nekst4.1

I n t e r v i e w w i t h H e a d o f P l a n n i n g S h e l lS p e c i a l : H e i n v a n d e n W i l d e n b e r g

S u m m e r c o n t e s tM a t h e m a t i c a l p h o t o c h a l l e n g e

T h e f u t u r e o f E c o n o m e t r i c sC h a n g e s i n t h e p r o g r a m m e

ekst

A s s e t | E c o n o m e t r i c s M a g a z i n e V o l u m e 1 7 , f o u r t h e d i t i o n , J u n e 2 0 0 9

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Ernst & Young

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For the seventeenth time in the history of the Asset | Econometrics magazine

the current editor-in-chief has the honour to introduce to you the editor-in-

chief for the upcoming year.

Rather annoying it must be for you, as a loyal reader of this great magazine, to read again and again about how much the current editor-in-chief enjoyed his work and about the fact that all beginnings have an end.

Apparently all chief editors do somehow have the feeling that they have to share this thought with you. But do not worry, I am not going to bore you with that.

Neither my intentions would be satisfied nor would your expectations of this preface be met if I would just leave it to announcing the new editor-in-chief. Therefore, as usual, I am going to tell you about the content as well.

So let us face things first though. Likely, the only reason why you are still reading is because you are curious about the new editor-in-chief. Therefore, I will spend just four sentences on the contents, including this one, before I continue with announcing the new editor-in-chief. This edition of Nekst contains several interviews, including one with Head of Planning at Shell and one with professor Nijman, who is affiliated with Netspar. Furthermore, due to great successes from last year, the photo contest is back as well. Your usual sections are of course also well represented. All right, to back the moment you have all been waiting for. Actually, without you probably noticing, you already came across the first name of the new editor-in-chief. I would like to ask you to first do as I describe and then to continue reading the next line. Form a word of all the first letters of the first words of the five paragraphs of this preface. That word makes the first name of the new editor-in-chief. Curious about his last name? Of course I am not going to give it to you just like that. Go to the website stuwww.uvt.nl/asset-econometrics/curious/ to check it out. Enjoy your summer!

Emile van Elen

Editor-in-chief

l w Ay S T H E S A M E

P R E F A C E

Nekst 4 - June 2009 �

COlOPHON

Nekst i s the quar ter ly magazine of Asset | Econometr ics ©2009

Corresp ondenceTi lburg Univers i t yRoom E 110P.O. Box 901535000 LE T i lburgTelephone: 013 466 27 47info@Asset-Econometr ics .n lwww.Asset-Econometr ics .n l

Editorial staffMarleen Balver tTess Beuk ersSer vaas van Bi lsenTim BoonenTimo DeistEmi le van E lenM ir jam Groote SchaarsbergWhitney Patt inajaBas VerheulL inda Vos

ContributionsMari je AlblasHett ie BoonmanEdwin van DamStefan DamenHarold van Hei jstDor i van HulstWi lber t K istemak erPatr ick Kui jpersWouter LudwigIr is MehlkopfRoel MehlkopfT im van der Molen KuipersHenk NordeRobber t van O ostenSander van der PloegPromotion committeeMar ta Serra-G arc iaT im Thi jssenFreder ic VermeulenBar t VerschoorDavid Vonk a

E nglish language correc tor

Nikk i Idema

Printing

Drukk er i j O ffset Ser vice

Circulation

650

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Preface

From the board

Chairmen of LOES associations

Interview Hein van den Wildenberg

Tapas, lecture and drink

Excursion Aon

Changes in the bachelor and master programme

Opinion poll

Econometric game

Active members weekend

Column Frederic Vermeiulen

Scientific article

Cycling dinner

Business interview Deloitte

The teacher: Theo Nijman

Beer cantus

Excursion Ernst & Young

Freshmen activity and drink

Nacht van Eindhoven

Symposium

Business interview Rabobank

Football tournament and drink

The passion of Kathinka de Veer

Column Roel Mehlkopf

Exchange report

Economic Business week Tilburg

Excursion Ministry of Finance

Living in Lodges

Practical report

Cooking with the committee

Committee profile

Summer contest

Puzzle

Quatsch

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Aegon

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A N O v E r v I E w

F R O M T H E B O A R D

This peaceful period will probably not last long, since there are five enthusiastic active members who cannot wait to start the summer as candidate board of Asset | Econometrics. During the summer there will be plenty of time for the candidates to familiarise themselves with the daily business of our association and learn more about everything that is known about the thirty-year history and traditions of our association.

Our association has many traditions most of which can be practised, and therefore are practised excessively, during an AMW. Therefore we were not at all surprised when a former board member drove off with the association flag hanging out of the window of his car after visiting the location of the AMW. Furthermore during this year’s AMW the tradition of Masters of Barbecue Masters was brought back to life with the installation of three new Juniors of Barbecue Masters. Unfortunately not all traditions were carried out properly. For instance, Douwe Egberts Roodmerk coffee was nowhere in sight and I have not been flipped while sleeping. Not that there were no attempts at flipping me, but I just kept waking up every time someone came near my bed. Resulting in frustrated members who waited next to my bed until I would fall asleep and finally a violent attempt to flip me while I was already awake. I hope I made up for the failing of this tradition by serving everyone bacon and eggs after going out and cleaning the toilets at the end of the weekend, one of the less favoured traditions among Asset | Econometrics chairmen.

With rounding up the last activity of the year and the introduction of the candidate board the ending of our year on the board of our association becomes definite. We are all excited about life after our board year, but it is strange to say goodbye to the world that we have created this year at the rooms of Asset | Econometrics. A world in which there is plenty of time for sports, including table football and various interesting variants of volleyball, and where strange nicknames like Allie, Buddy, Fox, Mattie and Swa are common use. A world were there is never a clean piece of dishes to be found and it is not uncommon to run into a half-eaten sandwich that looks like it has been sitting out for quite a while. A world where we laugh at Emile’s somewhat femine bag, Linda’s jokes that are so extremely bad it actually makes them funny, Mathijs’ dry sense of humour, Stefan’s loud voice when using the phone and my somewhat peculiar eating and drinking habits. And the best thing is that a while after the start of a board year, active members start to catch up on the humour created by a new board an actually join in on the bad jokes and the ridiculing of the habits and looks of board members. After almost a year the jokes are starting to get old so it is right about time for new jokes and a new world created by a new board.

On behalf of the Asset | Econometrics board,

Marije AlblasChairman Asset | Econometrics

Name: Marije Alblas

Position:Chairman

Asset | Econometrics

Board 2008-2009

Dear members, all good things come to an end. Even though the official end of our board year is still months

ahead, it certainly does not feel that way. After quite a busy period with among other things the Finance

Symposium, Active Members weekend (AMw) and this last Nekst of the year, it is getting significantly quieter

at the Asset | Econometrics room.


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PGGM

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H A I r M E N O F T H E l O E S

A S S O C I A T I O N SA N I N T R O D U C T I O N

Daniel Pollmanvectum

University of Maastricht

Kraket is a study association of and for students that study the course Econometrics and Operational Research at the Free University of Amsterdam. The small size of this study association is the thing that makes Kraket a very personal and fun association. Most students and teachers within the econometric course know each other very well. About our activities: Kraket organises several formal and informal events and activities for our students. This year’s formal activities were the study trip to New York, our Case day and different In-house days at important companies. When talking about informal activities, you must think of kart racing, making bonbons and playing football.

Vectum is the study association of the University of Maastricht. Every year, all members of Vectum are looking forward to our Members’ Weekend. Around this time of the year we will go to Kempense Meren in Belgium in mid-June. In this weekend we have much fun at the lakes, where we play some entertaining games and have a barbecue and a beer together. It will wrap up a fun year. For those who are leaving, either permanently or for their exchange semester, this weekend is a nice goodbye.

VESTING is the study association for Econometrics and Operations Research in Groningen. VESTING has approximately 250 members which makes it one of the smaller study associations for Econometrics in the Netherlands. Despite our relative small size, VESTING organises a large variety of activities, congresses, career days, socials and study trips. The previous destination of this year’s study trip was New York. Furthermore VESTING will celebrate her fourth lustrum in October 2010, which will no doubt incorporate some fabulous events!

Geert StapenseaEconometrisch Dispuut

Erasmus University rotterdam

Pieter StamKraket

Free University

Annelies langelaarvSAE

University of Amsterdam

Johan SandersvESTING

rijksuniversiteit Groningen

First of all I would like to introduce myself to you: my name is Geert Stapensea and this year I am the chairman of the Econometric Study Association in Rotterdam ( Econometrisch Dispuut ). Our most fun activity is without a doubt our International Research Project. Students do a research project in the Netherlands and will then travel to a destination outside Europe for about three weeks to have an unforgettable journey. I would like to thank the editors of this magazine for giving me the opportunity to tell something about the most fun activity of our association.

The VSAE is the study association for students Econometrics, Actuarial Sciences and Operational Research Management at the University of Amsterdam. The spectacular project of the VSAE is the Econometric Game which was organised for the first time in 1999. Over the last ten years, this game has evolved from a one day national event to a highly respected international event lasting three days. During the Econometric Game 2009 this April, 26 universities like the New York University and the University of Oxford, came to Amsterdam to strive for the highest honour by trying to solve the case concerning child mortality. The winner of this year’s Econometric Game was the Universidad Carlos III of Madrid.

In the Netherlands, besides Tilburg University, there are

five other places where the possibility exists to study

Econometrics. One might expect that the courses in

the other cities probably only differ in name when you

compare it to the courses at Tilburg University. Nekst

wondered if the same thing holds for the econometric study

associations. Therefore we asked the five chairmen of the

lOES associations in the rest of the Netherlands what kind

of activities they organise within their study association.


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� Nekst 4 - June 2009

Nekst was happily surprised to hear it would have the honour of interviewing a prominent employee

within royal Dutch Shell, who it just so happened studied econometrics at Tilburg University: Hein van den

wildenberg. Currently, Hein is located at the headquarters of royal Dutch Shell in The Hague, where he is Head

of Planning. Nekst asked him about his career and his view on Shell in the international energy market.

Arriving at the impressive building of Royal Dutch Shell, we were welcomed by an employee who showed us around the attractive ground floor of the building and offered us a drink before our interview with the busy Hein van den Wildenberg. After a pleasant chat, it was finally time to meet Hein in person.

EconometricsHein van den Wildenberg studied Econometrics and Operational Research from 1984 until 1988 at the Katholieke Universiteit van Brabant (now known as Tilburg University). Like most of us, the combination of economics and mathematics was one of the reasons Hein took a course in Econometrics. Furthermore, Hein was enthusiastic about studying in Tilburg because of the good international reputation of Tilburg University, the relatively small campus and the good career prospects that come with a course in Econometrics.

During his studies, Hein was an active member of the student association ‘Tilburgse Econometristen Vereniging’ ( TEV ), now known as Asset | Econometrics. He contributed to the book committee and also to the second conference of the ‘Wim Bogers Stichting’: ‘Information: the fourth factor of production?’ When we ask Mr van den Wildenberg about visiting the TEV drinks, he remembers them with a smile and tells us that one of his professors, Ben van der Genugten, often drank a beer along with the students. Since this professor is still teaching

one of the courses in Econometrics, Nekst wondered about the changes that have taken place over the past 25 years and also about what has stayed the same. Hein tells us that some courses, like Combinatorial Optimisation, have not changed but that the Masters have. Van den Wildenberg: “In my day there were four different courses in which you could graduate: General Econometrics, Mathematical Economics, Business Econometrics and Operations Research. I found both Business Econometrics and Operations Research very interesting.” After Hein’s internship at the department of Corporate Planning at Royal Dutch Shell, he graduated in Business Econometrics in his final year. As the current Head of Planning of Shell, he is glad he studied Econometrics: “Econometrics helps one to develop accurate analytical skills.”

CareerAlthough Hein investigated other companies after his graduation, he decided to work at the company where he took his internship: Royal Dutch Shell. Hein: “What I like about Shell is that it is a very professional and international company. The diversity in nationalities of the people working here is unique.” Mr van den Wilbenberg started as a performance analyst at Shell Pension Funds in Rijswijk. “Working at a pension funds department is a nice start after graduating. I believe it is good to focus on your first job, but as an econometrician

M P r E S S I v E I N T E r N A T I O N A l

C A r E E r I N J U S T O N E C O M P A N y

Name: Hein van den

Wildenberg

Position:Head of Planning at

Shell

I N T E R V I E W H E I N V A N D E N W I L D E N B E R G A T S H E L L

“Eco n o m e t r i c s h e l p s o n e to d e ve l o p

a c c u ra t e a n a l y t i ca l s k i l l s . ”

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Nekst 4 - June 2009 9

you should remember that there are many possibilities. Therefore, instead of saying that this was my first job, I rather see it as the start of my entire career.”

Even though the current Head of Planning worked at Shell at the beginning of his career (and still does), he left the company for a while to work at the Dutch Oil Company (Nederlands Aardolie Maatschappij) in Hoogezand-Sappemeer, a Shell-Exxon joint venture, where he worked as a project controller. In the meantime,

he followed a post-doctoral course for Register Controller at the Free University in Amsterdam.

Having gained this degree, it was time for the next great step in his career, which brought Hein to New York City, where he acted as controller of a small company that supervised the real estate asset investments of Shell Pension Funds in the United States. Hein: “The United States was a very exciting experience for me. I believe that the main difference between working in the Netherlands and in New York is the difference in mentality. In New York, the atmosphere is very service-oriented and a lot of people work to gain professional experience, whilst Dutch people have a more relaxed attitude.”

After New York, Mr van den Wildenberg returned to the Netherlands to work at a refinery in the town of Pernis. Initially he was a controller, but eventually he became the corporate

finance manager, leading a large team. Subsequent to this job, again a career opportunity in a foreign country crossed Hein’s path and led him to London. As a senior adviser in Mergers & Acquisition in London, he worked on great projects for three years. Hein: “I experienced the projects of acquisition and merging as a very important job. I thoroughly enjoyed it.” During these projects he travelled a lot to countries like Russia, US and Germany. Hein decided to stay in London to become the Finance Manager of Shell’s sales of jet fuel to airline companies. “As the

manager I was head of a total team of some hundred people. This team was a rather virtual one, as everyone was located in many different countries.”

As of September 2007, Hein has been back in the Netherlands and is working as the Head of Planning of Royal Dutch Shell at the headquarters of this company in The Hague. In contrast to his job in London, Hein does not have to travel quite so much now: “My current position is one that is less operational and more focused on key deliverables and projects.” As head of a team of four, Hein tells us that his work consists of the preparation of a long term plan for Shell, the updating of information about the company and the completion of certain projects together with his team. Van den Wildenberg: “The fact that people show interest in what the team delivers gives me much pleasure in this job.”

Shell Shell is the company where Hein van

den Wildenberg has worked for most of his career. Shell is a well-known global group of energy and petrochemical companies. It has around 102,000 employees in more than 100 countries and territories. Hein adds: “Shell is the right company for all kinds of academic studies. Although the finance sector of this company is very popular among econometricians, you will also find employees who studied philosophy or history, for example. The company supports employees learning the relevant competences. Like the diversity in nationalities, I experience

the diversity in study backgrounds as one of Shell’s great advantages.”

The main aim of Shell is to help to meet the world’s growing demand for energy in economic, environmental and socially responsible ways. Shell has different departments that all contribute to achieving this goal. One of Shell’s biggest departments is the Business department, which is itself divided into different sub-departments like Exploration & Production, Gas & Power, Oil Products, Chemicals and Oil Sands. Besides this, there are smaller sectors within Shell that lend support to the Business department. Human Resources, IT and Global Finance are three of these sectors. Hein van den Wildenberg works in Global Finance in Royal Dutch Shell. “As an econometrician, there are a lot of opportunities and possibilities within the finance sector of Shell. In business finance and corporate finance there are many roles. Also beyond planning, there are positions in Pricing

“ I n ve s t i g a t e yo u r s e l f t o f i n d a b a l a n ce

b e t w e e n h a r d a n d s o f t s k i l l s . ”

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All Options

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Nekst 4 - June 2009 ��

Strategies, Supply Chain Management and Statistical Analyses are also much related to the study Econometrics and Operational Research.”

The energy marketShell has a worldwide name because of its share in the energy market. Out of curiosity, Nekst asked the Head of Planning about the ins and outs of this market. Hein: “In the energy market the price of a good, particular oil, is very much driven by supply and demand.” Hein tells us that on the supply side of the market, factors like the weather, OPEC (Organization of the Petroleum Exporting Countries) supply and spare capacity and the stocks of oil are very important factors that influence fluctuations in the price of oil. “In order to envisage what the future might look like, Shell invents different scenarios for the coming forty years. In doing so, attention has to be paid to the so-called ‘three hard truths’.” Hein explains that first of all, the demand for energy is increasing, caused by the constant growth of the population worldwide and countries like China and India entering their more energy intensive phases. The second hard truth is that overall, in the future, the extraction of gas or oil will become more difficult. The final hard truth is that environmental stresses are increading. Whilst alternative energy sources like solar, wind and biofuels will become more important, van den Wildenberg believes that the use of fossil fuels remains important.

Not only the supply, but the demand side for this market is also important. Hein: “Energy users can help to decrease the energy demand by using it efficiently.”

Hein van den wildenbergHaving lived all over the world, Hein van den Wildenberg has finally settled in The Hague. He lives there with his wife and two young children. Hein: “My family is my greatest hobby and I am able to combine it perfectly with my work.”Our final question to Hein is whether he might have some advice for econometricians. Well prepared as Hein seems to be, he gave us a list of advices. Van den Wildenberg:

“First of all: always enjoy what you are doing. It is important to stay curious and to keep showing your interest. Besides this, I believe that if you are an econometrician, you should not underestimate yourself : that means you can do much more than the mathematical/statistical core you have learnt through your study. But putting effort into every job you have, it will pay off and give you a lot of satisfaction. What I am actually trying to say is: as you progress through your career, investigate yourself to find a balance between your hard and soft skills.” [ WP]

H e i n v a n d e n W i l d e n b e r g

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�2 Nekst 4 - June 2009

O T S O F F U N A N D N I C E P E O P l E !

