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James Joyce’s Ulysses? The Great Gatsby? Something challenging by Thomas Pynchon? Something whimsical by P.G. Wodehouse?
No, the smart vote goes to Isaac Asimov’s Foundations Trilogy.
The latest fan to come out in public is Hal Varian. In a Wired interview, he says:
“In Isaac Asimov’s first Foundation Trilogy, there was a character who basically constructed mathematical models of society, and I thought this was a really exciting idea. When I went to college, I looked around for that subject. It turned out to be economics.”
The first time I saw a reference to the books was in an interview with Roger Myerson in 2002. And he repeated the fact that he was influenced by Foundation in an answer to a question after he got the Nobel Prize in 2007. And finally, Paul Krugman also credits the books with inspiring him to become an economist. A distinguished trio of endorsements!
Asimov’s stories revolve around the plan of Hari Seldon a “psychohistorian” to influence the political and economic course of the universe. Seldon uses mathematical methodology to predict the end of the current Empire. He sets up two “Foundations” or colonies of knowledge to reduce the length of the dark age that will follow the end of empire. The first Foundation is defeated by a weird mutant called the Mule. But the Mule fails to locate and kill the Second Foundation. So, Seldon manages to preserve human knowledge and perhaps even predicted the Mule using psychohistory. Seldon also has a keen sense of portfolio diversification – two Foundations rather than one – and also the law of large numbers – psychohistory is good at predicting events involving a large number of agents but not at forecasting individual actions.
As the above discussion reveals, I did take a stab at reading these books after I saw the Myerson inteview (though I admit I used Wikipedia liberally to jog my memory for this post!). And you can also see how Myerson’s “mechanism design” theory might have come out reading Asimov. I enjoyed reading the first book in the trilogy and it’s clear how it might excite a teenage boy with an aptitude for maths. The next two books are much worse. I struggled through them just to find out how it all ended. Perhaps I read them when I was too old to appreciate them.
The Lord of the Rings is probably wooden to someone who reads it in their forties. It still sparkles for me.
Storn White, lifestyle artist.
Like most San Franciscans, Charles Pitts is wired. Mr. Pitts, who is 37 years old, has accounts on Facebook, MySpace and Twitter. He runs an Internet forum on Yahoo, reads news online and keeps in touch with friends via email. The tough part is managing this digital lifestyle from his residence under a highway bridge.
The article is here. Another highlight:
Michael Ross creates his own electricity, with a gas generator perched outside his yellow-and-blue tent. For a year, Mr. Ross has stood guard at a parking lot for construction equipment, under a deal with the owner. Mr. Ross figures he has been homeless for about 15 years, surviving on his Army pension.
Inside the tent, the taciturn 50-year-old has an HP laptop with a 17-inch screen and 320 gigabytes of data storage, as well as four extra hard drives that can hold another 1,000 gigabytes, the equivalent of 200 DVDs. Mr. Ross loves movies. He rents some from Netflix and Blockbuster online and downloads others over an Ethernet connection at the San Francisco public library.
Greg Mankiw is trying to make a reductio ad absurdum critique of the objective of income redistribution. He has written a paper with Matthew Weinzierl which shows that optimal taxation will typically involve taxing all kinds of characteristics that seem patently unfair and unacceptable. He concludes from this that it is the goal of income redistribution that entails these absurdities.
But there is a prominent guy who lives at a nice home at 1600 Pennsylvania Avenue who wants to “spread the wealth around.” The moral and political philosophy used to justify such income redistribution is most often a form of Utilitarianism. For example, the work on optimal tax theory by Emmanuel Saez, the most recent winner of the John Bates Clark award, is essentially Utilitarian in its approach.
The point of our paper is this: If you are going to take that philosophy seriously, you have to take all of the implications seriously. And one of those implications is the optimality of taxing height and other exogenous personal characteristics correlated with income-producing abilities.
This argument fails because the objectionable policies implied by optimal taxation in his model have nothing to do with income redistribution or utilitarianism. Indeed they would be optimal under the weaker and unassailable welfare standard of Pareto efficiency which I would assume Mankiw embraces.
Let me summarize. Optimal taxation involves minimizing the distortionary effect on output from raising some required level of revenue. It does not matter what that revenue is being used for. It could be for redistribution but it could also be for producing public goods that will benefit everyone. Whatever revenue is required, the optimal taxation policy generates this revenue with minimal cost in terms of reduced incentives for private production. Taxing exogenous and observable characteristics that are correlated with productivity is a way of generating revenue without distorting incentives.
If we tax income (a direct measure of productivity) you can lower your taxes by earning less, that is a distortion. If we tax your height (known to be correlated with productivity), you cannot avoid these taxes by making yourself shorter.
