You are currently browsing the monthly archive for January 2010.
You are late with a report and its not ready. Do you wrap it up and submit it or keep working until its ready? The longer it takes you the higher standard it will be judged by. Because if you needed the extra time it must be because its going to be extra good.
For some people the speed at which they come up with good ideas outpaces these rising expectations. Others are too slow. But its the fast ones who tend to be late. Because although expectations will be raised they will exceed those. The slow ones have to be early otherwise the wedge between expectations and their performance will explode and they will never find a good time to stop.
Compare Apple and Sony. Sony comes out with a new product every day. And they are never expected to be a big deal. Every single Apple release is a big deal. And highly anticipated. We knew Apple was working on a phone more than a year before the iPhone. It was known that tablet designs had been considered for years before the iPad. With every leak and every rumor that Steve Jobs was not yet happy, expectations were raised for whatever would eventually make it through that filter.
Dear TE referees. Nobody is paying attention to how late you are.
We got this cookbook for our eight year old for Christmas. Till today, we had only used the pizza recipe and we mainly took the lazy route and bought pre-made pizza dough. That did not test the quality of the book too much. Today, we embarked on a two-hour extravaganza and made gnocchi with tomato sauce and an orange cake. We used canned tomatoes but, apart from that shortcut, we made everything else from scratch. It was a huge success.
The gnocchi tasted totally authentic. It was really fun to make them, much easier than fresh egg pasta. The potato and flour combination has the same consistency as play dough. You roll it into a thin sausage and chop it into gnocchi. It’s perfect for all age groups. I think we had a first all family cooking epiphany with the four-year old to the four+ year olds working together like a fairly well-oiled machine. Gnocchi cook really quickly and you have to scoop them out as soon as they float to the top. We made enough to freeze half of them for a future dinner.
I don’t really bake so the orange cake was a total revelation. It’s quite sophisticated. In fact, there is nothing “childish” about the gnocchi or the cake. That’s the genius of this cookbook. It’s not at all patronizing. The gnocchi aren’t cut into dinosaur shapes to make them go down more easily! They have chosen some of the easier recipes with less sophisticated knife skills. They have thought of ways to explain the cutting and chopping so it can be done safely – the eight year old did all the peeling and chopping. The food is excellent and you get to hang out with your kids and actually cook. What could be better? This cookbook is a keeper. We’ve marked all the recipes we’re going to try. I’m looking forward to the hazelnut cake.
Responding to the message “Salinger is dead. Happy now?” His debut novel, King Dork is about a kid who, in an unavoidably Holden kinda way, hates everything about the cult of The Catcher in the Rye.
That said, unlike Tom, I didn’t hate “The Catcher in the Rye” when it was first thrust upon me by numerous parents, teachers, priests, counselors, and other authority figures. I knew I was supposed to revere it, to identify with Holden, and to keep it close to my bosom and all that. “Finally,” I would say, obediently following the script provided by helpful, smiling, over-eager adult facilitators, “someone who understands…” Maybe I even kind of meant it. And they would pat me on the head, or on the back, depending on how tall they were in relation to me. Eventually, though, I began to wonder. What does it mean when you’re in a room full of people who all have the same, exact opinion on something with little or no divergence? It’s kind of creepy, whatever it means.
Best restaurant I’ve been to so far in Boston. High quality, elegant, unfussy food. I had a “salad” with roasted potatoes and mushroom, a poached egg and truffle sauce. Totally delicious. For an entree I had a “epoisses capellacci”: a kind of tortellini shaped like a bishop’s hat stuffed with a stinky cheese. They floated in a simple melted butter sauces with chopped chives, celery and apple. Very generous portion and perfect on a cold, Boston night. For dessert, we split a cookie plate with a salty, saffron gelato (bit like an Indian kulfi). With the Boston Children’s Museum close by, we’ll be here again!
Senator Ben Nelson was the 60th vote in the Senate on healthcare reform. He held out for what is now called the “Nebraska purchase,” a side-payment from the federal government to Nebraska to extend Medicaid. He also got rid of the public option. He compromised a bit on abortion so he did not get all his cake. In an interview, he says:
NELSON: Well, I gave a little – a half-way in between and then you ask for it all.
So, compromise was short-term stance and he was going ask for the whole cake later on. How? Nelson planned to bargain hard for more in conference in the (now-hypothetical) scenario where the Senate and House bills were merged (my emphasis) as he preferred the House bill to his own language in the Senate bill:
NELSON: To get it there. Right. I know – with my language which was better than the language in the bill. But, once it went to conference, as part of the conference, there was still another 60 vote threshold, and that is when I would have insisted and that is what Christy was talking about when I mentioned this on the phone – how we would approach this in conference to say, for my last 60th vote, it has to have Nelson/Hatch/Casey.
