game theory - any book recommendation?

I'm almost done reading the book Against the Gods. The book started really strong, but now I'm really forcing myself to finish reading it. Not sure if the problem is the book or just me. The topic and the explanation seems less meaningful and harder to understand. Any ways, the books is now touching on game theory and its impact on economic theories. The simplified explanation in the book on game theory sounds very interesting.

I'm especially interested in the topic of game theory and SW product strategy / development and personal finance.

Here is the fundamental questions that I use intuition and experience to figure out.

1) I have a fixed time and engineering resources. I have a product development road map 15x compares to my resources. How do I optimize my product outcome to increase the odds of market success?

a) add features x

b) add feature y

c) improve performance

d) fix bugs

2) I have a set of long and short term financial goals, in no particular order.

a) build up cash reserve

b) retirement

c) pay down debt

d) build up capital for my future start-up business

e) children college fund

f) acquire the various insurances.

g) vacation fund

Since my budget is well under control. I have money left to over into one or more of these goals. Which one's are the priority now and why? What is the allocation of funds of each and why?

On the surface the core of these two questions are identical. This an optimization of resource question. However, the deeper view is much more interesting and I hoping game theory will help me break down these steps into patterns that I can use and solve. What's interesting here, is that, this really is a multiple person game. In product management, my counter-party are my engineers, my boss, customers, sales, marketing, and various direct and indirect product competition. Every move that I make, these people are making simultaneous counter moves intended to optimize their own position. I'm in the same team with some but not necessarily with the same value. For example, with sales, I'm on the same team, but we don't have the same value. What I deliver might be highly valued by sales but not valued by engineers (bug fixes.) Or valued by sales but not by existing customers. (new features.) New features give sales new option to go after new customer base while existing customer wants bug fixes and better performance.

Obviously a mix strategy is the way to go. Some new features, some performance enhancements, some bug fixes, etc. But can game theory help me determine which mix would be optimal in under which set of conditions? How I do optimize over the life of the product release (not just the current release?) I would be happy if game theory can help me to clearly articulate and measure the utility of each their winning scenario?

In the case of personal finance, I think the game is actually much easier. My counter-parties are stock market, IRS, and family members. I want to maximize my potential gain, minimal my potential loss, minimize my tax payment, and maximize my utility with my family. I have to optimize based my current employment and expenses situation. Stock market, no one has any control over so it's only a matter of fund allocation and diversification. The tactical details of the allocation, I left to my advisor. However, I'm still the super allocator between all these competing priorities.

this is a rather disorganized post because my mind is so busy trying to apply a new concept to an long term existing problem. So if you know of any good books send more recommendations my way.

Time saving tips: email inbox management

I'm always trying to find ways to work more efficiently. The key to mental work efficiency is focus. Focus on just one task at a time and group a bunch of things together so I do the same work easily. I made two simple changes to my outlook program and it's helping me to be more productive.

1) Turn-off all the incoming email notification. No icon in the task bar. No beep or message window. Nothing.
2) Setup a incoming email folder and direct all the email where I'm on the CC to that folder.

Not getting distracted by incoming email is a big boost for my productivity. My concentration is not randomly broken by a little icon or a pop-window. I'm still checking my inbox way too much. But, I'm checking my inbox between tasks instead of in the middle of it. When I check my inbox, I only read and respond to emails send directly to me. I don't even read the CC email. My objective is limit myself to read CC email just twice a day. It's not going to be easy, but with these 2 simple changes I definitely feel more focused and productive.

I'm heard rave reviews about the book "Get Things Done". I haven't read it yet. It's on my to read list. I bet this tip would be in there.

pictures from Miramar air show 2009 - blue angels

The traffic was a nightmare. I left from orange county at 10 and I didn't sit down until 2:45 just in time for the blue angels. I spend 4.75 hr in traffic, walking from the parking lot to show, and waiting for security check before getting in the gate. For 2 hour spend at the show, I spend 7.5 hrs getting to and from the show. That's pretty lousy return on time. However, seen the expression on my son's face when he saw the angels flying for the first time was worth it.

Here are some more amazing picture of the blue angels! here

Enjoy!

refinancing my home loan

I started monitoring the mortgage rates the end of last year because of the feds economic recovery efforts. The confirm loan rate moved lower very quickly but the jumbo loan never budgeted.

