Centives

Plug-in electric cars seem to lose value much faster than standard gas powered cars – attracting lower bids from those looking to purchase a second-hand car. Brad Tuttle looked at some of the reasons why:

• The depreciation statistics are somewhat misleading, since they assume that the full price was paid for the car. However when purchasing electric cars individuals can qualify for tax credits of up to $10,000.
• New electric vehicles are also very aggressively priced at times being almost as cheap as a second-hand car.
• Purchasers of second-hand electric vehicles usually have range anxiety – the concern that older electric cars won’t be able to travel as fast on a single charge.

Read more about the used electric-vehicle market over here.

Source: Time

Caroline Winter wrote about an art production factory that produces pieces worth several million dollars commissioned by some of the most significant leaders in the world. The twist? It’s North Korean:

• Mansudae employs 4,000 North Koreans and is tasked with building propaganda memorials to the Kim family dynasty.
• Mansudae also exports its work for much needed cash. It is sensitive to the needs of its buyers – for example when building a piece for Germany, it accepted photos of German children to ensure that the children depicted in the statue didn’t look too Korean.
• The art factory is particularly popular with African countries – North Korea it seems has a comparative advantage in building glorious monuments to great leaders.
• The factory is able to produce low-cost pieces for governments on a budget because the North Korean workers that build the pieces are used to working in harsh conditions.
• But it’s not just price. North Korea produces the most authentic work in the realist style since the rest of the world has moved on from the realist era of the 1900s, while North Koreans are untouched by the evolution of modern art.
• There is a communist-influence to the pieces – seen in the barrel chest of the man in the piece pictured above – but the artists who build the pieces are willing to work around those design principles.

Read the back story of the monument in the picture above, the slogans that are used to motivate North Korean workers, what the Germans bought from the factory, and much more in a surreal article over here.

Source: Business Week

Via: Freakonomics

Paul Fairchild is an American who appears to be trying to launch his career as a journalist. What is the subject of his first article? His hatred for Kryptonite. We at Centives believe that it’s possible that Fairchild is the alter-ego of the so-called “Super-Man” who recently helped save Metropolis. But anyway. Fairchild’s article:

• When Superman was first conceived of as a character he only had a handful of the abilities that he has today. Yet even though he wasn’t as powerful as he is today, he was still able to win against every opponent.
• But reading stories about an individual who wins every battle gets…boring fast.
• Instead the creators of Superman resorted to gimmicks to help make stories more interesting. Suddenly Superman could fly, had freeze breath, and heat vision. Problems such as Superman accidentally freezing people when he sneezed began to drive the story.
• But those gimmicks too became old. Superman needed a weakness. And the writers found…kryptonite. The hero was now vulnerable.
• Yet Superman could never really be killed (as dead characters don’t generate profits) – and villains pulling out a rock that hurt but never truly harmed Superman became monotonous.
• Thus the writers created different coloured kryptonite to drive the story of the month. Gold kryptonite turned Superman human for a day, red kryptonite could cause Superman to hallucinate and pink kryptonite made him gay.
• Ultimately kryptonite is a weak plot device which writers use when they’ve run out of ideas.

Read other gimmicks – such as lead – that writers have used to try to make Superman stories more interesting, how Superman’s evolution mirrors that of Achilles and much more over here.

Source: The Atlantic

Alex Mayyasi took a look at the economics of the restaurant business:

• Drinks normally have a profit margin of 80%. The rest of the restaurant? 4%. This is why most restaurants are glorified drink companies, and why Dunkin Donuts recently relabeled itself a ‘beverages’ company.
• A restaurant in the middle of nowhere expects that its food will be so good it’ll draw people in – these are the best places to go eat.
• Demographics is destiny for restaurants – they look to serve those in the community around them. Business district restaurants, for example, are aimed at the after-work drinks crowd and probably don’t have the best food.

Read more economic restaurant hacks over here.

Source: Priceonomics

After Microsoft launched the next generation Xbox One it announced that it would include a set of DRM (digital rights management) policies that would add certain features but also place certain limits on games. Gamers reacted badly and drove a sustained few weeks of negative media coverage. Yesterday Microsoft revealed that it has reversed its DRM policies. The twist? Several media outlets point out that ultimately what Microsoft had originally announced would have benefitted gamers the most. As Kyle Wagner writes:

• The Xbox would have tied every physical or digital game to a player’s account, and allowed the creation of an online marketplace where players could trade games with one another.
• Currently when people purchase used games retailers like GameStop make money. Under the Xbox One’s system game publishers – the people who actually develop the games – would have made money, which would ultimately lead to better games.
• New games would also have been cheaper since publishers would know that they’d generate returns on their investments in other ways.
• Xbox would also have allowed gamers to share their entire gaming library with ten people free of charge. Without the DRM Microsoft can no longer offer that service.
• Xbox One appears to have been unfairly maligned by gamers – popular games and platforms such as Steam and World of Warcraft had similar policies without the corresponding outrage.
• Now the Xbox resembles the gaming consoles of the previous generation – holding console gaming back for another half decade or so.

