Friday, August 08, 2008

Influence - How to increase your influence on everyday conversations

1. Reciprocity

- When you expect a favor from others you will have to do them a favor first. Once the favor is done make sure that you diplomatically let them know that " Hey if I was in the same position wont you do that for me".

2. Bigger Request Followed By Smaller Request

When you are asking a request always start with a large request which will most probably be rejected. Immediately follow that request with a smaller one without wasting any time.

3. Scarcity
People want what they cannot have. When you present Idea to some one, you need to let them know that there is something about this idea which cannot be had anywhere else unless they move in your direction.

4. Presenting an idea showing gain or Showing a Loss First
People are motivated by the idea of losing something more than gaining something. So always show what they would lose by not following what you are saying

5. Information
When there is a new Information supporting your position it is always better to get on the phone and tout the savings to your clients.

6. Establishing Credibility
When you are speaking as an expert trying to establish credibility before a crowd who does not know you. You need first tout your credentials and then explain the knowledge you have got.

7. Presenting Arguments -
Before presenting strongest arguments for the choice you are recommending always present a argument against the choice. Showing that you are knowledgeable and fair. Then present one you want them to take.

8. Public Commitment
People always will stick to public commitment they made either in words or in writing for any situation. If you want them to commit to a action in the future, always request them for explicit commitment instead of implicit commitment.

9. Consensus
People always make decisions on how others similar to them are doing ( Power of the crowd).
When you present ideas always bring in associations how you are helping oethers.

10. Liking
We like those who are like us. We like those who do things like us. We like those who work in a cooperative way to achieve success.

Further Reading - Influence by Cialdini

Sunday, January 13, 2008

Economic Theory

Relationship between Science - Fact - Theory

Science is the process of organizing, collecting and explaining facts.

Fact is something group of people agree upon.

There are infinite amount of facts.

Interrelationship of two facts is called theory.

1. Scarcity and Economic Costs

What is Competitive Advantage?

What is asolute Advantage?


Problems of empirical Verification - Environment cannot be controlled.

2. Gains to Specialization and Exchange

Production Possibility Frontier

A graph of production possibilities is called Production Possibility Frontier.

The production possibility frontier defines various production opportunities available open to an individual or an economy given full employment resources and existing technology.

Marginal Cost of a good or activity is the amount of other goods that must be foregone to obtain one or more unit of the good.

Comparitive Advantage and Gains to Trade

Absolute Advantage -
If an individual can produce more than others in the same time or produce the same in less time.

Comparative Advantage - An Individual has an comparative advantage if he can produce goods at a lower cost than others.

Gains to Specialization in Production and Exchange

By Concentrating ones own production by Comparitive advantage and exchanging the production with least comparitive advantage one would achieeve production Efficiency.

Production Efficiency is achieved at least cost.

The entire process of Economic Growth is essentially a process of pushing outward the boundaries set by the production possibility frontier.

Production Possibility Curve cannot answer-
What it is to be produced and who receives the outpu.