Page 1


The SCOPE | Vectum board of 2017 - 2018 wishes you all a Merry Christmas and a Happy New Year.


December 2017


Table of Contents 4 Word of the President

Magazine for Econometrics students at Maastricht University Year 23, issue 2 of 4 December 2017

6 Eating with Eccentric Econometricians - Rhianne van Heese Phalaborwa Calling!

9 Music Quiz 10 Cycling Dinner and its Greatest Recipes 12 Lea’s Exchange in New York City, USA 14 Puzzles

Editor in Chief Laura van Vledder Co-editors Fred Hagelstein Gagah Prambudi SCOPE|Vectum P.O. Box 616 6200 MD Maastricht +31 (0)43 388 39 40 NL34 INGB 0006 9295 73 Visiting Address Tongersestraat 43 Room 1.014 6211 LM Maastricht

15 Nerdy Math Jokes 16 Meet the Professor - An Interview with Eric Beutner 17 Bowling 18 Winterball 19 Life after Vectum - An alumni article written by Herman Sontrop 22 Oligopoly and equilibrium 25 Vectum Trial Leaderboard 26 Bouldering 27 Research Lecture Block 2 28 Chiara’s Exchange in Milan, Italy 30 Twelve Days of Christmas - Programming Edition 31 Ice Skating at the Vrijthof 32 Upcoming Activities 3


Word of the President

Dear members, Cold winds have reached Maastricht at the same time as the pre-Christmassy exam stress, and drove students into the cosy arms of the library. But after the (hopefully successful) Grande Finale in the MECC, you can finally take a deep breath; after 16 weeks of continuous focus and determination, you deserve a break. This also means that our board year has reached halftime, which is a good opportunity to look back. We already introduced some novelties in the first academic period, like the first-year trip and the Vectum Trials, and while these things were or are mostly successful, it is way easier to come up with good and innovative ideas when you know each other even better. Therefore, we put a focus on board integration and spent a good part of our free time together. Our shared hand, we would like to make sure that the misambition remains that we not want to simply adconception of competition and rivalry does not minister SCOPE | Vectum, but strive for progress. prevail, and burdens of the past can be put aside. At the same time, it is of highest importance to us to maintain Vectum’s values. My personal highlights of the past period were (of course) the Tuesday nights. In particular, I enThe second block was also the first period of our joyed introducing some of my favourite music to board year where we could already work in the you during the music quiz. Special thanks go to committees from week one onwards. Your input Alain Hecq, who gave the research lecture about is greatly appreciated, and I hope you will keep mixed frequency time series models, extended up your enthusiasm in 2018. by practical demonstrations in eViews. I also think that the year has been concluded propWe continued to work, with our friends and erly with the traditional ice skating on the Vripartners from SCOPE, on new models for coopjthof, even though my (lack of) balance did not eration with each other. Finding a solution that approve to that. Finally, the nights in the Preupleases all parties is difficult and will keep us verij have been a blast, and I am hoping for many busy for the rest of the academic year. Our leitmore quality evenings in 2018! motif for these discussions is strongly oriented at the conclusions of the semi-annual GMA 2017, So, what will await you and us next semester? I and we are going to make sure that econometriam looking forward to welcoming our third-years cians have at least the same opportunities in back from exchange. We missed you as much as the future as they had in the past. On the other 4

December 2017 you missed us. Be prepared to meet fresh faces Finally, Vectum is always searching for great and old friends. ideas. Do have such ideas? Then maybe a board position is the right thing for you. While there Are you already thinking about your professional is no need to decide any time soon, it can be of career after university? Together with our part- advantage to already make up your mind about ners, we are going to offer a record-number of which positions you might be interested in. career and orientation events. Next to the traditional business trip and case day, and inhouse But now get ready to dive into the usual mix days at Optiver and APG, we are also going new of nostalgia about last period’s activities, interways. Currently, Marijke is working on a Strategy views, home stories and puzzles, carefully selectTour, in cooperation with Asset | Econometrics ed by editor-in-chief Laura. Further, the research from Tilburg. While still in the acquisition phase, article by Dries Vermeulen is worth a read. this two-day event will give you the opportunity to get in touch with – you guessed it - strategy On behalf of the SCOPE | Vectum board 2017consultants. 2018, I wish all our members, alumni, partners and friends a merry Christmas and a happy new But of course, our social activities will not come year. too short either, so be prepared for what Lorenzo has in store for you. The weekly events will return in period 4, and continue to be open for all econometricians at Maastricht University. The Vectum trials will continue. After the first semes- Dominik Dribusch ter, Koen is topping the table, so congratulations. President of SCOPE | Vectum 2017 - 2018 But be careful, only the next semester will show whether anybody has what it takes to thrust Koen from the throne.



Eating with Eccentric Econometricians Rhianne van Heese - Phalaborwa Calling!

Name: Born in: Study: Nationality: Married since: Honeymoon in: Favourite Place:

In this edition of Eating with Eccentric Econometricians, Laura and her PerVectum teammates Gagah and Fred were invited to the cozy Maastricht home of fellow student Rhianne van Heese, a friendly twenty-three year old Dutch girl from Zeeland in her second year of the bachelor’s programme. This evening, Rhianne had the PerVectum team over for dinner to share some stories about her adventures ranging from the wilderness of South Africa to the quaint Maastricht, wherein she learned a lot about life’s most important matters, such as love, freedom, and econometrics.

Rhianne van Heese 1993 Second year BSc E&OR Dutch August 24, 2016 Paris Phalaborwa, South Africa

ty-seven year old South African gentleman who was preparing our burgers. Rhianne joked that when it comes to grilling, we should leave it to the South African, yet she herself had worked at the McDonald’s at the Vrijthof (maybe some of you have even seen her there). So both our hosts knew what they were talking about, and we went straight ahead into hearing their story.

