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Did you know that the number 4, spoken in Chinese, sounds very similar to the Chinese word for death? For that reason the number 4 is considered unlucky. (You may also know that the number 8 sounds like money and so it is considered lucky.) Well it is unlucky. Indeed, the 4th of the month is the peak day for death by cardiac arrest among Asian Americans. That is according to this study which I found via my new favorite blog, which I found via my always favorite Twitterer, nambupini.
Suppose you are selling your house and 10 potential buyers are lined up. For whatever reason you cannot hold an auction (in fact sellers rarely do) but what you can do is make take-it-or-leave-it price demands. To be clear: this means that you can approach buyers in sequence proposing to each a price. If a buyer accepts you are committed to sell and if he rejects you are committed to refuse sale to this buyer. All buyers are ex ante identical, meaning that you while you don’t know their maximum willingness to pay, you have the same beliefs about each of them. How do you determine the profit-maximizing price?
It is somewhat surprising that despite the symmetry, in order to maximize profits you will discriminate and charge them different prices. What you will do is randomly order them and offer a descending sequence of prices. The buyer who was randomly put first in the order (unlucky?) will be charged the highest price and this is an essential part of your optimal pricing policy.
Although it sounds surprising at first the intuition is pretty simple, it’s an application of the idea of option value. When you have only one buyer left you will charge him some price 
Now the same tradeoff determines your price to the second-to-last buyer. Except now the cost of having your offer rejected is lower because you will have another chance to sell. So you are willing to take a larger chance of a rejected offer and therefore set a higher price. Now continuing up the list, at every step the option value associated with a rejected offer increases and therefore so does the price.
OK that was easy. Now consider a model where the seller posts prices and the buyers choose when to arrive. This should break the symmetry if higher value buyers arrive earlier or later than lower value buyers. And they will for two reasons. First, nobody with a willingness to pay that is below the opening price will want to be first. Second, even among buyers with a high willingness to pay, the higher it is the more you value the increased chance to buy relative to lower prices later. (There is a “single-crossing property.”) The seller adjusts to this by further steepening the price path, etc.
Thanks to Toomas Hinnosaar for conversations on the topic. Here is a paper by Liad Blumrosen and Thomas Holenstein on optimal posted prices.
Have you seen these? They mysteriously lurk at the top right of miscellaneous web pages on the Harvard Econ department web site. Like here, look Philippe Aghion’s page has brains. Mankiw? brains. And there is no caption or explanation given. I started to think that it was there as some kind of experiment like those guys in gorilla suits that run across the screen when you’re supposed to be counting basketballs? So I am here to say that I am not blind to these brains. And I see the word juice there. You can’t slip anything by me.
I went through a long showdown with tendonitis of the hamstring. At its worst it was a constant source of discomfort that occupied at least a fraction of my attention at all times. I knew that I had to heal before I would get back my to usual smiling happy self. So I worked hard, stretching, walking, running: rehabilitating.
My hamstring doesn’t bother me much anymore. But you know what? Now that it no longer dominates the focus of my attention, I am reminded that my back hurts, as it always has. But I had completely forgotten about that for the last year or so because during that time it didn’t hurt.
So I am not the content, distraction-free person I expected to be. Now that I have solved the hamstring problem my current distractions draw my attention to the next health-related job: keep my back strong, flexible, and pain-free.
This is a version of the focusing illusion. People are motivated by expected psychological rewards that never come. The classic story is moving to California. People in Michigan declare that they would be much happier if they lived in California, but as it turns out people in California just about as miserable as people who still live in Michigan.
Pain and pleasure make up the compensation package in Nature’s incentive scheme. Our attention is focused on what needs to be done using the lure of pleasure and the avoidance of pain. And if it feels like she is repeatedly moving the goal posts, that may be all part of the plan according to a new paper by Arthur Robson and Larry Samuelson.