LSN: Why didn’t you stop it right then and there and say, “No Nelson/Hatch – nothing.”
NELSON: Because, at that point and time, the leverage wasn’t as strong – you have to play it…
LSN: You were the 60th vote, though.
NELSON: Yes, but there were some on the other side who probably wouldn’t have gone along with it at that point – they would have had no choice. A whole bunch of people didn’t the Nelson/Hatch/Casey – you saw that. There were a whole bunch of people who didn’t like the Nelson language – they only went along with because I could be the 60th vote. Leverage increases, exponentially, like the difference between a number 2 earthquake, 3 earthquake, 4 earthquake – goes up exponentially like that – your leverage goes like that at the very end…..if you are going to match Stupak, you match him at the end when you have the most leverage.
If the plan failed, he was willing to accept his own (!) language:
NELSON: If everything failed, Nelson is better than the language that is in the bill…..I could live with Nelson, but it is not my preference.
The Nelson strategy contradicts simple backward induction in complete information games in two ways. First, if a player has significant leverage at the end of the game, he should have the same leverage right now. There is no sense in which leverage increases at the end. Second, if it is common knowledge that Nelson will accept Nelson language in the end, then he has no leverage at the end in conference anyway.
Perhaps both issues can be rationalized with incomplete information? I do not know of models that do this but perhaps others are. There is an Abreu-Gul paper where players concede slowly over time in a war of attrition but there is a deadline effect here that is not in their paper.
Paul Krugman asks whyPad? Apple has thought through this problem in pricing the iPad. It’s main competition is Kindle, your cell(I?)phone and your laptop.
Kindle: The Kindle DX has a large screen and is the iPad’s main competitor in the e-Reader category. It is selling for $489. The cheapest iPad is $499 and has 16GB storage while Kindle DX has 4GB. Apple has signed deals with publishers and it seems books are going to be more expensive on iBooks than Amazon. Amazon seems to paying publishers to discount books. Still, given the greater capabilities (websurfing etc.) and sheer cool factor of the iPad, I would guess new consumers are going to go for the iPad given the price point. Existing customer like Krugman, it’s not so clear..you’d have to switch to the iPad and give up your Kindle. The sunk cost fallacy might help to dissuade you. But it seems a Kindle app allows your Kindle books to be read on the iPad so your books transfer.*
Cell(I?)phone: Your phone may already give you websurfing and email capability and have 3G. Apple has signed some deal with ATT where you can sign on one month at a time for either $15 or $30 and get data service. No yearly contract. So now if you thinking about buying the iPad Wi-Fi vs iPad Wifi+3G which costs $130 more you might buy the more expensive one for the option value of using 3G occasionally when you’re traveling. The price difference is actually quite hefty but since it involves no one or more year data contract with ATT, you are willing to suffer the hit on your wallet. Presumably, there was some clever use of Verizon as a threat point to get ATT to give such a good deal.
Laptop: This is where there is the least information. The demonstration showed that iWork functioned on the iPad but it was not clear that Powerpoint would work, even the Mac OS version. I Use VMWare to run Windows on my Macbook. Can that run on the iPad? Then, I’m sold!
*Updated: Commenter below cld pointed out Kindle app to me and I updated the post as a result.
The Econometric Society which publishes Econometrica, one of the top 4 academic journals in Economics has taken under its wing the fledgling journal Theoretical Economics and the first issue under the ES umbrella has just been published. TE has rapidly become among the top specialized journals for economic theory and it stands out in one very important respect. All of its content is and always will be freely available and publicly licensed.
Bootstrapping a reputation for a new journal in a crowded field is by itself almost impossible. TE has managed to do this without charging for access, on a minimal budget supported essentially by donations plus modest submission fees, and with the help of a top-notch board of editors who embraced our mission. There is no doubt that the community rallied around our goal of changing the world of academic publishing and it worked.
This is just a start. Already the ES is launching a new open-access field journal with an empirical orientation, Quantitative Economics. Open Access is here to stay.
