Megan McArdle applied economic theory to kidnapping and came up with the following conclusions:

• Hostage negotiations are ‘bilateral monopoly price negotiations.’ There is just one seller (the kidnapper) and one buyer (the hostage’s loved ones.)
• In such a market two things determine price: willingness to accept failure and capacity to pay.
• The party that is more willing to accept failure – that is an inability to mutually agree upon the worth of the hostage – has more bargaining power.
• Those who are able to pay more have less bargaining power. This is likely why Filipinos are significantly cheaper to ransom than Europeans.
• What shouldn’t matter is the established ‘market-price’ for a hostage. In such a situation there is no established market – there is just a series of one-off transactions.

To read more about deviations from this model, what this has to say about economics as a whole, how this relates to Somali pirates, and the mistake that both Caesar and his kidnappers made, click here.

Source: The Atlantic

Today if you want to share photos you go to Facebook, and if you want to upload and store them you use Dropbox or SkyDrive writes Mat Honan. But it didn’t always used to be this way – at one point Flickr was the place to achieve all those tasks. Then Yahoo bought Flickr and “murdered it and screwed itself out of relevance along the way.” Here’s how:

• When Yahoo purchased Flickr it focused on integrating it into Yahoo’s ecosystem rather than developing new products or features. This alienated the site’s prior fan base. At one point it required all Flickr users to abandon their old accounts and adopt Yahoo accounts.
• Moreover Yahoo spent too much time trying to monetize Flickr’s sophisticated image index.
• Yahoo had all the pieces in place to dominate social on the web – but it never put them together and now Facebook is a behemoth that Yahoo can’t compete with.
• Yahoo also missed the boat on mobile. It took a long time for Flickr apps to be released, and to this day the apps are slow, ineffectual, and lack basic features.
• Today Yahoo is trying to right past wrongs and is trying to take Flickr in the right direction. However the road ahead is difficult and Yahoo’s future itself is mired in uncertainty. The best outcome might be for Yahoo to spin Flickr off or sell it to somebody else.

To read more of what is an extensive analysis not only of Flickr but of Yahoo and the recent history of the web as a whole, and to find out how this all relates to cats with laser eyes, as well as some choice anecdotes and quotes, click here.

Source: Gizmodo

James R. Healey discussed numbers that suggest we might see a resurgence of manual cars:

• In the first quarter of 2012 manual cars were 6.5% of new cars sold. This is double what the rate has been in the past five years.
• This is all the more impressive because only 19% of the available cars had a manual gear shift as an option.
• The typical argument in favour of clutch pedal cars is that they save on fuel consumption. However that is no longer true – today’s embedded computers ensure that automatic cars are just as fuel efficient if not more so.
• Part of the appeal of manual cars is that they can be thousands of dollars cheaper.
• In certain types of cars it is easiest to get most power from a manual transmission.

To read other reasons for the rise in the sales of manual cars, including the role of habit and user-friendliness, as well as to find out what Ford’s Focus marketing manager has to say about the phenomenon, or to take a look at the expanded numbers click here.

Source: USA Today

Via: Salon

It appears that Mitt Romney’s Mormon roots and business credentials are going to be scrutinized closely in the 2012 elections. What’s the link between Mormonism and business? Schumpeter highlighted:

• Less than 2% of the United States’ population is Mormon, yet Mormons have created some of the most notable companies in the country. They include Romney’s own Bain Capital as well as JetBlue, Credit Suisse’s Investment arm and Marriott hotels.
• Their success is likely in part due to their clean living. Mormons do not consume alcohol or drugs which means that their judgment is rarely ever clouded.
• A history of persecution has also made Mormons more self-reliant.
• As the only global religion to have been created in the past 200 years, it is more oriented towards, and comfortable with, business than other religions.
• Even their conceptualization of God involves order and organization.
• The Mormon church itself is well run with estimates of its revenue running into the billions.

To read more about the organization structure of the Mormon church, other notable Mormons, the mission that all Mormons must undertake, and why Mormonism is one of the three “Ms” at Harvard business school, click here.

