Monday, June 22, 2015

A Defense of Price Optimization

A Defense of Price Optimization
A while back, I heard about insurance companies using price optimization for the first time. This is when an insurance company strategically raises prices on only some of its existing customers, hoping that the price hike is not so large that the consumer picks up and leaves. The rub is that the price increase in, say, auto coverage, is not actually based on how risky that particular driver is. The higher price is based on the kind of consumer the company thinks he is: whether he's likely to shop coverage and switch if hit with an increase.

Monday, June 8, 2015

Linear Assumptions are Bullshit

Linear Assumptions are Bullshit
I have a good buddy from college that I still keep in touch with. We went to the same school, during the same years, and we even had the same major: English. Obviously, we also had the same crap judgment when it comes to our education. We both taught for a while English, too. (Well, I did for a short time, while he foolishly refused to sell out and chase money, instead pursuing "passion" and "meaning".) We both love football, enjoy some of the same hobbies...you get the idea.

Recently, he lost his job. In a climate of shrinking education budgets, this sort of thing can happen regardless of how good of a teacher you are. Even though we graduated over a decade ago, we still talk regularly. And these days we chat about the different directions his career might go in, now that he has this transition moment.

Being self-centered, the next thought I had was about how this sort of thing might affect me.