From Robin Goldstein:
I’ve previously discussed the thorny issue of the overzealous advocacy of a traditional recipe to the exclusion of all others. In response to Florence Fabricant’s claim, for instance, that “for any pasta all’amatriciana to be authentic, it must be made with guanciale (pork jowl),” not bacon or pancetta, I responded that “too many food writers construct a counterfactual Italy of culinary dogmatism, a population of finger-wagging guanciale zealots, a nation…harrumphing around about how the world is going to shit now that people are making amatriciana with pancetta…People and recipes aren’t anthropological tokens. They’re living things, the products of neural assemblies and proteins and chemicals bouncing across the ages. Narrow your gaze and squint your eyes too tightly in the search for authenticity, and you might miss that whole, beautiful landscape.”
Perhaps I should revise this statement: clearly, there are some finger-wagging guanciale zealots in Italy. They tend to gravitate, it seems, toward the Ministry of Agriculture. The question of whether “zero tolerance,” when it comes to food, is fascist, patronizing, noble—or all three—is certainly one for further contemplation.
Wine produced around Montalcino can be called Brunello di Montalcino only if it is 100% Sangiovese. If imposters put Cabernet into their Brunello, and people like it, should the rules of the appelation be vigorously enforced? You are inclined to say no because people should have what they like. But if it were that simple there would be no reason for the appelation at all.
It could be that people want to know for sure which wine is 100% Sangiovese (and meets other benchmarks) and which is/does not. The appelation system allows them to know that without preventing them from having their SuperTuscan Cab/Sanjo blends if they prefer that.
The hypothetical “ticking time-bomb” scenario represents a unique argument in favor of torture. There will be a terrorist attack on Christmas day and a captive may know where and by whom. Torture seems more reasonable in this scenario for a few reasons.
- It’s a clearly defined one-off thing. We can use torture to defuse the ticking time-bomb and still claim to have a general policy against torture except in these special cases.
- The information especially valuable and verifiably so.
- There is limited time.
If we look at torture simply as a mechanism for extracting information, in fact reasons #1 and #2 by themselves deliver at best ambiguous implications for the effectiveness of torture. A one-off case means there is no reputation at stake and this weakens the resolve of the torturer. The fact that the information is valuable means that the victim also has a stronger incentive to resist. The net effect can go either way.
(Keep in mind these are comparative statements. You may think that torture is a good idea or a bad idea in general, that is a separate question. The question here is whether aspects #1 and #2 of the ticking time-bomb scenario make it better.)
We would argue that a version of #3 is the strongest case for torture, and it only applies to the ticking time-bomb. Indeed the ticking time-bomb is unique because it alters the strategic considerations. A big problem with torture in general is that its effectiveness is inherently limited by commitment problems. If torture leads to quick concessions then it will cease quickly in the absence of a concession (but of course continue once a concession has revealed that the victim is informed ). But then there would be no concession. And as we wrote last week, raising the intensity of the torture only worsens this problem.
But the ticking time-bomb changes that. If the bomb is set to detonate at midnight then torture is going end whether he confesses or not. Now the victim faces a simple decision: resist torture until midnight or give up some information. The amount of information you can get from him is limited only by how much pain you are threatening. More pain, more gain.
I went to a job talk by Josh Schwartzstein of Harvard. He is working of Selective Attention and Learning. Here is a leading example: Suppose you go to the doctor because you are sick. He says you have a food allergy and asks you what you have eaten. If you put low probability on the theory that your sickness is caused by food allergies, you may not be able to answer him as you did not collect data on what you ate given your beliefs. That is, selective attention leads to selective data collection. Josh uses this point to study the long run properties of learning but I want to take up something else he said.
He gave an interesting interpretation of Moneyball (2003) by Michael Lewis. The book (which I have not read but will now buy!) claims that the Oakland A’s found batters who were undervalued. They might not get runs but might be good at getting walks and this can translate into runs too. The Oakland A’s got such prospects for cheap because other teams did not realize the potential of such batters. They were focusing on the runs and not on the walks but the Oakland A’s worked out the value of walks. Once Moneyball gets published though, everyone should recognize this possibility and the players should get valued correctly by the market and arbitrage opportunities should disappear. And a paper by Hakes and Sauer confirms this: by 2004 wages reflect ability to get on base while they did not before! Other theories might also lead to similar conclusions but it’s an interesting interpretation and story nevertheless.
The Sports Economist picks up on the economic impact of Tiger’s expected absence from professional golf tournaments this year.
But it may be a boon to academia. I previously blogged about Jen Brown’s research on “the Tiger Woods effect” as evidence of strategic effort in contests. In tournaments with Tiger Woods present, the rest of the field performs noticably worse than in tournaments in which he was absent. While that study was careful to note and account for the possibility that Tiger’s absence (by choice) from a tournament might be correlated with some unobservable factor that could bias the conclusion, these concerns are always present.