So the implication that Mankiw wants us to be uncomfortable with is an implication of the way optimal tax theorists conceive the problem of revenue generation and the implication would be present regardless of how we imagine that tax revenue being spent. It has nothing to do with redistribution and we can feel uncomfortable with height taxation without that making us think twice about our desire to redistribute wealth.
Here is an interesting article about the history of the Ivy league and the member Universities’ attitudes toward sport.
The Ivy is never going to be the Southeastern Conference—and nobody is suggesting it should be. The schools don’t need the exposure of sports to attract students and alumni donations. But some of the league’s alumni complain that the schools offer their students the best of everything, except in this one area. “Why not give them the same opportunities and the same platform in athletics that you do in academics?” says Marcellus Wiley, a former NFL defensive end who played at Columbia in the 1990s. “I think they should revisit everything.”
If we take the objective to be maintaining reputation and attracting donations then there is a broader question. Why is the concentration among schools which compete on academic excellence so much higher than among those that compete on athletics? Competition for dominance in sport appears to be more costly and occurs at a higher frequency that the competition for academic excellence. Some possible reasons:
- There is more variance in academic talent than in talent in sports. Thus the top end is thinner and the market is smaller.
- There is more continuity in academic strength purely because of numbers. A bad recruiting class for the basketball team a few years in a row and you are back to square one. A freshman class at Harvard is large enough that variations wash out.
- It is easier to throw money at sport. One coach makes the whole program. Assessing the talent of faculty and attracting it with money is more complicated. And maybe irrelevant.
I would like to believe 1 but I don’t. I would like not to believe 3 but its hard. I do believe 2.
Oliver Hart and Luigi Zingales wrote an op-ed with their plan to regulate large financial institutions (LFI) which are too big to fail. I’ve blogged about their idea before but here it is again quickly:
Suppose a Credit Default Swap CDS pays off if Citibank, say, fails. Different traders of the Citibank CDS have different information about the chance that Citibank may fail. The price of the Citibank CDS aggregates that information. The price will be high if the chance of failure are high. Hence, a regulator can monitor the Citibank CDS price and step in to force the LFI to cover it loans or be taken over.
They have fleshed this clever plan out with a model but the main idea remains the same.
Here is one problem I see: If the CDS price is high, the LFI is meant to issue more equity to cover the debt against which CDS is trading. Suppose it just refuses – i.e. it breaks the rules. In their scheme, the regulator is meant to step in and put the firm in the hands of a receiver who recapitalizes it and sells it. But this is costly for the regulator. Maybe the market reacts to the takeover badly and systemic risk spreads through the financial system. The regulator can instead keep the current managers employed and bail out the LFI using taxpayer money. If this option makes the managers better off, this is what they will push for. This is what we see GM doing to avoid bankrupcy for instance, in their case trying to exploit the political risk of bankrupcy rather than systemic risk.
If the threat to enforce rules is not credible, the LFI has the incentive to “hold-up” regulator when the CDS price goes up. The mechanism proposed by Hart and Zingales is not credible as there is a commitment problem.
A post at Language Log explores the use of mathematics in linguistics. It closes with
Anyhow, my conclusion is that anyone interested in the rational investigation of language ought to learn at least a certain minimum amount of mathematics.
Unfortunately, the current mathematical curriculum (at least in American colleges and universities) is not very helpful in accomplishing this — and in this respect everyone else is just as badly served as linguists are — because it mostly teaches thing that people don’t really need to know, like calculus, while leaving out almost all of the things that they will really be able to use. (In this respect, the role of college calculus seems to me rather like the role of Latin and Greek in 19th-century education: it’s almost entirely useless to most of the students who are forced to learn it, and its main function is as a social and intellectual gatekeeper, passing through just those students who are willing and able to learn to perform a prescribed set of complex and meaningless rituals.)
Before getting into economics and after getting out of physics, I took calculus and found it very useful and interesting for its own sake. I do see that the way calculus is taught in the US is geared toward engineers and physicists, but I have a hard time thinking of what mathematics would substitute for calculus in the undergraduate curriculum if the goal was to teach students something useful. It can’t be analysis or topology. I took abstract algebra as an undergraduate and found it esoteric and boring. Discrete mathematics? OK maybe statistics, but don’t you need integration for that? Help me out here, if you had the choice, what would you replace calculus with? And remember the goal is to teach something useful.
Via kottke.org, here is the first installment of an Errol Morris essay on Han van Meegeren, the Dutch artist who duped the art world into thinking that his paintings were the work of Vermeer. Morris concludes with the following
To be sure, the Van Meegeren story raises many, many questions. Among them: what makes a work of art great? Is it the signature of (or attribution to) an acknowledged master? Is it just a name? Or is it a name implying a provenance? With a photograph we may be interested in the photographer but also in what the photograph is of. With a painting this is often turned around, we may be interested in what the painting is of, but we are primarily interested in the question: who made it? Who held a brush to canvas and painted it? Whether it is the work of an acclaimed master like Vermeer or a duplicitous forger like Van Meegeren — we want to know more.
