Comments on: Sophisticated vulgarity 1 http://blogs.reuters.com/emanuelderman/2011/07/28/sophisticated-vulgarity-1/ Models.Behaving.Badly Fri, 14 Sep 2012 09:10:53 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: complexwriter http://blogs.reuters.com/emanuelderman/2011/07/28/sophisticated-vulgarity-1/#comment-53 Sun, 31 Jul 2011 19:50:29 +0000 http://blogs.reuters.com/emanuelderman/?p=174#comment-53 Next question for this method (sophisticated vulgarity) is to estimate its constraints. if price for Puerto Rican canned guava desserts has changed in some manner according to reasons specific for the market of this product, how should fruit salad price behave? if fruit salad price is determined by chosen set of ingridients someone can construct fruit salad from another ingridients and gain “risk-free profit”. to avoid this our initial set of ingridients should be unique for our fruit salad, in other words there should be no another set of ingridients that can be used to construct same fruit salad. even in this case first question remains the same: what fruit salad price should do when price of one of ingridients changes? if fruit salad price changes in the same direction and with same amplitude (generally speaking, according to some predefined strict law) then it means that we can use fruit salad for getting its ingridients as separate valuable assets (if guava desserts became expensive and fruit salad is cheap, then buy fruit salad, decompose it, sell guava and take profit). So the idea is that for this method we should clarify “relationship” between ingridient and final product. If it is done then such pricing is relevant.

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