Fortunately, over the next year we will have a nice natural experiment due to the fact that Tiger’s absence will represent truly independent variation. Looking forward to seeing an update on the Tiger Woods effect. (Trilby toss: Matt Notowidigdo.)
I once tried setting my watch ahead a few minutes to help me make it to appointments on time. At first it worked, but not because I was fooled. I would glance at the watch, get worried that I was late, then remember that the watch is fast. But that brief flash acted as a sort of preview of how it feels to be late. And the feeling is a better motivator than the thought in the abstract.
But that didn’t last very long. The surprise wore off. I wonder if there are ways to maintain the surprise. For example, instead of setting the watch a fixed time ahead, I could set it to run too fast so that it gained an extra minute every week or month. Then if I have adaptive expectations I could consistently fool myself.
I think I might adjust to that eventually though. How about a randomizing watch? I don’t think you want a watch that just shows you a completely random time, but maybe one that randomly perturbs the time a little bit. Would a mean-preserving spread make sense? That way you have the right time on average but if you are risk-averse you will move a little faster.
You could try to exploit “rational inattention.” You could set the watch to show the true time 95% of the time and the remaining 5% of the time add 5 minutes. Your mind thinks that it’s so likely that the watch is correct that it doesn’t waste resources on trying to research the small probability event that it’s not. Then you get the full effect 5% of the time.
Maybe its simpler to just set all of your friends’ watches to run too slow.
T-Cow disagrees that Paul Krugman should be Fed Chairman:
Elsewhere I have to strongly differ with the Johnson-Kwak proposal that Paul Krugman be selected. I don’t intend this as a negative comment on Krugman, if anything I am suggesting he is too dedicated to reading and writing and speaking his mind. The Fed Chair has to be an expert on building consensus and at maintaining more credibility than Congress; even when the Fed screws up you can’t just dump this equilibrium in favor of Fed-bashing. What lies on the other side of that curtain isn’t pretty. Would Krugman gladly suffer the fools in Congress? Johnson and Kwak are overrating the technocratic aspects of the job (which largely fall upon the Fed staff anyway) and underrating the public relations and balance of power aspects. It’s unusual that an academic will be the best person for the job.
Even if you think that Krugman would be the best person for the job that doesn’t imply that we should give him the job. The decision is between Krugman doing what he is doing now and Bernanke as Fed chairman versus Krugman being Fed chairman, nobody doing what Krugman is doing now and Bernanke going back to teaching Princeton undergrads. To prefer the latter it is not enough that Krugman is a better Fed chair than Bernanke. His advantage there must compensate for the other changes in the bundle.
In the top tennis tournaments there is a limited instant-replay system. When a player disagrees with a call (or non-call) made by a linesman, he can request an instant-replay review. The system is limited because the players begin with a fixed number of challenges and every incorrect challenge deducts one from that number. As a result there is a lot of strategy involved in deciding when to make a challenge.
Alongside the challenge system is a vestige of the old review system where the chair umpire can unilaterally over-rule a call made by the linesman. These over-rules must come immediately and so they always precede the players’ decision whether to challenge, and this adds to the strategic element.
Suppose that A’s shot lands close to B’s baseline, the ball is called in by the linesman but this call is over-ruled by the chair umpire. In these scenarios, in practice, it is almost automatic that A will challenge the over-ruled call. That is, A asks for an instant-replay hoping it will show that the ball was indeed in.
This seems logical. It looked in to the linesman and that is good information that it was actually in. For example, compare this scenario to the one in which the ball was called out by the linesman and that call was not over-ruled. In that alternative scenario, one party sees the the ball out and no party is claiming to see the ball in. In the scenario with the over-rule, there are two opposing views. This would seem to make it more likely that the ball was indeed in.
But this is a mistake. The chair umpire knows when he makes the over-rule that the linesman saw it in. He factors that information in when deciding whether to over-rule. His willingness to over-rule shows that his information is especially strong: strong enough to over-ride an opposing view. And this is further reinforced by the challenge system because the umpire looks very bad if he over-rules and a challenge shows he is wrong.
I am willing to bet that the data would show challenges of over-ruled calls are far less likely to be successful than the average challenge.
A separate observation. The challenge system is only in place on the show courts. Most matches are played on courts that are not equipped for it. I would bet that we could see statistically how the challenge system distorts calls by the linesmen and over-rules by the chair umpire by comparing calls on and off the show courts.