T A P A S , L E C T U R E A N D D R I N K

DinnerAfter a long week of waiting it was finally Wednesday. So at seven o’clock sharp we entered Café Karel and walked into the cosy room where everyone was busy chatting and drinking their first beers. Some were already dressed up for the après-ski party at Café Babbus (more about that later). My friends and I found ourselves a nice couch in a corner, where we quickly joined the rest chatting and joking, until two beautiful waitresses came by to serve the tapas dishes. Hungry as we were, we only managed to stay seated for about thirty seconds before deciding to join the queue that would eventually lead us to the Holy Grail: tapas! When we got to the end of the queue, we discovered the paprika bread which proved to be a very tasty dish. A little bit further on we found ourselves a shrimp salad, some very tasty potatoes,

lots of spare ribs, chicken wings and some extremely delicious meatballs. Stupid as I was I took only one plate (the plates were rather small), so I very soon ended up in the queue again, which had grown substantially in the meantime. Fortunately, many members faced the same destiny, so the queuing was not that bad at all.

lecture & DrinkThe bottom of the large tapas plates became more visible by the minute and when we had finished eating everything (there was really nothing left), the time had come for us to go to Café Babbus. Here, in our local pub, the board of Asset | Econometrics announced a lecture provided by Aon that would soon follow. Three employees of Aon came to Tilburg to inform us about the credit crunch and about the implications this might have for pension funds, for example how funded rates are affected. As soon as the interesting presentation ended, Aon offered a barrel of beer to all the econometricians present. The Drinks & Activities Committee had also designed a mug, wholly in Après ski style. You were allowed to fill it for free once you had bought it. This added to the atmosphere and quickly and the smiles around me became bigger and bigger, including my own.

After much more laughing, joking, drinking, giggling, talking and shouting the lights went on and the music stopped playing. At that point I suddenly realised that it might be a good idea to go home. I could tell you a lot more about what happened on my journey home, but for the sake of my friends, it is best if I keep these stories to myself. So, this was the report of a beautiful night many more of which I hope will follow in the future! |

Name: Robbert van Oosten

Age:18

begin studies: 2008

It all started for me when I unsuspectingly followed a course and having been beaten up by a firm portion of maths, was

enjoying my break. Suddenly, two happy girls came by and told us about ‘the tapas-evening to be held next wednesday’.

Of course, we subscribed for this evening not-to-be-missed and immediately called one of our study mates that had

just left, to tell him that he had to cancel everything for this event and that he should subscribe to it as well.

S t u d e n t s e n j o y i n g t a p a s

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Nekst 4 - June 2009 �3

ExpectationsThe freshmen were to make a case about the currently much debated topic pensions, as this is one of the main pillars the division we visited, Actuarial Service, focuses on. The group was a nice mix of native and non-native students. Although the language between these two groups differs, they definitely had one thing in common: they all had no

clue what to expect, as this would be their first time to see econometrics applied in daily business. Quite a shock it must have been to see such a nice building with such a marvellous view over Rotterdam. Another thing that must have shocked them was the fact that nothing they learned in the past year was noticeable in the case Aon designed. Fortunately, the case contained a decent description about how the Dutch pension system works. The freshmen, divided into groups and put into several very nice looking rooms, received some additional explanation about the three well-known pillars and about the differences between a Defined Benefit scheme and a Defined Contribution scheme. As if this were not enough, several technical terms, such as ‘accrual rate’ and ‘salary offset’, were introduced. After the necessary habituation most groups started working hard on trying to find the answers to the somewhat tough questions. Not only because the winning group would receive much respect from the other groups, but also because the freshmen wanted to show off the extraordinary skills Tilburgian econometricians possess.

resultsThe day grew older and raindrops made place for beautiful sunbeams that fell into the Rotterdam office. Meanwhile the students whipped of their sweat that appeared because of the hard working so they could finish the case which they were to present in front of other groups. Several groups

came up with some original answers. Other groups with less original yet empirically well funded answers. All together most groups did a fine job and hence everyone could be proud of themselves for performing so well. Once the presentations were finished the group gathered once more in the main room so Aon could thank the students and Asset | Econometrics could thank Aon for their hospitality.

Aon must have thought that the students were rather tired after solving the case, as they arranged for a fine drink along with some snacks to regain strength. Also, in case the students would get tired in the future again, Aon handed over a sports drinking bottle to all students. All in all it was a successful day for all parties: students’ expectations were met, Aon got to present itself the way they wanted to and hence study association Asset | Econometrics is satisfied. [EvE]

On � May a group of 36 freshmen, accompanied by two board members and two student assistants, took off to

rotterdam to introduce the freshmen to a company where they might end up working after the completion of

their studies. The company to be visited was Aon Consulting, a firm focusing on risk management, employee

benefits and insurance.

E C O N O M E T r I C S I N T H E F U T U r E

E x C U R S I O N A O N

F r e s h m e n w o r k i n g o n t h e A o n c a s e

“ Q u i t e a s h o c k i t m u s t h a ve b e e n t o s e e s u c h a n i ce b u i l d i n g

w i t h s u c h a m a r ve l l o u s v i e w ove r R o t t e r d a m . ”

nekst4.indd 13 12-6-2009 11:59:47


Many of you may have received some signals that changes are going to be carried through in the bachelor

and master programmes of Econometrics & Or. In this article we will explain why the programmes are going

to be changed, which changes are going to be carried through and how you, as a student, may be affected by

these changes.

why changing the programme?A number of reasons have led us to reconsider our programmes. First of all the Faculty of Economics and Business Administration (FEB) decided to change its portfolio of master programmes as of September 2010. For us this was a good opportunity to let this happen simultaneously with changes that we already had in mind for our master programmes: considerably changing the contents of the ORMS master, making the MEEM master more appealing and creating a possibility for bachelor students Econometrics & OR to follow a master track in Quantitative Marketing. When changing the contents of the master programmes however, it is inevitable that the contents of many (preparing) bachelor courses have to be adjusted as well.

Secondly, during the last decade many changes have been carried through in high school (think for example of the introduction of the ‘studiehuis’ and the changes in contents and contact hours of the high school mathematics courses). These changes definitely did not result in an easier transition from high school to university, at least not for the more quantitative programmes like Econometrics & OR. Therefore adjustments have to be made in the first year of the bachelor programme in order to smoothen this transition.

Finally we would like to stress that the currently taught programmes have been introduced in the academic year 2000-2001, so nine years ago. Since then, the programme has changed hardly, even not when the bachelor-master structure was introduced in 2002. So, it is time for a thorough checkup.

which changes will be carried through?The sequence of courses Mathematical Analysis 1, 2 and 3 (6+3+6 ECTS) has been reordered as Proofs and Techniques, Mathematical Analysis 1 and 2 (3+6+6 ECTS). In Proofs and Techniques students should get a first training in abstract reasoning. Moreover, this course is meant to smoothen the transition from high school to university. Subjects are, amongst others: elementary proof techniques, the principle of induction, geometry, set theory, and algebraic skills. Mathematical Analysis 1 will focus on functions of one variable, Mathematical Analysis 2 on functions of more variables.

The complete track of operations research courses (from the ‘old’ first year course Modelling in Business Administration until the ORMS master courses) is going to be reorganised.

There will be more recognisable tracks in econometrics (Introduction Econometrics, Econometrics 1 and 2) and mathematical economics (Micro-economics, Introduction Mathematical Economics, Mathematical Economics and Game Theory) in the bachelor programme with a clear follow-up in the master programme MEEM. Students in MEEM should be able to follow either a track in econometrics or a track in mathematical economics. Courses with a hybrid setup like Orientation Econometrics (half econometrics, half finance) and Orientation MEEM (half econometrics and half mathematical economics) should no longer be offered.

The course Accounting disappears. Instead, in the third year there will be room for specialised

H E F U T U r E O F E C O N O M E T r I C S

& O r A T T I l b U r G U N I v E r S I T yC H A N G E S I N T H E B A C H E L O R A N D M A S T E R P R O G R A M M E S

Name: Henk Norde

Position:Academic Director

BSc Econometrics &

OR and MSc MEEM

Name: Edwin van Dam

Position: Academic Director

MSc’s ORMS and QFAS

nekst4.indd 14 12-6-2009 11:59:48


electives such as accounting and marketing.

In the third year of the bachelor programme there is a completely new course Object Oriented Programming and Databases. Dealing with databases (important amongst others for students in operations research and econometrics) and programming in C (important for students in finance) are essential ingredients of this course.

The different tracks in the master programmes (econometrics, mathematical economics, operations research, quantitative finance and actuarial science, quantitative

marketing) will become more recognisable and overlap between different tracks will be reduced to a minimum.

In the margin you will find the details of the new bachelor programme Econometrics & OR.

what do I, as a student, notice from these changes?The new bachelor programme starts in September 2009. That is, the first year of the new programme will be offered for the first time in the academic year 2009-2010, the second year of the new programme for the first time in 2010-2011 and the third year of the new

programme for the first time in 2011-2012. As a consequence, the first year of the old programme will no longer be offered, the second year of the old programme will be offered for the last time in 2009-2010 and the third year of the old programme for the last time in 2010-2011. For all courses which cease to exist in the new programme there will be two extra exams. Soon, a letter will be sent to all students with the changes in detail in the first year of the programme. Next fall a second information letter will be sent around with the changes in detail in the second and third year of the bachelor programme and with the changes in the master programme. |

year � (as of September 2009) year 2 (as of September 20�0) year 3 (as of September 20��)

Unit 1Linear Algebra (6 ECTS)Macroeconomics for EOR (6 ECTS)Proofs and Techniques (3 ECTS)

Unit 2Mathematical Analysis 1 (6 ECTS)Linear Optimization (6 ECTS)IT skills (3 ECTS)

Unit 3Mathematical Analysis 2 (6 ECTS)Microeconomics for EOR (6 ECTS)Introduction to Probability Theory (3 ECTS)

Unit 4Introduction Econometrics (6 ECTS)Probability and Statistics (6 ECTS)Introduction Finance (3 ECTS)

Semester 1Advanced Linear Algebra (6 ECTS)Introduction Mathematical Finance and Insurance (6 ECTS)Computer Programming for EOR (6 ECTS)Statistics (6 ECTS)Stochastic Operations Research Models (6 ECTS)

Semester 2Differentiation and Integration Theory (6 ECTS)Econometrics 1 (6 ECTS)Introduction Mathematical Economics (6 ECTS)Modeling in Practice (6 ECTS)Philosophy of Economics (6 ECTS)

Semester 1Combinatorial Optimization (6 ECTS)Econometrics 2 (6 ECTS)Game Theory (6 ECTS)Object Oriented Programming and Databases (6 ECTS)Quantitative Finance (6 ECTS)Risk Theory (6 ECTS)Social Philosophy (6 ECTS)

Semester 2Asset Liability Management (6 ECTS)Bachelor Thesis (12 ECTS)Inventory and Production Management (6 ECTS)Life Insurance (6 ECTS)Local Search Methods (6 ECTS)Mathematical Economics (6 ECTS)

N e w d i v i s i o n o f t h e c o u r s e s i n t h e b a c h e l o r p r o g r a m m e

nekst4.indd 15 12-6-2009 11:59:48

Aon

nekst4.indd 16 12-6-2009 11:59:48


Annick Traa [Master student]Definitely, the educational system in the Netherlands is changing constantly and the bachelor Econometrics & OR should change too in order to allow for a smooth transition from secondary school to university. However, one should not forget to safeguard the quality of Econometrics graduates at the end of the programme. Therefore I regret that part of the fundamental courses of Mathematical Analysis has been taken out. However, I have always considered the Accounting course to have little connection to the rest of Econometrics and I am sure this course will not be missed in the curriculum. Altogether I think the changes were inevitable because of the gap between secondary school and university level, but I would rather have seen the level at secondary school improved, than the entrance level of the bachelor programme lowered to close this gap.

Iris Mehlkopf [Fourth year student]I think it is, yes. Everyone knows that the knowledge students have of mathematics has decreased over the last years. This makes the transition from secondary school to university harder. Of course, it would be better to improve the level of mathematics at secondary school. However, since this is not likely to happen, a change in the bachelor programme would be the second best option.

Another motivation to change the bachelor programme might be changes in the master programme. I am less happy with these changes. The, in my opinion, unpopular master course ‘Mathematical Economics’ and ‘Econometrics Methods’ (MEEM) will be split into two parts. By doing this, the department hopes this side of Econometrics will gain in popularity, but I strongly doubt this. I think students are simply more interested in other fields, like Finance and Operational Research.

Paul Peters [Second year student]For most of the new students, there will not be a problem with the new set-up for the bachelor programme, because they have no knowledge about the previous contents of the study. Therefore the only thing that matters is whether there will be an improvement in the level of education. Many professors have thought about such adjustments and the main reason for the adjustments in the bachelor phase is because of the coming changes in the master phase. In the end, it seems to be a good idea to ‘pimp’ the bachelor and master phase. Nevertheless, it is still very important that all these changes, including the internationalisation of the entire university, coincide with extra attention for the students. Students have to adapt themselves to this new adjustment as well, especially those who are already studying Econometrics & Operations Research. So as long as students are well informed about all the changes and there are sufficient means to help them, the adjustment of the bachelor phase will be an improvement to the study.

robbert van Oosten [Freshman]Because the bachelor is between secondary school and the master, the bachelor should be adapted to both of them. Pupils coming from secondary school must be able to take the bachelor with their knowledge and on the other hand, students who have gained their bachelor have to be ready to continue with the master. So if the level of what pupils learn at high school changes, the bachelor should be adapted as well. This happened in 1998 with the introduction of the ‘Studiehuis’ and will happen again in a year’s time with the new mathematical courses ‘Wiskunde C’ and ‘Wiskunde D’. So if you look at it that way, the change is too late and at the same time too early. With the changes of the master programmes after Econometrics in the following years, however, the adaption of the bachelor is just in time.|

Some of you might know that changes in the bachelor and master programmes are going to be carried

through. because of the changes in the master, some bachelor courses had to be changed as well. Also some

adjustments have to be made to ensure a smooth transition from secondary school to the first year of the

bachelor programme. So what do students enrolled in Econometrics think of these changes? Is it about time

the bachelor programme was changed?

S H O U l D T H E E C O N O M E T r I C S

P r O G r A M M E b E C H A N G E D ?O P I N I O N P O L L

nekst4.indd 17 12-6-2009 11:59:48

�� Nekst 4 - June 2009

you may not know it, but there is a thing called the Econometric Game. It has been around for eleven years now,

starting as a small competition of teams from six Dutch universities in �999 and becoming an international

event attended by 2� teams from three continents in April 2009.

The Econometric Game is a competition for graduate students coming from all over the world. Every team consists of two PhD students and three students in final phases of their master studies, which in the case of Tilburg University comes down to either second year Mphil students or final year students of the Econometrics programme. This year, we, Luc Bissonnette and David Vonka, both from the Econometrics Department, joined as PhD’s and Georgios Petropoulos, Simone Sadzeviciute and Janos Zsiros (all from the Mphil Economics programme) were our team’s master students. As you can guess from the names, our team included no Dutch students, which can be interpreted as either very cool (we are so international here in Tilburg) or very sad (the Dutch students do not care).

The Econometric Game works as follows. There is one introductory day. The second day all teams work on case number one for nine hours. All teams deliver a paper. The jury reads the papers and selects ten teams for the finals. On the third day, the finalists compete on case number two. From these, the top three teams are selected and announced.

All the teams stay in hotels near the Amsterdam ZOO, where the competition takes place. On the first morning, participants assemble in the building of the University of Amsterdam to see the presentations of the case-makers. This year’s case was mostly written under the supervision of professor Jan Kiviet, from the University of Amsterdam. These first presentations are not very detailed; they give a fair picture of the cases, but no precise formulation of the question and no description of the datasets that will be used on the following days. This lack of information and the lack of a decent Internet connection made it hard to really start working. We had to

limit ourselves to the few papers suggested by the case-makers.

The real work began on day two. The first case dealt with child mortality in India. We were asked to analyse the link between fertility of a family and the number of children the family has lost. The case-makers were interested in causal relationships, which made the case rather challenging. We came up with a solution, which we would not hesitate to call original. We still argue, whether it was the completely stupid kind of original, or the genius kind of original. Both our positions on this issue changed a few times, but original it was. Anyway, the work ended at 18.00 hours. Thereafter, a rich social programme begun, including a huge dinner, talking to all the people and rather impressive amount of drinks. At 22.00 hours, the jury met us in a bar and announced the ten finalists, which included our team. To be completely honest, after a day of nervous preparation and another nine hours of frenetic work on the first case, we were not unambiguously happy about becoming a finalist. A free day in Amsterdam sounded more like a reward than another case. Still, it is not bad to beat teams from places like London School of Economics, New York University or the University of Oxford.

It is interesting to mention that the list of finalists was not a list of expected names only. It included among others two Eastern European universities ( Warsaw and Budapest) and a business school from Norway.

The third day’s case brought the finalists to Brazil, where the effects of a poverty programme had to be analysed using panel data on Brazilian regions and policy advice had to be given. In contrast to the first case, the case-makers had a concrete solution method in mind. Teams without reasonable

A S E S F O r C l E v E r P E O P l E

Name: David Vonka

Position:PhD student

E C O N O M E T R I C G A M E 2 0 0 9

nekst4.indd 18 12-6-2009 11:59:49


knowledge of dynamic panel data were in trouble. The time-span was an hour shorter and included not only writing a paper, but also preparing a presentation. When finished, all the teams assembled at the university again to hear the presentations of all teams. Luc, who was unwillingly volunteered by the rest of us to present the case, had to go just after an overenthusiastic presenter from University of Aarhus. He still managed to give a talk decent enough to earn the comment “You are a business student, aren’t you?” from fellow participants. It is unclear if it was meant as a way to decry his econometric knowledge or to praise his salesman’s skills.

