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Rank-Size Rule (also known as Zipf’s Law) states that a city’s population size tends to be proportional to the largest city’s population divided by the city’s rank (its position in population size hierarchy). Mathematically:City Population = Largest City’s Population / Rank of City For instance, if the largest city in a country or region has…
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Delays in construction projects and massive budget overruns appear to be not just a Georgian problem. Daniel Kahneman, in his book Thinking, Fast and Slow, refers to this phenomenon as the Planning Fallacy. The phenomenon arises from humans’ irrational tendency to plan for the desired (rather than objectively expected) scenario. Unfortunately, this issue affects all…
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Mergers and acquisitions can be executed either with cash or by transferring the shares of the new company. What is the difference? When the acquisition is done with cash, the entire risk of the transaction is borne by the shareholders of the acquiring company. In the case of an acquisition with shares, the risk of…
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