One Day Walking along the Freedom Trail

With Boston's favorite bakery- Mike's Pastry(北京的同学们，就和稻香村似的，连点“菜”方式都一样), I started my own freedom trail trip. Starting from Haymarket. Today the mood of overlooking the other side of sea haunted me, I am kind of homesick. The joy of walking alone on the street can be described the saying "只要心是自由的, 没有到不了的地方。"（you can fly with the free mind）

 Here Buried Franklin 

Backyard of the Old North Church- HOPE

View from Charlestown Bridge 

 Sailing Mood

 How are you in the other side of earth?

Copp's Hill Burying Ground

Bunker Hill Monument

-

@ USS Constitution

Hilarious Commercial Board

OUCH!!!!!

Way back home. 

sunset when I went back. @ the Charlestown Bridge

Finally I got home and have a taste of this piece of delicious. 

MAP OF FREEDOM TRAIL

Telecommunication Network Access Pricing Under Vertical Integration

When you make a long-distance phone call, it has to go through the local exchange carrier's local loop, switches, transmission facilities at both originating and terminating ends and through a trunk line in between the two points. Since the breakup of AT&T in 1984, competition in long-distance market has become a normal pattern in telecommunication industry. However, incumbent in the local markets with the essential facilities like local loop, or more precisely the very last mile form the local exchange to the end-user's home, has a major market power in the market.  Entrants in the long distance market have to pay access fee to get access to the local network to originate and terminate a call. 

Under vertical separation, bottleneck suppliers don't compete with the entrants in the long-distance market. The competition degree of the downstream market plays a important role in determine the market efficiency. Under vertical integration, incumbents share the long distance market with new entrants by providing them access to local network. They have to consider the tradeoff between retail sales to end-users and access fee gain from entrants when they set the access fee. Normally, there are four pricing rules of access fee, ECPR, Ramsey Pricing, Cost-based pricing and Global price caps.

 I. ECPR(Efficient Component Pricing Rule)

Access price is set equal to marginal cost of access plus the opportunity cost of access. The opportunity cost of access is the forgone profit contribution by selling access to downstream rather than selling to retail end-users. Here we assume the customer only subscribe one carrier.

               Pa=MCa+Copp= P1-C1. 

Here P1 is long-distance price of incumbent, C1 is the long-distance marginal cost of the incumbent. 

ECPR is relatively simple and it ensures that only entrance who can undercut the incumbent will enter. Also, "entry is neutral regarding operating profit for the incumbent", so it won't have incentive to destroy the entrants by predatory pricing, which is a potential problem of global price cap. However, just because the ECPR rule is simple, it is not suitable when products or services are differentiated. 

II. Ramsey Pricing

When maximize social welfare under the participation constrain, we can always get Ramsey pricing outcome. The mark up of local call prices, incumbent long-distance calls and entrants' long-distance calls are all obey the inverse elasticity rule. Here we use superelasticities to include the substitution and complementarity among different calls. The optimal access price under Ramsey pricing is composed of two parts, which are the standard Ramsey pricing equation and the substitution effect of the incumbents' sales of local network and their loss of retail sales. 

a = 2C0 + λ/(1+ λ)(p2/ε2) + δ(p1 – 2C0 – C1)   (Armstrong, Doyle and Vickers, 1996) 

Also, 2C0 +  δ(p1 – 2C0 – C1)  is called sophisticated ECPR.  δ here is a displacement ratio, which expressed the reactions of competitors. It is the ratio of quantity reaction of incumbent to the price change of entrant's long-distance call price and quantity reaction of entrances. Sometime, we call it business-stealing effect. When δ =1, Pa= P1-C1, the simple ECPR. 

The universal drawback of Ramsey pricing is that the requirement of information is high, and the computational burden is heavy.