Thereafter, the jury went reading and the participants went partying. The winners (Carlos III, Madrid) were again announced in a bar. The top three included Maastricht on second place and Cambridge on third place. Our team did not make it, but if we can guess from all the presentations we saw, we placed ourselves around the

median of the finalist group. We had a beer, went back to Tilburg and spent a day sleeping it all off.

Tilburg University has been participating in this game for many years now and certainly, there will be a team next year. So let us devote the rest of our 1200 words to a few observations and maybe some advice.

First of all, all potential participants should know that the participation does not cost the students anything. The department pays one part of the bill and the sponsors (ING this year) pay the rest.

Secondly, the game requires skill and speed from the participants. The defining feature of the game is the time limit. You need to be able to come up with a solution strategy, carry it out and write your solution up nicely in approximately eight hours. Good orientation in standard econometric methods matters. You can use any

books, but no-one in the team is aware of an econometric problem, the team is in trouble. Mastering an econometric software package is a huge plus. It should be Stata or Eviews, the case-makers tend to make sure that the cases are solvable by any of these two packages. There is not much time for Matlab kind of programming. At least one of the members of the team should be very confident in English.

It is surprisingly difficult to distribute the work among the five team members. The future teams should definitely spend more time preparing and working as a team than we did. We believe it is impossible to succeed if all team member work together on one aspect of the case. In a perfect world, someone does the summary statistics, someone writes introductions, someone solves the core problem, all happening simultaneously. Be careful when selecting the team leader. Too late we found out than our designate leader David is not able to supervise others while working himself.

All teams face an interesting dilemma about spending the “free time”. There is preparation for the next day and there is the great opportunity to meet people from all over the world. The 2009 teams displayed a wealth of strategies, ranging from some of the British teams, which did not leave the hotel room, to some of the American teams, which did not leave the pub. We were trying to follow the golden middle way. Still, looking back, it would have improved our performance to prepare more in the evenings and drink less. To conclude, the Econometric Game is exhausting, but definitely fun. Please consider applying for team membership next year. It is not bad for your CV either. Last but not least, based on what we saw in April, a top three placement is not out of reach for a well-prepared team from Tilburg University. |

T h e r e p r e s e n t a t i v e s o f T i l b u r g U n i v e r s i t y

nekst4.indd 19 12-6-2009 11:59:55

20 Nekst 4 - June 2009

It must have been a strange sight for people around Tilburg Central Station on the afternoon of Friday 24 April:

a group of about thirty active members, dressed in various bright colours and carrying big bags, gathered in

front of this station. Enthusiasm radiated from their faces. The air was crystal clear, the temperature had risen

to 20°C. It was the start of the Active Members weekend (AMw), the one-and-only, should-have-experienced-

so-try-before-you-die weekend.

This year’s AMW was different from previous ones: this edition was in fact a huge competition between teams (referred to as the Asset | Econometric games). Those teams could earn points with activities during the weekend. The ultimate goal was, of course, to win the Asset | Econometric games. Right from the start of the weekend, one could feel the tension of competition. There were five teams: Purple, Green, Orange, Red, and Blue. Most people would say that these are the names of colours, but team Blue gave their own interpretation to their name: Best Linear Unbiased Estimator. Ok, we are still econometricians…and please be so kind as not to ask me what it means! Yours truly was a member of the Orange team.

Nobody, except for the organising committee, had a clue where we were going. After we had received a picnic lunch, we headed for a coach going to Oirschot, a little village about twenty kilometres to the south-east of the fantastic city of Tilburg. The first activity was a picture trail in Oirschot. The teams had to walk a course following places that were on the pictures. During the walk questions had to be answered. Some questions were trivial in such a way that they could best be considered as bonus points, but to find out the answer for some others, we really had to expand our common knowledge and get some help from the locals. Fortunately, the locals were so kind as to help us to answer some questions, although we sometimes had trouble understanding their dialect. More importantly, they were so kind as not to help the other groups.

There were several activities on the way. One of those activities was rope pulling and our team was able, for the first time, to prove that we really were as strong as orange lions. We had to take up arms against team Purple. Maybe it was the heat, maybe it was the tension of the battle or maybe it was the fact that the other team could brace their selves against the curb? Unfortunately, our team was beaten. No worries, there were a lot of activities ahead of us.

After the picture trail, we walked to the beautiful accommodation the AMW-committee had picked for us: Kampeerboerderij Van Pinksteren. For some, this location was well-known, because the KOALA (Kansloos Oud Actief Leden Activiteit) also took place here. For others, the location should have been familiar, but they couldn’t quite remember whether they had been there or not. Our group stayed in accommodation ‘Het Fluitenkruid’. There were about 50 beds divided among two huge bedrooms. The distribution of active members among the two rooms was rather skewed (the committee took one of the huge rooms for themselves). But that was not really a problem, because everyone knew that the beds were only for decoration.

One of the many traditions of the AMW is eating pasta on Friday evening. Of course, one obeyed this tradition. With well-filled stomachs, we went back on the road for the next activity. This activity was ‘farmer’s golf ’, a rather strange modification to normal golf. First of all, you don’t play with a golf ball, but with a little street soccer ball. Secondly, you have to hit the ball with a stick with a clog attached to it. How on earth was this invented? And finally, this game is not played on fresh-cut grass. In fact, the grass came up to our ankles! A very

H I N G S I D O r E M E M b E r A b O U T

T H E A M w

Name: Harold van Heijst

Age:20

begin studies: 2007

A C T I V E M E M B E R S W E E K E N D

“J a a z e i t i e ! ”

nekst4.indd 20 12-6-2009 11:59:55

Nekst 4 - June 2009 2�

friendly man explained the rules of the game to us: “Try to hit the ball into the hole with as few strokes as possible. And do not aim at the cows!” And by that, our affinity with cows was once again tested. We were divided into groups and played this funny game for about two hours.

When we arrived back at the accommodation, some other active members joined the group. It was about to become a wonderful evening: VVV-Venlo had just become champion of the Jupiler League. Since Venlo is the town that supplies most Econometricians (as shown in the Almanak, page 127), this

was worth a celebration. Paul, dressed-up in a suit, was the presenter of the beer cantus. It goes without saying that a lot of Brabant songs passed the review. The traditional “1,2,3, zaufen, lass das Bier mal laufen!”, was extended with VVV is champion, PSV next year, and finally disapproving growls from the Ajax fans. After a couple of songs (and beers), people were no longer able to stand still, result: the conga. After the cantus, the conviviality continued. Kingzen (another famous tradition) and table football were played. In the early hours everyone found their way to their beds.

Only a few minutes later we were kindly awoken by the committee. Every team had tasks and our task was to prepare a delicious breakfast. No sooner said than done! By ten o’clock we were outside in our sportswear, it was another beautiful day. In several sports, teams could, once again, compete against each other. The war between the teams now really let loose. Like a lion sneaks up on a grazing gazelle and then strikes it down with a single blow, my Orange team effortlessly defeated the opposing team in Dodge ball. It didn’t show that we had hardly slept. The soccer games between the teams were played equally fanatically. The Blue team savagely - yet precisely

A c t i v e m e m b e r s f e e l i n g a t h o m e o n t h e p l a y g r o u n d

nekst4.indd 21 12-6-2009 11:59:58

Watson Wyatt

nekst4.indd 22 12-6-2009 11:59:58


- took down some of the best players, like Ajax slaying the Trojans, ensuring themselves two victories. Here and there a massive wham was dealt in order to capture the ball. These were the Asset | Econometric games in optima forma! Of course, we were all sportsmen, contrary to Zinedine Zidane and hence, after the games we all shook hands. The organising committee arranged a huge ‘buikschuifbaan’ (freely, though likely wrongly but hopefully funnily translated as ‘Belly Slide Job’) of about 25 metres. We had great fun on this slide. Homage to Pascal who even made it to the end of the slide!

In the afternoon, we took the bus to Eindhoven. We were going to swim, or just relax at the swimming pool, Ir Ottenbad. Some of us seized the opportunity to take a rest in the warm water of the Jacuzzi, having a good chat. Others still had enough energy to fight a water battle in order to gain monopoly over a floating mat. Once one had captured such a floating unit for himself, one tried to stand on it, shouting: “Ja zeit ie!”.

On our way back to the accommodation, we sat in a camera-equipped bus. But the cameras on the bus couldn’t

stop us from misbehaving. At every roundabout we yelled “rondje, rondje!” (round, round!). The friendly bus driver eventually buckled under the tumult. The locals in the bus looked somewhat surprised when the bus, amid our cheers, drove around the roundabout twice.

In the early evening, it was time for the barbecue. Everyone, except the vegetarians, enjoyed the well-grilled meat. Whitney, Emy and Pascal were granted the honorary title: Juneor of Barbecue Masters.

Before the AMW, every group was given the task to write a love letter for Stèphanie, create a banner for Rik van Beers, bring a sack of ice for Paul Peters and boxer shorts for Emile. Now it was the time to hand those ‘presents’ over to the organisers of the weekend, as they were to judge them. The love letters varied from epic poetry to somewhat more easily understandable ‘poetry’. The banners for Rik were all very praising of his divine character and the Blue group had even brought a sack of ‘Raketjes’ for Paul. The boxer shorts for Emile were very confusing, since they estimated his humongous trouser thingy with a rather big deviation. Of

course, Emile decided that the winning boxer shorts were the ones with a sock attached to the front.

In the evening, we went to Eindhoven again by bus. At Laser Quest Eindhoven we played an exciting laser game for about twenty minutes. Perspiring, we came out of the battle zone, curious about our scores. We were all ready for a refreshing drink. In Stratumseind we went to Café Santé. Little by little this Café was turned into a carrousel of ‘conga dancing’ econometricians.

Having all been brought back home by taxis, the committee had ensured that we could enjoy a spattered, brown or white egg. While waiting for everyone else to go to bed, some members tried to empty the fridge, which they failed to do. Admiration for the stock-managing skills of the committee. Finally, they tried to flip over the mattresses of some members, who did seem to be asleep. It’s a shame that their vision was clouded and they didn’t very much succeed in honouring this tradition, to start with. Apparently, they were also of this opinion and so they snuck up to the bedroom a second time, which resulted in a successful, 180 degrees flip over of Rik.

The next morning, the moment that everyone had been waiting for, had finally arrived: the presentation of the winner of the Asset | Econometrics games. Team Green managed to collect the most points during the weekend, therefore this team was the winner. Eternal glory awaits Elske, Nicole, Dennis, Stefan and Wilbert, at least until next year.Lars van Heijst got himself the so-called ‘discouraging prize’, and he was content with it. After some final cleaning, we headed back to Tilburg.

I want to seize the opportunity to thank the AMW committee, on behalf of all the active members, for a fantastic weekend! Well done! |R i k v a n B e e r s h a s b e e n f l i p p e d o v e r

nekst4.indd 23 12-6-2009 12:00:03


On 4 July, the Tour de France, the yearly high mass of cycling, will kick off in Monaco. The three weeks that

follow will, without any doubt, couple the beautiful scenery of waving corn fields to knife-edge heroic duels

in the Alps or the Pyrenees. Old saints will be celebrated while new martyrs will enter the scene.

Like in many religions, though, there will also be beings who bedevil and put to the test the righteous ones. Indeed, the list of fallen angels is all too long: Jan Ullrich, Floyd Landis, Ivan Basso, Michael Rasmussen and Alexandre Vinokourov are only a few top favourites who took drugs and were caught in the more recent editions of la Grande Boucle. Some people claim that cycling is simply too

heavy to be practised without any drugs. I am not sure about this. Therefore, I would like to propose an alternative economics-based explanation for the massive number of drug cheats in cycling (and other sports as well of course) and come up with some (quite obvious) policy advice that may help defeating the drug cheats that spoil the most beautiful sport on earth.

Doping in cycling can be considered as a game that can be analysed by means of game theory. Cyclists are the players in the

game who behave strategically while taking account of the other players’ actions. They take strategic decisions that should lead to the, for them, best possible outcome of the game.

Let us assume that there are only two cyclists in the peloton. Although the following simple example can be easily generalised in

a number of directions, it suffices to illustrate the mechanism behind drug taking. The table below summarises all the information that we need to analyse this game. The table, called a pay-off matrix, gives for each player the pay-offs for all the possible strategies of the different players. Assume that the pay-offs are measured in terms of the number of races won in a career. Four different situations can be distinguished. In the first situation, both Cyclist A and Cyclist B, who are equally talented, are taking drugs. The outcome in this situation is that both cyclists were 10 times

T ’ S E C O N O M I C S , S T U P I D ! ”

Name: Frederic Vermeulen

Position:Associate professor

C O L U M N

Cyclist B

Takes drugs Does not take drugs

Cyclist A Takes drugs (Cyclist A: 10, Cyclist B:10) (Cyclist A: 13, Cyclist B:7)

Does not take drugs (Cyclist A: 7, Cyclist B:13) (Cyclist A: 12, Cyclist B:12)

“Doping in cycling can be considered as a game

that can be analysed by means of game theory.”

nekst4.indd 24 12-6-2009 12:00:03


victorious in their respective careers. A second situation is characterised by the fact that both cyclists compete against each without taking any doping products. It is well possible that both cyclists are then able to obtain more victories than in the situation where both take drugs; for example because not taking harmful products prolongs their careers. In the final two situations, one of the cyclists cheats while the other one stays clean. The sinner is rewarded with 13 victories, while the fair one only obtains 7 victories.

Now it is easily checked that the situation where both cyclists take drugs is the solution of the game. This solution is a Nash equilibrium. In the example, taking drugs is a dominant strategy for both cyclists: irrespective

of what the other cyclist does, it is more profitable to cheat. If Cyclist B takes drugs, then it is in Cyclist’s A interest to take drugs as well: this obtains 10 victories compared to only 7 by staying clean. Also in the situation where Cyclist B is clean, it pays off to take drugs for Cyclist A. A similar analysis can be made for Cyclist B. We can therefore expect that the situation where both cyclists take drugs is the solution of the game. Importantly, both cyclists would be better off by cooperating: both would obtain 12 victories compared to the 10 in the Nash equilibrium. In other words, taking drugs is not a Pareto efficient situation.

What can we now learn from game theory? Well, if we would generalise

the above simplified game with a probability of being caught while taking drugs and an associated penalty, then it would be easily seen that increasing the fine or the probability of being caught has the potential of changing the current equilibrium where all cyclists take drugs to an alternative doping-free equilibrium. Based on such an analysis, the new policy instruments of unannounced drug controls and the biological passport seem quite effective in the battle against drugs since they increase the probability of catching the cheaters. If these devices would be combined with more adequate penalties, and here game theory may come into play, then it may even be possible to enjoy the Tour again with a childish naivite in the near future. |

T o u r d e F r a n c e

nekst4.indd 25 12-6-2009 12:00:04


As buyers or sellers in different markets, we negotiate prices and quantities. In the process, we often communicate

and share information with each other. Hence the question arises; does our communication lead to more efficient

outcomes? Although we might intuitively expect so, under the standard theoretical framework in economics this

assumption does not necessarily hold. Even if buyers have no reason to mislead sellers, the latter might believe

they do and hence ignore their messages. However recent research suggests that individuals prefer to be

truthful and messages are often believed; thus communication can have an important impact on outcomes.

Communication is present in many of our economic interactions. Despite its relevance, it is often difficult to predict the effect of communication on outcomes. Since communication is costless, discussions about intentions or an individual’s private information are not necessarily credible. However, recent research shows that individuals often exhibit an aversion to lying and are willing to forgo monetary payoffs for true statements. These

findings shed a new light on the role of communication in economic interactions and support its potential in determining economic outcomes.

In this article, we first discuss a strand of the literature, which focuses on individual’s preferences for truth-telling. Then we argue how these preferences can, under some circumstances, lead to more precise predictions regarding the role of communication in economic interactions.

The literature on communication is quite wide. On the one hand, it studies communication in situations of symmetric information, in which

y I N G O r T r U T H - T E l l I N G : w H y

D O E S I T M A T T E r I N E C O N O M I C S ?

Name: Marta Serra-Garcia

Position:PhD student

Current location: New York City

S C I E N T I F I C A R T I C L E

individuals communicate their intended choices before a game (for example, in coordination games and social dilemmas). On the other hand, it examines the transmission of private information between informed and uninformed agents. We will concentrate on the latter strand of the literature and work through an example. Imagine you want to buy a second-hand car. You go to a seller who has two apparently identical cars for sale. Suppose one car is labelled A

while the other is labelled B. You know one car is of good quality and worth 100 to you, while the other is of bad quality and worth 0 to you. Unfortunately, you cannot tell which car is

what quality, but the seller does know. Suppose the price of both cars is 50 and the seller earns a fixed wage of 50. Whatever car he sells you, he will earn 50 but you will only earn 50 if it is thehigh-quality car and lose 50 otherwise. Table 1 summarises the payoffs in this game, which we will call game 1.

Imagine the seller tells you that ‘Car A is of better quality’. Would you believe him? He has no incentive to lie, since he earns the same amount

“ S i n ce co m m u n i ca t i o n i s co s t l e s s, d i s c u s s i o n s

a b o u t i n t e n t i o n s a r e n o t n e ce s s a r i l y c r e d i b l e. ”

T a b l e 1 : P a y o f f s i n g a m e 1

Payoff to seller Payoff to buyer

High-quality car sold 50 50

Low-quality car sold 50 -50

nekst4.indd 26 12-6-2009 12:00:06


of money whatever car he sells. Thus, you have reasons to believe him and buy car A. Now, imagine someone told you the seller is a compulsive liar and enjoys misleading buyers. Would you believe him now? If this is the case, you might doubt his statement and decide to ignore it. If you do, you will buy the ‘good’ car with a probability of a half, while with the same probability, you might end up with the ‘bad’ car. Your expected payoff is then 0. If you are slightly risk averse, you might refuse to buy any car. Thus, in this case, the seller’s statements become irrelevant to your decision and also irrelevant in terms of monetary payoffs for him.

