How Economic Game Theory Tells Me To NOT Watch The Patriots

Debating “greens” is similar to debating Keynesians about economics. They get the equation wrong which makes their arguments flawed from the outset.

Interestingly is that the Keynesians argument is from the DEMAND side, i.e., you can grow the economy by increasing the demand via government stimulus.

Whereas the “Green” argument is from the SUPPLY side, i.e., 14% of our energy need is met from renewables, is what one guy argued on my Youtube channel yesterday.

There are many problems with the “Green” argument, of course, but here are a couple:

1. Basic physics. The Sun gives the earth, say on average 180 Watts per sq. meter throughout the day. Thus, you simply can not get MORE than 180 Watts per square meter of Solar energy from the Sun. It’s a literal impossibility.

But it gets worse than that due to efficiencies. A 30% efficient PV panel will give you 54 Watts per sq. meter electricity. (30% efficiency is on the HIGH end and not likely to happen for rooftop panels anytime soon.)

Wind turbines will generate between 1 and 2 Watts per sq. meter..total. That’s it. But it gets worse. You can’t stack wind turbines behind each other. They have to be linear, perpendicular to the wind direction. Thus there are inherent limits to the land that can be used for wind electrical generation.

Hydro. The world is already using most of the hydro capacity. There is not much more we can squeeze out of hydro.

So, of the big three for renewables, solar, wind, hydro, there are generation limitation issues which can’t be ignored.

2. Demand. Facts are a growing population uses more energy. The interesting thing is that per capita each individual doesn’t really use a whole lot more energy than we did back 150 years ago, maybe 3 times more per person or so, but the population is so much larger and that is truly where our energy needs come from.

Say we have a country of 10 people and each person in that country needs 100 Watts/day. This country then uses 1000 Watts a day in energy.

Let’s even grant what that one guy argued that renewables generate 14% of that demand, in this case 140 Watts.

But here’s the problem…if we add 1 more person to the mix, we now need 1100 Watts energy to live the comfortable lifestyle we’re accustomed to in this country. Can the renewables keep up with the increasing demand, given what I discussed above about the physical limitations?

If not, now renewables account for just 12.7% of energy provided. Add another person to our country and then renewables account for 11.66% and so on.

You can quickly see where this is going. Even if each individual person on earth has a consumption rate that stays flat, the fact that there are MORE individual people on earth consuming inherently means the demand is increasing.

But it doesn’t stop there. The poorer countries among us don’t want to be left out in the literal cold either. They would like some of the luxuries us in the west are accustomed to as well, i.e., being able to heat your home without the use of devastating firewood, for instance. The amount of people who die each year from woodsmoke is staggering. (Remember, by the way, wood is a RENEWABLE!)

So, these poorer folks will certainly consume more energy as the technology finds its way to their homes. And because they are living longer, due to removing the scourge of woodsmoke from their homes, they’ll consume more, for longer. Thus adding to the demand of energy needs.

3. So, we have limits on supply via renewables and we have an increasing demand need. Neither are good for the idea of renweables generating all our needs. but added together you can quickly see this is an exercise in futility.

Oh, but it gets worse. When you hear the numbers thrown around about how renewables generate X percentage of our total energy needs simply ask WHAT renewables?
It’s easy to fall into the seductive trap of renewables being the Big Three, Solar, Wind and Hydro. But what you’ll quickly find is the significant percentage of renewables is actual BIOMASS; Solar and Wind are a pittance relative to biomass.

And the funny thing is a lot of ‘greens’ don’t like biomass because it inherently means chopping down trees and burning them, thus increasing carbon into the atmosphere!

So, where does all this leave us?

“Greens” who focus on the supply side of energy production are flawed in their arguments. Just basic stuff here, actually. An Increasing demand with a flatlined supply can’t work if the goal is 100% renewables.

It always goes back to energy storage, i.e., batteries. Until the storage capacity is solved, all this is a dream. No other way around it.

Except for one thing… and this is what the “Greens” rarely publicly advocate… DECREASING demand. Which leads to silliness like the various climate treaties such as this: “In May 2015, Vermont was one of the initial 12 signatories of the Under2 MOU, committing to limit emissions to less than 80-95% below 1990 levels by 2050.”

The ONLY way these kind of things are going to transpire is with less people, because no one wants to live using 85% LESS energy than we did in 1990! No other way around it. People are inherently the problem. And the more people, the larger the problem becomes.

The “Greens” know this. Is it any wonder then they are so aligned with the population control groups?

Something to think about, no?

Game Theory is relatively new concept in economics that studies decision making by “rational” human beings. The reason for the “scare quotes” on rational is because human beings, by design, are NOT rational. However, much of economic theory would have us believe we are. But that’s a debate for another post.