The economics version of this question is why the price of a painting would fall just because it has been discovered to be a forgery by technical means and not because the painting was considered of lesser quality. And a corollary question. If you own a painting which is thought by all to be a genuine Vermeer, why would you or anyone invest to find out whether it was a forgery. There is probably a good answer to this that doesn’t require resorting to the assumption that buyers value the name more than the painting.
The value of a painting is the flow value of having it hang on your wall plus the eventual resale value. For the truly immortal works of art the flow value is negligible relative to the resale value. The resale value is linked to the flow value to the person to whom it will be sold to, the person she will sell it to, etc. Ultimately this means that the price is determined by the sequence of people who have the greatest appreciation for art, since they will be willing to pay the most for the flow value. The existence of just one person in that sequence who is sensitive enough to distinguish a true Vermeer from a Van Meegeren implies a large difference in the prices, even if that person is not alive today and will not be for many generations.
“These are relatively simple physical equations, so you program them into the computer and therefore kind of let the computer animate things for you, using those physics,” said May. “So in every frame of the animation, (the computer can) literally compute the forces acting on those balloons, (so) that they’re buoyant, that their strings are attached, that wind is blowing through them. And based on those forces, we can compute how the balloon should move.”
This process is known as procedural animation, and is described by an algorithm or set of equations, and is in stark contrast to what is known as key frame animation, in which the animators explicitly define the movement of an object or objects in every frame.
Why stop there? Next, we can use models from the behavioral sciences, program a few equations and let the characters, dialog, and action animate themselves by following the solution of the model. Don’t believe me? Here’s how to procedurally animate Romeo and Juliet.
Tom Schelling has a famous example illustrating how to solve coordination problems. Suppose you are supposed to meet someone in New York City but you forgot to specify a location to meet. This was before the era of cell phones so there is no opportunity for cooperation before you pick a place to go. Where do you go? You go where your friend thinks you are most likely to go, which is of course where she thinks you think she thinks you are most likely to go, etc.
Notice that convenience or taste or proximity have no direct bearing on your choice. These considerations may indirectly influence your choice, but only if she thinks you think she thinks … that they will influence your choice.
There was an old game show called the Newlywed Game where I learned some of my very early training as a game theorist in my living room roughly at the age of 7. Here is how the show works. 4 pairs of newlyweds were competing. The husbands, say, would be on stage first, with the wives in an isolated room. The husbands would be asked a series of questions about their wives, say “What wedding gift from your family does your wife hate the most?” and the husbands would have to guess what the wives would say. (This was the 70′s so every episode had at least one question about “making whoopee,” like “what movie star would your wife say you best remind her of when you’re makin’ whoopee?”)
When you watch this show every night for as long as I did you soon figure out that the way to win this show is to disregard completely the question and just find something to say that you wife is likely to say, which is of course what she thinks you think she is likely to say, etc. You could try to make a plan with your newlywed spouse beforehand about what to say, something like the first answer is “the crock pot”, the second answer is “burt reynolds” etc. But this looks awkward when the first question turns out to be “What is your wife’s favorite room to make whoopee?” etc.
So the problem is just like Schelling’s meeting problem. The truth is of secondary importance. You want to find the most obvious answer, i.e. the one your wife is most likely to give because she thinks you are most likely to give it, etc. For example, if the question is, “Which Smurf will your wife say best describes your style of makin’ whoopee?” then even though you think the answer is probably “Clumsy Smurf” or “Sloppy Smurf”, you say “Hefty Smurf” because that is the obvious answer.
Ok, all of this is setup to tell you that Gary Becker is clearly a better game theorist than Steve Levitt. Via Freakonomics, Levitt tells the story of a Chicago economics faculty Newlywed game played at their annual skit party. (Northwestern is one of the few top departments that doesn’t have one of these. That sucks.) Becker and Levitt were newlyweds. According to Levitt they did poorly, but it looks like Becker was onto the right strategy, but Levitt was trying to figure out the right answers:
The first question was, “Who is Gary’s favorite economist?” I thought I knew this one for sure. I guessed Milton Friedman. Gary answered Adam Smith. (Although he later apologized to me and said Friedman was the right answer.)
Then they asked, “In Gary’s opinion, how many more quarters will the current recession last?” I guessed he would say three more quarters, but his actual answer was two more quarters.
The next question was, “Who does Gary think will win the next Nobel prize in economics?” This is a hard one, because there are so many reasonable guesses. I figured if Becker writes a blog with Posner, he might think Posner would win the Nobel prize, so that was my answer. Gary said Gene Fama instead.