Hence this simple example shows that we often do not have a precise prediction about the role of communication in economic interactions. In the first case, the high-quality car is sold and both seller and buyer are better off. In the second case, the transaction might never take place and efficiency gains might be forgone. Furthermore both outcomes are possible within game 1.

Things can get worse, if we slightly modify game 1. Suppose that the seller’s wage is equal to the profit made by selling the car. More precisely, the low-quality car is worth 0 to him while the high-quality one is worth 30. By selling the low-quality car, the seller earns 50, while selling the high-quality one earns him 20. Table 2 shows the payoffs in this situation, called game 2. If the seller only cares about his own payoffs, what will he say? He will probably try to mislead you into buying the low-quality car.

Given these incentives, you have no reason to believe his statements. Your expected payoff is then 0 and you might end up not buying a car at all. Thus, communication in game 2 is irrelevant to the transaction’s outcome.

However, what happens if we assume individuals have a preference for truth telling? Well, under this assumption you will believe the seller and buy the high-quality car in game 1. In game 2, you might also be willing to believe the seller, if his aversion to lying is stronger than the 30 monetary units he forgoes by telling the truth. Thus, individuals’ aversion to lying can help us make sharper predictions about individuals’ communication and its impact on outcomes.

Recent studies have shown that individuals often exhibit an aversion

to lying. Gneezy (2005) conducted an experimental study among university students in Israel. He found that many students are willing to forgo monetary payoffs and tell the truth. Interestingly, he also found that as the gains for the informed player (the seller, in our example) for lying increase, individuals lie more often. On the contrary, when the harm from lying to the uninformed player increases, individuals lie significantly less often. Other studies in the literature, as Sánchez-Pagés and Vorsatz (2007), have found further evidence of lying aversion in similar situations.

Interestingly, this experimental evidence has also been incorporated into theoretical models of communication. Demichelis and Weibull (2008) have developed a model in which they assume that individuals have lexicographic preferences for truth-telling. That is, if a payoff can be achieved via a truthful and an untruthful message, the former is preferred. They study communication before a specific class of coordination games, in which two players want to coordinate which decision to make. Generally speaking, they then show that, under such preferences, the only

Payoff to seller Payoff to buyer

High-quality car sold 20 50

Low-quality car sold 50 -50

T a b l e 2 : P a y o f f s i n g a m e 2

D i d y o u m a k e a g o o d d e a l ?

nekst4.indd 27 12-6-2009 12:00:06

APG

nekst4.indd 28 12-6-2009 12:00:06


evolutionarily stable equilibrium in these games is Pareto-efficient.

This literature is very recent and many questions still remain unanswered. One of the most interesting questions consists of investigating the strength of individuals’ lying aversion. As we have seen in game 2, lying aversion can lead the seller to be truthful and the buyer to buy the car, only if the costs of lying are ‘high enough’. Further experimental studies could investigate the strength of lying aversion in different economic interactions, allowing us to have a better understanding of when it is relevant. This could lead to a better prediction power regarding the impact of communication in economic interactions.

Overall, communication might not be irrelevant to economic outcomes and thus efficiency, if we consider individuals’ preferences for truth-telling. However, doing so poses further challenges. How should we model lying aversion? Could it be simply modelled as a utility cost, which individuals suffer when they

do not tell the truth? This cost could also be dependent on the monetary payoffs obtained by lying, if the lie is thought to be trustworthy. To find the answers to these questions, both empirical evidence, mainly stemming

from experimental research and theoretical modelling will be needed. Furthermore it is the dialogue between them that will probably result in the most relevant answers. |

references

Gneezy, U. (2005). Deception: The Role of Consequences, American Economic Review, 95(1), 384-394.

Sánchez-Pagés, S. and Vorsatz, M. (2007). An experimental study of truth-telling in sender-receiver games, Games and Economic Behavior, 61,

86-112.

Demichelis, S. and Weibull, J. W. (2008). Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution, American

Economic Review, 98(4), 1292-1311.

W o u l d y o u b u y t h i s c a r ?

“Ave r s i o n t o l y i n g h e l p s u s t o m a ke s h a r p e r p r e d i c t i o n s. ”

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Deloitte

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b I K E S A N D F O O D

C Y C L I N G D I N N E R

We were to prepare a dessert. Because it was such nice weather, we decided to make a white chocolate strawberry tiramisu. After doing some shopping for all the ingredients we tried to concoct it. Because neither of us had ever made it before, we just had an attempt at it and were quite surprised that it tasted so good. Our first course was at Emile van Elen’s place. The sun was shining, so the first thing we did after we arrived was drink a glass of flat TEV wine on the balcony. Emile and Yvonne Blom served a delicious Carpaccio with salad and a dressing. This was of course a very good start to the cycling dinner! And while sitting in the warm afternoon sun we almost forgot the time, so we arrived a bit too late for our main course. Fortunately, when we arrived at the house where we were to consume the second course, we found Marleen Balvert and Lars van Heijst still cooking. It turned out

to be a very well prepared pasta dish with smoked salmon and vegetables. And again, a glass of fine white TEV wine was served. During the meal Marleen and Lars tried to bribe us with some money to give a good review of their meal in this article. Luckily for them, that wasn’t necessary, as they would get a good review anyway!

The dessert was served at my place. Tess and I tried to squeeze everyone into my room, which was a very tight fit. We were very happy that our dessert tasted so good because it was a bit of an experiment. After some beers and some more beers, we went to Philip’s for the final drink. Everyone was already there and was trying to convince one another that their course was the best. All in all this was a very good end to the cycling dinner! |

Name: Tim van der Molen

Kuipers

Age:18

begin studies:2008

A few weeks ago it was time for the cycling dinner. Every participant was placed in a group of two and had to

prepare a course so one would end up eating each course at someone else’s place with another group. This

is a very nice way to meet some other econometricians, especially for freshmen. I was placed in a group with

Tess beukers.

nekst4.indd 31 12-6-2009 12:00:08


we arrive at the Deloitte offices in Eindhoven 4� minutes early and are welcomed by a friendly lady at the

reception. Three quarters of an hour later, at the scheduled time, we are welcomed once more, this time

by Martin Delsman, senior consultant at Deloitte. Martin is accompanied by an active member of Asset |

Econometrics, Inge Pulles. For two days a week Inge is a working student at Deloitte. Martin has agreed to tell

us all about Deloitte and life as a consultant within Deloitte.

Deloitte started as an assurance advisory firm but has since grown much bigger. Today Deloitte has departments that specialise in tax advice, general consultancy and, Martin’s department, Financial Advisory Services (FAS). With 300 out of a total of 5000 Deloitte employees FAS holds the distinction of being the smallest of Deloitte’s departments. It is also the department where most econometricians work. Martin works in the Actuarial & Employee Benefits (A&EB) branch of FAS.

The pastWhen Martin was younger, he wanted to become a fireman or a chef. When he reached the age at which he had to choose a course, he says “I was good at maths and I thought it was rather fun. I also liked economics, so when someone told me about econometrics I thought, that sounds fine, let’s do that.” Martin originally comes from Waalwijk, which is close to Tilburg, and started his studies at Tilburg University in 2000. He did not move to Tilburg, but rather preferred to stay in Waalwijk. “I played in the first football team, and we trained twice a week and played matches every Sunday. I didn’t quit that team until this year.” Martin was, as he calls it, a passive-active member of Tilburgse Econometristen Vereniging (TEV), now known as Asset | Econometrics. He went to activities and drinks but did not take part in any of the committees. In his words “I was on some committees for my football club, but never within TEV.”

One of the activities Martin enjoyed during his studies was the study trip to Warsaw, in which Deloitte was the cooperating company. Martin liked the business case they worked on and in the evenings he chatted with some of the people who worked at Deloitte. Because he liked the people and the business case, he applied to become a working student and this is how he entered the world of Deloitte.

Reflecting on his time as a working student he says: “I was given a lot of fun assignments while working at Deloitte and the atmosphere within the team was very good. So I stayed at Deloitte to write my thesis. In the meantime, I started working at Deloitte fulltime and I still feel very much at home here.”

The teamWhen Martin tells us about his team, he is really enthusiastic. “There is an open atmosphere within our group. We even have nicknames for each other!” It is also a very young team. “The oldest member is about forty years old.” Because everyone is rather young, the hierarchy is less strict. “Deloitte has a very open culture. Of course there is some hierarchy, but the partner (senior employee who manages the department) is open to the ideas of others. Together you talk about what is the right solution to a problem. Sometimes he agrees with you and sometimes not.”

The workThe actuaries, insurance experts and employee benefit consultants within A&EB provide a full range of pension consulting and actuarial advisory services in the Netherlands. The fields of expertise are ‘employee benefits’, ‘pension accounting’, ‘merger & acquisition advisory’ and ‘actuarial & insurance solutions’.

“When you start at Deloitte you become an analyst, working either part-time, as a working student or fulltime. In time you might develop to become a consultant and later senior consultant, which means you are responsible for some projects. You could then become a manager or even senior manager, which means that you are responsible for a whole team, with different projects under your supervision. And if you aspire to even more, you can become a partner.” Whether or not you are promoted to the next level does not depend on how many

E r F O r M I N G A T T H E H I G H E S T

l E v E l

Name: Martin Delsman

Age:27

Function: Senior Consultant

B U S I N E S S I N T E R V I E W D E L O I T T E

nekst4.indd 32 12-6-2009 12:00:08


years you have worked for Deloitte, “if you show that you can do the job, promotion is a possibility. Age is not important, quality is.” An interesting point for junior colleagues is that they can have direct contact with clients from the moment they start working in our team.

Martin is senior consultant and therefore has to supervise a few projects, so it is his job to make sure that analysts do their work and to explain to them what they should do. “When you start as an analyst, you mainly calculate. When you get promoted to a higher position, you have to allocate tasks and check what has been done within the projects. You also have to review what the analysts have done.” This means that there is less calculating, but certainly not less econometric work. “When I see the final result of the work that the analyst has done, I need to think whether it makes sense or not. As an econometrician you have the analytical skills that enable you to see this right away. If the answer does not make any sense, I need to go through the calculations and check whether they have been done correctly.” This means that Martin does not use the theoretical part of his studies that much anymore, but mainly the practical part and analytical way of thinking. “This is what I liked most about my course, placing the result of the calculations into the context of the problem.” His job also requires him to look at the consequences of the results for the company that hired Deloitte. “Sometimes you have a beautiful calculation, but this does not concern our clients. I think this is Deloitte’s strong point, we are focussed on what the consequences for our clients are and how to improve the policy of that company together with the client.”

The most important thing Martin has learned from the work he does is the ‘helicopter view’. “People who have just started the job, throw themselves fully into a certain problem. Sometimes you need to take a step back and consider

the actual problem. The helicopter view helps you to apply your knowledge on a higher level.”

The international partDeloitte also has international clients. “At the moment, we are working on an assignment for KLM. We are checking whether the pensions have been disclosed correctly in the annual accounts and in doing so we have a lot of contact with our pension colleagues in France, as KLM is connected to Air France.”

Martin’s department works together with French and British pension departments. Hence, staff can go on exchanges with the Deloitte offices in these countries. “You can go to Paris or London for two months, twice a year,” Martin tells us. “Then someone from Paris or London comes to the Netherlands. I have plans to go to Paris in the near future.” These exchanges give you the opportunity to get to know people. This is beneficial when you have a customer who also has staff in France or the United Kingdom. “The pension law in these countries differs from the law in the Netherlands, so it is good to have connections and to simply be able to ask them about it.”

The credit crunchThe credit crunch is not causing Martin’s

team too many problems. A year ago, a lot of companies were taken over by private equity and this brought with it a lot of advisory tasks for Deloitte. But since the banks now lend less, the number of assignments has decreased for the team members working on pension due diligences. On the other hand, small businesses almost go bankrupt, which means that bigger businesses can buy them at a lower cost. This in turn means extra work for Martin’s team.

Still, Deloitte has taken action as a result of the credit crunch. However instead of firing people, all employees have been asked to take 13 extra days off during the year, three of which are to be paid for by Deloitte. Martin is not concerned, “This way, we share the pain. Besides, my girlfriend has 44 days off a year and I have 26, so we can have an extra vacation together. Maybe we’ll go diving this summer.”

The futureMartin does not have the ambition to become partner, yet. He says it seems like fun, but it takes a lot to get there. Perhaps he’ll start his own company some day but for now he says “I like it here so much that I am not planning to leave.” [MB]

M a r t i n ’ s t e a m

nekst4.indd 33 12-6-2009 12:00:12

AstricsActivities 2008-2009

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AstricsActivities 2008-2009

nekst4.indd 35 12-6-2009 12:00:21


Thursday morning, 9.00 hours until �0.00 hours. That was where we were squeezed into Professor Nijman’s

tight schedule. He is a busy man: Scientific Director Tilburg Center of Finance; Academic Coordinator Inquire

Europe; Scientific Director and Chairman of Netspar and – of course – full professor at Tilburg University.

This is the fate many of us might face in the future: loads of work, but we have known it from the beginning and we have chosen so. Professor Nijman chose this path in 1975 when he entered the Econometrics programme of the Free University of Amsterdam, which he finished with a PhD in 1985. He did not have a real reason for choosing econometrics except that he knew “it is something with maths”, but, looking back, he is sure he made the right choice. If he could reconsider this, he would choose it again without a doubt.

Now, he has been working at Tilburg University for 24 years, in which he contributed his part to the change of the very local department of Econometrics to a fully international institute. Until 2002 he had focused mainly on econometric methods and finance. The first ten years he concentrated his work mainly on econometric methodology and the next ten years on financial econometrics. However, since 2005 he focused on the analysis of pensions, in which professor Nijman has put almost all his effort the recent years. Many students recognise him from his contributions, both to the academic literature and to the public debate. He really likes his position as scientific director and chairman of Netspar, since it allows him to be very independent in his opinions, which he would not have been possible if he worked for the government or in business. Therefore he expects to stay at Tilburg University in the future and maybe until his retirement, in which he can enjoy his pension.

PensionsProfessor Nijman is not worried about his personal pension at all, but argues that many others should. Everyone knows, and econometric analysis gives the proof, that governments and people will have a hard time on financing the pensions of future generations. According to Nijman, there are two types of countries which both will struggle to maintain a decent pension: the ones that hardly save, for example most European countries and others like the

United States that do save but leave the citizens completely free in their decisions and therefore completely vulnerable to their own ignorance. The Dutch pension system avoids these pitfalls but has the drawback that it neglects the potential of fitting the schemes to individual preferences and circumstances, which would make use of the different sensitivities towards risk factors. An increase in retirement age is required globally - and Nijman predicts it to be raised further in the future. Professor Nijman: “My generation will have to cope with a lot of risk regarding the funding of our pensions. We cannot depend on the younger generations to pay for us. A huge part of it will be based on investments which always involve risk.” Another important factor which is stressed by Professor Nijman is the lack of awareness in society: “Hardly anyone thinks about his own future retirement or even plans how he or she will save up for it. It is taken for granted to receive a decent pension and this state of

E N S I O N S , E C O N O M E T r I C S A N D

D O w N - T O - E A r T H M A T H E M A T I C S

Name: Theo Nijman

Position:Scientific director

and chairman of

Netspar

T H E T E A C H E R

” S o m e e co n o m e t r i c i a n s t h i n k t h e i r a d d e d

va l u e i s t o m a ke t h e m o d e l m o r e co m p l e x . ”

nekst4.indd 36 12-6-2009 12:00:22


mind towards the problem must change as soon as possible since government cannot carry this burden on its own anymore.”

NetsparNetspar is a leading institute focusing on the problems regarding pensions. This network connects researchers from seven Dutch universities as well as international researchers. Netspar is supported by the government as well as the private sector. Netspar is based on three different pillars: research, exchange of knowledge and education and has already been successful in stimulating the debate on pensions and aging. Politicians have declared pensions to

be a vital policy concern and heated debates regarding the current funding can be seen on television. Even on the international level, Netspar has gained attention and other countries show interest in their work. For the period 2008-2011 14 million Euros have been raised from the private and public sector to fund Netspar and Nijman emphasises that there would be no limits for Netspar if they received more support. Netspar tries to meet the future demand for economists by coordinating the relatively new master’s programme ‘Economics and Finance of Aging’ and moreover initiated and sponsors three courses in the Econometrics curriculum.

EconometricsBesides all this, Professor Nijman teaches the courses ‘Asset Liability Management’ and ‘Pension System Design’ which both introduce students to tools to find solutions regarding problems with pensions.Theo Nijman regards Econometrics as a powerful device to solve financial problems but he criticises the current focus of the programme. The curriculum is very much centred on theory and tools, which is appropriate for the first semesters, but

later on more emphasis should be put on the great potential of econometrics to analyse real life problems. The best theory is useless if its use is not fine-tuned to the real life problem at hand. Furthermore, the students’ position towards econometrics is not always very efficient in Nijman’s opinion: “Some econometricians think their added value is to make the model more complex by adding another generalisation. . Rather they should try to find the simplest model that characterises the essence of the problem.” They simply lose track of the actual sense of Econometrics and that is why he pleads to all econometricians to always bear in mind the connection to a real life problem.

Personal lifeHe would like to spend more time on teaching and research himself, but, due to his several administrative positions, he spends three days a week on management and can only devote part of his time on these. Fortunately Frank van der Duyn Schouten has recently joined the Netspar board which should reduce the time Nijman spends on administrative duties. Nijman admits that work has become his hobby and that it does heavily influence his private life. Apart from doing research during the weekend, he also plays tennis and is part of an investment committee. He has three daughters of which one is currently studying psychology. This topic has immediately aroused his interest, since her thesis is surprisingly heavily related to statistics. Nijman is also interested in the use of statistics and mathematics in other fields, including applications in health care. There are too many things he would like to do.