They model the way evolution shapes our preferences based on two constraints: a) there’s a limit to how happy or unhappy we can be and b) emotional states are noisy. Emotions will evolve into an optimal mechanism for guiding us to the best decisions. Following the pioneering research of Luis Rayo and Gary Becker, they show that the most effective way to motivate us within these constraints is to use extreme rewards and penalties. If we meet the target, even by just a little, we are maximally happy. If we fall short, we are miserable.
This is the seed of a focussing illusion. Because after I heal my hamstring Nature again needs the full range of emotions to motivate me to take care of my back. So after the briefest period of relief, she quickly resets me back to zero, threatening once again misery if I don’t attend to the next item on the list. If I move to California, I enjoy a fleeting glimpse of my sought-after paradise before she re-calibrates my utility function, so that now I have to learn to surf before she’ll give me another taste.
That’s the subject of an article in Slate that leads with:
So, a Treasury secretary, a labor union leader, a hedge-fund billionaire, and an heiress walk into a conference call.
You will recall that the estate tax was temporarily repealed and it will come back in full force in 2011 unless some new legislation is passed. I have praised estate taxes before.
Salakot Slap: gappy3000.
- Where’s Missy?
- The Luxuriant Flowing Hair Club For Scientists.
- Bruce Lee’s screen test. (If you click on only one sordid link this summer, this should be the one.)
- Try your hand at synaesthesia.
- Cross-subsidization.
- Using curry to fight global warming.
- Not a lot of living in these rooms.
Despite what you have read, theory holds up just fine.
The relationship between economic theory and experimental evidence is controversial. One could easily get the impression from reading the experimental literature that economic theory has little or no significance for explaining experimental results. The point of this essay is that this is a tremendously misleading impression. Economic theory makes strong predictions about many situations, and is generally quite accurate in predicting behavior in the laboratory. Most familiar situations where the theory is thought to fail, the failure is to properly apply the theory, and not in the theory failing to explain the evidence.
Which is not to say theory doesn’t have its problems.
That said, economic theory still needs to be strengthened to deal with experimental data: the problem is that in too many applications the theory is correct only in the sense that it has little to say about what will happen. Rather than speaking of whether the theory is correct or incorrect, the relevant question turns out to be whether it is useful or not useful. In many instances it is not useful. It may not be able to predict precisely how players will play in unfamiliar situations.4 It buries too much in individual preferences without attempting to understand how individual preferences are related to particular environments. This latter failing is especially true when it comes to preferences involving risk and time, and in preferences involving interpersonal comparisons – altruism, spite and fairness.
It’s actually a really great article, you should check it out. It has this:
The fashion modeling market also has a formal mechanism in place, known as the “option,” to ensure all tastemakers get in on the action. An option is an agreement between client and agent that enables the client to place a hold on the model’s future availability. Like options trading in finance markets, an option gives the buyer the right, but not the obligation, to make a purchase. In the modeling market, it enables clients to place a hold on the model’s time, but unlike finance options trading, model options come free of cost; they are a professional courtesy to clients, and also a way for agents to manage models’ hectic schedules.
And it even has this:
In behavioral economics, Coco Rocha’s success is a case of an information cascade. Faced with imperfect information, individuals make a binary choice to act (to choose or not to choose Coco) by observing the actions of their predecessors without regard to their own information. In such situations, a few early key individuals end up having a disproportionately large effect, such that small differences in initial conditions create large differences later in the cascade.
Sarcasm is a way of being nasty without leaving a paper trail.
If I say “No dear, of course I don’t mind waiting for you, in fact, sitting out here with the engine running is exactly how I planned to spend this whole afternoon” then the literal meaning of my words leaves me completely blameless despite their clearly understood venom.
This convention had to evolve. If it didn’t already exist it would be invented. A world without sarcasm would be out of equilibrium.
Because if sarcasm did not exist then I have the following arbitrage opportunity: I can have a private vindictive chuckle by giving my wife that nasty retort without her knowing I was being nasty. The dramatic irony of that is an added bonus.