The Republicans fought like dogs to win the Florida recount in 2000. Norm Coleman dragged out the election in Minnesota. George W Bush passed two tax cuts via reconciliation in his first term. These policies play to Republican partisans but alienate moderates and independents. Wary of losing the votes of independents, one loss in Massachusetts has left the Democratic Party reeling and ready to step back from healthcare reform. Why are there differences between the parties in their focus on partisans vs independents?
Politicians are motivated both by ideology and reelection. They must take both into account when taking a policy stance. As party activists can influence the chances of reelection, they can affect the policy stance of the politician. This logic holds true for both Democrats and Republicans but what differs is the risks extremists in the two parties are willing to take to influence policy. Right wing activists are willing to decrease the probability of the Republican Party winning the election to increase the probability of having a policy closer to their ideal implemented should the party win. They are willing to run their own candidate in the Republican primary and risk them losing the general election against the Democrats. The recent congressional election in New York is an example of this. So, even moderate Republican politicians must take this threat into account and adopt more right wing policies to counteract it.
But left wing activists are not willing to take a similar gamble except in extreme circumstances (e.g. Ned Lamont vs. Lieberman in CT). So, Democratic lawmakers can afford to woo moderates without losing the support of partisans.
This is part of the story but not all of it. Most importantly, it relies on an asymmetry between the preferences of right wing vs left wing partisans. A deeper theory would also explain the asymmetry.
Here’s a case where English has it relatively easy. There’s been plenty of fuss over whether to retain actress or to use actor for females as well as males, whether to adopt new gender-neutral terms like chair and craft in place of chairman and craftsman, and so on. But most English words for social roles and titles are already linguistically gender-neutral: president, senator, minister, dean, secretary, teacher, boss, judge, lawyer, …
In languages like Italian and Spanish, in contrast, nearly all such words are specified for grammatical gender, and their grammatical gender is usually interpreted sexually.
From an interesting post at the great blog Language Log. Lots of great comments too.
Jeff and I had a look at the torture memos which attempt to delineate prosecutable offenses from acceptable interrogation techniques. There are many interesting passages. On “interstate stalking” (page 32):
To establish the requisite intent, the prosecution must demonstrate that the defendant undertook the travel with the specific intent to harass, or intimidate another. See Al-Zubaidy, 283 F.3d at 809 (the defendant “must have intended to harass or injure [the victim] at the time he crossed the state line”). Thus, for example, a member of the Armed Forces who traveled to a
base solely pursuant to his orders to be stationed there, and subsequently came to be involved in
the interrogation of operatives, would lack the requisite intent. He would have traveled for the purpose of complying with his orders but not for the purpose of harassment. Nevertheless, because travel within the special maritime and territorial jurisdiction is also covered, the intent to travel within that base for the purpose of intimidating or harassing another person would satisfy the intent element.
The definition of maiming:
Section 114 makes it a crime for an individual (1) ”with the intent to torture (as defined in section 2340), maim, or disfigure” to (2) “cut, bite, or slit the nose, ear, or lip, or cut out or disable the tongue, or put out or destroy an eye, -or cut off or disable a limb or any member of another person.” 18 U.S.C. § -114. It further prohibits individuals from “throw[ing]or pour[ing] upon another person-any scalding water, corrosive acid, or caustic substance” with like intent.
This implies the following is not ruled out:
So long as the interrogation methods under contemplation do not involve the acts enumerated in section 114, the conduct of those interrogations will not fall within the purview of this statute. Because the statute requires specific intent, i.e., the intent to maim, disfigure or torture, the absence of such intent is a complete defense to a charge of maiming.
Pages 23-39 in the first memo are interesting reading of what is or is not allowed in the Bush administration interpretation of various laws. The second memo picks up on international themes. For instance, I believe the British practised the following techniques in Ireland (p 69):
(1) Wall Standing. The prisoner stands spread eagle against.the wall, with fingers high
above his head, and feet back so that he is standing on his toes such that his all of his ) weight falls on his fingers.
(2) Hooding. A black or navy hood is placed over the prisoner’s head and kept there .. except during the interrogation.
(3) Subjection to Noise. Pending interrogation, the prisoner is kept ina room with a loud and continuous hissing noise.
(4) Sleep Deprivation. Prisoners are deprived of sleep pending interrogation.
(5) Deprivation of Food and Drink. Prisoners receive a reduced diet during detention and pending interrogation.
These were judged not to be torture by a European court. Similar techniques were ruled not to be torture by an Israeli court. There are many other interesting passages. It would be an interesting exercise to list every method discussed in the two memos and whether they constitute torture.