Rhianne’s father is a chemical engineer and worked on projects in different countries throughout his career. While growing up, Rhianne’s family had moved around between Italy, Germany, the Netherlands, Belgium, and Spain, We arrived shortly before dinner at Rhianne’s picking up on the languages along the way. She home, a brick house nestled among other fam- attended high school in Madrid, and when she ily and student residencies close to the Belgian and her two brothers, one now at Hogeschool border – so far, nothing unusual for a Maastricht Zuyd and one at University College Maastricht, student house. We were greeted by our host and that they all wanted to study in Maastricht, they a teasing smell of meat on a grill. Upon enter- found the house to share. Rhianne first completing, it was clear that her home had what many ed a year at Hogeschool Zuyd in International student flats lacked, such as furniture, and an Business to obtain her Propedeuse, and began overall aura of feeling at home among mature her studies in Econometrics & Operations Readults. From the framed photos on the walls, search in the fall of 2016. shelves full of (non-course-related) books, and other memorabilia from different corners of the When most of us decided where and what to world, we could already sense that our hosts felt study, this is oftentimes the first big decision we at home around the world before our conver- make in our young adult lives, but not in Rhianne’s sation even began. In the kitchen, we were in- case. Before starting her studies in Maastricht, troduced to Rhianne’s husband Eugene, a twen- Rhianne’s parents decided that they wanted to


December 2017 buy property in South Africa, and found what they were looking for in Phalaborwa, a countryside town in the north east of the country, east of the Kruger National Park and the border to Mozambique. Rhianne’s mother became good friends with her real estate agent, whose son Eugene showed Rhianne’s family around their picturesque hometown. The two would eventually spend some quality time on their own, and fell in love. The couple got married there in South Africa, where Rhianne decided to stay with her new family for a year and postponed her studies.

around them, Eugene knows exactly which spots are best to see animals on a safari and also how to behave accordingly. Although Rhianne had to get used to them, he remains calm, and would only back away if he can see that the animal is clearly aggressive.

So coming from such a lifestyle in touch with nature and the outdoors, what is life like now for Rhianne back in the Netherlands, considering that Eugene is still based all the way back in South Africa? The two have gotten used to being spread out over the world, as Eugene had to When we asked Rhianne what her favourite travel to Saudi Arabia frequently while they still place was so far, she did not hesitated to tell us lived in Phalaborwa, and now he is currently in more about South Africa. If there’s one word that Maastricht for only a visit due to visa restrictions. describes the people and culture, the two tell us: When she came to Maastricht, the courses startit’s very chilled, which we would agree with after ed so soon after their wedding, that they had to having met Eugene. Rhianne and Eugene got to postpone their honeymoon, which they spent in know each other better by travelling together, Paris. Rhianne is enjoying the studies and will be road tripping throughout the country and also going to Taiwan on her exchange, where she and later throughout Europe. Yet back home in Phal- Eugene may add an Asian chapter to their life toaborwa is where they feel best. Their house is gether. at a game reserve far from the city life, where the majority of their neighbours are subjects On behalf of the PerVectum team, I would like of the animal kingdom. Certain amenities such to thank Rhianne and Eugene for their delicious as a store or hospital are spread many kilome- cooking, great company, and wish them all the tres away, so driving a car is necessary. On their best in their studies and careers, as well as more way around, it would not be unusual to come travelling to come! If you may come across Rhiacross lions or elephants – sometimes even pop- anne at the SBE, do take a minute to hear one ping by their backyard to say hello. The nosiest of her many African anecdotes that will get you neighbours seem to be the monkeys, who have rushing to the next airport, especially now in a knack of finding their ways indoors together winter. with the spiders, scorpions, or snakes you may find hanging out in your shoes. Having grown up




Koenen en Co zoekt stagiairs en starters die zichzelf durven zijn. Die ergens voor staan, ook zonder blinkende auto of schoenen. Die begrijpen dat de vorm leuk is, maar dat de inhoud telt. We verwachten 100% inzet en ook 100% jou. Omdat alleen jij kan wat jíj kunt. Omdat eerlijkheid het langst duurt. Omdat er geen stomme vragen bestaan. Zo werken we samen aan jouw suczes én dat van onze klanten. Samen laten we ondernemers suczesvol ondernemen. Check onze vacatures op

Suczes. Een kwestie van doen.


December 2017

Music Quiz written by Joost Veth

After a year of absence, I was very pleased to hear that this year the famous Vectum music quiz had been restored to former glory. After all, what is better than a good night of competing among friends while listening to great music? (I admit I am slightly biased, as the Music Quiz was first introduced in my board year). Anyway, the first Tuesday of the block we all gathered at the Ma van Sloun for a good night of entertainment. And the organizers did not let us down! The president himself put together an amazing quiz, nicely balanced over the years, and thanks to the the point system, the competition was exciting till the very end, with an unexpected twist: even though it seemed as if team 1 (Fred‘s team) was amazing) and 3 (my team did pretty great as well) were competing for the win, it was team 4 who, with an incredible final sprint (28 out of the maximum of 40 points in the last round!) took the victory by correctly answering the very last question. Painful detail: our team held the key to the victory as we were allowed to answer before team 4 and a correct answer would’ve given us the win, but in the heat of the moment nobody knew the answer! But no hard feelings, as it was a fantastic evening full of fun, drinks, competition and good music nevertheless!



Cycling Dinner

On November 7, all participants of the cycling dinner showed off their inner Gordon Ramsay and Jamie Oliver and cooked a delicious starter, main course, or dessert. They grabbed their bikes and cycled from house to house to enjoy the food and company of their fellow econometricians. And what turns out, they are not only good with numbers, but are also fantastic cooks! Two great recipes of the night are on the next page for you to try to cook at home. It was a great evening and after our bellies were filled, we went to the Preuv to enjoy the fourth course, drinks.


December 2017

Recipes of Cycling Dinner

Mexican Wraps with Guacamole-Dip By Evy Dooms and Johanna Sturm

Pre-heat the oven at 200 °C. Cut one stem of leek in rings, 250 grams of white cabbage in strips and 2 carrots in thin strips. Peel one onion and dice it. Finally, drain one can of corn. Cook 500 grams of minced meat in a bit of oil. Add the onion and cook it together with the meat for a bit. Add the carrots, cabbage and 100 ml of vegetable stock and let it simmer for 5 minutes. Add the corn and leek. Season with salt and pepper. Cover 8 tortillas with sour cream and divide the meat filling. Roll the tortillas closed and cut them in half. Put them into an oven dish and sprinkle them with cheese. Keep them into the oven for about 10 - 12 minutes. To make the guacamole, cut 2 avocados, remove the seed and the skin and mash it with a fork. Add a little bit of lemon and 300 ml of yoghurt. Season with some pepper, salt and a bit of tabasco.

