Tag Archives: relationship

Required: A new value proposition

Today, more than five years since I started out with Pinky, I realise that I need a new value proposition for the relationship. So far things had been simple – I was simply the rich guy in the partnership. I was working for the Giant Squid when we met, I’ve since remodelled myself as a quant management consultant and make reasonable money out of it, and save for a short period in 2011-12, my contribution to the household finances has far outpaced hers.

However, with Pinky now pursuing an MBA from a top global (pun intended – it was she who coined the phrase “value proposition” for this post) B-school, this is going to soon change. The next two years she’s in debt of course (some of it to me), but after graduation she’s likely to get a great well-paying job which is likely to significantly cut down my advantage in terms of the family finances (I still hope that I’ll retain my lead, and I mean this in a good way – that she gets a really well-paying job and I’ll be able to outpace her).

So by this one stroke of Pinky going to get herself an MBA, my main value proposition in the relationship has been completely destroyed. What this means, of course, is that I need to find a new proposition. If I’m a dog (remember I described myself as a bakery doggie in a recent post?) I need to learn new tricks. Or perhaps I need to get back to my old tricks?

Back in 2006, when we first talked, what impressed Pinky (by what she tells me now) was this blog – my income statement wasn’t particularly great then, and she had absolutely no clue about it until we met three years later. In 2006, Pinky liked how I used to write about every damn thing here, especially about all my failed attempts at relationships. She has repeatedly told me since that she loves being written about, and that one of her great big hopes of being with me was that I would write reams about her on this blog, like I have about all those failed attempts at relationships.

On this count, though, I’ve utterly failed her. For reasons I’m still not able to put a finger on, I’ve hardly written about her. There was the usual flurry of posts in the first few days of our involvement (this one and this one and this one and this one and this one and this one and this one). By the time the last of those posts was written, I was preparing to meet her parents and things were cementing. And then, bang, boom, fizzle! I stopped writing about her!

There has been the odd post I’ve written here or there but I’ve been writing nowhere close to what she possibly expects from having been with me for over five years now. On the primary criterion – the spike – that she evaluated me on when we got together (I must say I did damn well in those initial days to sustain interest), I’ve been an utter failure. It’s almost like the reason she married me has not come to bear fruit.

In this context, I hope to get back to my old value proposition – maybe because I’m not creative enough or too lazy to come up with a new one. In the year and half that I have (before Pinky graduates) to come up with the new proposition, there might be some other good that might come out – something else I might discover about myself which would be a great value proposition for me in the marriage. You need to start your search somewhere, though.

When you break up, sometimes your first attempt at doing a rebound is by checking if your ex is still single and if you can hook up with hem (my friend and fellow-IESE-WAG Aravind told me yesterday that this is the word the Swedes have come up with as a short form of saying “him/her”, as a gender neutral pronoun). You are unlikely to succeed, and you are more likely to find someone totally new. But your ex gives you the starting point for your search.

It is similar in my case. With my value proposition due to expire, my first instinct is to go back to my ex – my ex value proposition that is (I have no other exes!!). Maybe it will succeed. Maybe it will not – in which case I’ve to find something new. But rebounding to the ex is the safest bet. So if I manage to make this work, you can hope to find a lot more Pinky in these pages.

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?

 

Relationships and the Iterated Prisoner’s Dilemma

It was around this time last year that something snapped, and things have never been the same again. Until then, whenever she threw some tantrums, or we had some fight, I’d always give her the benefit of doubt, and unconditionally apologise, and make an effort to bring the relationship back on track. But since then, I don’t feel the same kind of sympathy for her. I don’t feel “paapa” for her like I used to , and have questioned myself several times as to why I even aoplogise, and not expect her to do that.

The optimal strategy for Iterated Prisoner’s Dilemma has been shown to be a strategy called “Tit for tat”. To explain the problem, you play a series of games against an “opponent”, and in each iteration, each of you choose to either “cooperate” or “defect”. For each combination of choices, there is a certain payoff. The payoff looks similar to this, though the exact numbers might be different. In this table, the first value refers to the first player’s payoff and the second represents the second player’s.

Player 1/ Player 2 Co-operate Defect
Co-operate 1 / 1 2 / 0
Defect 0 / 2 0.5/ 0.5

So you play this game several times, and your earnings are totalled. There was a tournament for computer programs playing this game sometime in the 1960s, where the winner was “tit for tat”. According to this strategy, you start by co-operating in the first iteration, and in every successive iteration you copy what your opponent did in the previous iteration. Notice that if both players choose this strategy, both will co-operate in perpetuity, and have identical payoffs.

