So nowadays the process for arranged scissors has slightly changed, mainly due to the introduction of “modern” communication channels such as the internet and the phone. In earlier days, it was simple – the only way you could check out the counterparty was by way of meeting, and there was a protocol for that. There was a protocol about the kind of questions that one could ask, the standard templated answers to give, the answers you weren’t supposed to give, questions you weren’t supposed to ask, etc. And based on canned questions and canned answers, people would make the most important decisions in life.

Now you have the phone. And the internet. So you have people saying “my son wants to talk to your daughter on chat (sic) before meeting up. Hopefully you are liberal enough to allow that”. The typical answer to this is “what to do? youngsters nowadays are like this, so we have to allow this”. And the boy and girl talk “on chat”. And hope to be better informed than their counterparts 10 years back regarding the most important decision of their lives.

Now, from my very limited personal experience, it seems like some sort of protocol is being established in this “modern channel” also. Neha Vish had a nice article about this a while back on her blog, but I’m not able to find it – about a Sastri who sits behind a girl while she chats up a prospective NRI boy on Yahoo! Messenger, and gives her expert instructions. It seems like the generalized Sastri’s advise has now become part of common knowledge, and has become part of the “protocol” for “modern channels”.

The chat protocol is heavily derived from the single-meeting protocol that I had mentioned earlier. There are canned questions, and canned answers. It is in fact easier to give canned answers here since you don’t need to look into the counterparty’s eyes (though I don’t know how many “couples” actually put eye contact before making the most important decision of their lives). Heck – you can copy paste – or even have a friend chatting for you.

The essence of this protocol, as I see it, is what I call as the “direct approach”. You know that you are checking out the counterparty only for purposes of possible long-term relationship, and not to be friends, so you get straight to the point. One popular quesion seems to be “what kind of girl are you looking for?”. And then they ask about habbits and hobbits and rabbits and rapids, and about hobbies and jobs and career plans and settlement plans and so on.

By becoming part of the standard arranged marriage protocol, what has happened is that “modern channels” have also gotten demodernized, with standard templates coming into the picture. It seems like more innovation is needed if standard good old courting is to be brought back into the arranged scissors scene.

For the record, I’ve partially withdrawn from the market. I have delisted myself from the one exchange where I’d been listed. OTC search is still on but not in full josh. I like things this way, with the only downside being that I’m not getting enough material to fund this series

Update

Here is the link to Neha’s article on Boothalingam Sastrigal – the one that I had mentioned in the blog but was too lazy to dig up the link for.

http://www.withinandwithout.com/2007/09/fiction-fragment-sastrigal-and-engineers/