Caramelized Pears

By Lorenzo Oliver and Koen Ramsay Melt 50 grams of butter in a pan and add 50 grams of (brown) sugar and 3 tablespoons of honey. Make sure you caramelize it on low heat. Cut 4 pears in pieces (design the structure however you like) and add them to the slightly viscous substance. Bake this for approximately 8 minutes. Keep on stirring and turn the pears from time to time. Serve the hot caramelized pears together with ice cream. You can add any ice cream you want, but we recommend vanilla, stracciatella, caramel, or treacle waffle ice cream from “Hertog IJs”!



Lea’s Exchange in New York City, USA From the moment that I decided to go to Maastricht University, I was already looking forward to my exchange. With Maastricht’s enormous amount of partner universities all over the world, finding the right place to go can be quite a challenge. The only thing I knew for sure until the list of available places got published was that I absolutely did not want to go to the US since I already spent an exchange year during high school there. Well, somehow I still ended up in New York City. Though I had already visited the city twice before, when I stepped onto my plane departing to JFK airport in August, I knew it was going to be a completely different experience and I was ready to experience the American college life. This imagination was however already ruined when I found out that New York University (short: NYU) does not even have an American football team. Remembering from my high school year how crazy Americans are about the school’s sports teams, I at least made my way to the Bronx to watch the men’s and women’s soccer team. It turned out that only 5 students showed up and the teams sucked. So I soon figured out that NYU students rather spend their time studying, networking and interning (at least at Stern, which is NYU’s business school). As my courses were not as demanding, I, on the other hand, spend my time exploring the city and traveling around.


After living in the big apple for almost four months now, I find myself complaining about all the tourists that just don’t know how to properly cross the street (because let’s be honest, none of the busy New Yorkers have time to wait for the traffic light to turn green), mostly avoiding Midtown as it is just way too crowded and discovering the beauty of the not so touristy areas of the city that never sleeps. I practically ate my way through New York and often an ice cream place or amazing looking cookies that I saw on Instagram guided me through the city. I am definitely going to miss the variety of food New York has to offer; name any cuisine and I bet you will find a restaurant that serves that food. As a die-hard sweet tooth (and passionate baker), I of course enjoyed several cookies on my mission to find the best cookie place in NYC, ate the best cupcakes in my life and had to try the store right next to uni that sells cookie dough like it’s ice cream. No worries about the calorie intake though as my daily exercise increased significantly when I moved. Not only my daily 1 h walk to the faculty and back, but mostly the exploring of the city on the weekend contributed to that. But honestly, how else would I have found the cute café in Brooklyn that

December 2017 serves delicious peanut butter hot chocolate or the gnoccheria, which serves an insane amount of different gnocchi?! Or randomly walk past a Pringles pop-up store where you could try 20 different kinds of Pringles and personalize your own stack? And that was even for free; the magic keyword as the city is expensive enough on its own. Thanks to NYU, I was also able to enjoy the breathtaking view from the One World Observatory, several delicious dinners and even a couple of Broadway shows for free, which are definitely a must during a visit in NYC. What I like most about NYC though is just the city’s unique vibe, the hustle and bustle, the city lights at night, the random conversations you overhear in the subway and cars honking the horn just for fun.

for this on-point description of our metro experience), we did survive the rest of the trip. After leaving Emiel behind (that was intended though), Marie and I continued our travels through Guatemala and Belize. For a moment, Yasmin (Marie’s house mate who was traveling with us) and I thought our trip would have to end early when the bus driver took off and left the two of us behind at a random stop in the middle of nowhere in Guatemala. Luckily, everything turned out fine in the end and we made it back on the bus. From exploring the depth of the jungle in Tikal, seeing the famous ruins there and monkeys to snorkeling and chilling at the beach in Caye Caulker, it was an unforgettable trip and a nice break right before exams! As much as I enjoyed traveling around, I have to admit that I was always happy to see New York’s amazing skyline during the landing on my flight back. I am already dreading the moment when I step onto the plane the next time, not being sure when I will return. I think it is safe to say that wherever you end up on your exchange, you will always carry the place you’ve called your home for a semester in your heart and have an amazing time!

Exploring New York itself was not the only thing on my bucket list for my exchange though. Of course I also wanted to take advantage of its location and airports and travel. As I’ve already seen most parts of the East Coast south of New York, my first trip was up north to Boston with a couple of exchange students. I really loved the city and it reminded me a bit of Maastricht, maybe because both cities are home to the world’s best universities? I met up with Freija (another third year for the ones who don’t know her) in Chicago where we froze horribly, but would not let the cold or rain ruin our great trip. Finally, I decided to escape the cold weather after Thanksgiving and made my way down south to meet up with Marie and Emiel (another two third years) in Mexico City. Thankfully, after Marie almost got swallowed by the subway (credits to Emiel 13



Santa’s gifts Christmas is right around the corning and Santa decided to stop by the Preuv to give ten SCOPE | Vectum members a gift. The gifts are in boxes with numbers 1 through 10 written on them. With the gift is a note with a unique student number on it (the student numbers are also from 1 to 10). Santa tells the Vectum members that they only get their presents if everyone find the box with their own student number inside. Rudolph allows everyone to look into five boxes, but they are not allowed to discuss anything with each other once the first person has opened a box. The members decide to use the following strategy: the student first opens the box with their student number written on top of it. Next, they open the box with the number that was in the previous box, etc., until a student has opened five boxes or has found their own present. What is the change that everyone will get a present? Bored Econometrician After a heavy exam period, and lots of free time ahead, all the econometricians of Maastricht University have to find something to do in their spare time. One person has decided to get creative and make up a new mathematical operator ¤, because let’s be honest, +, -, * and : can get quite boring. Here are a few examples with this operator in use.

1 ¤ 4 = 5, 2 ¤ 5 = 12, 3 ¤ 6 = 21, 4 ¤ 7 = 32, 5 ¤ 8 = 45

Can you figure out what this operator does?

Do you know the solution to both puzzles? If yes, please send your answer to Everyone who is currently in their Bachelor or Master of Econometrics and Operations Research here at Maastricht University is allowed to enter the contest. The winner will be drawn by a lottery of the correct answers. Deadline is Saturday, January 19th at midnight!