The last question we got wrong was one that was posed to Gary, asking which of the following three people I would most like to have lunch with: Marilyn Monroe, Napolean, or Karl Marx. I know Gary has a major crush on Marilyn Monroe, so that was the answer I gave, even though the question was about who I would want to have lunch with, not who Gary would want to have lunch with. Gary answered Karl Marx (which makes me wonder what he thinks of me), but did volunteer, as I strongly suspected, that he himself would of course prefer Marilyn to either of the other two.
But close:
You take all of the conflict, all of the chaos, all of the noise, and out of that comes this precise mathematical distribution of the way attacks are ordered in this conflict. This blew our mind. Why should a conflict like Iraq have this as its fundamental signature? Why should there be order in war? We didn’t really understand that. We thought maybe there is something special about Iraq. So we looked at a few more conflicts. We looked at Colombia, we looked at Afghanistan, and we looked at Senegal.
See the TED talk. (hat tip: The Browser)
The French Open began on Sunday and if you are an avid fan like me the first thing you noticed is that the Tennis Channel has taken a deeper cut of the exclusive cable television broadcast in the United States. I don’t subscribe to the Tennis channel and until this year they have been only a slight nuisance, taking a few hours here and there and the doubles finals. But as I look over the TV schedule for the next two weeks I see signs of a sea change.
First of all, only the TC had the French Open on Memorial Day, yesterday. This I think was true last year as well, but now this year all of the early session live coverage for the entire tournament is exclusive on TC. ESPN2 takes over for the afternoon session and will broadcast early session games on tape.
This got me thinking about the economics of broadcasting rights. I poked around and discovered in fact that the TC owns all US cable broadcasting rights for the French Open many years to come. ESPN2 is subleasing those rights from TC for the segments they are airing. So that is interesting. Why is TC outbidding ESPN2 for the rights and then selling most of them back?
Two forces are at work here. First, ESPN2 as a general sports broadcaster has more valuable alternative uses for the air time and so their opportunity cost of airing the French Open is higher. But of course the other side is that ESPN2 can generate a larger audience just from spillovers and self-advertising than TC so their value for rights to the French Open is higher. One of these effects outweighs the other and so on net the French Open is more valuable to one of these two networks. Naively we should think that whoever that is would outbid the other and air the tournament. So what explains this hybrid arrangement?
My answer is that there is uncertainty about the TC’s ability to generate enough audience for a grand slam to make it more valuable for TC than for ESPN. In face of this TC wants a deal which allows it to experiment on a small scale and find out what it can do but also leaves it the option of selling back the rights if the news is bad. TC can manufacture such a deal by buying the exclusive rights. ESPN2 knows its net value for the French Open and will bid that value for the original rights. And if it loses the bidding it will always be willing to buy those rights at the same price on the secondary market from TC. TC will outbid ESPN2 because the value of the option is at least the resale price and in fact strictly higher if there is a chance that the news is good.
So, the fact that TC has steadily reduced the amount of time it is selling back to ESPN2 suggests that so far the news is looking good and there is a good chance that soon the TC will be the exclusive cable broadcaster for the French Open and maybe even other grand slams.
Bad news for me because in my area the TC is not broadcast in HD and so it is simply not worth the extra cost to subscribe. While we are on the subject, here is my French Open outlook
- Federer beat Nadal convincingly in Madrid last week. I expect them in the final and this could bode well for Federer.
- If there is anybody who will spoil that outcome it will be Verdasco who I believe is in Nadal’s half of the draw. The best match of the tournament will be Nadal-Verdasco if they meet.
- The Frenchmen are all fun but they don’t seem to have the staying power. Andy Murray lost a lot psychologically when he was crowing going into this year’s Australian and lost early.
- I always root for Tipsarevich. And against Roddick.
- All of the excitement on the women’s side from the past few years seems to have completely disappeared with the retirement of Henin, the injury to Sharapova and the meltdown of the Serbs. I expect a Williams-Williams yawner.
Turns out that a good way to predict how the US Supreme Court will rule is by counting the number of questions asked to either side. The winning side will be the one with the fewest questions asked. Is this because
- the justices have made up their minds already and ask more questions of the losing side, or
- more questions put the lawyer on the defensive, weakening his position?
That is, does outcome cause the questions or the other way around? I think it has to be the fomer, indeed the latter eventually implies the former. If questioning per se made a side weaker, then the justices would learn this and would realize that their questions were generating more heat than light. Once they realize this, they will know that the only way to get their side to win would be to ask more questions of the other side.