We primarily drew this from a report on Gizmodo, but pretty much every major tech site has a similar article with additional interesting points.

Back in 2010 Glenn Derene compared UPS, FedEx and USPS to see which delivery company was the most careful with packages:

• Packages sent by FedEx suffered the most drops while those sent by USPS faced the least.
• Across all carriers marking a package as ‘fragile’ led to rougher treatment of the box.
• A USPS package deals with an average temperature change of 32 (presumably Fahrenheit) degrees. A FedEx package is exposed to temperature changes of 26 degrees.

Click here to read the comments of the three shipping companies, graphs that illustrate the conditions that the packages experienced and more.

Source: Popular Mechanics

Diablo III’s real money auction house has been having issues for a while now. In the truly excellent Ivy Business Review William Meneray provided a broad overview of how the makers of the game decided to agree upon a real money auction house, and why things have been disastrous since:

• Before Diablo 3, Blizzard – the company behind the game – had released World of Warcraft, a game which required users to pay a monthly subscription to play.
• While the venture was exceedingly profitable, soon many games adopted a subscription pricing model, and it was clear that gamers had grown tired of paying fees.
• At the same time games on Facebook that allowed users to purchase in-game items for real money were meeting with incredible success.
• Blizzard decided to use this model for its next game – Diablo 3. Players would be allowed to exchange real money for digital items.
• In the earlier installment of the game – Diablo II – there had been a black market, where users could essentially exchange real money for in-game items. The practice was banned but the market persisted.
• By having its own real-money auction house Blizzard was effectively legalizing something that had previously been banned. By doing so it was hoping to control it – and make some profits on the side (around 15% per transaction).
• However the economy has been suffering from hyper-inflation. While players can get money there’s nothing that effectively takes money out of the system, fuelling high prices.
• Gold farmers – those who are paid to play the game for the sole purpose of generating profits, like workers in a factory – also upset the economics of the game by making up to $60 million per hour.
• Gamers, meanwhile are not only upset by the failing economy of the game, but also because the game is now less fun to play. Blizzard had made it harder for players to find good items, reasoning that they could easily obtain it themselves through the new auction house. With the inflation making prices unaffordable players have trouble advancing in the game.

The full article is very well written – you should also check out the rest of their site and expect to see us link to more of their content in the future. This article on Diablo was also the first in a multi-part series, so look out for the next installment.

Source: Ivey Business Review

Movoto is a blog that advertizes itself as ‘the lighter side of real estate’. Randy Nelson demonstrated why by looking at the cost of 3D printing a house:

• The MakerBot Replicator 2 is a $2,199 machine that can be used to 3D print bricks.
• The materials for a standard brick would cost about $12 per brick and would take the printer 2.9 days to print. In contrast Home Depot sells bricks for 30 cents.
• To use the machine to print the bricks for an entire average sized house would require over 220 years and $332,820.
• If you wanted to speed things up, you could purchase 2,000 of the 3D printing machines and have your house built and ready to go in four months…at a hardware cost of $4.4 million.

Find a calculator that allows you to calculate the length of time it would take, and the money it would cost for you to 3D print your own dream house, and why clogged print heads could throw everything off over here.

Source: Movoto

Via: Nick Johnson

Before going to market with a new product, companies generally use focus groups to test the reactions of potential future customers. Pity then that focus group participants frequently lie . Will Leitch talked about how and why he does it:

• Focus groups can pay up to $300 an hour just for sitting and talking.
• Technically individuals are only allowed to participate in focus groups every six months – but there are no explicit checks to make sure this is happening. Rather, it depends on the honour system. Leitch himself has done four in a week.
• Before placing you in a focus group there is generally an interview where individuals will be asked questions such as “have you purchased a treadmill recently” answer yes and the individual will be a part of the group.
• Generally those behind the focus group make it obvious what answer they want to hear. Individuals simply have to let the focus group lead them – ensuring that they are pleased and hear what they want.
• During the focus group it is also important to be as invisible as possible. If the individual is tagged as an outlier whose views don’t reflect the mainstream, then they are less likely to be invited back.

Read more about how to manipulate focus groups and make some extra cash on the side over here.

Source: New York Magazine

Via: Newmark’s Door

If you’ve travelled out of a major airport recently you might have seen a hologram providing various instructions. Joanne McNeil did some background research on them:

• The holograms cost the same amount as the annual salary for a customer service representative – and is advertised as working 24 hours a day, 7 days a week, and not requiring a background check.
• The holograms currently loop the same pre-recorded segment over and over, but the companies behind the hologram are developing technologies that will let them respond to questions.
• Those in the holograms are usually professional actors since “facial expressions are everything”. The holograms might outlive the actors as swapping recordings is expensive.
• Soon the holograms might also be seen at doctor’s offices, museums and more.

The full article looks at the societal implications of the holograms, how they work, and what experts have to say about the technology. Read it here.

Source: Domus