That explains the invention of sarcasm. But it evolves from there. Once sarcasm comes into existence then the listener learns to recognize it. This blunts the effect but doesn’t remove it altogether. Because unless its someone who knows you very well, the listener may know that you are being sarcastic but it will not be common knowledge. She feels a little less embarrassment about the insult if there is a chance that you don’t know that she knows that you are insulting her, or if there was some higher-order uncertainty. If instead you had used plain language then the insult would be self-evident.
And even when its your spouse and she is very accustomed to your use of sarcasm, the convention still serves a purpose. Now you start to use the tone of your voice to add color to the sarcasm. You can say it in a way that actually softens the insult. “Dinner was delicious.” A smile helps.
But you can make it even more nasty too. Because once it becomes common knowledge that you are being sarcastic, the effect is like a piledriver. She is lifted for the briefest of moments by the literal words and then it’s an even bigger drop from there when she detects the sarcasm and knows that you know that she knows …. that you intentionally set the piledriver in motion.
Sarcasm could be modeled using the tools of psychological game theory.
I wrote previously about the equilibrium effects of avoiding spoilers. You might want to strategically generate spoilers to counteract these effects. I just discovered that a website exists for generating spoilers: shouldiwatch.com.
The premise is that you have recorded a sporting event on your DVR and you want to enjoy watching it. Enjoyment has something to do with the resolution of uncertainty. So you have preferences for the time path of uncertainty resolution. Maybe you want your good news in lumps and your bad news revealed gradually. Maybe you like suspense. A mechanism can fine tune and enhance these.
But it always cuts two ways. A spoiler creates a discrete jump in your beliefs at the beginning followed by another effect on your beliefs as the game unfolds. For example, ShouldIWatch.com allows me to set a program that will warn me when the Lakers beat the Celtics by more than 10 points. The idea is that I don’t want to watch a blowout. But there is an effect on my beliefs: knowing that it is not a blowout changes my expectations at the beginning of the game. Then there is a second effect during the game: if the Lakers take a 15 point lead, I am expecting a come-back by the Celtics. In return for the increased excitement at the beginning I pay with reduced excitement in the interim.
This trade-off could make for a cool model. An event will unfold over time. An observer cares about the outcome and cares about the path of his beliefs but will watch the event after it is over. A mechanism is a program which knows the full path of the event and reveals information to the observer before and while he watches the event. Design the mechanism which maximizes the observer’s overall expected value taking into account this tradeoff.
File this under psychological mechanism design.
BP’s cap on the ruptured gulf coast oil well is a two-edged sword. On the one hand, there is a good chance it will hold and the problem will be solved. On the other hand, the cap makes it harder to verify whether this solution has failed.
The cap means that pressure is diverted elsewhere underground. Right now there is a camera in place pointing at the capped part of the well. When the cap was not in place this camera made it common knowledge whether oil was flowing into the gulf and it made quite clear how much. With the cap however, “seepage” in other locations can only be measured by noisy tests that can easily be disputed by both parties.
For example, BP will cite:
Some seepage from the ocean floor is normal in the Gulf of Mexico, according to University of Houston professor Don Van Nieuwenhuise.
“A lot of oil that’s formed naturally, by the Earth, ends up escaping or leaking to the surface in the form of natural seeps and yes, there are a lot of these all around the world,” he said.
and the government will argue:
“If the well remains fully shut in until the relief well is completed, we may never have a fully accurate determination of the flow rate from this well. If so, BP — which has consistently underestimated the flow rate — might evade billions of dollars of fines,” Markey, D-Massachusetts, said in a letter to Allen released Sunday.
The deadweight loss of negotiation and litigation means that even if the risk to the gulf is substantially reduced by having the cap in place, it may still be better to uncap the well and seek solutions (such as extraction of the flowing oil) that can be monitored directly by the camera that is already there.
A mathematician who was very important for economic theory, he died last week. Here are a number of thoughtful remembrances.
If I missed yours I am very sorry, please post a link in the comments.
At Steppenwolf Theater in Chicago. Bruce Norris is the playwright.
This guy I know is saying that a theater critic is always the bad guy. He’s like “the playwright is so special just because he wrote the play in the first place, but the critic never gets credit for his part. I mean the word ‘critic’ already carries such a negative connotation.”