Google determines quality scores by calculating multiple factors, including the relevance of the ad to the specific keyword or keywords, the quality of the landing page the ad is linked to, and, above all, the percentage of times users actually click on a given ad when it appears on a results page. (Other factors, Google won’t even discuss.) There’s also a penalty invoked when the ad quality is too low—in such cases, the company slaps a minimum bid on the advertiser. Google explains that this practice—reviled by many companies affected by it—protects users from being exposed to irrelevant or annoying ads that would sour people on sponsored links in general. Several lawsuits have been filed by would-be advertisers who claim that they are victims of an arbitrary process by a quasi monopoly.
What is the distortion? One example would be an advertiser who is targeting a very select segment of the market and expects few to click through but expects a lot of money from those that do. This advertiser is willing to pay a lot but may be excluded on quality score. So one view is that Google is transferring value from high-paying niche consumers to the rest of the market.
However, for every set of keywords there is another market. Google would optimally lower the quality penalty on searches using keywords that reveal that the searcher is really looking for a niche product. With this view the quality score is a mechanism for preventing unraveling of an efficient market segmentation.
The article is in Wired and it looks at Hal Varian, chief economist at Google.
What is there to do outside Chicago with bored young boys? I imagine easy day-trips to Cape Cod or Cape Ann for parents in Boston. And I can’t even speculate about the options available in San Francisco or Palo Alto….I turn green with envy just thinking about it.
Unsuccessful hikes in rural Wisconsin, a horrible weekend in a seven golf-course resort outside Galena have soured us on the idea that any escape is possible. Over the last year, on the advice of seasoned veterans of the Midwest, we’ve decided to give the day-trip one more whirl. Saugatuk, Michigan, was a big success. Good food, good beer, cheap house rentals, private sandy beaches and pretty countryside. Just what the doctor ordered.
Closer to us and in some ways more historically interesting – Lake Geneva in Wisconsin. I thought its description as the Newport of the Midwest was a stretch till I saw mansion upon mansion lining the shore of Lake Geneva. The empire than Wrigley’s chewing gum built is as impressive as any feudal monarch’s. And it has a chewier, softer and more benevolent foundation than the war and pillage that lead to a typical King’s wealth. The boat ride that allows the great unwashed a fleeting glance into the capitalist palaces does not hold a child’s attention for long.
For that, we had the East Troy Railroad Museum. The first carriage we saw had “Evanston Express” displayed on it. An old El car that ran between Evanston and Wilmette. The museum has a good cappuccino and smoothie stand and there is an ice cream parlor next door. The trip we took in an open carriage was exhilarating. We spotted old train stops that had been left to crumble. People waved from the houses and cars we passed. Our joy was infectious. At the start of the ride, on one side of the line are McMansions and on the other trailer parks. This is left behind soon for countryside and then finally a farmer’s market. But it’s the open carriage itself that’s most fun. With old lights and seats that flip around for the trip back.
The train was driven by an enthusiastic old volunteer and there was a young volunteer guide. Public good provision that left us all charmed. Good to know that the torch will be passed from the Senior Members to the Junior Members and the East Troy line will live on.
Here is an article (via MindHacks) profiling the types of people who are attracted to conspiracy theories.
It is the domain of psychology to study the specific conspiracy theories that appear and the people who advocate them, but to a game theorist the prevalence of conspiracy theories is not surprising. They fill a credibility gap. Like nature, the truth abhors a vacuum. It cannot be an equilibrium that only the truth is told and retold. Because then we would learn to believe everything we hear. That would be exploited by people trying to take advantage.
Conspiracy theories are just one example of noise that must be present in equilibrium to ensure that we don’t believe everything we hear. And arguably conspiracy theories about events that have already happened or are beyond our control are the cost-minimizing way of moderating credibility. Nobody really gets harmed.
I’m sipping my morning coffee and glancing at the Sunday New York Times when my 8-year old son asks “What is stillborn?”. I choke on my coffee a bit and open my eyes wider to see a photo of several women in Tanzania burying a tiny stillborn baby on the front page of the paper. After a quick answer that doesn’t invite much discussion I flip the paper over so that the distressing photo is no longer in view. Only to see another photo — this one of a college student feeding a lamb with a bottle in upstate New York — that makes the first photo even more depressing. Apparently in the U.S. we have a surfeit of college educated young people to care for newborn lambs, while in Tanzania (and in distressingly many other places throughout the developing world) mothers and their babies die because there are too few people with the requisite skills to care for them.
Psyblog has a rundown of 18 failures of the brain’s system of attention. My favorite:
9. Ironic processes of control
In fact sometimes attention is a real bear. What about when you really want to get something right, like putt the ball, hit a beautiful serve right in the corner or reverse the car into a narrow space? Naturally you concentrate even harder than normal, really focus. Unfortunately that just seems to make things worse: you miss the putt by a mile, frame the ball 50ft in the air and ding the car. What gives? These are what Wegner et al. (1998) call ‘ironic processes of control’. Sometimes too much attention is just as detrimental as too little.