Relationships can be modelled as an iterated prisoner’s dilemma. You can either choose to be nice to your partner (co-operate) for which you get a steady return, or you can choose to be nasty (defect), in which case you get a superior payoff if your partner continues to be nice. If both of you are nasty simultaneously both of you end up getting inferior payoffs (as shown by the Defect-Defect box in the above matrix).

Early on in the relationship, I was very keen to make things work and did my best to prevent it from falling into any abyss. I played the “Gandhi strategy”, where irrespective of her play, I simply co-operated. The idea there was that whenever she defected, she would feel sympathy for my co-operative position and switch back to co-operate.

So something snapped sometime around this time last year, which led me to change my strategy. I wasn’t going to be Gandhi anymore. I wasn’t going to unconditionally defect, either. I switched to playing tit-for-tat. You can see from the above table that when both players are playing tit-for-tat, you can get into a long (and extremely suboptimal) sequence of defect-defects. And that is what happened to us. We started getting into long sequences of suboptimality, when we would fight way more than what is required to sustain a relationship. Thankfully it never got so bad as to ruin the relationship.

Periodically, both of us would try to break the rut, and try to give the relationship a stimulus. We would play  the co-operate card, and given both of us were playing tit-for-tat we’d be back to normal (Co-operate – Co-operate). Soon we learnt that long defect-defect sequences are bad for both of us, so we would quickly break the strategy and co-operate and get things back on track. We weren’t playing pure tit-for-tat any more. There was a small randomness in our behaviour when we’d suddenly go crazy and defect. In the course of the year, we got formally engaged, and then we got married, and we’ve continued to play this randomized tit-for-tat strategy. And the payoffs have been a roller coaster.

Today I lost it. She randomly pulled out the defect card twice in the course of the day, and that made me go mad. While in earlier circumstances I’d wait a few iterations before I started to defect myself, something snapped today. I pulled out the defect card too. Maybe for the first time ever, I hung up on her. Do I regret it? Perhaps I do. I don’t want to get into a prolonged defect-defect sequence now.

And I hope one of us manages to give the relationship enough of a stimulus in the coming days to put us on a sustained co-operate co-operate path.

Coding

Back when I was in school (11th/12th) I think I was an awesome coder. I think I was especially good at what they called as “logic coding”, i.e. coming up with algos. I used to experiment quite a bit (as much was possible with TurboC) and had a lot of fun too. I remember doing graphics in TurboC, making a “pong” game, brick breaker, and a lot of other cool stuff. For our 12th standard project, Hareesh and I built this totally awesome cricket scoring program, which we unfortunately didn’t take forward (and went to college instead).

It was my love for coding that meant I fought with my parents (who wanted me to study Electrical) and decided to study Computer Science at IIT Madras. And then I lost it. Somewhere along the way. I didn’t enjoy coding any more. Soon, I began to hate coding. I would love coding when I would write the odd program in “pure” C, or when I would participate in contests such as BITWise. But I’d completely lost it.

So over the last six to seven years (after I graduated from IIT) there have been occasions when I have thought I’ve regained my coding mojo, only to lose it again very soon. I’m still very proud of that Excel+VBA model that I had written in the very first week of my third job. But a couple of months later, I was hating coding again. And so it was while debugging a complicated piece of code at work this morning that I realize why I have this love-hate relationship with coding.

It’s simple – basically I hate coding for others. I hate writing code that others will read or use. I don’t mind writing code that others would use as a black box, of course. But I think writing code that others will read or use puts too many constraints on the way you code. My instinct is always to stop doing something when I’m personally satisfied with it, and with code it seems like I’m satisfied sooner than others would be satisfied with my code.

At a fundamental level, I like coding and I think I’m pretty good at it, so it isn’t something I want to give up. But then the formal processes and endless testing involved with writing code for others really kills joy (as does GUI, and Java). Code saves a lot of time, and helps “studdize” what might be otherwise fighter work, so I like doing it.

In an ideal world, I would be writing code that I would alone be using, AND profiting from it (I never intend to sell code; I intend to sell the results of the said code, however; that would mean no one else would read/use my code per se, so I can write it the way I want). Hopefully I’ll get there, sometime.

Relationships and Prisoner’s Dilemma

So I ws thinking about this car analogy for relationships. I was thinking about how when you start your car, you will need to drive in first gear, with full engine power, slowly releasing the clutch, using a lot of fuel. However, after you have gathered certain speed, it is wasteful and unstable to go on in first gear. It is time for you to take your foot off the gas pedal, hold down the clutch and change gears, and shift the car to lower engine power.