Yahoo! has been building a social science group in their research division. In addition to some well-known economists, they have also been attracting ethnographers and cognitive psychologists away from posts at research universities.
The recruitment effort reflects a growing realization at Yahoo, the second most popular U.S. online site and search engine, that computer science alone can’t answer all the questions of the modern Web business. As the novelty of the Internet gives way, Yahoo and other 21st century media businesses are discovering they must understand what motivates humans to click and stick on certain features, ads and applications – and dismiss others out of hand.
The article is an interesting peek into the boundaries of business and basic research. They are not always smooth.
However, there are risks when a for-profit company adopts an academic approach, which calls for publishing research regardless of the outcome. Notably, one set of figures from a study conducted by Reiley, the economist from the University of Arizona, raised eyebrows at Yahoo.…it could underscore a growing immunity to display advertising among the Web-savvy younger generation.The latter possibility would do little to bolster Yahoo’s sales pitch to advertisers hoping to influence this coveted age group. But raising such questions may be the cost of recruiting researchers committed to pure science.
In principle a prediction market should generate more accurate predictions than a simple poll. For example, in an election, the outcome of a poll should be known to the traders and incorporated into their trades. But in practice, the advantage of prediction markets is small, or so suggests a new study.
In a new study, Daniel Reeves, Duncan Watts, Dave Pennock and I compare the performance of prediction markets to conventional means of forecasting, namely polls and statistical models. Examining thousands of sporting and movie events, we find that the relative advantage of prediction markets is remarkably small. For example, the Las Vegas market for professional football is only 3% more accurate in predicting final game scores than a simple, three parameter statistical model, and the market is only 1% better than a poll of football enthusiasts.
More here. My view is that there is no theoretical reason for interpreting a market price in a prediction market as a probability. That is, if Coakley is trading at 75 cents there is no reason to interpret that as a 75 percent probability that Coakley will win. At best there is an ordinal relationship: a higher price means a higher probability. Likewise with a poll.
Studies like these should instead be measuring the conditional probability of an event given the price observed in the market. Because, even an “innacurate” prediction can be a very good one. To take an extreme case the market might always underprice the probability of a Coakley win by 25%. But then by dividing the market price by .75 we can infer the right probability with perfect accuracy.
Sandeep and I are writing a paper on torture. We are trying to understand the mechanics and effectiveness of torture viewed purely as a mechanism for extracting information from the unwilling. A major theme we are finding is that torture is complicated by numerous commitment problems. We have blogged about these before. Here is Sandeep’s first post on torture which got this whole project started.
A big problem is that torture takes time and when the victim has resisted repeated torture it becomes more and more likely that he actually has no information to give. At this point the torturer has a hard time credibly commiting to continue the torture because in all likelihood he is torturing an innocent victim. This feeds back into the early stages of the torture because it increases the temptation for the truly informed victim to resist torture and pretend to be uninformed.
In light of this it is possible to say something about the benefits of adopting more and more severe forms of torture, waterboarding say. A naive presumption is that a technology which delivers suffering at a faster pace would circumvent the problem because it makes it harder to resist temptation for long enough.
But this logic is backwards. Indeed, if it were true that more severe torture induced the informed to reveal their information early, then this would only hasten the time at which the torture ceases because the torturer becomes convinced that his heretofore silent victim is in fact innocent. So credible torture requires that those who resist the now more severe torture must find compensation in the form of less information revealed in the future. In the end the informed victim is no worse off and this means that the torturer is no better off.
Once you account for that what you are left with is that there is more suffering inflicted on the uninformed who has no alternative but to resist. And this only makes it more difficult to continue torturing once the victim has demonstrated he is innocent. That is, the original commitment problem is only made worse.
These two conditions are sufficient:
(1) When the race is close or
(2) When the prize is big.
Federer can afford to relax in a match with small stakes or when he is close to the winning point. But he should work hard at Wimdledon and if the match is tied. The same principles apply in elections. In the Massachusetts special election, it has been known for months that the second condition is satisfied. Because, without the Massachusetts Senate seat, the 60 vote barrier needed to fight the filibuster is gone. The White House, the Democratic Party etc should have been focused on the Massachusetts race on this ground alone. Belatedly, it was discovered that condition (1) also obtained. But even you didn’t know that, you did know that the coalition you had to hold together to get stuff through the Senate was pretty fragile and one crack was enough to send the whole thing flying.
The Republican Party recognized that the second condition was key, worked like crazy and played the optimal strategy. It’s common sense but only one party seemed to get it.