I normaly strive to pay as little attention as possible.
Not a weird animal from a dream but a vegetarian restaurant in Chicago. It’s actually a green tomato, a favorite of farmers’ markets. As the name suggests, the food is meant to be seasonal just like the tomato. Thankfully, the weather has finally improved over the last few weeks and some semi-decent produce is actually available in the Midwest. When we’ve been before, there’s been the odd miss but not yesterday – all the eleven plates we shared were excellent. I’m going to attempt to make the feta marinated in chili sauce – why didn’t I think of that before? The American popover is somehow related to the Yorkshire pudding – hadn’t realized that either. And I’m going to grill sliced fennel! I won’t be able to reproduce the presentations but hopefully the taste will come through.
If you’re ever coming through Chicago, you should try this restaurant, even if you’re not a vegetarian. They serve really original, tasty food.
I don’t think this is the right way to make it.
Linguine and clams is one of those dishes where insistence on simplicity is rewarded. The basic mechanics of the dish are extremely straightforward. There are just a few little secrets that elevate a good dish to an excellent one.
Obviously you want fresh clams. You don’t want fresh pasta. Dried pasta works much better here, more on that later. You want garlic, parsley is a nice touch, olive oil, butter and white wine. That’s it. (Bacon?? Sorry Sandeep, no.) Maybe red chile flakes.
Start boiling the pasta. Set the timer for 1 minute short of al dente. Heat a flat pan which can be covered. When hot add a touch of olive oil and chopped garlic (If you like the red chile flakes here is where you add it.) When the garlic is soft but nowhere near brown place the clams in the pan and cover. After about a minute throw splash in some white wine and cover again. After another minute you should have open clams and a lot of clam juice in the pan. Remove the clams to a bowl and reduce the heat on the pan.
Look in the pan. This is your sauce. You will soon be placing pasta in this sauce and you want the pasta to be covered but not swimming, so you are adjusting the heat so that it reduces to that target when your timer goes off. Just before it does, swirl in butter to enrich the sauce.
When the timer goes off you have pasta which is not quite cooked. That is what you want. Use tongs and directly lift the pasta out of the boiling water and into the sauce. There is a reason for this. The pasta water has starch in it from the pasta and some of this water will come along with the pasta into the sauce. The starch tastes good and it will help give body to the sauce. Also, the water will increase the volume of the sauce and you want this because you are going to cook the pasta for its remaining minute in the sauce. Pasta is a sponge at this point of the cooking process (think of what your pasta looks like when you have leftovers: swollen and soft. It has soaked up everything around it.) The pasta will soak up the juices in its last minute of cooking. Fresh pasta will not do this.
When this is done, throw in your parsley, toss and plate the pasta. Arrange the clams on top and serve. Provide bread and fork. Beer is best.
Seen in Evanston on Dempter St. Intentional? Hopefully the training is about writing.
The credit card companies are claiming they will have to charge annual fees and cut reward programs for customers who always pay on time because they are being forced to stop ripping off confused customers who incur late fees and sudden doubling of their interest rates. Ed Yingling, President of the American bankers’ association warns:
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
The idea seems to be that since the price is being cut for the people with credit problem, it will have to be increased for those with good credit.
I claim this is does not make any sense and is not going to happen. There are two reasons for this.
To understand the first reason, we must consider why credit card companies charge different prices to different consumers in the first place. This is a form of price discrimination. To people with lots of outside options, you have to give a good deal – this is the rationale for reward programs for good risks. For people with few options, you can afford to raise the price – this is the rationale for high interest rates for the high risk consumers. To implement price discrimination you have to be able to identify people in the two groups. The credit card companies have access to both internal and shared data to do this. You make profits in both markets, with higher profits presumably in the high risk market if you manage the risk correctly. If you cannot price-discriminate because you do not have the information or are not allowed to do so by law, you set a uniform price, hiking up the price to the low risk and lowering it for the high risk. This is the idea Yingling is suggesting. For a monopolist, uniform pricing makes less profit that price discrimination as it is less targeted to cnsumers’ willingness to pay.
The new legislation is limiting the firms’ ability to impose terms on the high risk consumers. So, they will make less money in that segment. But the key point is – legislation is not outlawing their ability to price discriminate. There is no incentive for them to do uniform pricing as they still have the information, ability and incentive to price discriminate. As long as the different segments have different patterns of willingness to pay for credit card services, the rationale for price discrimination is present.