I think it is similar with romantic relationships. Once you’ve reached a certain level and gotten past the initial phase, it is wasteful to continue in the same full throttle. Once both of you understand that the other is firmly in the basket, there is no need to waste much time just assuring and reassuring each other of the other’s presence. It is simply a wastage of fuel. Also, if there is too much torque at too much speed, there is a good chance that the car will spin out of control, so that needs to be avoided.

A relationship is like a car with two control systems. It is important that both of you coordinate the gear change, else there is a danger that the axle might snap. Let us move out of the analogy for the rest of the post.

So there are two of you and both of you have the choice of whether to change gear or not. Now, the ideal thing to do would be to change gears together, since that will ensure the relationship is at the same level but you’ll both be spending lesser energy on it. The worst case is if exactly one of you changes gears. If one of you suddenly slows down while the other is still at full throttle, it is likely that the other will suddenly feel insecure that the one has stopped responding, and this is likely to lead to some sort of breakdown in the relationship, even if temporary. And in order to get things back on track, you’ll need to go full throttle, thus leading to wastage of energy.

So basically, exactly one party deciding to scale down can prove to be disastrous for both of them, because of which the dominant strategy is to stay where you are – at full power. Let me draw the 2 by 2.

———————————————————————

|                        |    Scale down           |  Remain at full blast     |

———————————————————————

| Scale down|    0                               |  -100                                  |

———————————————————————

|Remain at   |  – 100                         |  -50 |

| full blast     |                                      |                                              |

——————————————————————–

You will notice that the players start off at a Nash equilibrium! Of both of them remaining at full blast. And thus neither has the incentive to scale down, unless he/she is sure that the other will also scale down simultaneously! And if the couple is not communicative enough, they will continue in this suboptimal state for too long, and end up burning way too much energy and willpower, which could’ve been otherwise put to good use.

Hence it is important that the couple communicates about matters such as these, and coordinates the shift in gears, and saves valuable energy!

Pricing My Best Friend’s Wedding

Any of you remember this movie called “My Best Friend’s Wedding”? If you don’t, here is a brief description of the plot. Julia Roberts and Dermot Mulroney (had to look up imdb to remember his name) have this agreement that if they are both single as of her 28th birthday, they will get married to each other. As it happens, 3 weeks before that, the hero announces that he’s found a woomaan and is going to get married to her, much to the dismay of the heroine, who now puts fight to somehow spoil this new relationship.

I was thinking of this kind of arrangement as a financial product. Actually, the movie has what I call as the “European version”. More complicated is the “American version” which I describe here. Basically I give you the OPTION to marry me on any day before my 28th birthday (6th Dec 2010). That would be simple enough to “price” (or “value”, to put it in layman’s terms) – it is a standard American option. However, let me add this twist into it. I also reserve the right to withdraw this option on any day before expiry or exercise.

So basically some day before my 28th birthday I can wake up and cancel this option that I’ve given you. Now the challenge is to price this. One thing that is obvious is that the value of this is now less than the value of the pure American option. But pricing it is a challenge (though, thinking about it carefully, it shouldn’t be too hard to solve. I think we can use option-on-option fundaes in order to price it, but still it’s nontrvial).

The European option, of course (as it is done in My Best Friend’s Wedding) easier to price. Basically, there are two events that need to happen on the day of expiry for the option (ok technically it isn’t an option since if these two events happen, then the parties are forced to execute the contract) and so it can be easily modeled using a two-factor model. The American, as we discussed, is tougher (though I’m sure that if I were to present this problem to my colleagues, they’d solve it in a jiffy).

So the reason I’m writing this is that I’m planning to enter this kind of a deal with someone. And I’m wondering if it’s better to enter into a European deal or into an American. Remember that if it is the “American” deal, I’ll be giving away the option (to marry me before either my 28th birthday or I withdraw the option) for free. Considering this, under what conditions should I try to sign the European contract, and under what conditions should I give away the American?

Also, how does the pricing of the American option change if I’m allowed to give it away to more than one person (with the understanding that as soon as one person exercises the option, I withdraw the option from all the other people I’ve given it to). And typically, will I be able to get more benefit in total by giving away this American option to a number of people than if I give it away to one person (assuming I’m indiffernet between all these people with respect to marriage).

Ok it’s late in the night and it’ s my third post in the last 1 hour, so it might be a bit muddled up. Also, you might find it a bit too technical (remember that I’m a quant). Nevertheless, I hope I’ve been able to communicate what I wanted to communicate. And am looking forward to your advice on this.

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.