Ingenious new support for that view:
The mighty insect colonies of ants, termites and bees have been described as superorganisms. Through the concerted action of many bodies working towards a common goal, they can achieve great feats of architecture, agriculture and warfare that individual insects cannot.
That’s more than just an evocative metaphor. Chen Hou from Arizona State University has found that the same mathematical principles govern the lives of insect colonies and individual animals. You could predict how quickly an individual insect grows or burn food, how much effort it puts into reproduction and how long it lives by plugging its body weight into a simple formula. That same formula works for insect colonies too, if you treat their members as a collective whole.
And this is not just an accounting trick. If you take a “colony” of, say, 100 people and and measure how much energy their bodies use it would be 100 times the energy that a single body uses (duh.) But a single animal that weighs 100 times as much as a human uses only 100^(3/4) ≈ 32 times as much energy as a single human. There are economies of scale within a single organism but not across.
Except with ant colonies. The mass to energy ratio of the colony as a whole follows the same law that governs indivduals of non-colony animals. Via Not Exactly Rocket Science.
It’s been blog fodder the past week.
In other words, to pull off a successful boast, you need it to be appropriate to the conversation. If your friend, colleague, or date raises the topic, you can go ahead and pull a relevant boast in safety. Alternatively, if you’re forced to turn the conversation onto the required topic then you must succeed in provoking a question from your conversation partner. If there’s no question and you raised the topic then any boast you make will leave you looking like a big-head.
It makes perfect sense. First of all, purely in terms of how much I impress you, an unprovoked boast is almost completely ineffective. Because everybody in the world has something to boast about. If I get to pick the topic then I will pick that one. If you pick the topic or ask the question then the odds you serve me a boasting opportunity are long unless I am truly impressive on many dimensions.
And it follows from that why you think I am a jerk for blowing my own horn. I reveal either that I don’t understand the logic and I am just trying to impress you or I think that you don’t understand it and I can fool you into being impressed by me.
Via kottke.org
And this is what I sometimes worry about: do I put them back on top of the stack? Do I put the bowls back in the empty front spot on the shelf? Because if I do that, then guess which dishes are going to get reached for the next time? That’s right, the same ones.
I think about this every time I put our dishes back in the cupboard. I assumed it was just me and that I was crazy.
The worry is that the dishes in regular rotation will depreciate faster than the ones that get stuck at the bottom of the stack. I would say that if this was a potential problem then you have more dishes than you need. Do you go a month without a single day in which you work your way to the bottom? Then you can safely get rid of a number of dishes equal to the number that never gets used.
Maybe you have occasional large gatherings and the extra dishes are there just for those occasions. Then it would seem that the question turns on a comparison of the time it takes before the difference in wear is noticeable and the frequency of these gatherings. Still I would say the trade-off is non-existent. First, unless you are buying really cheap dishes, the time span we are talking about here is measured in years not months. You can always rent dishes for your party.
Second, we are talking about just a few extra dishes. Forcing them into the rotation will indeed ensure uniformity. Now they will all be dented and scratched. Again, renting is the remedy if your concern is the impression you make on your guests.
When you search google you are presented with two kinds of links. Most of the links come from google’s webcrawlers and they are presented in an order that reflects google’s PageRank algorithm’s assessment of their likely relevance. Then there are the sponsored links. These are highlighted at the top of the main listing and also lined up on the right side of the page.
Sponsored links are paid advertisements. They are sold using an auction that determines which advertisers will have their links displayed and in what order. While the broad rules behind this auction are public, google handicaps the auction by adjusting bids submitted by advertisers according to what google calls Quality Score. (Yahoo does something similar.)
If your experience with sponsored links is similar to mine you might start to wonder whether Quality Score actually has the effect of favoring lower quality links. Renato Gomes, in his job market paper explains why this indeed might be a feature of the optimal keyword auction.
The idea is based on the well-known principle of handicaps for weak bidders in auctions. Let’s say google is auctioning links for the keyword “books” and the bidders are Amazon.com plus a bunch of fringe sites. If Amazon is willing to bid a lot for the ad but the others are willing to bid just a little, an auction with a level playing-field would allow Amazon to win at a low price. In these cases google can raise its auction revenues by giving a handicap to the little guys. Effectively google subsidizes their bids making them stronger competitors and thereby forcing Amazon to bid higher.