Many of them will have to be postponed until he retires. But even then, lecturing on the use of econometrics in finance and pensions is likely to be one of his activities. [ TD]

Theo Nijman’s choices:

Amsterdam or Tilburg?Tilburg

Free University or Tilburg University?Tilburg University

listening or speaking?Speaking

Telegraaf or Nekst?Nekst

Theory or practice?Practice

Calculator or mental arithmetic?Calculator

AlM or Pension System Design?Pension System Design

beer or wine?Wine

risky investment or savings account?Risky investment

Stress or boredom?Stress

“ S e e t h e s t r e n g t h s o f t h e u s e o f E co n o m e t r i c s

i n r e a l l i f e a p p l i ca t i o n s. ”

nekst4.indd 37 12-6-2009 12:00:23

ORTEC

nekst4.indd 38 12-6-2009 12:00:23


S I N G I N G , D r I N K I N G A N D F A l l I N G

B E E R C A N T U S

We wanted to be sure to get a nice table at the cantus, where we could sit together with as many econometricians as possible. So about half an hour before the start of the cantus, we changed into our orange outfits and cycled to La Vida. After we had found a table in a perfect spot, which was close to the bar and with enough space to move around, we waited until the singing and drinking began.

Because this was my first beer cantus in Tilburg, I didn’t know the rules in detail or what kind of songs we would be singing. As a result, I took a quick look at the rather small cantus book while we were waiting. I quickly concluded that the songs were familiar to me and that most of the rules where quite straightforward. A notable rule was that it was not allowed to go to the toilet during the cantus. Furthermore, we were only allowed to drink when the organisation of the cantus allowed us to. Just before it all started, the

organisation explained the rules one last time. With that said, everybody was more than ready to empty their first glasses!The cantus started a little rusty, probably due to overall soberness. However, after a couple of songs and beers you could really sense the atmosphere growing. Especially during songs like ‘‘t Dondert en ‘t Bliksemt’ and ‘Stil in mij’. Everybody was singing as loudly and as physically as possible. In between the songs, we sang the short famous cantus song ‘Trink, trink, Brüderlein trink!’. It was only allowed to drink after this cantus song, which is why (almost) everyone emptied his or her glasses in one gulp as soon as it had ended.

With the end of the cantus in sight, everyone got pretty ‘tipsy’ and lots of people were standing on benches and tables, dancing and singing. When the cantus was over, everybody stormed to the nearest toilet, causing quite a chaos. After that exceptional event, everyone enjoyed the so-called ‘after party’. Some casual music was played and there were lots of cold beverages available. Many members of Asset | Econometrics were around, so it was practically like drinks at café Babbus. This leaves me with one thing I wish to share: the considerable number of people falling on the ground. Whether this was due to the condition some of us were in or to the fact that the floor was all wet, as those who had fallen down tried to explain their behaviour, is for you to guess.

Around two o’clock at night, the lights popped on and the party was over. A lot of people were really tired, as one could easily derive from their facial expressions, and cycled directly to their homes, some taking a slight detour. It was a wonderful evening, which all once started with a nice cantus. |

Name: Patrick Kuijpers

Age:20

begin studies:2007

2� April, the day on which the fourth COdE beer Cantus took place in the Music & Theatre house la vida. The

theme of the cantus was orange, thereby making this event a great warming up for the upcoming Queen’s

day. At first, only active members of the Asset associations were allowed to buy tickets for this special event,

but eventually as there were some tickets left, I managed to get myself one as well.

M e m b e r s e n j o y i n g t h e c a n t u s

nekst4.indd 39 12-6-2009 12:00:25


E N E w I N G P E N S I O N C O N T r A C T S

E x C U R S I O N E R N S T & Y O U N G

We all thought the day at Ernst & Young would immediately start with a talk by the company, so everybody had a quick bite to eat at Amsterdam Central Station. We were quite wrong, as the day started with a delicious lunch. Luckily, most of us had left some space, so a considerable amount of lunch disappeared into the stomachs of the ever hungry Tilburgian econometricians. After this student’s ritual, the employees of Ernst & Young told us a bit about themselves, what they had studied and how it all started for them at Ernst & Young. They also told us about their daily work at the company. One of these people was Ellen Kessels, former board member of Tilburgse Econometristen Vereniging, now known as Asset | Econometrics. Ellen’s talk was followed by an interactive lecture about what econometricians can mean for Ernst & Young and what Ernst & Young can mean for them. Of course, one of the hottest items at the moment in the financial world, the credit crunch, was a main topic of discussion. It was clearly explained to us how the credit crunch started and how it was possible that it had become so largely and widely spread across the different sectors.

After a short break, it was time for serious business: the students were put to work, as

a case developed by Ernst & Young had to be solved. In groups of five, we had to pretend we were hired by the board of a company specialised in waste retrieval. The company had several employees in their service who were not satisfied with their pension contracts. We needed to come up with a solution that would satisfy the employees. In order to gather more information, we needed to negotiate with some professionals (who were actually the well acting employees from Ernst & Young). There were five professionals, but we could only talk to three of them. Of course, the right questions needed to be asked in order to retrieve the essential information.

With the information received, a solution had to be found by implementing the information in Excel. After that, we needed to be present a solution to the board of the company. With this case, Ernst & Young tried to show us that working as an econometrician at their company does not mean you have to calculate and model things all day long, but that skills like negotiating and presenting are important for the employees of Ernst & Young as well.

Of course, the winners would not leave Amsterdam without a prize. Unfortunately, our group did not win, but I heard the winners thoroughly enjoyed the bottle of champagne they received. This rumour was confirmed by the fact that the bottle was already empty before we even left Amsterdam.

Now the winners had been announced and the case was solved, it was time to get to know the company in a more informal way. Ernst & Young invited us for drinks and a delicious three-course dinner. Exactly twelve hours after we had gathered at Tilburg Central Station, it was time to leave Amsterdam again. Tomorrow some courses at the university would be waiting for us again. |

Name: Iris Mehlkopf

Age:22

begin studies: 2005

At �0 o’clock on 2� March we gathered at Tilburg Central station for a trip to Amsterdam. The trip, organised

by Asset | Econometrics and associated with the third year course ‘life Insurance’, was to lead us to Ernst &

young.

D i s c u s s i o n i n p r o g r e s s

nekst4.indd 40 12-6-2009 12:00:26


It is a long road to becoming a real student, but with a guide at your side everyone can find his way down this road. Over the past year, Asset | Econometrics has quite often led the freshmen to interesting activities. For the last time this academic year we stopped by 18 to add the finishing touches to our student life. Since our upcoming years should not just consist of lectures and pubs, but also the more sophisticated cultural offerings, we were inducted into the secrets of cocktail making.

The evening started off with an important lesson: if possible do not cook for yourself but instead let someone prepare an exhaustive dinner. As we had come together for the advanced level of amusement, we expected above average catering. Indeed, it did meet our expectations and the dinner was certainly above the average student’s cooking – at least for my part (this might not be that much of a struggle though). Only the chicken salad seemed to be less satisfying than steak and spare-ribs, which were both popular choices. Therefore, the kind-hearted shared their fortunate choice.

After finishing the three-course dinner, we proceeded to the main event of this night’s training: The cocktails. We were instructed by the official barkeepers and were shown how to mix several cocktails: Cosmopolitan, Apple Teaser and Mojito. After a while and a few wet shirts, everyone got used to the shaker and we could try our first Cosmopolitans – luckily three times per person. Some people might have put some more emphasis on the interesting part of a cocktail, mine were unfortunately quite juicy. Not everyone is born to make cocktails…

The following two drinks were prepared quite easily once you got the hang of it and some decided to create their own rather foolhardy compositions. Overall, the Mojito added a very interesting taste due to its mixture of peppermint and lime, so that it is definitely worth remembering for future drinks.

After finishing all the cocktails, concoctions and wannabe-cocktails, we hurried to Café Babbus to conclude the evening and consolidate our past experiences in there. Asset | Econometrics opened barrel after barrel and everyone was busy keeping up, which of course steadily improved the atmosphere. Everyone who failed to come did indeed miss out on a nice evening. It was the last freshmen get-together for us and now we have to make room for new people who are eager to immerse themselves in Tilburg’s student life. But

we do not need to worry: there is still a lot to do with Asset | Econometrics and we are prepared. [ TD]

After a whole year packed with freshmen activities, we concluded the work of the Freshmen Committee with

a final night out at Havana’s, where we would soon learn how to create some fancy cocktails like the Mojito

and the, according to many female members, all-time-favourite Cosmopolitan.

H A v A N I A N C O C K T A I l S A N D

D U T C H b E E rF R E S H M E N A C T I V I T Y

“ I f p o s s i b l e d o n o t co o k f o r yo u r s e l f b u t i n s t e a d l e t s o m e o n e

p r e p a r e a n e x h a u s t i ve d i n n e r. ”

F r e s h m e n e n j o y i n g t h e i r d i n n e r

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Flow Traders

nekst4.indd 42 12-6-2009 12:00:26


In the preperation we have had a laugh about the teams from chemistry and the team from artificial intelligence: how were they supposed to solve any of the problems and what were they thinking to take part in such a match?With four laptops crammed with software and e-books, and Servaas’ book of applied physics just in case we had solve all problems before midnight, we took the train to Eindhoven at the end of the afternoon. At the CQM main office we were welcomed by the employees and guided to our very own office. Within less than 30 minutes this clean office was transformed into a big mess with cables and books all over the place. Bram took a seat in the (excellent) chair of the CEO, but unfortunately he could not enjoy it for more than ten minutes, as it was time

for dinner which took place in a nearby tapas restaurant. We had the honour of sitting next to the chemistry team. They were unfamilair with packages like SPSS, AIMMS, Arena, Delphi, Excel, Paint, etcetera, but they knew basic Matlab programming and had common sense (so we were told). Walking back to the office we evaluated our winning probability.

Back in the office we got a short introduction into the problems we were to face the upcoming night. There was a total of five problems to be solved, three of them were big. The first problem was to deliver beer to hundred pubs in one day with six trucks and to take back empty beer crates; a typical problem for the savings algorithm of Clarke & Wright. The second problem

was beer taste optimisation. With 200 simulation runs we had to identify the impact of eight control variates on the taste. The third problem was to optimise a supply chain by the use of simulation. CQM programmed a simulation tool for us, but it was intentionally made extremely slow by including redundant loops. The first problem was to protect a museum by camera surveillance with as few cameras as possible. Our solution was really nice but CQM thinks that a wall is fully protected if only one side is seen. Imagine that the famous painting ‘Nachtwacht’ is on the unprotected side! Very few points for us on this one. The last problem was the so-called ‘Ants game’. The goal was to get as many of your twelve ants to the other side of the battlefield as possible. You can make the ants powerful by dividing your 1000 available points among your ants. If one of your ants meets another ant on the battlefield, the ant with least power gets killed. During the night three rounds were played on a large screen, the last round counting twice. After every round there was a possibility to analyse other teams’ strategies.

After a night of very hard working we got a lunch in the PSV stadium during which our solutions on the problems were verified. Unfortunately we ended up seventh (out of 9) and even got beaten by the chemistry team. Fortunately the good reputation of econometricians was defended by our fellow mates from Maastricht, they won the match. [SvB]

The ‘ Nacht van Eindhoven’ (Night of Eindhoven) is the yearly highlight for Operations research & Management

Science (OrMS) orientated students. This event, organised by CQM, shows students the practical aspects of

the quantitative methods they have learnt and to meet prospective employees within CQM. The Night of

Eindhoven is in fact a match between different student associations in the field of quantitative mathematics.

b l O O D , S w E A T A N D T E A r S

N A C H T V A N E I N D H O V E N

A c l e v e r a n t

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�2 May 2009. I still doubted whether or not I wanted to visit the symposium ‘A New Financial world, the Day after

the Credit Crunch’, organised by Asset | Econometrics. Twenty minutes after the final subscription deadline, I was

luckily still able to subscribe myself for the symposium. After the symposium a member of the editorial staff of

Nekst approached me and asked whether I would be willing to write an article about the day! A valid reason to

actually try to remember the newly gained information, since I had to write an article about it.

N E w F I N A N C I A l w O r l D

Name: Hettie Boonman

Age:21

begin studies: 2006

S Y M P O S I U M

Thursday 14 May 2009. The day the symposium would take place. I tried to imagine how I would feel if I were part of the committee (which was not the case). I would most definitely be quite nervous for a day that you have been preparing for so long. Nevertheless, the entire committee seemed very controlled and calm. Even the chairman of the committee didn’t look at all nervous about her upcoming speech. Nothing was actually going wrong, so I guess there was nothing to be nervous about either. The chairman of the symposium committee, Nicole van de Reij, opened the day. In order to make the upcoming lectures as interactive as possible, she encouraged the audience to ask any questions they might have. The committee wanted all the questions the audience might have about the credit crunch to be answered.

The chairman of the day was Professor Beck, affiliated with Tilburg University and chairman of the board of the European Banking Centre. The current crisis we have been experiencing over the past year has turned into a global recession. Prof. Beck asked the audience: “What policies do we need in the Netherlands, in Europe and on a global level, to overcome this crisis?” Too little attention has been paid to the role of politics up till now. The neglect of risk-taking and bail-out expectations go a long way in explaining the build-up of the bubble in the United States and parts of Europe. I noticed the person in front of me being pretty touched by one of the slides shown by Prof. Beck; a wages scale of employees in different sectors. The wages of employees in the financial business sector during a period of economic welfare were almost double the wages of employees with a similar position in another sector. However, after the crisis, the wages of those employed in financial business dropped to the level of the other sectors.

The first plenary lecture was given by Mr Brouwer, executive Director of De Nederlandse Bank (DNB). “The losses on the United States subprime mortgage market and the ensuing worldwide financial crisis is a typical example of the tail wagging the dog”, Mr Brouwer explains. Important for econometricians is that the current crunch raises fundamental issues on the structure of financial markets, such as the viability of certain business models and the size and complexity of financial institutions.

After the interesting lecture by Mr Brouwer, the floor was given to Mr De Boo, Head of Government, financial institutions and the rest of the world accounts at the Central Statistical Office (CBS in the Netherlands). He stated that the governments intervened massively by taking various actions in response to the escalating financial turmoil that started in 2007. Such interventions can have consequences for government finance. This was shown by means of graphs in his presentation.

Since I had chosen for the parallel sessions (one could also choose a workshop about trading, provided by All Options), after the fifteen minute break and having stretched my legs I continued with a lecture by Mr Van den Bosch, Manager Credit Risk & Pricing management at SNS REAAL. Mr Van den Bosch gave several ideas on how the Netherlands could get involved in a credit boost. The second parallel session was given by Mr Van Wiggen, Senior Manager Financial Services Risk Management at Ernst & Young. He concluded that we should not throw away all risk models. Mr Van Wiggen: “All models are wrong, but some are useful.” Furthermore, according to Mr Van Wiggen, Basel II helps to increase inside risk. However, he also believes that the underlying assumptions of the models need to be reconsidered.

nekst4.indd 44 12-6-2009 12:00:27


Before her lecture, however, we had the opportunity to listen to another speaker, Mr van Welie. Mr van Welie, CEO at ORTEC Finance, started his lecture about pension funds. Pension funds are a hot item at the moment, because of the current state of the financial world. Many (Dutch) pension funds have seen their funding rates decreased by a lot ever since the credit crunch. The extreme drop of the funding rate of Dutch pension funds is comparable with a loss of 200 to 250 billion euros. We can call ourselves lucky that in the past many pension funds had a large buffer. That is the reason why pension funds are still standing. But to protect ourselves against a new ‘black swan’ event, we have to debate the past and learn from the lessons from the past. Mr van Welie told us about models and the use of these models for measuring risk management and asset liability management. Nobel Prize winner Paul Krugman emphasised the use of models by saying: “The only way to make sense of a complex system is to work with models.” But models are a simplified statement of reality and they can always be improved.

The main question about managing risk is how much risk you are willing take and how to manage those risks. Part of the answer to this question is that there must be a good match between the wishes of the stakeholders and the implementation of the pension funds. Therefore it is important that the stakeholders understand the risks and are prepared to bear them. To prevent problems in the future we have to be very careful about taking risks. Therefore the ambition level of models is very important. The models are the basic element of calculating risk. A good predictability is necessary. Also the transparency of the models and products and the fact that stakeholders understand the risk is important. The last, but definitely not least important question is

about the stochastic distribution used in the models. Did we choose the right distribution? Past data tells us that a Gaussian distribution underestimates risks. Furthermore, questions about the correlations are important for the right predictability. After the interesting lecture by Mr van Welie, it was time for Ms Biezeveld to tell us about pension funds from a more sociological viewpoint. Actually, she continued the lecture of Mr van Welie. The topics of the lecture given by Ms Biezeveld had a link between the risk management of the pension funds and the future risks you can expect. A topic that needs special attention is the aging of society and the probable increase of the retirement age. These are good points for designing future pension schemes. There are a lot of topics that need to be plugged into the pension scheme and therefore have to be discussed in detail.

After these lectures we closed the day with a nice social drink and Summer Party drinks at our local, Café Babbus. Everyone who arrived at the drinks was given a free thematic cocktail! Once the evening became night, it was time for famous Asset | Econometrics songs like ‘Tribute’ by Tenacious D and ‘Kryptonite’ by 3 Doors Down. It was a dignified ending to a successful symposium. |

Name: Stefan Damen

Age:22

begin studies:2006

During the second break of the symposium, Ms biezeveld entered the building. before her lecture we had

a cup of coffee and talked about her experience in the pension business. I was very surprised when I heard

about her past. She talked about her studies and I quickly found out she had studied social sciences. In my

opinion, this is not a logical step to becoming active in the pension sector after the completion of your studies,

so I was curious about her lecture.

M s B i e z e v e l d

nekst4.indd 45 12-6-2009 12:00:32


Seen from Eindhoven central station, one cannot miss the impressive rabobank building. Inside this

rabobank headquarters, we were welcomed by william verkooijen, who guided us through the rabobank

office jungle to finally end up in a room with a wonderful view of Eindhoven, where the interview would take

place. william told us about his work and daily life as head of business Analysis and Modelling.

rabobank Because William has worked at Rabobank for only four months, we were surprised he could tell us so much about the bank that was once founded by farmers. Rabobank consists of about 150 local banks. This cooperation of banks together own Rabobank Netherlands, which acts as a service-organisation for the member banks. Every bank is autonomous; most of the daily work is done within the bank. William works at the Risk and Capital Management department of Rabobank Netherlands, which is centralised because of the specific expertise and to facilitate regulators in the communication with Rabobank. As a result, the department Mr Verkooijen works at, supports all the local banks in the Netherlands with the development and maintenance of credit risk models for private individuals as well as companies.