You can win a €10 gift card from DeliBelge! Find out last edition’s solutions by clicking here. Congratulations to Katherine Faulkner for winning the puzzle contest last edition! 14

December 2017

Nerdy Math Jokes

The Romans didn’t find algebra very challenging, because X was always 10

Geometry keeps me in shape Q: Why doesn’t a mathemtician go to the beach? A: Because he knows he only needs sin and cos to get a tan “Math jokes never work on me.” “Would you say you have trouble differentiating them? Or it’s because they’re not an integral part of your life? I agree, sometimes they just don’t add up.”

Q: What kind of insect is good at math? A: An account-ant



Meet the Professor

An Interview with Eric Beutner Where and what did you study? I studied Mathematics with a minor in Economics at the University in Bonn and received my PhD at the RWTH Aachen in 2005. I then worked as a Postdoc in Aachen until 2008 before starting in Maastricht What are you currently doing research on? I started with the probabilistic side of mathematical finance building models to show the existence of risk minimising strategies. Eventually I became more interested in statistics around 2009. For instance, if an insurance company has portfolios with n clients, how do you estimate the risk of an entire portfolio? How does someone become an actuary? To become an actuary, one should take actuarial courses, such as the Master’s courses offered at this faculty, and pass examinations that are required by nationally organised actuarial institutions. Then one would find a position for actuarial work, for example in insurance companies. What are qualities that your ideal actuary should have? The ideal actuary should have a very good quantitative training and should be able to explain the results of their perhaps sophisticated methods in an accessible way to people who do not have that same background. Those are probably the two most important things. Where else can actuaries find employment other than insurance or pension companies, which are two commonly known employers for actuaries? Actuaries can also work for regulators and in consulting. What is interesting about working in the actuarial field? What I find interesting is that it allows you to combine both probability theory and statistics. You can combine all the techniques you’ve learned in the bachelor’s and apply them to derive models for questions such as: how long do we live on average and how does this affect our pension systems? What I also find nice about it is that you can address relevant societal questions with quantitative methods. So you’re not only focusing on the statistical side, you would also need an interest in finance.


December 2017


It was mid-period and everyone seemed to be ready to take a little break from their studies. Realising the competitive spirit of the members, SCOPE | Vectum coordinated the anticipated bowling games. And off we went to the bowling alley! After some cars lost their way, we finally gathered in Heerlen to start our bowling night. We played in groups of 6 and started the game in a very chill mode. However, the heat kicked in after Lorenzo reminded everyone that these points would be added into your Vectum Trials score. Everyone was bringing their A-game and we witnessed some amazing strikes! At the end of the game, it did not matter how many times you hit a strike or got a gutter ball since everyone enjoyed the game. Our amusing night was concluded with the usual drink at Preuv. Though we had to hold the beer glass in our left hand, due to our already weary right arm, it was still a lovely night!




The temperature is getting colder, Magisch Maastricht is being built; this could only mean one thing: SCOPE’s annual winterball was just around the corner. This year’s theme was Moulin Rouge which is quite a daring theme, since the girls in the Moulin Rouge in Paris don’t have the most modest attire. Apparently many girls were worried about the dress code because SCOPE later send out a message that girls could wear any fancy dress they would like. This made picking a dress much easier. Before going to the winterball, Vectum had a nice dinner at a Greek restaurant just around the corner from the Rebelle. This was perfect for the girls who had to walk in heels, and it was also quite convenient for everyone after the great consumption of wine at the restaurant. At the entrance, we got a glass of champagne on the house and we had a little photo session when everyone still looked nice. Next we stepped onto the dancefloor that really came to life after a dance group performed on the song Burlesque. We sang and danced the night away, and it is safe to say that everyone enjoyed the SCOPE winterball!


December 2017

Life after Vectum An alumni article written by Herman Sontrop

My name is Herman Sontrop, I was born in Nijmegen in 1975 and I studied Operations Research at the University of Maastricht. A few weeks ago, I bumped into one of my old math teachers i.e. Hans de Graaff, who at the time taught me the fundamentals of analysis and linear algebra. We had an invigorating talk about how we’re both doing after such a long time, after which Hans asked me to write a piece on how studying econometrics was beneficial to my future career, hence this article. In short, studying econometrics had a massive contribution to my career and my personal development, which resulted in many solid job opportunities and lots of possibilities for future development. Even though my experience turned out great, it wasn’t always smooth sailing when I began my studies.

challenging. After a year and a half of struggling and not doing so well, I decided econometrics was not for me and I quit, only to pick it up a few years later. The second half of my studies surely was much more pleasant and enjoyable. During my absent years I gained more confidence in life in general and about my skills and decided to give econometrics a second chance. My motivation to do well this time around was much greater and consequently my grades improved substantially. I especially liked my final year in which I could put much of the theory I learned into practice.

During my master thesis, I worked at CQM, a small firm based in Eindhoven that creates software for solving complex scheduling problems. There I worked on creating advanced heuristics to tackle vehicle routing problems. In mid-2005, I started studying econometrics in late 1996. I graduated based on my thesis titled ‘Fast EjecAt the time, Microsoft Windows 95 was just re- tion Chain Algorithms for Vehicle Routing with leased, Apple was close to being dead, Steve Jobs Time Windows’, under supervision of prof. dr. was still alive and just re-joined Apple, Google Stan van Hoesel and prof. dr. Marc Uetz, who latwas a start-up and Facebook didn’t even exist! er moved to the University of Twente. Ejection chains, by the way, are methods that in order to My first-year experience was quite different than solve hard discrete optimization problems, move I expected. Back then, the university had only to intermediate infeasible solutions first in order a small computer room, which was completely to have access to more flexible, efficient neighpacked with students. Especially for economet- bourhood structures during local search, which rics students, the performance difference be- are made feasible later, ejecting out the infeasitween students was large, with many dropouts. I bility so to speak, hence the name. remember my first year as quite intimidating and


PerVectum During my time at CQM I met prof. dr. Emile Aarts, the current rector magnificus of the Tilburg University. At the time, Emile was both an external advisor for CQM and vice director of scientific research at Philips Research in Eindhoven. Based on my work at CQM, he offered me a job in a bioinformatics start-up group at Philips Research, which I accepted. In the next 6 years, I worked at the high tech campus mostly on gene expression breast cancer prediction problems. Gene expression measurements essentially attempt to measure how active genes are in your body. Based on the human genome project, in the early 2000s, a new type of measurement technology i.e. microarrays, burst on the scene. For the first time, this technology allowed biologists to measure the activity of all genes simultaneously, instead of one by one, which was way more time consuming and restrictive. Back then it was believed that this type of data would allow for unparalleled breakthroughs in solving diseases and that within a decade, diseases like cancer would be solved. Unfortunately, as we all know, at present, a disease like cancer is still far from being solved. In our group, based on gene expression measurements extracted from a primary tumour, we tried to predict if a person would develop a metastasis. In other words, if the cancer of a patient who already was diagnosed with breast cancer would spread to other parts of the body. For various reasons, it turned out that this type of prediction problem was difficult to solve.

poses a variety of statistical challenges, mostly dealing with the potential to overfit a predictor. When a predictor is overfit, it performs very well on training data, yet does not validate on unseen data i.e. it generalises poorly. It turns out that when p >> n, you can always construct a perfect predictor on training data. In such scenarios, proper evaluation schemes are paramount.

