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Professor Kevin Murphy’s last lecture (of the fall 2025 quarter Price Theory I course). Professor Murphy teaches with a sharp, lightning-fast intellect that channels the timeless, foundational wisdom of the great economic thinkers. Problem No. 1: Nudge Problem No. 2: Why platforms running two sided market often charge the supply side Coming next: details and intepretations.

Costly Persuasion with Posterior-Separable Costs In the costly persuasion model, there is a cost $c(E)$ for experiment $E$. Assume it’s posterior separable: $$ c(E)=\mathbb E_{\mu\sim\langle E\mid\mu_0\rangle}[k(\mu)], $$ The sender chooses not only what information to reveal but also how much information to acquire. The entire problem collapses back into the familiar concavification framework: the sender’s interim value becomes $$ \hat v(\mu)=\mathbb E_\mu[v(a^*(\mu),\omega)]-k(\mu), $$ and optimal persuasion reduces to choosing a distribution of posteriors with mean $\mu_0$ to maximize its expectation....

Another vivid example of “in the worst case, what (tf) would happen if xxx information is leaked?” ICLR is one of the most important computer science conferences. They do double-blind peer review on OpenReview. OpenReview makes all paper submissions and reviews public (e.g. anyone can view and make public comment on it, like Twitter). Reviewers goes under anonymous encrypted alias. Around Nov 11, a bug was found in OpenReview that you can query the anonymous encrypted alias of reviewers and get the true reviewer identity....

There’s a weird little hierarchy in classical music where “pleasant” is treated like a dirty word. The sweeter and more singable the piece, the faster some people rush to dismiss it as shallow. Waltz of the Flowers gets this treatment all the time: overplayed, overrated, “too syrupy.” The audacity! Tchaikovsky crafted every bar with care, every note is perfection. The orchestration is rich and luminous, structure is classic, and the melody is unforgettable without ever feeling cheap....

Perhaps the most unserious divertissement among the collection: “The last dance of Clara’s banquet tells the story of Mother Gigogne and her children, who appear from beneath her vast hoop skirt. The music is vibrant and at moments clownish in this fairytale number.” (Warner Classics)

Technically, the 2nd act of Nutcracker takes place in the candy kingdom. Marzipan is a kind of dessert. However, the original French name for the dance, Mirlitons, is an older term for a simple reed or pipe flute, similar to a kazoo. Huh. Puns. As I said, timeless. The high-pitched trill of the orchestral flutes float up to the stage and seemingly fuel our steps, which are as colorful, bright & perky as our costumes....

Tchaikovsky’s music is so iconic that the dance ‘Trepak’ is always associated with the piece. Cause technically, Trepak is a fast, energetic folk dance that originated in Ukraine and Southern Russia, known for its male dancers performing athletic moves like leg-flinging. It is widely recognized as the “Russian Dance” from Pyotr Ilyich Tchaikovsky’s ballet The Nutcracker. The name comes from the Ukrainian word for the dance, tropak. Good old memory from Tugan Sokhiev with Munich Philharmonic in Shanghai 2024: the momentum, the rhythm, the chill of sitting at the choral seat for an encore of full spirit!...

The 3rd of Nutcracker’s Divertissement is the Chinese Tea. I like this piece because its iconic, fancy flute&piccolo soli: This piece is also particularly controversial because, during the time Nutcracker is created, China is in Qing Dynasty so our image then wasn’t the most flattering of all (Eg. the male character in Balanchine’s version is quite offensive) You can do a lot exploring China’s splendid aesthetic from our rich history. The SF Ballet’s version is cute, they did a dragon dance:...

The 2nd divertissement following the first Spanish Dance is more of an Adagio, fancy Arabian Coffee dance. It’s not the easiest thing to choreograph—there are versions in which the girls look like they’re from Rite of Spring… (Just say, hypothetically, in the worst case, you need a bathroom break during Nutcracker…) But it’s undoubtedly beautiful, if executed well:

A Divertissement (French for “entertainment” or “amusement”) in ballet means one/several short dance performed as an interlude, often irrelevant to main plot but to showcase the dancers’ technical abilities. The Nutcracker has technically 7 divertissements: Mhmm, technically the Waltz of Flowers is also an interlude dance The naming of Tchaikovsky’s Dibertissements would sometimes be criticized to be racist. (Well, technically it’s more of a choreography problem, where the costumes and dances included a lot of racial stereotypes)....