Grow your business and stay connected with today’s buyers and sellers.
An executive at a very large firm recently mentioned these factors when considering customer experiences and market share:
- 71% of internet time is now mobile [Link].
- Unlock your room with the Hilton app. Order room service. [Link]
- Unlock your rental car doors & flash the headlights using the Avis App [Link]
- Snapchat, a very fast growing app only experience [Link]
- Turkey’s President Erdogan communicated via iPhone FaceTime recently [Link].
- The old and new: [Link]
- Pokemon Go, a very popular “AR” (augmented reality) app [Link news]
Does your brokerage have the right tools for today and tomorrow?
One app, one system from leads to closings.
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Kristina Lerman, Xiaoran Yan, Xin-Zeng Wu:
Social behaviors are often contagious, spreading through a population as individuals imitate the decisions and choices of others. A variety of global phenomena, from innovation adoption to the emergence of social norms and political movements, arise as a result of people following a simple local rule, such as copy what others are doing. However, individuals often lack global knowledge of the behaviors of others and must estimate them from the observations of their friends’ behaviors. In some cases, the structure of the underlying social network can dramatically skew an individual’s local observations, making a behavior appear far more common locally than it is globally. We trace the origins of this phenomenon, which we call “the majority illusion,” to the friendship paradox in social networks. As a result of this paradox, a behavior that is globally rare may be systematically overrepresented in the local neighborhoods of many people, i.e., among their friends. Thus, the “majority illusion” may facilitate the spread of social contagions in networks and also explain why systematic biases in social perceptions, for example, of risky behavior, arise. Using synthetic and real-world networks, we explore how the “majority illusion” depends on network structure and develop a statistical model to calculate its magnitude in a network.
Leonard Hyman and William Tilles:
Why do electric companies spend so much on new plants when consumers show so little inclination to buy more of the output?
From 2000 to the present, investor-owned utilities doubled their equity base while kilowatt-hour sales rose less than 10%. The more they invest, the more they can earn, so they have an incentive to invest when regulators allow them to earn more than the cost of capital.
If sales do not increase, how will they earn additional profits to cover the cost of the new investment? They can cut costs or raise prices, of course. They have cut costs for two decades. Now it looks as if they will have to raise prices, working through the slow state-regulatory process.
They might have to raise prices for a kilowatt-hour just as the introduction of disruptive technologies might give consumers an alternative to the legacy electricity provider. That’s the death spiral: Utilities raise prices, making an easier entry for competitive products, then utilities lose sales and must raise prices more to pay for all of the overhead they installed unnecessarily, and competitors take still more of the market.
That brings up the electric company’s peculiar relationship with its customers. Electricity consumers do not line up the night before to buy power. They have no thoughts about the electric company while the lights are on and only the worst thoughts when the lights go out. They may stick to the local utility’s electricity retailer—but largely out of inertia, or because they never heard of the competitors, or they don’t believe any action offers anything worth the effort of switching.
MATTHEW GOLDSTEIN, RACHEL ABRAMS and BEN PROTESS:
But much of this investment has not benefited poor neighborhoods. Banks are expected, under the Community Reinvestment Act, to help meet the credit needs of low-income neighborhoods in areas they serve. Private equity has no such obligation.
The idea is that banks should follow an implicit social contract: In return for government loans and other support, they are expected to serve a community’s needs. Private equity, which unlike the banks does not borrow money from the government, is answerable to its investors. Those investors include some of the nation’s largest pension plans, whose members — teachers and police officers among them — may support improvements to such lower-income areas.
Times found, private equity has focused on buying newer homes in middle-income areas like the suburbs of Tampa, Fla. They have largely avoided more urban communities with older homes, because doing so would be less lucrative for their investors.
“There has been a missed opportunity here,” said Dan Immergluck, a professor of city and regional planning at the Georgia Tech College of Design, who has studied the effect of the financial crisis on housing. “They are pushing the market up at the top end and neglecting the bottom end.”
Government officials are also concerned that private equity’s mortgage firms face less scrutiny than banks. While banks are examined by regulators for financial soundness, no similar testing occurs for private equity’s companies.