III. Cost Based Pricing- Long-run Incremental Cost Pricing( LRIC Pricing)

"http://www.ictregulationtoolkit.org/en/Section.2092.html"

IV. Global Pricing Cap

Global pricing cap is a price cap includes the access pricing into the multi-product price cap. It treats access product as one of the whole products into regulation. Under this method, if regulator can assign an idealized or perfect weight to the price cap which can lead to all product pricing at Ramsey pricing. Then the global pricing cap give a more flexible way for firms to reach the optimal pricing. However, just as we said, to calculate the optimal quantity weight is an ideal idea, which requires full information. Therefore, as a good theoretical method, global pricing cap never implemented. Moreover, applying a price cap may in a way enhance the incentive of incumbent to introduce the predatory pricing strategy. The local exchange carriers might set a price below the marginal cost to get rid of competition in the first stage, and recoup the revenue from monopoly pricing later. 

All of the above four access pricing method is designed for ONE WAY ACCESS situation, we will discuss later about two-way access and other topics in network industry regulation.

Ratchet Effect

Ratchet effect is an effect when we discuss about regulation lag or the issue raised when we talked about commitment problems.  Any finite contract with asymmetric information actually might exhibit the ratchet effect.

For example, under Bayesian mechanism, regulator at first only know the information of regulated firms based on the distribution information. At stage one, if there is two options, a high power incentive and a low power incentive, regulated firms will automatically choose the one favored to themselves and as a result reveal the type of the firm. Self-selection is an important feature of bayesian mechanism. At stage 2, usually when the first contract expires, regulator can use the information of firms' ex post cost to reset the firm's prices. Without commitment, firms are in a situation of " punished by doing well in the last period." If firms know about this mechanism they will have a less incentive to engage in cost reducing effort.  It can leads to a series of problems, less investment, cost inflation, etc.

What if there is a commitment of the regulator of not changing the contract for a relatively long period (which still has the ratchet effect in the last period). It can reduce the above problems, but as all long-term contracts it have the problem of inflexibility . In a world changed almost every second, a fixed contract can not probably deal with the turmoil, say policy and technology changes. Not to mention the unredeemed promise. In a regulatory world, we can't just say, hey, don't cry for the pouring milk. We have to correct the mistakes.

Joskow mentioned in "Regulation of natural monopolies"that "the behavior of a firm will depend on the information that its behavior reveals to the regulator ex post and how the regulator uses that information in subsequent regulatory reviews." It is a game between the regulator and regulated firms. When there is no commitment, we can analysis the situation happened from both sides' behavior. He cited the UK's RPI-X mechanism as a real world example. The RPI-X mechanism is a price cap adopted an annual inflation rate and a target productivity change factor"X", which will be reset every 3-5 years to reflect the current realized cost of service. Under the observation, firms under this regulation made their greatest cost reduction efforts in the earlier period and reduce the effort as the review approached.

Dilemma raised, solutions must be offered. Usually, there are two ways out. First, rely on the law. Because even without commitment , firm have the protection of law. So it can partly increase the confidence and stability of investments. Second approach, which is kind of meaningless, is abandon the incentive regulation, just use the rate of return regulation.

--------------
reference:
  Paul L. Joskow, Regulation of Natural Monopolies
For more information:
1. Laffont and Tirole,(1993), A theory of Incentive in Regulation and procurement
2. Laffont and Tirole, Competition in Telecommunications

Suprise Today

Today when I went downstairs, I recieved a package from amazon. When I opened it, wow....THE BRO CODE AND PLAY BOOK by Barney Stinson. Phil, you know me so well. This birthday present is sooo cool, out of expectation and totally a keeper.

Anyone who is a fan of HIMYM as me would totally enjoy reading those two collections. I plan to quote some of my favorite articles tonight. Though I am not a bro, I feel like such a dude now..LOL

---------------------I am back segment line-------------------------------------------
---------------------Barney is awesome segment line--------------------------------------
One of the code told about the age difference of male and female. here is the page.

According to Bro's code:

The age difference of male and female follows this formula:

X<= Y/2 +7

X: chick's age

Y: Bro's age

The max age of women available is 7, when the boy was just born. 

