Archives for Ian Ayres

Put Your Money Where Your B-Tush Is

Thanks to The Times‘s nice writeup (“Dieting? Put Your Money Where Your Fat Is”), an Internet company that I helped found,, has been getting a spike in commitment contracts. As readers of this blog know, stickK (shameless plug) is a commitment store that helps you stick to your goals. We’ll elicit support from your […] Read More »

I Pay Them to Leave

A business exec told me that he thinks of consulting firms a bit like Charlie Sheen thinks about prostitutes. When I asked him to explain, he said that when Sheen was being sentenced for using a prostitute, the judge asked him why a man like him would have to pay for sex. And Sheen reportedly […] Read More »

Comment, Comment on the Wall, Are You Community or Not at All

One of the coolest things about posting at Freakonomics is the chance to be educated by your high-quality comments, which add to our posts and sometimes correct our mistakes. But to be honest, every once in a while I have been depressed by the harsh general tone of criticism. (For example, the comments here got […] Read More »

Investment Tips for Retirees Worried About Inflation

As I was getting coffee in the faculty lounge, I started talking to a senior colleague who is nearing retirement. He said that he avoided a lot of the market pain of the last year because he had only about 25 percent of his savings in stock. (Now with the market drop, he has an […] Read More »

Good Economic News for the Holidays: Volatility Is Down

One of the most important but underreported financial indicators is the CBOE‘s Volatility Index (^VIX), which measures the market’s expectation of future volatility in stock prices. (The CBOE has written a nice technical white paper describing how it is calculated, here.) Traditionally, the annualized volatility of the S&P 500 has been 20 percent, but last […] Read More »

The Art of SATergy

My son took the SSAT exam this past Saturday. And while I was sitting in the Choate athletic facility waiting for him to finish, I remembered that Avinash Dixit and Barry Nalebuff‘s new book, The Art of Strategy, has a great example concerning standardized testing. Game theory is so powerful it can help you figure […] Read More »

Dubai, Shanghai, Mumbai, or the Highway

In early December, I spoke at a Yale Law School breakfast on the current financial crisis — focusing on Robert Shiller‘s book, The Subprime Solution. (Several of my earlier posts — here and here — were actually preparation for my presentation.) The first question to Shiller from the audience began: “Lots of my investment-banker friends […] Read More »

An All-Pay Auction

Martin Shubik invented a famous game-theory exercise, sometimes called “the dollar auction,” where a teacher auctions off a $20 bill to the highest bidder. Bids have to be in round dollar amounts, but the twist is that both the highest and the second-highest bidder have to pay. When uninitiated students start to play this game, […] Read More »