V Pattabhi Ram
Dateline: May 15, 2005. Venue: The KBC game show.
India’s finest quiz show is back on air. An entire country, glued to its drawing space, watches the Big B with his patented French beard mouthing “Sure?” “Confident?” “Lock kiya jai?”. China, the hot wannabe engineer from IIT, took the flight to play KBC with Bachchan. He had spoken to Wafers, the bright young one who wanted to be a CA, that he would use her as the “phone a friend” option if there were a question on finance. “Oh, all that would be necessary only if you get into the hot seat,” ragged Rinku, the cub reporter. “Don’t be boorish. You had better be ready to interview the next crorepathi,” remarked Muscles, the young intern from the medical college.
The Big B landed at the studios, shook hands with the participants and got cracking. “Fastest fingers first” said Bachchan, indicating that he who got the answer first would get to play the game with him. “Who was the Greek philosopher ……………………….” Before he could complete, China had punched in the answer “Diogenes.” Unaware of China’s skills the Big B, after a pregnant pause, said “who lived in a tub?” What fastest fingers first; China had beaten even Bachchan hollow! An auspicious start indeed thought China. Would he bag the one crore prize?
He need not have worried. In no time he had cracked ten questions and won Rs 3.2 lakh. He hadn’t as yet used his lifelines. Q 11: “Who directed the music for the movie Bombay?” They might as well have asked him his grandfather’s granddad’s grandfather’s name. “Audience poll”, called China. The audience voted in favor of A R Rehman and China went with them. Questions 12 and 13 were simple and China, the ace quizzer, had won Rs 25 lakhs. Then came Q 14.
“What part of the human anatomy enlarges to ten times its normal measurement during periods of emotion or excitement?” asked the Big B smiling. Ha, China knew the answer. Hadn’t Muscles told him about how the biology professor had asked this very question in the classroom to the lady doctor who was so stunned that she stammered “I .…. I refuse to answer that question.” The professor had said “Debbie, your refusal to answer makes three things evident. First, you didn’t study last night’s assignment. Second, you have a dirty mind. And third”, concluded the professor, “I am afraid marriage is going to be a tremendous disappointment for you”. Thanks to Muscles, China knew the answer and he beamed “The pupil of the eye.”
Wow! He was now on Rs 50 lakhs and had two lifelines still in hand. After the mandatory claps the Big B forked out the Rs 1 crore question: “Who were the second set of people to win the Nobel prize for their work on capital markets?” China thanked his stars that he had sounded out Wafers to be ready for a call from him. The Big B trotted out the four sets (a) Modigliani and Miller (b) Black and Scholes (c) Harry Markowitz and William Sharpe (d) Warren Buffet and Peter Lynch.
China had read about Buffet and Lynch, the legendary fund managers who had made cartloads of money for the investors. No Nobel Prize winner could do that he reasoned and ruled the pair out. The remaining three pairs made no meaning to him. He called for 50:50. Markowitz and Sharpe went out of the frame. And he had to choose between (a) Modigliani and Miller and (b) Black and Scholes. China decided to use his final lifeline and the Big B called Wafers. Ouch. The lady didn’t have the answer. She had bunked that class on capital markets and hadn’t caught up.
China’s heart sank and he asked her “Okay, what should I do?” Wafers remarked, “Name anyone of the two pairs.” “What?” exclaimed China. And then elaborated, “If I get the answer wrong I pick only Rs 3.2 lakhs. If I walk out I get Rs 50 lakhs. I would prefer to walk out.” Wafers screamed, “No, I have read about decision trees in my classes. And it tells me that you should answer”.
China too had read about this silly thing called “the trees”. His horn-rimmed professor at the IIT had said, “the value at a decision box is the higher of the expected values of the various branches that emerge from the box”. Even as he had dozed, the professor had thundered Rule 2, “the value at a chance node is the aggregate of the expected values of the various branches that emerge from the chance node”. And then for effect the professor had added Rule 3; “there are probabilities only at chance nodes and not at decision nodes”. While these thoughts raced through China’s head, Wafers elaborated: “You have to make up your mind on whether to “Answer” or “Not to Answer”. That’s a decision. If you decide “Not to Answer” you pick Rs 50 lakhs for sure and hence the expected value is Rs 50 lakhs. If you decide to “Answer”, your answer may turn out to be right or wrong. That’s a chance. Since there are only two choices, it’s like tossing a coin. There is a 50% probability of getting your answer right and a 50% probability of getting it wrong. If you get it right you win Rs 100 lakhs. If you get it wrong you win Rs 3.2 lakhs. The expected value therefore is (0.5 X 100) + (0.5 X 3.2) = Rs 51.6 lakhs. Since the expected value of “Answer” (Rs 51.6 lakhs) is greater than the expected value of “Not to Answer” (Rs 50 lakhs), China you must answer the question”.
China trusted Wafers analytical skills but he couldn’t bring himself to let go the opportunity to make Rs 50 lakhs even if there was an expected value of Rs 51.6 lakh that Wafers talked of. He shook hands with the Big B and walked out. The Big B understood. Wafers didn’t. She was upset. Was her decision tree analysis faulty, she asked herself tersely?
Dateline: August 15, 2005. Wafers read a quote, “Men worry more about losing than about winning.”
First published in the Hindu Business Line