Comments on: Efficient Markets:part 2 http://hedgethat.com/2008/06/07/efficient-marketspart-2/ A blog about hedge funds, stocks and general market insights. Tue, 23 Feb 2010 05:44:06 +0000 http://wordpress.com/ hourly 1 By: BBV4Life http://hedgethat.com/2008/06/07/efficient-marketspart-2/#comment-6 BBV4Life Wed, 11 Jun 2008 21:32:10 +0000 http://joeyknish.wordpress.com/?p=5#comment-6 In order to define rationality, we must first define the parameters of the game. The many people waiting on line for Shake Shack all have different variables that affect whether or not their decision is rational. Let's say the goal of the game is to maximize Money and end up with the highest Utility: - A mindless corporate zombie on their lunch break loses no tangible value waiting for ShakeShack or pissing their lunch break elsewhere because this lapse in time has no hourly wage attached to it. Sad to say, most people have no earning power besides their paycheck. - The utility provided by the food and experience varies greatly depending on the person recieving the product, so this can't be generalized - I can say to a high degree that waiting 1.5hours for a seat at Tao is much more irrational than ShakeShack. - A human's irritability at waiting online for a meal has no tangible +/- value for our game of money, and has no effect on end utility because he may be surprised by enjoyable food. There are too many variables that go into the value of an individual's time and perception of utility. In order to define rationality, we must first define the parameters of the game. The many people waiting on line for Shake Shack all have different variables that affect whether or not their decision is rational.

Let’s say the goal of the game is to maximize Money and end up with the highest Utility:

- A mindless corporate zombie on their lunch break loses no tangible value waiting for ShakeShack or pissing their lunch break elsewhere because this lapse in time has no hourly wage attached to it. Sad to say, most people have no earning power besides their paycheck.

- The utility provided by the food and experience varies greatly depending on the person recieving the product, so this can’t be generalized

- I can say to a high degree that waiting 1.5hours for a seat at Tao is much more irrational than ShakeShack.

- A human’s irritability at waiting online for a meal has no tangible +/- value for our game of money, and has no effect on end utility because he may be surprised by enjoyable food.

There are too many variables that go into the value of an individual’s time and perception of utility.

]]> By: joeyknish http://hedgethat.com/2008/06/07/efficient-marketspart-2/#comment-5 joeyknish Tue, 10 Jun 2008 03:00:06 +0000 http://joeyknish.wordpress.com/?p=5#comment-5 To: Awesomeness, I got some food for myself as well as my colleagues. It was definitely not worth the wait. The fries were pretty good and the black and white shake should be renamed the heart-attack shake. However I think Shake Shack's burgers are comparable to Joe's Best Burger or even Good Burger which do not have an hour and a half long wait. The sheer amount of people who are willing to spend the amount of time for a slightly above average fast food meal does not make any logical sense to me. Waiting an hour and a half for a seat at Momofuku noodle bar or tao restaurant make sense but definitely not Shake Shack. Everyone of course is entitled to their opinions and everyone gets to vote with their dollars. I can see that Shake Shack is a very very profitable enterprise. To: Awesomeness,

I got some food for myself as well as my colleagues. It was definitely not worth the wait. The fries were pretty good and the black and white shake should be renamed the heart-attack shake. However I think Shake Shack’s burgers are comparable to Joe’s Best Burger or even Good Burger which do not have an hour and a half long wait. The sheer amount of people who are willing to spend the amount of time for a slightly above average fast food meal does not make any logical sense to me.

Waiting an hour and a half for a seat at Momofuku noodle bar or tao restaurant make sense but definitely not Shake Shack. Everyone of course is entitled to their opinions and everyone gets to vote with their dollars. I can see that Shake Shack is a very very profitable enterprise.

]]> By: Awesomeness http://hedgethat.com/2008/06/07/efficient-marketspart-2/#comment-4 Awesomeness Mon, 09 Jun 2008 13:16:38 +0000 http://joeyknish.wordpress.com/?p=5#comment-4 I've waited for over an hour to get some halal at 53rd and 6th. It was great. In your case, you didnt like it as much because you were waiting on line to get food for the other people and not for yourself. I’ve waited for over an hour to get some halal at 53rd and 6th. It was great. In your case, you didnt like it as much because you were waiting on line to get food for the other people and not for yourself.

]]> By: BaiMianBao http://hedgethat.com/2008/06/07/efficient-marketspart-2/#comment-3 BaiMianBao Sat, 07 Jun 2008 13:35:23 +0000 http://joeyknish.wordpress.com/?p=5#comment-3 Joseph, Is waiting 90 minutes for Shake Shack irrational? What if one considers it the greatest food ever - akin to manna from heaven. Wouldn't it then be rational to wait even longer? Joseph,

Is waiting 90 minutes for Shake Shack irrational? What if one considers it the greatest food ever – akin to manna from heaven. Wouldn’t it then be rational to wait even longer?

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