The cooperative structure of Rabobank implies that major proposed changes require positive advice from the member banks. This makes that Rabobank has remained relatively stable over the past years. In addition to the all finance strategy for the home market, Rabobank also has international exposure. Rabobank International has departments all over the world. These are active mainly in the agricultural and food sectors. Rabobank International offers its employees the opportunity to go abroad: employees with specialisation in a particular area are then able to help internation member banks with for instance their risk management processes.

The idea of a career abroad does not appeal to William at this moment. However, from earlier experiences he says it is interesting to experience the huge differences in the way of working among the different countries.According to William, the nicest thing about working at Rabobank is that you have to cooperate a lot with others: “Cooperation is Rabobank’s keyword. It is important to reach a consensus on an important topic with all stakeholders. This is the main difference with other banks.” William adds that Rabobank is also quite active in formulating a personal training programme for every employee. Based on individual preferences, employees can, for instance, take business training, which is also what William did. William’s team consists of eight modelling analysts and three business analysts. William: “My team is a nice and pleasant group, we work hard but in a relaxed atmosphere.”

william’s careerWilliam studied Technical Mathematics at Eindhoven University of Technology and graduated in 1992. We were surprised to hear that William went to Tilburg University to do doctoral research after his studies. Mr Verkooijen: “I obtained my doctorate on a topic about Neural Networks in Economic Modelling. This is about considering networks via non-parametric case studies. Neural networks originate from psychology in which they were proposed as a model for the working of the human brain.” Prof. Hennie Daniëls and Prof. Jef Plasmans were both in William’s

r E D I T S C O r I N G I S N O T b O r I N G

Name: William Verkooijen

Age:41

Position: Head of Business

Analysis and Credit

Risk Management

B U S I N E S S I N T E R V I E W R A B O B A N K

“ I p r e f e r w o r k i n g f o r a b a n k , b e ca u s e I l i ke t h e

i n t e ra c t i o n , t e a m w o r k a n d d y n a m i c s. ”

nekst4.indd 46 12-6-2009 12:00:32


doctoral committee. William enjoyed his time at Tilburg, but also says that for him personally doing research was appealing for a limited period of time: “It is valuable to be able to work very intensively on one subject. It was this research that got me interested in economic topics. Nowadays, I prefer working for a bank, because I like the interaction, teamwork and dynamics.”

Following William’s doctoral research, he started his working career in at ABN AMRO bank, where he worked for thirteen years. He got this job via contacts he established whilst taking his doctoral degree. During the first years, he worked in IT in the area of data-mining, which was a real hype in those days. This was mainly based on working with databases, statistical techniques and much use of software. He did this

for about three years. He experienced that it was hard to push new techniques into the organisation. In those areas, for instance marketing and credit scoring, where the need was identified by the business-units itself the new techniques were easily adopted. After having full-filled a function as data warehouse consultant, William moved to t the area of credit risk management. When credit risk management became important mainly through Basel, his job was in this sector. Mr Verkooijen experienced the birth of credit risk management and watched it become what it is today. When he started, the department consisted of only three employees. As of that moment, it started to become more and more obvious that credit risk management was also important to manage the risks of private individuals and small and medium enterprises. For instance, within retail it is also a

much applied method. William saw the department expand from three people to over fifty: “The environment became more and more professional.” In his final years at ABN AMRO, William worked on the integration of risk and capital models between ABN AMRO and Fortis. Via personal contacts William got contact with Rabobank, where he found a new challenge in managing the business analysis and modelling teams.

A regular working dayWilliam starts his working day in the morning by checking numerous emails. William: “After that, I try to go through the small points of action I noted down the day before. Furthermore, I have a lot of meetings, with team members, colleagues, stakeholders, etc.” The risk manager at Rabobank also has a lot of appointments with business managers.

Moreover, he has several feedback meetings and performs validation checks for his group. Mr Verkooijen: “Sometimes, we have to develop credit risk models for corporate clients. Then there are expert meetings with specialists from the member banks, as these models are build on both expertise and statistics.” Usually he has a long working day of about nine to ten hours. He likes the combination of on one hand dealing with a broad range of topics and on the other hand the in-depth discussion of modelling solutions with my team. This combined with day-to-day management of my teams make my job interesting and challenging. William says that as a manager with a mathematical background you have be able to delegate the details to the specialists while keeping a good eye on the end-result as well as on the process followed. This has convinced us

that working at the risk management department in his position is very all-round and interesting.

william’s personal lifeWilliam lives in Raamsdonk, a small village near Waalwijk. He has always been a fanatic cyclist, a hobby that he spent a lot of time on whilst he was a student, especially. In his best years, he also participated in races at amateur-level. Due to this hobby, his studies in Eindhoven took an extra year to complete. This hobby was also the main reason why he was never active in committees within student associations. When William was younger, he had not a specific idea about what exactly he wanted to do in the future. He always had a broad mindset: “Spot for opportunities and grab the best!”

Asking him about his future, William finds it difficult to make it concrete; as he is fresh in his new job. He does know, however, that he wants to keep in touch with the field of work in which he is now active. William: “Perhaps a position on the next management level would be interesting in case my personal development will make this possible.” He also puts some emphasis on the statement that the opposite of the statement ‘Credit scoring is boring’ holds. William claims that this saying should not scare you off. There are lots of challenges in this specialist field. As a final question we ask William about his choice of studies. Mr Verkooijen: “Taking my current job and fields of interest into account, I think Econometrics would have fit better with my personal profile.” It was hard to suppress the smile on our faces after hearing this. [ TB]

“ T h e s a y i n g ’ C r e d i t s co r i n g i s b o r i n g’ d o e s n o t h o l d a t a l l .

I t h i n k t h e o p p o s i t e i s a c t u a l l y t r u e. ”

nekst4.indd 47 12-6-2009 12:00:32

Charity: Wandeling voor behandeling

nekst4.indd 48 12-6-2009 12:00:32


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T I T E l

F O O T B A L L T O U R N A M E N T A N D A N N O U N C E M E N T D R I N K

nekst4.indd 49 12-6-2009 12:00:32


Every student in Tilburg is familiar with the four student associations: Olof, Plato, d’Artagnan and vidar. Most of

them have the appearance of having lots of fun, characterised by drinking much beer. However, vidar, known

as Tilburg’s Student and rowing Association, also has a serious side, namely, the top class sportsmen. Nekst was

curious about this side of vidar and asked freshman Kathinka de veer about the ins and outs of the rowing sport.

Kathinka de Veer is only nineteen years old and currently enrolled in the Econometrics programme. Unfortunately, she will switch to the Economics course at the end of this academic year. She likes Econometrics but due to her passion for rowing, she did not have enough time to study this year. Kathinka is one of Vidar’s so called ‘Women 8’, one of the top class rowing teams of this student association. Besides the ‘Women 8’, the competition section of Vidar consists of seven other rowing teams, for example the ‘Men 8’ and the ‘Women 4’.

vidarDuring the TIK-week of 2008, Kathinka de Veer joined Vidar with the idea that being a member of this association would bring her into contact with new people, but most of all that it would bring her much fun. Another reason to join Vidar is the combination of serious sport and fun. Kathinka: “I see myself as a sporty lady and I really like these two aspects of this student association.”

becoming one of the ‘women �’As a freshman of Vidar, during the first weeks you have to train twice a week to learn the basic skills of rowing, which is called the ‘afroei’-period. After this period, the selection for the ‘Women 8’ of Vidar starts in the so called pre-training period. “It was strange to see so many people drop out after each selection. For a place in the ‘Women 8’ you have to compete against each other, but at the same time you are also a member of the same association.” Kathinka tells us it was a time in which she had to prove that she had the motivation and strength to become a top class rower. In the pre-training, the number of training sessions per week increased every few weeks. “Sometimes it was very rough, because at the same time I had my freshmen

period at debating society Dionysos, which is a sub-association of Vidar consisting of a group of women.”

Although it was a hard time for her, at the beginning of January it was finally official: Kathinka de Veer signed a contract at Vidar and could proudly pronounce herself as one of Vidar’s ‘Women 8’. Kathinka: “I was very happy that I had been chosen, because now the real competition began. Instead of competing against other women members of Vidar, we now had to form a team of eight women to defeat the rest of the Netherlands.”

rowingEven though it was luckily the end of a period with lots of stress, Kathinka tells us that the really hard work had just begun. Starting with a schedule of two training sessions per week at the beginning of the academic year, by the time you are a top class rower you have developed your body to train six to nine times per week in the competition season. We asked Kathinka what ‘Women 8’ do during a training session. “Half an hour before the training begins, all eight women meet at a certain place, from where we cycle together to Vidar. After arriving at our association, we put on our sports clothes and are ready to start our training. First of all we have to warm up our muscles by stretching and practice the technique of rowing on dry land in a so called ‘bak’. After that the coaches give us tips and explain the goal of the training. Then we prepare the boat and start the actual rowing.”

Since Kathinka’s team only consists of women, there is also a lot of talking before they start rowing, but once the eight women are in their boat, concentration and silence are very important. Kathinka tells us that there are

O w I N G I S A l l A b O U T T H E

F E E l I N G

Name: Kathinka de Veer

Age:19

begin studies: 2008

K A T H I N K A D E V E E R ’ S P A S S I O N

nekst4.indd 50 12-6-2009 12:00:34


different training schedules: “The first sort of training is one were everybody needs to focus on different technical points. Besides this, we also have speed sessions of a certain distance within your training. This means that we have to row for example two kilometres at the highest speed. Another sort of training is one where we have to row long distances at the same speed.” If you think that this is the whole training, you are mistaken. Since, after the actual rowing, the boat has to be cleaned and the women have to do exercises to strengthen and stabilise their muscles. Kathinka de Veer: “Training can take five hours of your time per day. Luckily we have one free day a week to let our muscles recover and to do other things like studying or having fun with friends.”

living for the sportYou may wonder: what is a student life like without drinking beer and wine at a party every once in a while? However, when you sign a contract at Vidar as a competition rower, you promise to live as healthily as possible for the rowing sport. This means that drinking alcohol or heading for late night parties is prohibited. Kathinka tells us that when someone from Vidar sees you after midnight or notices you drinking alcohol, her coach will be fined. “It is harder for me to go home before midnight when I’m having fun than not to drink alcohol.” Since the rules hold for all the eight women, everyone obeys them for the whole team. “It would not be appreciated if one of the women broke the rules, while the rest are doing their best to keep their word.” Furthermore, you need a good resistance, so healthy food is very important. Kathinka: “We

need to eat a lot of proteins and in the beginning we had to gain weight, because at the end of the season you will have lost it all.”

The competitionThe women train and live in this healthy way with the aim of winning the national competition for top class rowers of every student association in the Netherlands. Kathinka explains that there is a long distance season that begins in February with the so called ‘Winter competitions’ in Delft. In the middle of April, the short distance season starts with the Varsity, which is the oldest and probably the most famous rowing competition in the Netherlands. Kathinka de Veer: “The competition I personally liked most is the Heineken Rowing Four Camp that

takes place during the long distance season. This competition consists of four different distances: 5 kilometres, 2.5 kilometres, 500 metres and 250 metres. Unfortunately I couldn’t participate because of an injury. Nevertheless, it was a nice weekend in which my team and I learned a lot about rowing and about each other.”

‘blikken’The short distance season is the most important period, where there is a competition weekend every two weeks. On the Saturdays you compete against other teams to gain points for the Ernst & Young Division, which is comparable to the Premier League in the world of football. On Sundays the teams row to win a ‘blik’. This is the term that is used in the rowing world for the award you receive when you win an important competition. The number of ‘blikken’ a rower has indicates his

or her experience and expertise in this sport. Unfortunately, the ‘Women 8’ do not have a ‘blik’ yet, but Kathinka hopes that she and her teammates will win one in the upcoming competitions.

The passionListening to Kathinka, rowing at the level she does is not just anything. You must have a passion for this sport if you are willing to train so much and to obey the rules of non-drinking and not going to late night parties when you are a student. Nekst asked Kathinka what she liked best about the sport: “Comparing rowing to tennis, the sport that I used to do, I think the fact that rowing is a team sport gives it a more exciting dimension. During my first training weekend in Bruges I got to know my rowing mates very well

and since then we are very close. In fact it is necessary to be close in order to perform well in the boat. Not only do you need to have a good technique, but we need a good rhythm too. That is something we lacked in the first few months. During the first months as the ‘Women 8’, my teammates and I got a better understanding of the water, the boat, the oars and how to respond to the water. Eventually you do not row on technique, but really have to feel the movement of the boat in every stroke.” Kathinka really likes rowing and hopes she will continue rowing in the competition section of Vidar next academic year. “Rowing is a sport that you learn very quickly, but it takes a couple of years before you can say that you understand it and actually can row.” Nekst wishes Kathinka good luck in her rowing career. [ WP & MGS]

“ I t i s h a r d e r f o r m e t o g o h o m e b e f o r e m i d n i g h t w h e n I a m

h a v i n g f u n t h a n n o t t o d r i n k a l co h o l . ”

nekst4.indd 51 12-6-2009 12:00:34

Rabobank

nekst4.indd 52 12-6-2009 12:00:34


E N T E r T A I N M E N T F O r A S T U D y

b r E A KC O L U M N

A fallacy is an argument that is not logically sound. As an Econometrician you are probably good in logic, so finding fallacies in the speeches of politicians should not be too difficult for you. Let us run through a couple of fallacies of famous politicians. Let’s start off with an easy one: George W. Bush. His famous quote “You are either with us, or

against us”, which he often used during the Iraq invasion, clearly is a fallacy. Bush creates false dilemma where he pretends that there are two options, where in fact there are many others. George Bush was probably inspired by Jesus, who said: “He who is not with me is against me, and he who does not gather with me scatters”. A more tricky application of the false dilemma was used by Mark Rutte, the leader of the Dutch liberal party, when he claimed that “government expenditures must be cut otherwise we will run into a budget deficit”. Mark Rutte wants you to believe that there are only two possible outcomes, where of course there are other alternatives, such as raising taxes.

Also politicians on the left are not without fallacies. Agnes Kant, the leader of the Dutch socialist party, is famous for quotes like: “Yesterday I received an email from a woman from the city of Lutjebroek who has been waiting for three years for her medical treatment. This proofs that our health care system is a mess.” Apparently Agnes Kant applies a model where significant results can be derived on the basis of a sample size of one observation.

Politicians are also masters when it comes to the evasion of the burden of proof by simply pointing out that many people believe something. When watching parliamentary debates you often hear politicians saying things like: “Everyone knows that longer periods of prison time do not work” or “No sane human being would agree that we

should all become vegetarians”. Even if the majority of voters believe in an idea, that does not make it a good one. After all, there has been broad support for slavery and fascism in the past and these things did not turn out very well.

Finally, there is the slippery slope fallacy. That fallacy was used by Maxime Verhagen, one of the leaders of the Dutch Christian-Democrats, when attacking a proposal of the Labour party to reform the pension system by claiming that “if we start to reform the pension system, then future politicians will inevitably continue to reform such that the whole pension system will eventually dissapear.” The slippery slope argument of Maxime Verhagen makes the false assumption that a relatively small first step inevitably leads to a chain of related events culminating some kind of terrible outcome.

So, these are some example fallacies. I leave it up to you to find a lot more! |

Name: Roel Mehlkopf

you have been studying for hours preparing for an exam and you feel like you could use a break. but what

to do during the study break? Here is my favourite study-break-activity: finding fallacies in the speeches of

politicians. It turns out to be fun and really easy. Even better: this activity can be done at any time of the day

because all debates in the Dutch parliament are broadcasted live on the Internet.

Position: PhD student

“ E ve n i f t h e m a j o r i t y o f vo t e r s b e l i e ve i n a n

i d e a , t h a t d o e s n o t m a ke i t a g o o d o n e. ”

nekst4.indd 53 12-6-2009 12:00:35


It was more than one and a half years ago that I started planning my exchange experience and it was more

than four months ago that I finally seated myself in a plane to start the adventure. Although my time in

buenos Aires is not over yet, the editorial board of Nekst asked me to take a quick look back and share my

exchange experiences with the readers of its magazine.

Buenos Aires is often compared to Paris or to New York City. It is one of the biggest cities in the world (one and a half times the size of New York City), but during the day you don’t really notice this. Another thing about the city is that it is divided into a lot of different neighbourhoods, which are separate cities in themselves, with their own atmosphere and own centres. The neighbourhood in which my apartment is located is one of the richest neighbourhoods in the city, with lots of clothes shops, restaurants, bars and

foreigners. Because this is one of the nicest areas of Buenos Aires, we spend most of our days in our neighbourhood, with visits to the other areas to explore more and more of the city from time to time. Buenos Aires is a city with more then twelve million residents (if you include the suburbs), which is over one third of the total number of inhabitants of Argentina. Besides this, Argentina is the eighth biggest country in the world, which together result in lots of uninhabited areas. Also, the Andes in the west, the Atlantic Ocean in the east, Antarctica in the south and the desert in the North make Argentina a country with a multitude of different, breathtaking nature views. Besides exploring the city, one of the things that I have been doing during my time abroad is exploring more of South America. Because this is the perfect time to see much of the different landscapes I am trying to take trips to the best places around like Uruguay, Chili, Bolivia, Machu Picchu (Peru) and Rio de Janeiro (Brazil).

Apart from seeing more of the world, there are of course more reasons why I chose to do an exchange period. One of them was that I did not yet want to enter the labour market and look for a job. Another reason was that I was up for a new challenge and that I wanted to learn a new language. Also, meeting new people, getting to know different cultures and living in another kind of civilisation were important reasons for me to choose to live abroad for a while.