In late 2009, I joined forces with the TU Delft and the Academic Medical Center (AMC) to obtain a deeper understanding of the complexities of this type of data and how to evaluate it. This work formed the basis of my PhD dissertation ‘A critical perspective on microarray breast cancer gene expression profiling’, which I completed in early 2015 under supervision of prof. dr. Marcel Reinders (TU Delft) and dr. Perry Moerland (AMC).

During this work I heavily used R, an open source statistical computing framework. While I was still doing my PhD I often worried whether these skills would come in handy one day. Little did I know that it was. Somewhere early 2012 I was looking on a job site and I noticed an Utrecht based company called FRISS, asking for people For one, obtaining high quality gene expression with R skills. FRISS specializes in detecting fraud, data is extremely challenging. The measurement identifying risk and securing compliance for inprocess is very complex and before data can be surance firms. After a successful job interview I sensibly compared between samples, data must joined FRISS as a consultant in 2012, while simulbe strongly pre-processed and undergoes nu- taneously still working on my PhD dissertation, merous systematic transformations and correc- mainly in Amsterdam. tions based on complex models. Unfortunately, the specific choice for a processing method of- In the same year, a new web platform for R ten directly influences subsequent analysis. launched, called Shiny. In short, Shiny enables you to develop advanced interactive analytic Second, in these scenarios, the number of obser- web applications, without having a deep undervations (n) is often much smaller than the num- standing of building web pages per se. It was ber of variables (p) i.e. the number of genes. This during this time when I discovered that the com20

December 2017 bination of doing data science, visualization and web building would become my new passion. After my initial introduction into building web pages, I spend much time improving my skillset and became quite good at it. At present, I’m a senior data scientist, the product owner and team leader of the analytics department at FRISS. In my daily work with my team we work hard to bring the best of web visualization, web design and machine learning to the web products FRISS offers.

However, perhaps the best skill I learned while Our latest mission is to bring more Artificial Intel- being at the university is the ability to decomligence (AI) into the hands of insurers such that pose a big problem that I don’t yet fully underinsurance can become more honest and less im- stand into ever smaller blocks that I eventually pacted by fraudsters. Doing AI properly, getting can work out and learn to understand, which clean data and picking the right techniques is ultimately helps me to understand the bigger quite hard at times. Separating fact from fiction problem I started with. Studying econometrics and knowing the boundaries of what’s possible surely helped me to hone those skills and I can and what’s not is equally important. Even more recommend it to anyone! difficult is to provide insight and reason to those without a solid data science background.



Oligopoly theory


Oligopoly and equilibrium written by and Dries Vermeulen Oligopoly equilibrium Imagine a remote village with two bakeries baking breads that are close substitutes in the eyes of the villagers. If this was a “Cournot market”, then both bakers would decide how much bread to bake and bring to the marketplace. An auctioneer would be waiting at the market place to set the price in exactly such a way that market demand equals the total amount offered. If, instead, this was a ‘Bertrand market’, then each bakery would set its selling price and wait for customers. After the realization of demand, both would be obliged to bake exactly the amount of bread their clients are asking for. A glance at reality shows, however, that our market is neither a Cournot nor a Bertrand market. It is not a Cournot market as bakeries commonly choose their own prices, but it is not a Bertrand market either as it is usually up to the bakers to decide how much bread to make. More generally, in free-market societies there typically is no law telling firms how much to supply and what price to charge. A natural assumption in theories of oligopoly would therefore be that firms choose both their price and quantity of output. The foundation for this type of analysis is due to Francis Edgeworth (1922, 1925). He recognized that price-setting oligopolists may be unable or unwilling to meet their demand. The disturbing conclusion of Edgeworth’s explorations was that oligopoly prices are essentially indeterminate. In more modern language, he showed that in the resulting model, no pure-strategy Nash equilibrium exists. Since then, the non-existence result has been established under a variety of cost and demand conditions, for example by Shapley and Shubik (1969), Alger (1979), Friedman (1988), Benassy (1989) and Canoy (1996). In this short survey, we study price-quantity competition in oligopolies for a specific example, and we argue that the non-existence result is not as pervasive as past literature would like us to believe. Consider a duopoly model where firms compete in a market with a differentiated product. Firm i ∈ {1, 2} chooses (pi , qi ), where pi is the per-unit price and qi is the amount that firm i decides to produce. Both firms simultaneously decide on which price-quantity pairs to select. Thus, this model falls within the setting of games in strategic form, and we can apply Nash equilibrium 22

December 2017

Oligopoly theory


to solve the game. The demand functions are D1 (p1 , p2 ) = 18 − 2p1 + p2


D2 (p1 , p2 ) = 18 − 2p2 + p1 .

