The counterfactual lives

We have learned in our statistics and econometrics classes to think about the counterfactual of a given situation. What if instead of this happening, something else happened. What if we didn't give the kids schooling what would be the outcome in terms of GDP growth.

Apparently, we internalized this concept very well. And we are now imagining endless counterfactual lives. We spend a lot of time second-guessing our decisions and mentally punishing ourselves for not having made the right choices.

What if I had moved to country A because I really liked their culture, and continued dating B because he was so amazing and maybe I gave up on him very fast, and what if I pushed a little more for a job at C where I would be making a lot of money? Wouldn't my life be great? Or if what if I have stayed at our first job, married our first love and by now have amazing and brilliant kids, wouldn't I feel satisfied?

The problem we are facing now is that we have endless possibilities instead of A, B and C. We could easily move to several countries, we have met pretty awesome people and we could have found many different jobs.

However, our idea of counterfactual lives is very biased. We never imagine that we would miss our culture if we moved to country A, or that B would turn out to be an unreliable womanizer or the fantastic job at C would have given us a heart attack at 35. The grass is always greener on the other side.

We tend to think that from all the possibles lives we could have picked, we chose the a sub-par one.

Are we just non-committal freaks, trying to have all opportunities open all the time? Are we obsessive comparing our lives to others? Are we just trying to improve all the time?

Two thing come to my mind when I think about this:

• a Tony Judt quote that Meg posted the other day: " Who could do any better in the circumstances? The answer, of course, is 'a better me' and it is surprising how often we ask that we be a better version of our present self--in the full knowledge of just how difficult it was getting this far". 
• Eternal Sunshine of a Spotless Mind - in the movies, Joel try to erase his story with Clementine. He gives up in the middle. Our memories and our mistakes are just part of who we are.

Astérix and the electric guitar

Last week I saw the very good Brazilian documentary “Uma noite em 67” (a night in 67) about the music festivals held by a major TV chain. Those music festivals were a big hit in the late 60’s (kind of the same success American Idol had… but with better musicians and not so cheesy jury) and the main popular singers of Brazil at the time performed at the competition.

One thing, however, caught my attention more than anything. In 1967, some famous Brazilian musicians organized a protest against the electric guitar.  According to them, the electric guitar would destroy the Brazilian music as after the electric guitar would come the Imperialist Pop music.

This reaction towards the electric guitar seems very much as how Astérix reacted to the Romans – they resisted and they would alone defeat them. Never mind that the Romans had better sewage systems, for instance. The point was: they would not be destroyed by the imperialist conqueror. As you can see very much the spirit of Porto Alegre…

What happened in the 67 festival? For me, onBee of the most touching moments was when Caetano Veloso started his song – Alegria, Alegria (Happiness, Happiness) – with a Beach-Boys-alike band, with electric guitars and long hairs. He was first being booed by the audience (“how dare him spoil our heritage with this Imperialist instrumnent?”) but the music is so beautiful and Caetano co charismatic that in the middle of the song, the audience changed its mind and began applauding and singing along. 

That same night Gilberto Gil and Os Mutantes presented also a beautiful song with electric guitars. The Tropicalismo movement was born: electric guitars mixed with Brazilian traditional music, Bossa Nova and Rolling Stones together. And the music is just absolutely amazing - it changed the way music was understood and played in Brazil. It's not only the old vs the new: it's embracing the new that exist globally and using it with a local beat.

It’s funny how Brazilians some time insist in protecting their country from the evil influence of the rest of the world. We are on our best when we take elements from the outside, mix with our good things and make a fantastic product. Check the success Embrapa had with agriculture (The Economist said that the rest of the World should learn from us how to improve the productivity of the agricultural sector). Should we go back to our anthropophagic roots? 

Things I'm not good at

1 - throwing things away
2 - not gesticulating when I'm talking
3 - organizing my shoes
4 - organizing my closet, as a matter of fact
5 - not smiling
6 - saying goodbye

Elizabeth Bishop lived in Brazil and in Cambridge, MA - as I did. And she wrote a beautiful poem about losing people and places.

One art

The art of losing isn't hard to master;
so many things seem filled with the intent
to be lost that their loss is no disaster.

Lose something every day. Accept the fluster
of lost door keys, the hour badly spent.
The art of losing isn't hard to master.

Then practice losing farther, losing faster:
places, and names, and where it was you meant
to travel. None of these will bring disaster.

I lost my mother's watch. And look! my last, or
next-to-last, of three loved houses went.
The art of losing isn't hard to master.

I lost two cities, lovely ones. And, vaster,
some realms I owned, two rivers, a continent.
I miss them, but it wasn't a disaster.


--Even losing you (the joking voice, a gesture
I love) I shan't have lied. It's evident
the art of losing's not too hard to master
though it may look like (Write it!) like disaster.

What women should know about Game Theory

Let's say you start seeing a new guy. And, yes, you get really excited about him. He is very smart, cool, tall, dark and handsome. But you are really unsure whether he likes you or not.

So you decide to give him a signal that you are a cool, smart, independent girl.You obviously don't want to scare the guy away saying how much you like him and how needy and kind of crazy you really are. And here you are, acting really cool because he didn't call 3 days in a row or you are making excuses for his behavior (yes, he's just scared of how much he likes me) and so on.

And that's the road to disaster.

Because you should not be signaling, you should be screening.


You should be acting kind of crazy because you want to know if the guy sticks around it's only because he likes you. You should make sure that the guy will make an effort to see you. If he likes you he will make the effort to signal it.

And the genius advice my micro teacher gave is: the signal should be costly for him. If the guy takes you to an expensive restaurant, that's not s costly effort for him (for most guy I know, at least), he just likes it - with or without you. If he takes you along to things he already likes, it doesn't mean he likes you.