Looking back I can definitely say that meeting different people and experiencing different cultures has been very interesting and a lot of fun. I share my apartment with

T U D y I N G I N b U E N O S A I r E S

Name: Bart Verschoor

Age:23

begin studies: 2004

E x C H A N G E R E P O R T

“Ac ce p t t h e c h a l l e n g e a n d t r e a t yo u r s e l f t o a n

u n f o r g e t t a b l e e x p e r i e n ce ! ”

M o n u m e n t i n B u e n o s A i r e s

nekst4.indd 54 12-6-2009 12:00:39


a German and two Americans, which has given me the opportunity to learn more about their lives at home and has given rise to some interesting discussions about the differences. Apart from discussions about the different cultures we, of course, also exploite the different drinking games and social rituals of each country. Besides my roommates, I have friends here from all over the world, ranging from Spain to Canada and from Mexico to Japan. the Argentineans, too, are in general willing to make contact with the foreigners. They are really helpful if they notice that you could use some help and they also like to spend time with us.

My university in Buenos Aires, Universidad Torcuato di Tella, is a small private university. The university is smaller than most secondary schools in the Netherlands and has only 1200 undergraduate students. I have started to appreciate the facilities of Tilburg University more and more since I have been here. Studying at the university is almost impossible (besides the few places they have in the basement, but those do not really stimulate your studying performances), therefore I studied for my midterms in the national library of Buenos Aires.

Normally, classes are attended by somewhere between twenty and thirty students and you have four hours of theoretical lectures and two hours practical per course each week. The courses I am enrolled in are Money & Banking, International Finance and Politics & Economics. Each of them are very interesting, especially since they also look at the financial crisis Argentina encountered in 2001 when it defaulted on the biggest part of its public debt and had to step away from the fixed exchange rate the Peso had with respect to the United States Dollar.

The academic level of the courses is much higher than I had expected it to be. This can of course be partly explained by the fact that the Spanish level makes the courses harder, but the level of the courses in general is pretty high as well. The university is often called the Harvard of Latin America, which gives you an idea of how the Argentines look up to the university. The level of the courses means that we do have to keep up with the work on our courses, but it also means that the courses are very interesting and challenging.

If I take a step out of reality and try to observe myself living the Argentinean life, I think I can say I am pretty integrated by now. The high quality wine and beef especially, are things that I have got used to very quickly. Also, the fact that Argentines in general do not rush life is something I have got used to, although I realise that some people in the Netherlands would like to argue that I was already used to that back at home. The proud nature of the Argentines is starting to become a part of my life, too, although the Dutch criticism of will of course never disappear.

Luckily, this is only a quick look back and my period in Buenos Aires is not over yet, but there is already one thing I can say with certainty: I will undergo some severe reverse homesickness when my time in Argentina is over and when the time comes to return to the Netherlands. I will miss the Argentine culture and the Argentineans, with their love for their country and products. I will miss the exploring nature of life as an exchange student and I will miss the challenge of starting in a totally new environment. But most of all, will I miss the friends whom I have made here during the last couple of months, some of which are definitely friends for life.

If you doubt about going on an exchange, I can definitely recommend the experience. Altogether this period has been one of the best periods of my student life (together with my year on the Asset| Econometrics board). An exchange period is a unique opportunity to explore more of the world and to learn more about different cultures and perhaps also about yourself. My advice? Accept the challenge and treat yourself to an unforgettable experience! |

C o l o u r f u l h o u s e s i n B u e n o s A i r e s

nekst4.indd 55 12-6-2009 12:00:44


last April, the eleventh edition of the Economic business week Tilburg (EbT) took place. During two weeks

students had the chance to come in contact with their preferred future employer. besides that also a lot of

trainings, assessments, workshops, cases, high teas, dinners and other activities were possible. The programme

was most promising and many opportunities to match both parties were presented.

Now, the evaluations have been processed and as the title already implied, we are proud to say that the EBT 2009 was a sensation. Indeed, in the end leads Ambition via Development to Success.

OpeningMonday 30 March, 20.00 hours: the largest career event of Tilburg University commences. A team of seven men representing all study associations of Asset, have been working very hard for almost a year for this moment. After a short word of welcome of the chairman of the EBT organisation, the Vice Dean of the Faculty of Business and Economics of Tilburg University, Harald Benink, officially opened the week. After these two speeches, the magicians’ duo Rob & Emiel started their show full of magic and mystery. During an hour they amazed their public with a spectacular tailor-made show or as they call it a cocktail of comedy, magic, theatre, interaction and

surprise. The best act was saved for the last ten minutes: although one of them was blindfolded, he was able to “see” the correct bank account number of a bankcard of a random spectator sitting in the crowd. After the show was ended the evening was closed with an informal drink. It was a satisfying evening and we were looking forward to the next day since that would be the first day of our EBT 2009.

Training sessionsAbout eight hours after Rob & Emiel were said goodbye, everybody met again at Tilburg University for a quick breakfast and

instructions for the first day of our event, the Training Day. During this day twelve companies provided one or two training sessions. The training sessions varied from application trainings, to network training, or communication training. It was a day with a complex logistic plan and we are very satisfied that everything went well. During the lunch and drink we received much positive response from both students and companies, so we can conclude that it was a good day.

Assessment CentreThe Wednesday was reserved for the traditional Assessment Centre at the Willem II Conference Centre. This day the students got the opportunity to experience how it is to practise the assessments that are regularly used by application procedures for a job or internship at a firm. During the day each student had the possibility to participate in three rounds of assessments. These three

rounds were preceded by a plenary session of Berenschot. In this plenary session the general use and content of an assessment was explained. It was a long and busy day for both students and companies. However, the beautiful location, the professional ambiance, together with a very diverting and enthusiastic field of companies, made this day to a success.

Entrepreneurship & SMEThe next day was divided in two different themes. During the morning it was all about Entrepreneurship. Four workshops were offered for students, each focusing on a

M b I T I O N | D E v E l O P M E N T |

S U C C E S S

Name: Sander van der Ploeg

Function:Chairman EBT 2009

E C O N O M I C B U S I N E S S W E E K T I L B U R G

“ In total 54 companies presented themselves. ”

nekst4.indd 56 12-6-2009 12:00:44


different stage in the development as a (future) entrepreneur. Afterwards a closing plenary lecture of Prof. Dr. J. Vianen and student entrepreneur Y. Soeteman about Entrepreneurship was offered.

After the lunch, the Small- and Medium-sized Enterprises (SME) companies had the chance to present themselves to the students of Tilburg University. During a networking lunch the six companies, originating from six different fields of business, were present and afterwards they gave workshops about what it is like to work for a smaller company.

Accounting ActivityOn Friday, all the Big Four companies were invited to participate in a new activity that was introduced this year, the Accounting Activity. In the morning, all the Accounting students were able to see one of the Big Four companies presenting themselves during a workshop. Since the groups were small, the workshop was very interactive and all raised questions were answered. In the afternoon all students and representatives of the

companies came together to learn how to cook during a food workshop in the city centre of Tilburg. In this way, all students were able to talk to all companies and see the differences between them.

CompaniesAfter the weekend only four days were left. On Monday, Wednesday and Thursday in total 54 companies present themselves via company presentations, workshops, high teas, dinners and individual conversations to the students of Tilburg University. You can imagine that it is quite a puzzle to make a well working schedule for all those activities, representatives of companies, different locations, different time schedules and last but certainly not least the students.

On Tuesday we went back to the Willem II Conference Centre to welcome students and nine companies for the famous Case Day. The day started with a small word of welcome by the chairman of the EBT. After that the companies gave some insights about how the company looks like and

presented the case study. From that point on students were divided into groups and started solving this case. After lunch, a couple of hours were left to prepare and at the end of the afternoon solutions were presented to each other. Afterwards an informal drink was organised and at the beginning of the evening all the participants and representatives of the companies were invited to join for a luxurious dinner. During the dinner an etiquette expert learned everybody the tips and tricks about what you should do and what you certainly should not do during a business dinner.

On the final day, still eighteen companies were presenting themselves via many activities (as was already mentioned above), but also a renewed activity was presented: the Informal Activity. During this activity students could participate in a business game held in Holland Casino in Breda. During this afternoon, first a tour was made through the Holland Casino and then a business game commenced. For the duration of this game every group of students together with the representatives of the companies were representing a party and had a distinctive objective. In the end a game was played by means of bargaining and negotiation and every party was trying to achieve their goal.

The EBT 2009 was a success and together, as a team, we succeeded to master the problems that we encountered and we are proud to say that during these days everything went smoothly and no large problems were run into. On behalf of the entire EBT organisation, I would like to thank all the volunteers and participants for their help and support during our event. We hope to see you all again for next year’s edition! |

T h e E B T c o m i t t e e

nekst4.indd 57 12-6-2009 12:00:51

�� Nekst 4 - June 2009

E l l I N G b O N D S

E x C U R S I O N M I N I S T R Y O F F I N A N C E

For security reasons we had to identify our-selves in order to be allowed into the building of the Ministry. At two o‘clock the presenta-tions started. First there was a general pres-entation about the Ministry of Finance and the agency. In this presentation we learned about what econometricians within the Min-istry of Finance do. This general presentation was followed by a more specific presentation about the Dutch Direct Auction (DDA), which shed light on several aspects that were famil-iar to most of us. Finally, we were instructed to solve a case with respect to the DDA.

The group was divided into six smaller groups and each group represented a bank. The main idea was that the Ministry of Finance had some bonds for sale and we had to buy some of them on behalf of the bank we represent-ed. Each bank received a list of ten customers who were interested in buying a bond from the government. For each customer, there was information on how much profit they wanted for each bond and how much they wanted to invest in the government bonds. These profits were between 50 and 52 points. However, as a bank we had to decide for our-selves whether or not we wanted to increase our expected profit by placing a bid that dif-fered from our customers’ wishes. If we chose to do so, this would be at the risk of not being able to satisfy our customers’ wishes or buy-ing a bond with a profit rate our customer is not interested in. At the end of the bidding period, the government would determine the profit of the bonds, which was called the cut-off price.

For example, if the government needed 100 Euros and they would get bids for a total of 50 Euros from banks to buy the bond with a profit rate of 50, 70 Euros from banks at a prof-it rate of 50.5 and 20 Euros, respectively, from banks at a profit rate of 51, then the cut-off

price would be 50.5. This is because the gov-ernment only needs 100 Euros and can sell enough bonds at a price of 50.5. But of course the banks do not know beforehand what the cut-off price will be. If a company desires a profit of only 50 for a bond, the bank could place a bid indicating they want 50.5 points profit. This way, the bank can try to raise the cut-off price and keep the difference. This is to the advantage of the banks, because they receive the difference between the cut-off price and the bid of the customer. If a com-pany wants at least 52 and the bank indeed tells the government they want 52 and the cut-off price in the end turns out to be, say 51.5, there is no problem. But if the bank plac-es a bid for 51.5 and the cut-off price is 51.5, then the customer refuses it because he only wanted to buy a bond with a profit rate of at least 52. As a result, the bank would have to sell the bond to someone else on the market. This costs the bank money, so by indicating another bid to the government than what the customer wants, a risk is also involved.

From the above you are probably able to tell that it was quite a complicated game and we have still not even listed all of the rules of the game. Nevertheless, it was a fun game to play and everyone enjoyed it. Whilst the people who did the presentations were calculating which group was the winner, we were able to have a drink and a chat outside the room. The winner was the bank that earned the largest amount of money in the end. There were two groups that got the highest profit, so they had to share the prize they won, which was a nice bottle of wine. Although not all par-ticipants could be a winner, everybody had a great time.|

Name: Dori van Hulst

Age:20

begin studies: 2007

On the sixth of May we went to the Ministry of Finance in The Hague with a group that consisted of about

twenty people who are taking the second year course Orientation ME/EM. we met at Tilburg west train station

at �2 o’clock and arrived at The Hague Central Station at half past one. From there, the Ministry of Finance

was easy to reach on foot; it only took a five minute walk to get there.

nekst4.indd 58 12-6-2009 12:00:51

PriceWaterhouseCoopers

nekst4.indd 59 12-6-2009 12:00:51


Our visit to varkensmarkt ��-� does not start inside Stan van workum’s house. No, it starts with Stan jumping

around in the playground across the street. “well, actually it is the first time I have sat on this swing,” he

mentions while he jumps off the seat. He takes us inside and briefly shows us his room. “It is not that interesting

here, so let’s go into the living room.”

At first we smell the pasta – probably the evening meal – and then we find two ladies sitting on one of the three benches. “I am being interviewed,” Stan says with a smile – some eyebrows rise slightly – and to us he says: “please sit down.”

A nice roommateThe bench is quite comfortable, as is the whole living room with its open kitchen. There is certainly enough space for Stan and his six housemates. Stan joined them about seven months ago. “In my first year of Econometrics I was still living in Oss, but I did miss something. You know, you just miss some part of your student life if you don’t live on your own. So I started looking for a room, my criteria were: at least 18 m2 and no more than 300 Euros monthly rent. After some searching, I saw this ad for a room that was 17 m2 and that cost 280 euros so I thought I ought to give it a try. Now I live here and I really enjoy being here. The only thing is that my room is only 16 m2 and I pay 312 euros per month, so I was a bit misled by the housing association. I would have gone looking for another room, if I did not like my housemates so much. I don’t think there are many student houses where the students are as close as we are. We maintain an ‘open-door-policy’, as we like to call it. Besides the location is quite good, it is very close to the centre.” Stan’s roommates are also very pleased with their choice. “He is very enthusiastic, happy and he sings all the time. Stan also likes to impress us by baking omelettes and cooking a nice meal.” However, one of his roommates has a theory: “Stan is a nice guy, except when he plays his shooting games on the computer. I think that is why he is so nice. He gets rid of all his aggression by playing those games.”

Cleaning, cooking and enjoying the – hopefully – delicious meal are things Stan and his roommates do together. In this house Stan discovered a whole new world of cooking: the oven. “I do eat a lot more pizza, in Oss we did not have an oven. I also learned another thing here: when I am cooking, I should not listen to other people’s advice. Most of the time I just buy some ingredients and make up the recipe while I’m cooking. A few months ago I was given all kinds of tips and advice about how to cook beans, warm up the potatoes etcetera. I listened to everybody and the result was awful.” One of Stan’s roommates confirms this by nodding.

Afterwards they like to drink coffee or tea and watch television or play games. Stan points at a bookshelf in the living room; it is filled with games. Skip Bo and Singstar especially are favourites in the house. “I always win at Skip Bo and Matthijs is really good in humming the songs with Singstar,” Stan says. He is talking about his roommate Matthijs Poorthuis, a fifth year econometrician, who could not make it on the evening of the interview due to his Vidar activities. One of Stan’s roommates mentions that they all are actively involved in student life, either in student associations like Plato and Vidar or study and sports associations. Asset is very well represented by both a board member of Asset | TOP-DOWN and the chairman of Asset, who just moved to the Varkensmarkt. “Our huisfeut,” according to Stan.

New sportsStan is more the sports guy. He plays handball at Camelot and back in Oss he dances both ballroom and salsa. The dancing started a few years ago, more as a joke that resulted from some alcohol. “I was at a party and a

H O U S E w I T H A l I v I N G r O O M ,

P l Ay G r O U N D A N D S O M E A S S E T S

Name: Stan van Workum

begin studies:2007

Address: Varkensmarkt 11-1

L I V I N G I N L O D G E S

room surface: 16 m2

Monthly rent: 312 euros

nekst4.indd 60 12-6-2009 12:00:52


girl I knew kind of lost her dancing partner, so I said that I could dance and that I wanted to join her. I gave her my number thinking she would never call me and she did not, that is until fifteen minutes before her dancing lessons started. She texted me asking whether I would like to come, so I did. The people are very nice and I always have a lot of fun, especially after the lessons.” Dancing is one of the many new things Stan has tried, including gliding (zweefvliegen) and waterskiing. “The problem is that when I try something new, I love it, but after a while I get used to it and then begin to find it less interesting.” Stan is rather good at dancing, he is already getting a little bored though since he picks up the new moves quite quickly. When we ask Stan what he thinks of the dancing styles of econometricians in general, he answers with a question: “What dancing style?”

Handball is another one of his specialties. In his room we find two shelves filled with medals. Two of

them are very special, they are gold and stand for his victory at the beach handball national championship. There is also a nice medal for skiing but though it looks gold, it was bronze.Handball can be played not only in a gym at the sports centre, but also at the beach. Stan is chairman of the tournament committee of Camelot and in August there will be a big beach tournament in Tilburg, the Camelot TBSM. He is also organising a trip to the Czech Republic to play another beach handball tournament.

Famous“That is just about how I fill my days,” Stan says. “Besides studying, I play handball, organise tournaments, like to dance and I go to – almost – all the activities organised by Asset | Econometrics. I am actively involved in the student association, together with some of my econometrician friends.” He met these people during his TIK-week in 2007. “We started with a group of, I think sixteen people and in the end eight friends remained. We

study – or studied – together, go to a lot of student activities and we go on vacation. Last year we went to Valencia and no I am not telling you where we will be going this year. You know, we are a little bit famous in our year,” Stan says with a big smile on his face, “and I am afraid people follow or stalk us.”

Besides making a lot of jokes and talking about his passion for beach handball, Stan also thinks about his future. “I would really like to go to Singapore for an internship or something like that. When you take a look at the skyline of that city, or metropolis actually, you think a lot of people must be working really hard there; the word motivation is the first thing that comes into my mind. They must be very dedicated to their jobs. That is why I would like to go there, to experience the dedication and strive for perfection. It is something I miss here in the therlands and at our university. Not that I am such a hard worker, but I would be a pusher if my environment were to encourage me more.”