Maybe its because reviews are so pointless. I mean what can a review actually accomplish? OK maybe you might convince some people to see the play or not to see the play, and maybe you might shed some light on some kind of deep meaning, but really what does that matter in the long run?
Hold on a sec, I don’t like the way that sounds. I don’t think I really believe that and I certainly don’t like the way it feels. Let’s do that again. Back up.
The female lead in the play takes off her shirt once. And the reality show Top Chef is featured in a crucial scene.
Now I am sure to have an impact. You don’t mind spoilers do you? Well, it doesn’t matter. It’s just a play and even if you do know what’s going to happen, there is nothing you can do about it because its already written and its going to unfold just that way no matter who is there watching. Do you smell smoke?
On the other hand, this review is being written right now and it can change at any moment. Did you hear that? She just said that this review is going to suck. You didn’t hear that? There, she said it again. You didn’t hear that?
_________
I’m not going to bother with this review any more. I know you just think I am making stuff up and you’re not going to listen to me anyway so what’s the point? So I’ll tell you about the dinner we had before the play. Even though I know that I will get bored of that by the end of this paragraph (yes, she told me that too.) But that’s kinda sad isn’t it? I mean it was a nice dinner. It made me happy. I had rhubard consomme, I should at least be able to write a nice review of that. But look, I am already bored of telling you about dinner.
OK, you wanna hear about the play again right? That’s why you are still with me through all this. OK good. It ends tragically. Everybody dies. Even I die. You don’t believe me, see I told you you wouldn’t. There I go, messing it up again. You gave me another chance and I blew it. I can’t let it end this way, let’s try again. Back up.
OK, you wanna hear about the play again right? That’s why you are still with me through all this. OK good. It’s beautiful and touching and it ends well and everybody goes home feeling warm and fuzzy.
Hey this is great. This is what a review is all about. Why am I always being such a downer? Nobody wants to read my ponderous reviews. From now on I am going to write nice, normal reviews and everyone is going to love them and everyone is going to love me.
Ick, it already feels wrong. I just can’t pretend like that. But I’ve already written all this stuff and its come out all wrong. I need to start over. Back to the beginning.
_____
This guy I know is always saying that a theater critic is always the bad guy…
Step 1: The 41-year-old should begin by having his first child when he is 32.
Step 2: when the child is 6 she should begin taking piano lessons.
Step 3: the 41-year-old’s mother should consistently beat him at golf.
Step 4: At age 39, notice that you can hit the ball twice as far as your mother and therefore there is no good reason she should always win. Notice that as long as your ball is always closer to the hole than your mother’s you will win.
Step 5: Use this strategy to actually beat your mother at golf for the first time.
Step 6: Notice that the same strategy applies to playing the piano vis a vis the now 7-year-old daughter.
Step 7: Begin attending daughter’s piano lessons and learning all of her pieces with the plan that you will always be a better pianist than her, even when she is a concert-playing professional.
Step 8: Around age 40 notice that this is going a little slowly and so its time to start learning some serious pieces.
Step 9: At age 41, learn to play Children’s Song #6 by Chick Corea.
It’s not very good. My hands get tired toward the end of the fast sections and you can see that I lose the rhythm a bit. Also I am rushing. (still ahead of my daughter though 🙂
I have never taken piano lessons, but I think I might start.
- This review of the new David Mitchell novel is pretty close. I would add this. Mitchell has total mastery of prose and microstructure, yes, but here he’s trying to be conventional and in many places I was just bored. I prefer Number9Dream with no attempt whatsoever at macrostructure. What should I read next?
- Somehow it’s more funny when phones do this than when my kids do.
- The Grateful Dead sing the star-spangled banner.
- Mother’s Day makes Mothers want to cheat on their husbands.
- Caffeine overdose calculator.
- Krakow prison tattoos preserved in formaldehyde.
The memory of watermelon and tomato soup still fresh in my mind, this recipe came across my google reader. Grilled watermelon and heirloom tomato salad.