Moreover, there is second reason why fees will not go up – competition. The low risk consumers are profitable as they generate merchant fees because they use their cards frequently. Suppose all the credit card companies cut rewards and/or impose annual fees. Then, one company or another has an incentive to cut the fee or increase rewards to steal customers from another. In fact, this is the most fundamental force keeping fees down and rewards high – the low risk, high volume consumers of credit card services generate revenue. To entice them to get your card, you have to give them rewards up front. The legislation does not change this competitive logic.
So, look forward to more points that help keep up the constant upgrading of your iPod.
(Hat tips: Kellogg MBA students – Aneesha Banerjee, Ondrej Dusek, and Steven Jackson)
Here is a nice article (via The Browser) theorizing about why Wikipedia works. The apparent puzzles are why people contribute to this public good and why it withstands vandalism and subversion. The first puzzle is no longer a puzzle at all, even us economists now accept that people freely give away their information and effort all the time. But no doubt others have just as much motivation, or more, to vandalize and distort, hence the second puzzle.
The article focuses mostly on the incentives to police which is the main reason articles on say, Barack Obama, probably remain neutral and factual most of the time. But Wikipedia would not be important if it were just about focal topics that we already have dozens of other sources on. The real reason Wikipedia is as valuable a resource as it is stems from the 99.999% of articles that are on obscure topics that only Wikipedia covers.
For example, Barbicide.
These articles don’t get enough eyeballs for policing to work, so how does Wikipedia solve puzzle number two in these cases? The answer is simple: a vandal has to know that, say, John I of Trebizond exists to know that there is a page about him on Wikipedia that is waiting there to be vandalized. (I just vandalized it, can you see where?)
There are only two classes of people who know that there exists a John I of Trebizond (up until this moment that is.) Namely, people who know something useful about him and people who want to know something useful about him. So puzzle number 2 is elegantly sidestepped by epistemological constraints.
Modern classical music, especially, is really hard. What the hell are you listening too, this endlessly winding dissonant stuff without much melody?
The only way to get this kind of music in your ear is to listen to it over and over, which is what I have been doing with the first movement, “Prelude,” of the Maw Violin Concerto the last couple of days. It doesn’t matter whether I want to hear it again or not: I just play it again when it’s done.
When I cycle a piece of thorny orchestral music this way the fog slowly lifts, the picture clears, figure and ground separate. Past pieces I’ve placed on endless loop have included Ligeti’s Melodien, Birtwistle’s The Triumph of Time, Lieberson’s Piano Concerto, and Schuller’s Of Reminiscences and Reflections. Initially they were all daunting listens but now they are old friends. In every case I have learned to understand the composer’s acerbic language much better, so that new experiences with their other pieces aren’t as hard.
That’s Ethan Iverson who, in addition to being the piano player for the frontier jazz trio The Bad Plus, writes an outstanding blog, Do The Math. This post clarified a lot for me. Iverson is a broad, open-minded, and gifted musician and even he approaches contemporary classical music the same way my PhD students approach the Revenue Equivalence Thereom. I have tried exactly what he describes here for Ligeti, etc. and I have yet to turn that corner.
OK so I am apparently obsessed with this theme, but I guess that is what makes me a blogger.
Research, like a lot of collaborative activities, encourages specialization. Successful co-authorships often combine people with differentiated skills. So successful co-authors are complementary which means that your co-author’s other co-authors are substitutes for you. This should imply that you are less likely, other things equal, to have a successful co-authorship with your co-author’s co-authors than with, say a randomly selected collaborator.
If we tried to look for evidence of this in data the difficulty would be in holding other things equal. You are more likely to talk to and have other things in common with your co-author’s co-author than with a random researcher so this would have to be controlled for.
These issues make me think there is some really interesting research waiting to be done taking data from social networks, like patterns of co-authorship or frienship relations on Facebook and trying to simultaneously identify (in the formal sense of that word) “types” (e.g. technician vs idea-man) and preferences (e.g. whether these types are complements or substitutes.) The really interesting part of this must be the econometric theory saying what are the limits of what can and cannot be identified.
In chess, one way a game can be declared a draw is if black, say, has no legal move. This is called stalemate. Typically stalemate occurs because white has a material advantage but fails to checkmate and instead leaves the black king with no space to move that does not walk into check. It is illegal to place your own king in check.
The reason stalemate is an artificial rule is that check is an artificial rule. Clearly the object in chess is to conquer the opponent’s king. One can imagine that check evolved as a way to prevent dishonorable defeat when you overlook a threat against your king and allow it to be captured even though it could have escaped. To prevent this, if your king is in check the rules of chess require that you escape from check on the next move and it is illegal to move into check. This rule means that the only way to win is to checkmate: place your opponent in a position where his king is threatened and cannot escape the threat. The game ends there because on the very next move the king will certainly be captured.