Doesn’t Make Economic Sense For Me To Watch Patriot Football Games
For this post though I want to talk about why I choose to not watch most Patriot football games. My choice in this comes down to basic economic theory and IS rational once you undestand how this works.

So, here’s a little spreadsheet I created for myself to decide whether or not I should watch a Patriots game.

There is just a TON of economic AND financial planning theory tied into this one decision actually and this is what makes human beings so interesting.

Losing Hurts More Than Winning Brings Joy
Okay, first and foremost, taking the Nobel-Prize winning work from Daniel Kahneman and Amos Tversky(K&T) we know the pain of losing is much greater than the joy of winning…for most people. Now, economic theory is based on the premise that humans are rational, so Kahneman and Tversky’s theory is/was at odds with economics. After all, it doesn’t make economic sense that losing $1 would hurt more than the joy of winning $1. But K&T studies proves it does.

Their research has been further validated by other researchers but you don’t really even need to read this stuff to understand how this makes sense. Just think about: You find $100 on the ground. YAY! You drop $100 on the ground and can’t find it. NO! Which causes more emotion? Losing does, by nearly a factor of 2 to 1.

Given K&T’s research, validated in my own personal experience by the way, why would I want to risk 100 points of pain watching the Patriots lose if I can only get 50 points of pleasure to watch them win? This should not be a tradeoff a rational human being should willing to make.

Patriots Losing to The Giants (TWICE) Taught Me A Lesson About Myself
Ironically though, with all my professional and educational background it took until the Pats losing the second time to the Giants in the Super Bowl for me to figure this out for myself.

I remember watching the Pats beat the Rams, beat Carolina, and beat the Eagles in Super Bowls. That was great and made me happy. But when the Pats lost those two games to the Giants, it was DEVASTATING. You’d almost rather have had the Pats not get to the Super Bowl to begin with than to lose those games EVEN though they had won 3 times before.

Going into the Super Bowl against Seattle the Patriots Super Bowl Record was 3-2. But those 2 losses were MUCH more painful, by far, than the joy of those 3 wins. It makes no sense, from the economics perspective of rational human behavior, and I get that, but for a fan you can throw your rational behavior out the window.

Spreadsheet Used To Determine If I Should Watch Game
So, as the Patriots were preparing to play that Super Bowl against Seattle, I came to the conclusion that I just couldn’t watch. And while I hadn’t developed my spreadsheet then it was the same formula in my head. Here is how it goes:

A Patriots win is worth 4 points of joy for me if I watch the game.

A Patriots loss causes me 6 points of pain if I watch.

A Patriots win is worth 3 points of joy if I watch.

A Patriots loss is worth 3 points of pain if don’t watch.

Add those up and you get -2. The negative means it’s too much a risk to watch the game.

Must Factor In Likelihood of Patriots Winning In Different Scenarios
But there is more to the formula. You also have to factor your own superstitions…again human beings are NOT rational. But my belief is that if I watch the Patriots play they are MORE likely to lose than if I don’t watch them play. In fact, if I don’t watch them play I believe there is a 60% chance they’ll win. Yet, if I do watch them play, I believe there is only a 40% chance they’ll win. Does that make any sense? Of course not. But no one would ever be able to prove to me, as rational and level-headed as I am on most matters, that just my eyes viewing a Patriots game would not make them more likely to lose. Crazy right? Or basic humanity, maybe?

Now, we add up the numbers and we still get a negative number. Finally, using the IF, THEN function in Excel, if the end number is negative, then do I watch? The spreadsheet pushes out a “No”. As you can see above.

And there you have it. Simple automation at work. Telling me NOT to watch the Super Bowl. Who am I to argue with mathematical formulas or artificial intelligence?

Patriots Lose To The Eagles…And I’m All Right
Lo and behold, as disappointed as I was that the Pats lost night to the Eagles, because I did not watch after the first half I’m not nearly as devastated as I was when they lost to the Giants. The reason is that I don’t have certain plays replaying in my mind of what could have been.m

I still get upset watching this replay of Danny Woodhead’s third quarter touchdown and thinking at this stage in the game how the Patriots were on a roll and couldn’t be stopped. Yet..it all fell apart. I remember Mario Manningham and David Tyree like it was yesterday. UGH. But I have no clue what happened last night, other than the Pats lost. For some reason it’s easier to deal with.

Why? Because humans are not rational beings. Which is what makes being human so fascinating. Our hearts are huge. So, much bigger than our brains think they should be and I wouldn’t have it any other way. I just won’t watch the Patriots play a football game. Crazy, huh?

© Copyright 2018 Heritage Wealth Planning