To make sure the guy you are seeing likes you make sure he's sending a costly signal to demonstrate his interest. My personal experience is that no guy likes kind of crazy behavior - but some of them stay even after I act kind of crazy. And the one that matters always stood there. Some of my friends like to take the guys they are dating to family reunions. Others take them to the ballet.

Otherwise he may just be spending time with an easy girl he never actually liked... and you will end up having long dinners with friends trying to understand how a guy that "clearly" liked you dumped you. He may never have liked you on the first place, as harsh as it seems...

And I admit that there is a fine line between acting a little crazy and scaring every guy away. Or you may end up attracting freaks who like really crazy girls.

And - guys - be aware: there's a difference between interesting and hence kind of crazy and  crazy to distract you from the fact that I have a very boring personality...

P.S.: This post is for my awesome professor Asim, who taught me about contract and game theory. I actually wrote in a memo for his class that game theory had helped me on the dating part of my life and that now I was hoping contract theory would help me not get a divorce...

What Thom Yorke taught me about Economics

I went to the amaaaaazing Thom Yorke and Atoms for Peace concert. Thom Yorke is the lead singer of Radiohead and object of indie blind devotion. And - just to be honest - I adore him. Since my teen years, Radiohead has always been a favorite of mine (come on! The guy wrote Creep - my teen anthem)! The fact that Flea - bass player of Red Hot Chili Peppers - was also on stage just made my day. It was just awesome.

And Thom managed to teach some Economics concepts.


1 - Coordination failure
We had Orchestra seats - kind of in the back of the Theater but still pretty centrally located. However, we stood up all the concert. If the guys on the front rows sat down, the whole orchestra would have watched the concert sitting and not standing up. So, sometimes rational human beings do not take the best decision for the collectivity because if the decision is not made by everybody at the same time, the cost of being the first one to act it's too high for any private individual to do it. Therefore, I stood up...

2 - Warm glow
When Radiohead released their album "In Rainbows" (amazing album btw), they offered it for download to the price you wanted to pay. The question was: why would you pay for something you could get for free? Rationally, it wouldn't make any sense. Still, people paid for downloading the album. Maybe those people derive utility from doing something they consider good (reqarding amazing musician for their music). People's utility function is not only based on maximizing resources - it also involves how they feel about it.

Contracts or how to avoid a divorce - part deux

After a very insightful feedback on the my post  from an unexpected source of relationship wisdom and one illuminating comment by a life guru on an actual situation I was going through, I have a few observations to make on marriage and contracts:

1 - If you frame it as a contract, you lose it. The problem is if you try to make informal relationships too formal, you'll lose the easiness and flexibility. You'll end up with a stiff relation without any spontaneous movement. Nothing more boring than scheduled romanticism.

2 - If you focus too much on the details of the contract, you may loose the big picture. Why are you willing to spend the rest of your life with that person? The big picture should be because you love them. A lot. Sometimes is good to take a step back and remind yourself why you're doing this in the first place.

3 - I still think it's a valid internal process to figure out more or less what are your expectations regarding a marriage and the act of codifying expectations may be truly insightful (my bet is that most people will have kind of unrealistic expectations on marriage but they never really thought about it)

4 - Can we make a Tiger Woods clause? In Portuguese - "apelou, perdeu"! Roughly translated as you don't play fair, you loose. Immediately. (OK, so this clause comes from my obsession to understand what the heck was Tiger doing with all those women - NY Magazine called them half-hookers). So, en hommage à S., I just had to mention Tiger.

Contracts or how to avoid a divorce

The wedding wave has arrived in Cambridge. Over the past 3 months, 4 of my brilliant classmates decided to get engaged. As I plan a trip to Pakistan to attend one wedding, I have started to think on what makes a marriage successful?

My answer to that was: contract theory! Marriages should be viewed as partnership contract between two people and not as romantic fate. Before people start thinking that I'm a cold-hearted bitch, I have to say I'm actually more romantic than most people: I want a marriage that lasts, I don't think I could go through a divorce without losing my mind. That said: let's analyze contract theory a little bit.

As we have learned in contract theory class, to draw a good contract you must go through 3 phases: gather internal information of what you want to achieve in the partnership, negotiate and explicit the deal terms with your counterpart, codify it so a third party can enforce the contract at an eventual breach. Problems arise because contracts are incomplete: you can never foresee all the possibilities of life when you draw a contract and there is a possibility that one of the parties may want to renegotiate the contract because they feel that unforeseen events have altered they payoff of the partnership.

If you're lost in the economics-jargon, worry not, my dear.

To have a successful marriage you have to first understand who you are and what you expect from a marriage (how many hours you want to dedicate to the family vs. work, how many kids you wanna have, what kind if education you want to give them, how you feel about savings vs spending, how ambitious are you, should you have a TV on the living room or in the bedroom, etc.). When you have that clear you can talk to your partner (who also knows what  s/he wants) and you can understand the other and compromise to codify the mutual understanding into one marriage contract. You know your role and you trust the other to follow their role. If people took the time to actually understand what they want and communicate it to the partner, I think many divorces (aka contract renegotiation) would be avoided because we would have a better contract on the first place.

In my view, marriage contracts should have already stated that they will have periodic revisions as to make sure that the partners are still happy after so many unforeseen events (aka life) happen.

My only caveat would be: DO NOT OVER-REGULATE! I personally hate to be micro-managed and would be annoyed to the point of leaving the negotiation table if I had a partner that would insist on negotiating details such appropriate skirt length, authorized nail polish colors, appropriate time spent on bed on Sunday mornings, etc, etc. Just let me be!