This gives rise to stalemate: it is only because of check that a player can have no legal move. If we dispensed with checkmate, replacing it with the more transparent and natural objective of capturing the king, and eliminating the requirement that you cannot end your turn in check, then a player would always have a legal move. (it is easy to prove this.) Thus, no stalemate.
You can learn a lot about who loves you by walking around with food on your face.
Should you tell someone when they have food on their face? You will embarrass them but you will spare them embarrassment later. The embarrassment comes from common knowledge. He knows that you know, etc. that he had food on his face. You would escape this if you could alert him about the food without him knowing it was you.
You could wait and expect that the food will fall. But you run the risk that it won’t and he’ll discover the food and realize that you let him walk around with food on his face. And once you wait for a bit you are committed. You can’t very well tell him after the meal is over. “You mean you sat there talking to me the whole time with sauce on my chin?”
And what happens when you are in a group and one guy has food on his face? Whose going to tell? Whoever is the first to talk proves that everyone else was willing to ignore it.
Bottom line: if you are dining with me and I have food on my face, send me a text message.
Sandeep has previously blogged about the problems with torture as a mechanism for extracting information from the unwilling. As with any incentive mechanism, torture works by promising a reward in exchange for information. In the case of torture, the “reward” is no more torture.
Sandeep focused on one problem with this. This works only if the torturer will actually carry out his promise to stop torturing once the information is given. But once the information is given the torturer now knows he has a real terrorist and in fact a terrorist with valuable information. This will lead to more torture (for more information) not less. Unless the torturers have some way to tie their hands and stop torturing after a few tidbits of information, the captive soon figures out that there is no incentive to talk and stops talking. A well-trained terrorist knows this from the beginning and never talks.
Let me point out yet another problem with torture. This one cannot be solved even by enabling the torturers to commit to an incentive scheme.
The very nature of an incentive scheme is that it treats different people differently. To be effective, torture has to treat the innocent different than the guilty. But not in the way you might guess.
Before we commence torturing we don’t know in advance what information the captive has, and indeed we don’t know for sure that he is a terrorist at all, even though we might be pretty confident. A captive who really has no information at all is not going to talk. Or if he does he is not going to give any valuable information, no matter how much he would like to squeal and stop the torture.
And of course the true terrorist knows that we don’t know for sure that he is a terrorist. He would like to pretend that he has no information in hopes that we will conclude he is innocnent and stop torturing him. Therefore the torture must ensure that the captive, if he is indeed an informed terrorist, won’t get away with this. With torture as the incentive mechanism, the only way to do this is to commit to torture for an unbearably long time if the captive doesn’t talk.
And this leads us to the problem. In the face of this, the truly informed terrorist begins talking right away in order to avoid the torture. The truly innocent captive cannot do that no matter how much he would like to. And so torture, if it is effective at all, necessarily inflicts unbearable suffering on the innocent and very little suffering on the actual terrorists.
My old post about A-Rod colluding with the opposition to massage his stats was drawn from a New York Times article. It suggested that in blow-out games when a few extra runs here or there would not affect the outcome, A Rod would collude with friends on the other side to raise improve their stats and his.
Now a follow-on article in the NYT says a data analysis suggests this did not occur. I personally think A Rod is getting a bad rap and did not cheat. But the statistical analysis does not make a convincing proof of this hunch.
The data say that in low stakes situations A Rod had many fewer runs than in high stakes situations. This leads the NYT to conclude that either there was “no tipping going on or it was pathetically ineffective.”
This when a little game theory is useful. When the game is close, you have the most incentive to exert effort to win. When it is not close, even the likely winner slacks off as there is no reason to work hard. This is the game theory analysis of R and D races for example (though the details are quite intricate and can sometimes be surprising).
This logic meant A Rod would naturally, given the dynamics of the game, have played hard when the game is close. The collusion has a countervailing effect when the game is not close. But this effect may not be large enogh to counteract the natural incentives of competition. So the data do not prove anything. But I still think A Rod did not cheat.
(Another Hat Tip: Pablo Montagnes)
Ridge is one of my favorite wine producers. They are extremely well-known and have wide distribution so it should be easy to find a bottle of something wherever you live in U.S. (well not Utah obviously). Single vineyard Zins are their specialty but they are pricey enough that you don’t drink them every day. The York Creek is around $30, for example. I had never had it before this last weekend. It lived up to expectations. It’s definitely an American wine. It’s jammy. I tasted lots of blackberries and cherry. It’s very thick, chewy and velvety. It’s aged in oak but I could not taste obvious vanilla. The oak had mellowed the tannins so it was very smooth. You got the feeling that by 2012 it will have more complexity. Now, once you open a bottle, you can’t stop drinking as it’s delicious. The unfortunate thing is that it has roughly 15% alcohol so you might regret the easy drinking. I’m going to buy more bottlles, invite some frieds over and commit to drinking less that way.
