The Economy

“Psst…  Want to buy this?  It’s worth $500, but you can have it right now for only $49…” There’s something appealing in the idea of getting a bargain.  Somehow, paying less for something than it is supposedly worth. The rather dubious, yet familiar, statement at the start of this article need not just be confined to back alley deals and crowded markets though.  It’s something that most, if not almost all, mobile phone companies do. The question is then, why are we so blind to this? From the standpoint of the mobile service provider, the strategy is at least twofold.  One, it appeals to consumers’ innate sense of getting a bargain.  Two, if the consumer goes over the cap amount, then the company can charge the inflated rate for usage. Yet as a customer, is it really worth all the weighing up and judging what is and isn’t included in a cap when it ...

Customer or consumer, loyalty can be a tenuous thing.  There is little doubt that a business selling something, be it a good or a service, is attempting to profit in some way from the transaction.  A customer may buy on the grounds that the perceived value they will receive is worth at least the money that they’ll part with. In saying this, once a customer is generally familiar (and not dissatisfied) with something, they will tend to use it again.  There is a general inertia, or “stickiness” as some describe it, in customer behaviour and preferences.  This is not entirely irrational.  There is a search cost, time and money spent, in finding something new.  People generally also prefer to avoid uncertainty.  So sticking with what you know, is often the easiest approach.  Therein brand loyalty tends to arise. Yet in saying this, it’s curious (said perhaps euphemistically), the ways in which businesses often exploit ...

Over months, if not years, the embattled Australian Prime Minister Julia Gillard has managed to hold onto both her position as PM and the leader of the Australian Labor Party (ALP). After failing to win the 2010 federal election decisively with a clear majority, yet managing to form a minority Government, Julia’s grip on power has been tenuous, albeit just enough.  A fact reiterated on the 21st March 2013, with the latest Labor leadership spill, this time initiated by Simon Crean. With a voice that some Australians find less pleasant than fingernails scaping down a blackboard, Julia has repeatedly irked many Australians, whom have called for her removal.  This has been largely borne of the way in which she came to the position of the PM.  Regardless of one’s political views, knifing Kevin Rudd in the back for the top job, has not sat well with many Australians. Perhaps oversimplifying things, the paradox of voting states ...

Russia is a mix of revolutionary reforms and vestiges of the past. A sprawling mass of land, it is country rich in natural resources, culture, and science. With an attractive flat tax rate of 13 percent, even for foreigners provided they’re present in the country for 183 days of the year, Russia is moving forward with economic incentives aimed at promoting business and investment in the economy.  This is in contrast to many other countries where the supposed solution has been to drop the official interest rates set by their respective central banks to near zero, and other unconventional monetary policy approaches. Yet Russia is also known for its strict political measures and the controls imposed on its citizens.  Such as banning milk with a rainbow logo on it because it’s potentially gay-related; or imprisoning citizens for exercising their opinions because freedom of speech is not a right they have. At the heart of much ...

The once in a decade transition of power has occurred with Xi Jinping now the President of the People’s Republic of China. As China continues to expand its economic and political power globally, Xi Jinping will have a lot of work ahead of him. Many continue to ponder the significance of the strategic natural resources in the Senkaku (or Diaoyu) Islands.  With both China and Japan continuing to rattle their sabres over the islands.  Some have been so bold as to suggest it may lead to war between the two countries.  Most hope sense and diplomacy will instead prevail. Internally the country potentially faces a serious economic bubble in housing and with its banks’ balance sheets bloated with bad credit. For Xi Jinping, given his apparent reformist stance and dislike of cronyism, commentary falls as to whether China will move closer towards a more open and capitalist society.  It may, however, move in ...