As time pasted by, your last chance to have a girl at least at your same age is when you are 14.  Ever since then, all the women suitable for you would be younger than you.

If you are 100, the maximum age of woman would be 57. Say the max of longevity is100, then women above 57 years old is permanently out of market.

-----------------------------Jabbering segment line ------------------------------------------

To Bro Lansey,

Article 96:  Bros shall go camping once a year, or at least attempt to start a fire.

-------------------------------Set a bonfire segment line-------------------------------------

ICT Regulation Toolkit- Great Website to learn telecomunication regulation

My regulation course professor assigned some reading on this website. http://www.ictregulationtoolkit.org/en/Index.html
It turns out to be very interesting and useful.

Chinese Thanksgiving Recipe(转）

Western family has the tradition of cooking Turkey in Thanksgiving. I personally haven't got the chance to taste this famous dish, however, I saw this chinese thanksgiving recipe on a blog, which exhibits those  photos of homemade Beijing Duke. So delicious and makes me homesick.


A recipe stolen from a blog presents as following:
You Would Love It.....

烤鸭做法： Procedure of toasting the duke:

1、鸭子1只，化冻后洗净去内脏，用盐里外均匀的抹一遍。

1.  One Duke, unfreeze it. Clear the belly, then smear salt all over the duke( inside and outside)

2、用蚝油、花椒粉、五香粉或13香调成酱，将腹腔抹一遍。

2. Use oyster sauce, chinese prickly ash, the five spices powder (prickly ash, str aniseed, cinnamon, clove and fennel), smear all over the inside of the belly.

3、腹中填葱段、姜片、桂皮、八角、香叶，用牙签封口

3. stuff the duke with chopped scallion, ginger,cinnamon, star anise and myrcia, seal the duke with toothpick.

4、烧一锅开水，一直开大火保持水温，不断用开水浇烫鸭子全身约3分钟，使鸭皮紧绷。

4. Boil a pot of hot water, keep the temperature above 80 centigrade. watering the duke with hot water consistently about 3 mins. It will help the duke skin firm.

5、放在通风处风干半天，鸭皮全干后，用蜂蜜、香醋和生抽（3:1:1）调成汁，刷遍鸭子的全身，继续风干12小时以上（我是头天夜里刷的汁，第二天傍晚烤的，约20小时）

5. Now comes to the waiting time. Put the duke in a well ventilated place, until the duke skin dried. Meanwhile, prepare a mix sauce of honey, vinegar and soy sauce (3:1:1). When the duke is dry, smear it with the sauce all over. Then continue drying for about 12 hours or more. You can do the preparation on the night, and roast it the next night.

6、烤前再刷一遍汁，入烤箱，华氏300°F（约摄氏150°C）烤2小时。其中1小时后拿出来再刷一遍汁，并且把腿和翅膀用锡纸包住，防止烤糊。（实践证明原来翅膀是整个全翅都要包住，我这次就把翅膀烤黑了一点）

6. Before you put the duke in the oven, smear the mix sauce again. Wrap the duke with tinfoil.  Tune the oven to 300°F , time for 1 hour first. Smear again, then 1 hour again.

Pay Attention: wrap the duke including the wings and legs.

7、烤好后的鸭子用刀片成连皮带肉的鸭片，放在荷叶饼中，加甜面酱和切好的葱丝后卷起来吃。

7. when you hear the "Ding", the duke is done. What you need to do now is to slice it, and warp the duke with the beijing sweet sauce into the flak cake.