The cost of production is given by Ci (qi ) = 3qi . We compute the Nash equilibrium in this model. In order to do that, we first need to compute the best response of firm i when facing choice (pj , qj ) of his competitor j. The profit function of firm i is Πi (pi , qi ) = pi · si − Ci (qi ) = pi · si − 3qi where si = min{qi , Di (pi , pj )} is the sales that firm i realizes by choosing (pi , qi ). Now first notice that in a best response we have qi ≤ Di (pi , pj ), since producing more than is demanded only costs money. On the other hand however, since demand is continuous, when qi < Di (pi , pj ), firm i can increase his profits by keeping qi fixed, and slightly increasing pi . So, in any best response, qi = Di (pi , pj ), which implies that si = qi . So, finding a best response (pi , qi ) boils down to solving the constrained optimization problem max (pi − 3) · qi s.t. qi = Di (pi , pj ). Substitution yields Πi = (pi − 3) · (18 − 2pi + pj ). This is a quadratic function in pi , with max location pi =

1 6 + 18 + pj = 6 + · pj . 4 4

This gives the following equilibrium prices and quantities: p∗1 = p∗2 = 8 and q1∗ = q2∗ = 10. As it turns out, the duopoly game does have a unique Nash equilibrium in pure strategies, when firms can choose both prices and quantities. We compare the outcome under this approach with the standard Bertrand and Cournot equilibria. The previous analysis showed that any in best response qi = Di (pi , pj ). Thus, in the Nash equilibrium, firms produce exactly the demand given prices. This then shows that the Nash equilibrium coincides with the Bertrand equilibrium in which firms are required to produce the demand, given the prices. Although we only argued this in the context of the above example,



Oligopoly theory


this identity is true in general: a Nash equilibrium of the price-quantity oligopoly model is also a Bertrand equilibrium of that model. This in contrast to the results of Kreps and Scheinkman (1983), who showed in a Stackelberg setting that the equilibrium coincides with the Cournot equilibrium, which is in our example p∗1 = p∗2 = 9 and q1∗ = q2∗ = 9. Finally, the model in which no Nash equilibrium exists allows for spillover demand. Thus, when firm j has a demand of Dj (pi , pj ), and produces a quantity qj < Dj (pi , pj ) (this is called rationing), unserved customers at firm j move to firm i, who gets an additional demand of Dj (pi , pj ) − qj = 18 − 2pj + pi − qj . Demand for the products of firm i is then given by  [18 − 2pi + pj ]+ Di (pi , pj , qj ) = [36 − pi − pj − qj ]+

if 18 + pi − 2pj ≤ qj , if 18 + pi − 2pj > qj .

To see that this demand specification does indeed not admit an equilibrium, first observe that in equilibrium qi = Di still should hold. This implies D1 = [18 − 2p1 + p2 ]+ and D2 = [18−2p2 +p1 ]+ . Note that this is precisely the original demand specification, leaving p1 = p2 = 8 and q1 = q2 = 10 as the only equilibrium candidate. Given that p2 = 8 and q2 = 10, firm 1’s demand function reduces to  [26 − 2p1 ]+ D1 (p1 ) = [18 − p1 ]+

if 2 + p1 ≤ 10, if 2 + p1 > 10.

It can now be easily verified that (p1 , q1 ) = (8, 10) is no longer a best reply. In fact, given (p2 , q2 ) = (8, 10), firm 1 has an incentive to ‘generate spillover demand’ by hiking its price. Specifically, it maximizes Π1 = (p1 − 3) · [18 − p1 ]+ , which reaches its maximum at p1 =

21 2 .

Thus, in this case, the best reply to (p2 , q2 ) = (8, 10)

is no longer (p1 , q1 ) = (8, 10), but (p1 , q1 ) = (10.5, 7.5).


December 2017

Vectum Trials Leaderboard

The Vecutm Trials are in full spin we have hit the half way mark. Currently, Koen is leading with 348 points. But no need to worry, there will be many opportunities in 2018 to get more points and to kick Koen off the thrown! Who will be the best in 2018? Only time will tell. Place 1 2 3 4 5 6 7 8 9 10

Name Koen Laura Claudia Katherine Merit Wout Johanna Dominik Johannes Marijke

Points 348 338 335 311 298 288 285 244 226 220

Place 11 12 13 14 15 16 17 18 19 20

Name Huguette Joshua Evy Hugo Lorenzo David Chris Fred Svenja Gagah

Points 218 199 198 188 181 178 172 166 163 159




Does wall-climbing sound not so challenging for you? What about climbing without a rope, i.e. bouldering? The SCOPE | Vectum members seemed to be all too curious to miss this unique opportunity to taste the sensation of climbing without a rope. On November 21, we went to Sittard to experience this. Before we started, some people were a little worried with the fact that we would not have any safety ropes while climbing. However, after arriving to the spot, we could see that it is actually lower to the ground (or safety mattress), so there is no excuse of being afraid of heights! We were, at first, instructed to follow the easiest path at one corner of the building. In bouldering, you typically start with an easy path with no slope following one-coloured rocks and jump down after reaching the top. However, ‘easy’ seems to be non-existent in Vectum members’ dictionary and soon after the brief introduction everyone started to climb more challenging paths. To add the already challenging bouldering activities, we also tried the balancing rope where you are challenged to balance yourself walking over a rope without holding onto anything. And trust me, it is harder than it looks! Overall, it was an active, challenging and fun evening.


December 2017

Research Lecture Block 2 For any econometrician, the word ‘forecasting’ appears very regularly. In fact, one of the main responsibilities of an econometrician is to forecast economic output and make a model out of it. However, have you ever wondered how you would forecast an economic event with different time frequencies? Consider this example: you are about to make predictions on the GDP of a country with various variables, such as interest rates and stock price. We know that GDP is typically reported quarterly, whereas interest rates and stock price can be obtained monthly or even daily. How would you incorporate these two different time frequencies of the variables? Fortunately for SCOPE | Vectum members, we had the second research lecture specifically to discuss this approach! Alain Hecq shared his main research on forecasting mixed frequency time series with ECM-MIDAS models. The MIDAS model aims at transforming high-frequency variable (in our example: daily interest rates and stock price) to common low-frequency with preserving all information contained. Employing this approach would result in reduced number of parameters to estimate while still incorporating the information contained in the high-frequency variables. As always, with Alain’s sprinkles of jokes, the research lecture became more lively. After a pretty intense, yet intriguing, research lecture, we decided to cool down at the Preuv. We started the party quite early, but that only meant we got a lot more fun time!



Chiaraâ&#x20AC;&#x2122;s Exchange in Milan, Italy When we had to choose our semester abroad locations, I had the feeling that the general motive was to get out of Europe. I had a different motive: I wanted to learn Italian. At my exchange university, Bocconi, I was able to do exactly that while studying at one of the worldâ&#x20AC;&#x2122;s best universities for economics and, generally, just having a great time.