SleepoverFinally, we ask Stan if we could take a longer look at his room. It is a rather calm, light room and then we notice why. “I do not have any curtains yet, but I don’t really miss them.” With pride he shows us his shelves of medals and his aquarium. Then all of a sudden, he invites us for a sleepover. “Tomorrow morning we all have to go to class so then we can go together. I will sleep on the couch and you can sleep in my bed.” Well Stan you might think you are famous, but you are not that famous yet. So we kindly rejected the invitation. Maybe some of you would like to stay? Then you could at least try to figure out where Stan and his friends are going on vacation or you might be surprised by one of Stan’s omelettes. [MGS & TeB]S t a n i n h i s r o o m

nekst4.indd 61 12-6-2009 12:00:55


Since I play draughts (sports!) on a high level, I wanted to combine draughts with Econometrics. Therefore

I decided to write a theoretical thesis instead of doing an internship. Several years I played championships

and considered the final ranking list unfair. However, there is no use for complaining when you cannot come

The settingConsider 100 participants in a tournament. At the end of the tournament we wish to determine the number one, but also the number 37, etcetera. We can only play nine rounds, so it is not possible to play a round robin tournament in which all participants play against each other once. Since we play only nine rounds, it is desirable that the participants play against opponents with approximately the same strength. Otherwise, grumpy old men start complaining if they have lost the first three rounds and have to play against a grandmaster in the fourth round.

The Swiss systemFor these kind of tournaments the Swiss system is being used. All players play the same number of rounds. After each round we create a ranking list. Based on the ranking list the pairing of the next round is made. In this way players will play against other players with approximately the same strength. A more important part of the Swiss system is how the ranking list is determined. In the ranking list the participants are primarily ranked on the

number of points scored. When participants scored the same number of points (winning gives two points, a draw gives one point and if you lose you get nothing), they take the Average Opponent Rating (AOR). If you have faced strong opponents, you will end higher, at least if you have scored the same number of points. This sounds reasonable, but in fact this is mathematically very wrong. First let me explain a part of the rating system.

The rating systemIn chess and in draughts we have a world-ranking list in which all members are rated. A high rating is given to strong players. Using

the normal distribution function (mean zero, variance 200√2), we can compute the expected scores when two players play against each other (figure 1).

Taking the AOR to rank the participants is blasphemy. Taking the average of two points of a non-linear function is only allowed to pretty blonds. An econometrician notices in no time that it is more advantageous to play against two players with approximately 300

O M b I N I N G S P O r T S A N D

E C O N O M E T r I C S

Name: Wouter Ludwig

Age:23

begin studies: 2004

P R A C T I C A L R E P O R T

F i g u r e 1

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rating points less than to play against someone with 600 ratings points less and someone with the same rating.

Tournament Performance ratingsTake the Tournament Performance Rating ( TPR) instead of the AOR. That is, the rating that gives an expected score equal to the number of points scored. For example, the TPR of a player who scores three points against two players with ratings of 2200 and 2250 (master level), is equal to 2417(grandmaster level) with expected scores of 1.56 and 1.45.

The TPR has another advantage over the current ranking system. There is no more need to rank primarily on the number of points and secondarily on opponent strength, since the TPR gives a perfect balance between score and opponent strength.

Stationary Tournament Performance ratingIn my thesis I go a little further than the TPR. I compute a TPR for all players, such that if the ratings of all players would be equal to their stationary TPR, the tournament performance rating of all players would also be equal to their Stationary Tournament Performance Rating (STPR) again. Such a STPR exists for all players and is unique. For the proof of this I refer to my thesis “Comparing Swiss Tournament Systems”.

Comparing Swiss Tournament SystemsTo proof that the ranking method described above is better than the currently used ranking method, it is necessary to compare the systems in a quantitative way. The ranking list of a round robin competition can be considered fair, since all players have played against each other. A ranking list after nine rounds can be considered as a prognosis of the ranking list of the round robin tournament. The deviation between the ranking lists can be measured in a quantitative way. With simulation techniques we can show with a high certainty that the ranking method of the STPR is better than the AOR ranking method. |

F i g u r e 2

Mathematically simplified:

In which F is a function that computes the TPR of a player

(STPRp) given the STPR’s of the opponents (STPRo)

Aparticipant: F(STPRo) = STPRp

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Shopping listFour persons

¼ kg mushrooms5*102 grams tortellini meat302 + 10*22 grams pasta sauce carbonara 1 bag of Parmitalia cheese e0 teaspoon of salte0 ‘Pak Dubbelvla’, stirred not shakenChocolate sprinkles

recipe for tortellini with carbonara sauce and mushroomsTake a pan with enough water and let the water boil. Boiling the water takes about ten minutes. Meanwhile, wash the mushrooms and slice them into pieces. If you are finished with the mushrooms and the water is still not boiling, then you have probably not been precise enough about slicing the mushrooms. If you have been precise enough, the tortellini can be put into the water. Do not forget to add a little bit of salt. Now you have to wait about ten minutes before you can add the mushrooms to the tortellini. The tortellini is best served al dente. Take the pan off the cooker and drain the water. Put the sauce in the pan and heat it a little, so that everything is nicely warm. Now your meal is ready to be served! If you prefer, you can put the cheese on your tortellini.

recipe for stirred but not shaken ‘dubbelvla’ with chocolate sprinklesFind four bowls, one for each person. DO NOT shake the ‘dubbelvla’. If you shake it, the whole meaning of ‘dubbelvla’ is ruined. Put a portion of ‘dubbelvla’ in your bowl. Then the fun part has started now: you can decorate your dessert with chocolate sprinkles. Now you are allowed to stir the dessert. Make sure that the chocolate sprinkles are well distributed according to a uniformly divided distribution. Enjoy your dessert!

reaction from Stefan DamenAfter a busy day at the Astrics room I like it very much when I can, as it is called in Dutch: ‘aanschuiven’. As a real Burgundian, I like everything I can eat. But on this evening I ate one of the best student meals! Because we were with only one woman and three guys, there was one dominant strategy: eat as much as you can! So I took the biggest plate (diameter sqrt(2) * 23 cm) to fill it with the delicious Tortellini Carbonara made by beautiful minds.The dinner was good, the dessert was the best! A nice mixed strategy of chocolate pudding and vanilla custard was very tasty. As a matter of fact, it was the second time we had eaten this nice dessert with the committee. So maybe it is an idea to introduce this as a tradition, if you are going to eat with your committee? reaction from Timo DeistI do very much agree with Stefan, although I do not understand his Dutch, finishing off the day with a nice dinner is perfect. My focus lies on the sum of quality and quantity and this dish comes off quite well. Even though it seems to be a rather straight forward dish, one can refine it with different spices and cheese. Since the major taste is based on the sauce, everyone should make sure he or she finds the right brand which fits his personal taste.

Concerning the dessert: No one should ever shake the ‘dubbelvla’, not even stir it. That ruins the whole idea of ‘dubbelvla’. Certain members of our committee have developed the sadistic habit of torturing innocent vla-epicures, who I will not name here. So, bear in mind: Please, do NOT shake the vla! Please!! |

O O K I N G w I T H b E A U T I F U l M I N D S

C O O K I N G W I T H T H E P R O M O T I O N C O M M I T T E E

The promotion committee is proud to present to you Elske leenaars & Pascal Heuijerjans as the cooks of

the evening. They made a delicious dish of tortellini carbonara and for dessert ‘dubbelvla’ with chocolate

sprinkles. The meal costs around 2,�0 euros per person.

T o r t e l l i n i w i t h c a r b o n a r a s a u c e & m u s h r o o m s

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A N I N T r O D U C T I O N T O T H E

I N T r O D U C T I O N A C T I v I T yC O M M I T T E E P R O F I L E

An introductionThe Introduction Activity Committee 2009 consists of four members. These four members, who intend to organise an unforgettable day, are Anouk Rennen (chairman), Marleen Balvert (secretary), Stefan Damen (coordinator) and I am the treasurer. For obvious reasons, we are the very first committee to organise this day, as this will be the first time such an introduction activity will take place. As a result, there are a lot of possibilities but, on the other hand, it will also demand a lot of creativity from the members.

Our missionThe committee started the project with the intention of transforming the large group of freshmen into one big cosy group of both Dutch students and foreign ones. We know from previous years that groups that were formed during MAK camp and TIK week stick together for a long time. So we figured it was our aim to: familiarise students enrolled in Econometrics with each other. Therefore, this activity has not been introduced to compete with MAK camp or TIK week, but solely to complete the introduction. Furthermore, it has proven rather difficult to reach the new first year students in order to bind them with our association. In this way we hope that freshmen will become more familiar with Asset | Econometrics, so they can benefit from our association just like we do. Ultimately, Asset | Econometrics might end up with more active members from the first year.

The activityDuring the meetings we decided that the introduction activity must contain elements that force students to cooperate and communicate with each other, as we believe this would be the best way to get to know each

other. After investigations by all committee members and a brainstorming session, we had a big list of ideas. Subsequently, we made a selection of all these great ideas and created an initial and rudimentary set up of the day.

The introduction activity will take place in the first week of the new academic year. It will last a full day with many different games located in and around Tilburg University. The lectures will be rescheduled. Students will be split up into different groups and together they have to get as many points as they can by winning different games, in order to receive the coveted freshmen award 2009. But be aware! Not everyone in your group is to be trusted. There will be an unknown group member who has other intentions during the different games. Participators need courage, human knowledge, intelligence and initiative to achieve the result they want. It will be a day full of trust and distrust but most of all; it will be an entertaining day.

At the end of the day we will have a barbecue. We hope to be able to invite our active members to this barbecue as well, although this is not certain yet because of the rather tight budget. If active members do join in, freshmen will have the opportunity to hear more about our association and then perhaps Asset | Econometrics will appeal to them and they will become active members, too. Whether or not they will become active, they will certainly not forget Asset | Econometrics quickly!

If it is up to us, which it is, the introduction activity will succeed in all its goals. We are looking forward to realising our ideas and to making it an unforgettable day! |

Name: Wilbert Kistemaker

Age:19

begin studies:2007

In the first week of September the Introduction Activity will take place for the first time. The idea behind this

activity is that freshmen will get to know each other better at the beginning of their courses. During this day

we will play a lot of games in which the participants will have to compete with each other but also cooperate

with one another.

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The rules are simple: email us a picture that shows both you and a mathematical object you encountered on your holiday. The submission deadline is 1 September, 2009. Several submissions will be published in the first edition of next year’s Nekst.

rules for entry

A T H E M A T I C S O N H O l I D A y

S U M M E R P H O T O C O N T E S T

Nekst is excited to announce the second Asset | Econometrics photo contest. The contest will gather pictures

from around the world on the theme of you and a nice mathematical related object, like an equation or a

certain famous pattern. The most original picture will win an original ‘vlaai’ or a crate of beer.

l A N N I N G

T O C O N C L U D E

P h o t o s h o p i s n o t a l l o w e d

Entries must be received before 1 September, 2009 via [email protected]. Entries should show both the mathematical object and the member that enters the contest.It is forbidden to edit your submission with Photoshop or any other photo-editing program.Entries will be assessed for originality by this year’s and next year’s editors-in-chief. All Asset | Econometrics members and members of the Department of Econometrics and Operations Research, may join the competition.No correspondence will be entered into.

Entering a submission to this competition constitutes acceptance of the rules.

Friday, �0 JulyBeach DayHaving finished all exams and (hopefully not too many) resits, it is time to enjoy the summer: Asset | Econometrics will head for the beach of Scheveningen this day. Let the sun shine!

Tuesday, � SeptemberGeneral Members Meeting & DrinkOn Tuesday, 8 September the candidate board will be inaugurated. They will share their plans for the upcoming year. Afterwards there will be a drink.

nekst4.indd 66 12-6-2009 12:01:02


The puzzle: what does the complete long division look like? That is, what are the numbers that are to be placed on the dots?

Please send your solution to the puzzle to [email protected] before 1 September, 2009. The previous puzzle, the Kwon Tom Loop puzzle was solved by many members. Therefore, Nekst chose a winner at random. The lucky winner is Heidi Veugen. She can pick up a crate of beer or a ‘vlaai’ at the Asset | Econometrics room. For the winner of this final puzzle, the same prize will be waiting. |

For the last time this academic year you have the opportunity to solve an Asset | Econometrics puzzle and

to possibly win nice prizes. In order to solve the puzzle you have to posses above average mental arithmetic

skills, as this edition’s puzzle is about solving a long division. All that remains to say is Good luck!

M E N T A l A r I T H M E T I C T r A I N I N G

P U Z Z L E

. . 9 / 6 . � . . . \ . � 3 . . . 2 ------- . 9 . . . . 4 . ------- . . 4 . . . . . ------- 0

Name : Mrs. M. Berenpas (Master) QFASTitel : Inflation Risk and the FTKSupervisors : Dr. R.J.A. Laeven, Prof.dr. J.M. Schumacher

Name : Mr. S.D. Hooghwerff (Master) QFASTitle : An individual-claim copula model for the volatility of non-life insurance loss reservesSupervisors : Dr. F.C. Drost, Mrs. drs. W. Montulet RBA, Dr. B. Kramer

Name : Mrs. A.A.M. Loonen (Master) QFASTitle : Segregated fund guarantees, modeling and hedging interest rate and equity derivativesSupervisors : Prof.dr. J.M. Schumacher, Mr.prof.dr. Boshuizen

Name : Mrs. M.A. Meulenberg(Master) ORMSTitle : Divisible Design GraphsSupervisors : Prof.dr.ir. W.H. Haemers

Name : Mr. T.O. Michielsen(Master) MEEMTitle : Operational Efficiency in Public and Private Postal Companies: An Empirical AnalysisSupervisors : Dr. M.H. ten Raa

Name : Mrs. J. Oosthuizen (Master) QFASTitle : A Stochastic Discount Factor Approach to VAR ModelsSupervisors : Prof.dr. J.M. Schumacher, Prof. dr. B. Melenberg

Over the past months, the following econometricians obtained their Master’s degree. Asset | Econometrics

would like to congratulate:

r A D U A T E S

C O N G R A T U L A T I O N S

nekst4.indd 67 12-6-2009 12:01:02

Dutch quotesEmy van der Wielen: “Ik heb niet zo veel verstand van politiek, ik weet niet eens wat links en wat rechts is.”

Linda Vos bij het concert van The Sheer in de 013: “Hee, van wie is dit nummer eigenlijk?”

Tijdens het toetje van het cycling dinner:Frank Steenbergen: “Hmm, er zit iets in dat smaakt naar koek, dat is erg lekker. Wat is dat?”Tim van der Molen Kuipers: “Koek.”

Marleen Balvert tegen Linda Vos als ze de waterkoker wil aanzetten en op een knopje drukt: “Hey, werkt deze op batterijen?”

Tijdens het cycling dinner doet Freerk Post geheimzinnig over een meisje.Freerk: “Jullie mogen haar naam raden. Het begint met een ‘T’ en eindigt op ‘essa’.”Hettie Boonman: “Sabine!”

Linda Vos tegen Marije Alblas over het gestolen bord van Asset | Econometrics: “Ik vind het echt triest dat mensen zoiets jatten en ook gewoon niks van zich laten horen. Als je nou iets jat van de gemeente of zo...”

Stephanie van Breda de maandag na het ALW tegen Evelien Kerkmeijer: “Je mag wel een appel uit deze zak, die zijn toch op.”

Joris van Raak tijdens RavA tegen Marije Alblas: “Maar jij kan daar als onzijdig persoon natuurlijk een belangrijke rol in spelen.”

Ruud Hendrickx tijdens Oriëntatie MEEM over de case van dat vak: “Het ging best goed. Ik had nog 1 kilo M&M’s voor mezelf. Stefan Damen: “Ja, dat is te zien.”

Robert de Veer tijdens de RavA: “Technische bedrijfskunde is Econometrie light.”

Tim van der Molen Kuipers komt op 5 mei ‘s avonds het bestuur tegen op station Tilburg: “Hebben jullie Bevrijdingsdag gevierd in Haarlem?’”Stefan Damen: “Nee, in Wageningen.”Tim: “Vieren ze daar ook Bevrijdingsdag dan?”

Marleen Balvert: “Een pimpelmeesje is toch pimpelpaars?”

Stephanie van Breda tegen Linda Vos: “Hee Linda, zit hier SBS 6 op de computer?” (SPSS, red.)

Bart Kruize tijdens de OID vergadering als er een discussie is of we een spreker in de ochtend of in de namiddag willen: “Dat ligt eraan of hij een ochtendmens is.”

Linda Vos tegen Paul Peters: “Hoe ging de Kennedyloop?”Paul: “Ja, goed. Ik was uiteindelijk als twee na laatste binnen van de vier. Dus ja, als tweede eigenlijk. “

Emile van Elen: “We moeten kaarten hebben, we gaan Mexxen.”

Marleen Balvert: “Maar dan moet je k toch uitrekenen?”Stan van Workum: “Nee, die vervang je gewoon door c.” Frank Steenbergen tegen Professor Einmahl: “Maakt u altijd al een deel voor dit tentamen?”Professor Einmahl: “Nou, niet altijd, ik ben pas 32. Nou ja, plus epsilon dan.”

English quotesHettie boonman: “I only know a few words Dutch (Editorial note: German).”

Tim Boonen: “Not wising at other people.”

Servaas takes the jack from a staple of card: “I have the farmer.”

Linda Vos asks a foreign student from China: “What is the English word for ‘Swa’?”

Professor Talman: “Do not expect this to be good, I do it out of my mind!”

Linda Vos: “There is a party of an association that celebrates its twentytwoth birthday.”

Professor Talman: “Through the i’s I cannot see the 1’s anymore.”

Linda Vos: “We are going to visit Arnoud Klep and his women.”

Professor Talman while explaining an equation: “What went to the right is right, so what is left should also be right.”

Linda Vos while playing Kingzen: “And then you need to add.”

U A T S C H !

R E M A R K A B L E Q U O T E S

Fortunately, the editorial staff of Nekst received many quotes that relate to the study of Econometrics and

to the activities organised by Asset | Econometrics. Therefore, a very well-filled page with some striking and

sensational quotes! Please mail all remarkable quotes you have heard to [email protected]!

6� Nekst 4 - June 2009

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SNS REAAL

nekst4.indd 69 12-6-2009 12:01:02

NIBC

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Documents

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