Of course its rare that the stronger bidder is so easy to identify and anyway the whole auction is run instantaneously by software. So how would google implement this idea in practice? Google collects data on how often users click through the (non-sponsored) links it provides to searchers. This gives google very good information about how much each web site benefits from link-generated traffic. That’s a pretty good, albeit imperfect, measure of an advertiser’s willingness to pay for sponsored links. And that’s all google would need to distinguish the strong bidders from the weak bidders in a keyword auction.
And when you put that all together you see that the weak guys will be exactly those websites that few people click through to. The useless links. The revenue-maximizing sponsored link auction favors the useless links and as a consequence they win the auction far more frequently than they would if the playing-field were level.
(To be perfectly clear, nobody outside of google knows exactly how Quality Score is actually calculated, so nobody knows for sure if google is intentionally doing this. The analysis just shows that these handicaps are a key part of a profit-maximizing auction.)
Renato’s job market paper derives a number of other interesting properties of an optimal auction in a two-sided platform. (Web search is a two-sided platform because the two sides of the market, users and advertisers, communicate through google’s platform.) For example, his theory explains why advertisers pay to advertise but users don’t pay to search. Indeed google subsidizes users by giving them all kinds of free stuff in order to thicken the market and extract more revenues from advertisers. On the other hand, dating sites, and some job-matching sites charge both sides of the market and Renato derives the conditions that determine which of these pricing structures is optimal.
My attempt at describing a paper in words. The paper is by Anirban Mitra and Debraj Ray and I am going to offer a simplified version of it.
Suppose an aggressor faces a victim and decides whether to attack the victim or not. Each has wealth which can be stolen at some cost. Each belongs to some group, e.g Hindu or Muslim. The aggressor’s group can decide how to much to invest in a “conflict infrastructure” that reduces the cost of an attack to a member of the aggressor group. How do the number of attacks change as a function of aggressor and victim incomes?
First, suppose victim incomes increase keeping aggressor incomes fixed. There are two effects. Keeping investment in conflict infrastructure fixed, certainly the aggressor group has a greater incentive to attack and this effect increases attacks. However, in principle, if investment in conflict infrastructure goes down significantly, this might reduce the number of attacks. As the benefits of attacking have gone up and aggressor incomes are kept fixed, this effect is never going to be large enough to cancel out the first one. The first conclusion is that as victim incomes go up so do the number of attacks.
Second, suppose aggressor incomes go down keeping victim incomes fixed. There are two effects. The first effect is the same: a fall in aggressor incomes increases their incentive to attack the victims, in the same way that a rise in victim incomes increases the incentive to attack, keeping investment in conflict infrastructure fixed. But as aggressor income has gone down, this can increase the costs of investing in conflict infrastructure. If this second effect is large enough, it can cancel out the first effect. The second conclusion is that the impact of a change in aggressor incomes on the number of attacks is ambiguous.
Then the authors use the model to offer an interpretation of Hindu-Muslim violence in India. They have data on violence and also data on household expenditures by ethnic group. They show that a change in Hindu expenditures has an insignificant effect on ethnic violence but that an increase in Muslim incomes has a large, positive and significant effect on violence.
Using the model to interpret the data, we would conclude that Hindus are the aggressor group and Muslims are the victim group. The combination of the theory and the data is necessary to offer this interpretation. I like this aspect of the paper as well as the quite surprising elicitation of the identity of the aggressor group vs. the victim group. Why is there this asymmetry? The authors offer some interesting speculations based on Indian Partition. I highly recommend the paper: the theory and the empirical analysis and simple enough that a theorist or an empiricist can understand the whole paper. The conclusions are surprising and the methodological approach is attractive.
This lecture brings together everything built up to this point. We are going to develop an intuition for why competitive markets are efficient using a model of profit maximizing sellers who compete in an auction market by setting reserve prices. In the previous lecture we saw how the profit maximization motive leads a seller with market power to choose an inefficient selling mechanism. This came in the form of a reserve price above cost. Here we begin by getting some intuition why competition should reduce the incentive to distort price in this way.
(This is probably the weak link in the whole class. I do not have a good idea of how to teach this and in fact I am not sure I understand it so well myself. This is the first place to work on improving the class next time. Any suggestions would be appreciated.)
Finally, we jump to a model with a large number of buyers and sellers all competing in a simultaneous ascending double auction. With so much competition, if sellers set reserve prices above their costs there will be
- no sellers who are doing better than if they just set the reserve price equal to cost
- a positive mass of sellers who would do strictly better by reducing their reserve price to equal their cost
In that sense it is a dominant strategy for all sellers to set reserve price equal to their cost. This equates the “supply” curve with the cost curve and produces the utilitarian allocation. Here are the notes.