Source: The Economist

Nick Easen reported on the growing Asian hotel boom. Highlights included:

• The 50 hotels that the brand owner of Westin and Sheraton will open in Asia this year represents 60% of the business’s development in 2012.
• By the end of 2013 one Chinese island will have more hotels than the Hawaiian islands.
• China’s hotel market is predicted to be double that of the United States by 2039.
• Marriott is planning to go from 11 hotels in India to 100 in just five years.
• The hotel chains are hoping to create brand loyalty in the next generation of international travels.
• However one of the challenges is finding experienced employees – most are young and new and are working in the hotel industry for the first time.

To read more about what the United Nations World Travel Organisation has to say, what will happen in 2025, the role that Baku, Colombo, and Dhaka have to play, and how domestic brands in these countries are stepping up their game, click here.

Source: BBC News

Microsoft’s Xbox gaming console was introduced in 2002 into a market that was dominated by Sony’s PlayStation and Nintendo’s GameCube. Today it has become the top selling console. Four years later Microsoft released its Zune media player to compete against Apple’s iPod, hoping to replicate the Xbox’s success. Yet the players never caught on and were discontinued in 2011. What explains the differing outcomes of the two products? Todd Bishop reports on a talk given by Robbie Bach that highlights:

• The Xbox challenged the existing norms at the time and envisioned a new future of downloadable games by adding a hard drive into the console. This was well before either Sony or Nintendo had contemplated such a move, and it paid off. In contrast the Zune tried to follow Apple’s lead and failed to catch on.
• The Xbox’s marketing strategy appealed to a wide range of gamers. Zune’s marketing strategy targeted niche customers and ultimately failed to spread the Zune message.
• With the Xbox Microsoft found willing partners in game publishers such as EA to support the console. Music publishers were never keen on supporting Zune.
• The Xbox was able to take advantage of mistakes made by Sony in its transition to the PlayStation 3. The Zune was never given that chance since Apple rarely makes any mistakes.

To read more about what intrapreneurship means, what failure Bach considers to be the “most painful thing in [his] life”, as well as why Bill Gates thought that the Xbox needed a modem and much more click here.

Source: GeekWire

How does the FBI determine who its most wanted fugitives are? Daniel Nasaw took a look at the history of the list:

• The ten people on the list are not ranked in any particular order.
• The FBI only puts people on the list if the trail has gone cold and it believes that the public could aid in the capture of the fugitive. Of the 495 people who have made the list 465 have been captured.
• Other criteria for being on the list include having a federal warrant out for an arrest, being deemed a threat to society, and being worth a $100,000 reward.
• The top 10 list has mirrored the interests of the FBI. Up until the 70s violent anti-Vietnam war protesters dominated the list. In the 90s it was terrorists. In the 00s it has been child pornographers and pedophiles.
• Individuals are removed from the list if they are captured, die, or are no longer considered a menace to society.
• It can take a long time to replace somebody on the list. 11 months passed between the death of Osama bin Laden and the selection of his replacement.

To find out exactly how many of the most wanted have been captured through tips from the public, who currently makes up the list, why the FBI doesn’t put people on the list unless the trail has gone cold, the specific bureaucratic processes for adding somebody to the list, and who was deemed threatning enough to replace Osama bin Laden, click here.

Source: BBC

Shawarma places across the United States are seeing a surge in demand. But what is Shawarma? And why is it suddenly so popular?

• Shawarma is a Middle Eastern dish of meat prepared over a period of 24 hours served in a pita.
• In Avengers, Iron Man endorses it as a food that he’s never had but would like to try, saying that there is a place that he knows. At one point in the movie the superheroes take him up on the offer.
• Shawarma has seen a surge in interest on Google and Twitter. Jon Stewart also gave it a mention.
• Shawarma joints are appreciative of the increased interest.

To read more about the proper way to prepare Shawarma, the relationship between food and culture, and the best place to get it in Boston, click here.

Source: Boston Herald