荷叶饼（煎制版）：The flat cake:

材料：Materials: 

All purpose flour:800g, hot water 640ml, a cup of vegetable oil ( 60 pieces of flat cakes)

做法：Procedure:

1、水烧开，滚水倒入面粉中，一边倒一边搅拌，揉成几乎光滑的面团（如果太烫可以稍微放凉一些再揉），用略拧干的湿布盖好放一边醒1小时左右。

2、醒好的面先揉匀，后揪成大小均等的剂子（约乒乓球大小），用手稍微压扁。

3、三个为一个单位，把其中两个小圆饼的一层涂抹上薄油，一层一层的叠起来（最上面一层不要涂），然后用擀面杖擀成圆薄饼。

4、放入平底锅用中小火煎，不需再放油，中间稍微鼓起来后即可反面，再次鼓起后即可盛起。

5、煎好后的饼沿边缘轻轻撕开，即可撕成3个荷叶薄饼。

甜面酱加工：

1、热锅热油后转小火，倒入买来的甜面酱炒香

2、加入适量白糖和水，不停搅拌均匀，待糖化匀后，即可盛起（也可以在起锅前撒些香油）

  

Tips：

1、在制作荷叶饼时，也可以两个小面饼中抹油擀成一张薄饼，这样就撕出来两张分别是一面脆一面软的荷叶饼。有人爱吃这种，有的人却喜欢吃两面都软的，那么就可以用以上的3个小面饼层叠的方式，这样中间的那层煎出来就两面都是软的。可以为不同的朋友提供不同选择。

2、做好后的荷叶饼如果不马上吃，要用湿布盖上，防止变干硬。

3、甜面酱还需要加工，是因为很多甜面酱买来的时候太浓稠，且主要是以咸味为主甜味较少，所以需要加糖加水。另外，也是用油把甜面酱炒香。

4、鸭架汤是一只烤鸭最棒的副产品。烤鸭剔下鸭肉后留下的鸭架子，放入锅中加水加少许盐慢慢熬，熬出来的汤是奶白色的，撒一点葱花再喝，非常鲜美。

Creative Tofu Cooking

 Those who are carving Tofu, here comes my very own recipe.

1. Colorful Life
Shopping list:

• Bell Pepper container
• Healthy and must-be ingredient: carrot
• The main actor: Tofu
• Supporting actors and actress: ground meat, celery

Preparation: 

• Chop all ingredients besides the container :) into small pieces. 
• Cut the pepper in the middle, empty it, wash it outside and inside.

Procedure: 

• Steam or quick boil the lovely red bell pepper . If you prefer diversity, use green, yellow and red bell peppers.
• Meanwhile, Normal cooking procedure. Heat oil, throw meat, carrots, celery and tofu in time order in the pot. Stir-fry them. Put a little water after stirring 2 mins. When all done, probably 5 mins. add salt and a little soy sauce. 
• Carefully put the mixed delicious in the container.

Ta Da~~~

I know my explanation is kind of confusing. The picture can express itself well. And if you happened to be one of my friends, come and of course with gift, you can have a taste of this playful dish.




2. Beast with kind heart
It is a produce of my flashing thoughts. Turns out to be such a delicious food.
Attention: Only serve to your family or close friends. You know, it looks so ugly. :p
Shopping List: 

• Unique flavor: Shahe Fen ( Hints for friends living in Boston, especially BU student: Super 88 Markets serves all kinds of ingredients) 
• Healthy part: Carrot
• Energy part: Meat( pork or chicken), One Egg
• Last but not least: Tofu~~

Preparation: 

• Crack the egg, gently stir it until the yoke is mixed around. 
• Chop Shahe Fen into small pieces (reference: all shahe fu dishes you used to have in a restaurant). Dress them with the mixed egg.
• Cut meat, carrots and tofu into pieces.

Procedure: Here comes the normal procedure again.

• High Heat Oil, put meat, carrots and tofu into the pot in time order.  
• Add one glass of water, turn to 7-8 degree heat, wait for the water to boil.
• Put the prepared shahe fu dressed with egg into the pot.
• Add soy sauce, salt. 

Finished again.

My cooking is always related with my mood. It is also the reason why I call them creative cookings. So, please don't try to find precise instructions in my Chefish Life sector. Great flavor always mixed with great mood. Love your food, and put your own idea inside. You know when is the right timing. Of course, I assume you are an experienced cooker. :P

Ugly Breast is Coming......

Trust Me, It does taste delicious.