My current loan is from Wells Fargo. It's an excellent program.
- 30 year fixed jumbo at 6.25%
- 10 yrs interest only period
- 0 points

Working as a self-employed consultant at the time, the little extra flexibility is nice. Although I have always paid the principle as if it as a regular 30 year fixed loan.

Here is my criteria of refinance.
1) 30 yr fixed jumbo loan
2) .75 or higher LTV
3) less than 1 year for refi fee payback.
4) new monthly payment should be about the same as my current interest rate.

All these condition basically works out that my new interest rate must be at least 1% lower and less then 1.25 of combined point and fees. The LTV ratio is also very important because the falling house valuation. Anything loan below .75 LTV would require additional cash from me. I knew this the area of highest risk so I saved aggressively.

Here is the break down on the new loan. I am refinancing my home loan at Pen Fed credit union. I was referred to them from another blogger Adam Nash : Refinancing? Try Pentagon Federal Credit Union (PFCU).

1) 30 yr fixed jumbo loan
2) 4.875% interest rate
3) 1% origination fee, 0 points
4) .70 LTV
5) 13 month refi fee payback

As soon as I saw the new PenFed rate, I knew the moment has finally come. It's not everything that I wanted. I submitted my application this morning. Let's see if I get approved and the result of house appraisal valuation.

The important lesson for me here is that I worked with the end in mind. I defined my target as clearly as possible. My goal was not to find the lowest possible interest and try to guess how the market will move from week to week. It was a set of clear and measurable conditions. And I didn't lock myself into those condition. I stayed flexible and considered some possible alternatives.

The mental and numeric preparation is the key. In life, you never know when the right condition will come along. You have to do all the preparation in advance. Define the target conditions, know which conditions are flexible and which are fixed. Set aside the necessary resources. Then patiently wait and jump on the opportunities quickly. No need to doubt or second guess. The decision to apply for the loan was made almost a year ago. I only spend about 30 minutes to refresh my memory and double check my math one last time before I pulled the trigger. I'm confident that I have made the right decision. (Of course, it's really hard to see the down side to 4.875% for a 30 yr loan jumbo. )

Living with Purpose and Passion

One of my favorite blog site recently posted "Defining success". I thought it was a really interesting question and posted the follow response..

It just as helpful to define failure and/or what success is not... I think for some people that is a lot easier because we all have a very strong emotional response to the fear of failure. Where as the positive happiness seems to be much more elusive.

Failure is when I stop listening or seeking good ideas
Failure is when I worry about being right for other people
Failure is when I don't care.
Failure is when I care more about the end result then doing something I believe in.
Success is not a goal and it's not the achievement.
Success is not a process.
Success is not about being right.

Success is the mental and emotional engagement to the attempt to reach the goal. Success is being passionate about trying to reach that goal. I can completely fail to reach the goal and still feel that I succeed. I'm rarely bothered by the fear of failure as long as I'm mentally and emotionally engaged. I can be wrong and I'm wrong often. I'll acknowledge the wrong and try to make it right. I don't need to wait until the end some long process to measure my success. Every night, I can ask myself did I have a successful day. Every moment I can ask myself is the choice I'm making now a successfully one.

I want live a purposeful life (measured by goals and achievements). And I want to live a passionate life (measured by success vs failure). When someone can find a way merge the two, I believe he/she will be on the road to happiness.

when do i get a bail out?

Here is the latest of government bail out for the auto industry.
http://www.cars.gov/ Car Allowance Rebate System, where people can get trade-in value of $3500 or $4500 for a new car (leased or purchase) when they junk a old fuel inefficient car.

My Honda Accord is now 15yrs old. I figure is finally my chance to get some government bailout money. Turns out, my car is too efficient, I don't qualify. Yet Again.

I should be happy. I have a job, good mortgage, made conservative investment choices, bought a fuel efficient car. However, every time there is a bailout and i don't qualify because I haven't demonstrate sufficient need, it just makes me mad. Oh well... this is why we have a "progressive democracy". We take money from people who have it now and people who will have it in the future to help people who need it now.

This makes me think.. how am I going to treat my children financially?
Am I going to be fair and treat them the same way? Or am I going to be equitable and treat them different depending on the level of need?

must read.. why education matters more than ever.

Education and technology: Supply, demand, and income inequality