Milan is a paradise for anybody who loves food. I, at least, loved going out for aperitivo which is meant to be just a snack before dinner but as students we usually interpreted it as dinner. That meant a nice cocktail and a buffet of Italian food for only 7 to 11 Euro. Overall, the food was just amazing! Pizza, pasta, gelato, so simple but so good!

Bocconi is the oldest and most prestigious economics university in Italy - and private. Gucci and Louis Vuitton bags, credit cards as student IDs or random art galleries in the university lived up to the private university stereotype. I took the opportunity of choosing non quantitative courses and went all out: I attended a course in Sociology and another course called Management of International and Supranational Organizations which was basically about the UN and the EU. I also took two economics courses, Experimental Economics and Psychology and Economics (Poverty, Inequality and Income Distribution) and an applied statistics course called Applications for Management. All of my courses were super interesting and the professors were very enthusiastic about what they were teaching! Most professors often included topics from their own research. To get the full Italian experience I worked as an Something that I was a bit worried about in the Au-Pair in an Italian family in the beautiful moun- beginning was that there were only lectures and tains of the Emilia Romagna during the summer. no tutorials. In the end, it turned out the be It was the perfect combination of improving my completely fine because most of my professors Italian, experiencing the real Italian life and trav- tried to be as interactive as possible and had elling on my free days. This way I travelled to the tendency to repeat everything so often that most of the big Italian cities from Milan in the even the person in the last row on Facebook had North over Bologna and Florence to Naples in the to understand at least the basics of the lecture. South (just to name a few big ones). Definitely, a highlight of my travelling was hiking from one village to another in Cinque Terre. Even though I had a great time as an Au-Pair, I could not wait to finally move to Milan. 28

December 2017 Next to all the courses, Bocconi has a lot of associations, although most of them are academic. At least once a week I could attend discussions, symposiums or other interesting events hosted by the university or an association.

change students. One of my favorite moments was at a Christmas dinner with some friends when we noticed that all of us eleven were from different countries.

Milan is also a great location to travel around Europe. With three airports and a very busy Flixbus station it doesn’t take long or a lot of money to get where you want to go. Besides my tour of Italy, I got to explore Barcelona, the French Riviera, Vienna and Budapest, where I visited Majd. A friend from my Italian course was from Barcelona and she invited another friend and me to join her when she went back to vote in the referendum about Catalonia’s independence from Spain. Even though we came across some voting Now coming to my conquest to learn Italian. stations and saw all the people lining up to vote, Besides speaking Italian for the entire summer we didn’t see any violent confrontations (fortuduring my time as an Au-Pair, I attended the lan- nately!). It was really fascinating to be there and guage courses that Bocconi offered – an Italian see these historical moments (the peaceful part crash courses before the start of the semester I mean) first hand and not through the media. and also a follow up course throughout the semester. As my goal besides having an amazing semester abroad was to improve my Italian, I took every opportunity to speak and practice it. So, I participated in the Bocconi language exchange where I met up once a week with an Italian girl and together we practiced her German and my Italian. I was also very lucky to live with three Italian girls who only spoke Italian to me! I am What I really liked about Milan was that there so proud of them because they never switched were always things going on, mostly related to to English when I didn’t understand them but food. I don’t think there was a week when I could kept on repeating or rephrasing what they were not have gone to a food truck festival, sagre (fessaying. That was super useful but at times also tivals dedicated to a specific type of food: pochallenging. The top of the iceberg regarding my tatoes, pumpkins, ravioli, risotto, etc.) or other self-imposed Italian commitments was taking food festivals. I can tell you, as a food enthusiast, the CILS B2 exam at the end of my stay. CILS is I had a great time! Besides all the food, Milan basically the Italian equivalent of the Cambridge also hosts many concerts and luckily during the certificate. For anybody who wants to learn Ital- time I was there, two of my favorite bands – The ian, Bocconi offers many opportunities! Kooks and Milky Chance - were performing in Milan. And last but not least, Milan is of course Even though I improved my Italian a lot during one of the world’s fashion capitals. It was really the summer, I did not dare to take any courses in funny to see the Milanese people go crazy during Italian. That made it pretty difficult to connect to Fashion Week. Italians at university because most of the English courses were also electives and therefore mostly I don’t think I could have picked a better location filled with exchange students. The Italian crash for my semester abroad. I got to enjoy amazing course and the international welcome activities food, go to a great university and for me most formed, however, a great bond between the ex- importantly learn Italian. 29


Twelve Days of Christmas Programming Edition

Christmas is just around the corner! The house is decorated in Christmas theme, the Christmas tree is set-up, and the streets are beautifully decorated with lights. Even though your surrounding is ready for the most wonderful time of the year, you probably haven’t thought about Christmas all that much yet because of all the exam stress. But not to worry, it is never too late to get into the Christmas spirit! Open your favourite programming tool, click on the logo or name * of your desired programming language, and just copy-paste the code. We provide C++, Java and Python, so whatever language you are familiar with, you can enjoy the great song “Twelve Days of Christmas”!

C++ Java * The links only work in the PDF file, and unfortunately not in Issuu. 30

December 2017

Ice Skating at the Vrijthof

Have you noticed the beautifully decorated Christmas lighting across Maastricht? Even better, have you been to the infamous Christmas market in the centre of Maastricht? It would be unpleasant if we do not experience the magical night, so following the long-lasting Vectum tradition, we went to Magisch Maastricht to close the calendar year. The ice skating was, obviously, the major attraction that night. Located in the centre of the Vrijthof, decorated with a huge Christmas tree at the centre of the ring, topped by nice weather, what more could you ask for? It was truly magical! Everyone were welcome to join, no matter if you were a rooky or an advanced ice skater. They even provided a cute Rudolf Reindeer and seal seats to help us glide of the ice in joy. This yearâ&#x20AC;&#x2122;s magic night was not only all about ice skating; we also had a chance to ride the Ferris wheels! After we had got enough skating around the ice rink for hundreds of times, we decided to enjoy Maastricht from above. With the twinkling city lights in sight, early winter breeze, and comforting hot chocomel, you just wished time stopped for a little while.



Upcoming Activities HEADING by GMA January written 23rd, Semi-Annual

We are already half way through the academic year and that means also our board year. So it’s time to present what we’ve achieved and what we’re striving for in the next half a year.

January 29th – February 2nd, Business Trip 2017 Is volupta doluptia qui restibu sciae. Seque reperit volupta et, unt aceaquost faccat hic tet, sinto In the last week of January, Vectum’s yearly business trip will take place. During our stay in Amsterdam, we will magnimusam reptaeZanders, volupti Willis untionTowers etur ma asimiliam eumTraders fugitam aciis qui cases voluptae. visit Sabic, Pharmerit, Watson and Flow andaut work onquibust interesting in the Ximinctatur molor fields aut aut eserrovit faciam, voluptas ipsusa consequae conet postias eum fugiani of Econometrics, Actuarial Sciences and Operations Research. hitatur re eici voles vendenissit oditem volum faccat haribea velis quostia num audae nim sita num fuga. Itatem fugia Week vid et,1,coris dolupta aborenem esequis totatur February 5th,quaspic Research Lecture con andnis Study Abroad Talk magnis voluptam adit,research to inuslecture nonsequ aepudi et anim quibusae coremResearch. fuga. LesAfterwards, ma nobitem quiatia The of this blockdunt will be given in the fieldnusdam of Operations some of our will talk about abroad. asperum, que omni blandisthird-years dolorit resecullecte nostheir autexperience dis et dolut et officil modipsunti abo. Cium autes dolore nesequibus, omnitat estio int voluptiore de erio. Nem nihitiori duscita distion nectas Week 1,etFebruary 7th, LEDomnisquate minciis et inctaque lam, inverum ex earumque sinciis quunt verum, quo et destium, On February 7, the Landelijke Econometristendag, will take place in Nieuwegein. is the largest recruitment quaes eatia dolupta nem dolorepro volupta iusaestin eruntibus experita This de molupta quiasi cullore event for econometricians in the Netherlands. es andit optatur sam in corpor magnis sequo ex et officium quia sincit quunt omnimpo resere endeliquas eserrum voluptate autestiorum ius aut eatet volorer spellaudae quamend ellacer feratis Week February 20th, amentest facernate nosapit, sim2,doluptatiati dusaBeer di utand elisWine et et Tasting reperfe *ruptatem volorro que por It’s time to find out how much of a beer or wine expert you are. Join the fun event to taste special beers and sinctot asinihi ciaerumet quatem incipita doluptat aut adisquis maio. Sedia qui blabore, si alit quiassi wines from different countries! re nat fuga. Offic te pra veriberum esed et quam quos aliam ut quis dolecta tiisit explabo rporecerum imus el ipsam volorro del eaquisit, et quam aceatatiis eveleniassi volupientem Week 2, quos February 22nd,excercia Inhousecone Day Optiver volor sequas as a 22, nisseque nonseque eiuntem endam aliatis voluptia doloritam doluptaque On February we willcon travel to Amsterdam for an Inhouse day at the trading company Optiver. re, solor sit ma autatemo officiame sae vendi andus et ant quiatius remquis quamus, idebitaepe occusdae ne non nimaio. Neque exerumWeek faccab ipsandit, 27th, officab int inveliquod ut plania audions ecusc3, February Squash ipicium hit modi aped moditobea quamus, quist,3, accuptate endelis eos aliantur? Aborposandi It’s time be active! In week we will playquos a squash tournament! dendam rem voluptur, inctora susa quis voluptatiis cor moluptiam si que pro et molorio tes rese exped ut es as sitatia comnissus ulparum, excepudis dundam vendae Week 3, March 2nd - 3rd, Strategy Tourculpa dis at. Together withmoluptatur, Asset | Econometrics, theetstudy association Tilburg, wequi willdoluptur head offsa to quis someam of sithe biggest Lum quibus conecab ius volore laborumof arum repta am, unt strategy consultants in the dolorum country onverum this two-day ut ut ernat molorum fugitiaspe quia aut quaero fugiasievent. tistiis es cus estis autatisque in renihitisi am es volessum consequam aceatia eriandaectet plam, oditium aut alit magnis aspita Week 4, March 6th, Escape Room * volupta teceatur asperroribus eosandam ea necerrumet inctur? Epraerum nimi, acit volecerion eaAre you able to get out of the room in time by solving all kinds of puzzles? Only time will tell. quoditi debit ex et alis eum exceperio con pelestia conseca borat. Iciis nos natur re venis magnam quiatur, necatium consequunti des ad ex et odiciis id modiam quiat. 4, March Inhouse Day APG Ihicia doluptusant fugit, nesedWeek mos et, officid 9th, quam fuga. Aliasi deriaerita pratque offic tores alit On March 9, we will go to Heerlen for an Inhouse day at the pension company APG. latur? Olorent que que ommossimet vernatatem facculpa ne aut fuga. Et pratium es endaesequis consequamet ipitass imillitinis arum eatur? As aut volupta tiorunt ilicia quis necae nobist auta iliWeek 5, March 13th, Indoor Beach Volleyball * bus in nosa dolessinis dolupta eate doluptat alignih iliquam, sequid quiam aut doluptae cusam, se Can’t wait for summer? Then join us for a fun night of indoor beach volleyball! simus, endae sam quati con re idenis eium quodipsunt, sam, odicilignata sumquas acepel id quiatis sitiaep erchil iunt lias cus aut rendanimeni doluptiae dolupis dolo eum explam quat iumquo Week 6, March 20th, Pubquiz withnis Inergy conserem quaerem pernatum rerspid odi and quaersp elecerf eraeper together epudandent Join us and sinum test your knowledge on random triviamodigenit, (and big data business intelligence) with re the cor asimpor aut harundu cipsam que pra aut laborep eruptatem re dolor sit quiassumquis dolorer company Inergy! oviduntium vitatias dolor at rae de si dit voluptat voluptaquodi comnimusam qui doluptatur audici consequ iaest, quatem quiatis res acepudam dolum April 7th – ipsantiaessi 15th, Ski Trip 2018 ex esti cullo quibus doloribus, que In the resit week, will goasonnobis our third nectatatem quewe ventur aut Vectum unt. Ski trip to La Plagne - a beautiful and large skiing area in France! Poreperum fugias aut faccae nonsequam voluptaque cus abo. Et dolutemped ut perori cum quo omniendit voluptatum vel eum qui desciassunt quam quid quunt quam, qui nobit, is aut volendantis * These activities are subject to change


PerVectum 2017/2018 - issue 2  
PerVectum 2017/2018 - issue 2  

SCOPE | Vectum proudly presents the second edition of the PerVectum in the academic year 2017/2018