I put 3/4-inch thick slices of watermelon on a charcoal grill for about 1 minute, then cut them into these circles using a stainless steel measuring cup (I don’t have cookie cutters.) This kind of salad you want to break out the fleur de sel. Drizzle with olive oil, the good stuff, and a squeeze of lemon juice. Basil from the garden. Fantastic. It’s going into my regular summer repetoire.
Oh, and this is the 1000th Cheap Talk post.
This is a very interesting article that has the unfortunate title “Plants Can Think And Remember.” (Unfortunate because the many links to it that I have seen come with snarky comments like “Whatcha gonna do now vegetarians??”)
It reminds me of a great joke: Three scientists are on the committee to decide mankind’s greatest invention. The engineer is arguing for the internal combustion engine, the doctor is arguing for the X-ray machine and Martha Stewart is arguing for the Thermos. “The Thermos, you’ve got to be kidding?” Sez Martha “Well you see it keeps hot things hot and cold things cold.” They look perplexed. “Yeah, big deal.” Martha: “How does it know??”
The article is about some pretty sophisticated ways that plants respond to signals in their environment. That is very cool. Kudos to the Plant Kingdom. But while, there may be something in the underlying research that justifies saying that plants “think”, I rather doubt it, and it is definitely not to be found in this journalistic account. Look:
In their experiment, the scientists showed that light shone on to one leaf caused the whole plant to respond.
“We shone the light only on the bottom of the plant and we observed changes in the upper part,” explained Professor Stanislaw Karpinski from the Warsaw University of Life Sciences in Poland, who led this research.
When I light a match to the coals at the bottom of my charcoal chimney, eventually all of them ignite and turn red even the ones on the top. My charcoal can think.
Then there’s stuff about “memory.” But I already knew that plants had memory. When I give my grass water today, it is green next week. When I don’t give my grass water today, it is brown next week. The grass changes its color next week depending on whether I give it water today. It remembers.
This is Asia:
More 
Here’s an experiment you can do that will teach you something. Get a partner. Think of a famous song and clap out the melody of the song as you sing it in your head. You want your partner to be able to guess the song.
Out of ten tries how often do you think she will guess right? Well she will guess right a lot less than that. This is the illusion of transparency which is very nicely profiled in this post at You Are Not So Smart. We overestimate how easily our outward expressions communicate what is in our heads.
This should be an important element of behavioral game theory because game theory is all about guessing your partner’s intentions. As far as I know, biases in terms of estimates of others’ estimates of my strategy is untapped in behavioral game theory. Its effects should be easily testable by having players make predictions about others’ predictions before the play of a game.
There are games where I want my partner to know my intentions. For example I want my wife to know that I will be picking up coffee beans on the way home, so she doesn’t have to. Of course I can always tell her, but if I overestimate my transparency we might have too little communication and mis-coordinate.
Then there are games where I want to hide my intentions. In Rock-Scissors-Paper it shouldn’t matter. I might think that she knows I am going to play Rock, and so at the last minute I might switch to Scissors, but this doesn’t change my overall distribution of play.
It should matter a lot in a casual game of poker. If my opponent has a transparency illusion he will probably bluff less than he should out of fear that his bluffing is too easy to detect. So if I know about the transparency illusion I should expect my opponent on average to bluff less often.
But, if he is also aware of the transparency illusion and he has learned to correct for it, then this changes his behavior too. Because he knows that I am not sure whether he suffers from the illusion or not, and so by the previous paragraph he expects me to fold in the face of bluff. So he will bluff more often.
Now, knowing this, how often should I call his bets? What is the equilibrium when there is incomplete information about the degree of transparency illusion?
In a long game of course reputation effects come in. I want you to believe that I have a transparency illusion so I might bluff less early on.
Academics appreciate the pure search for knowledge, whether or not it can ever be put to use. This is the pinnacle:
In what appears to be an attempt on Amruthavalli’s part to understand suicide by hanging, the housewife hanged herself from the ceiling of her family home in Madivala on July 7.
What the suicide note says:
‘No one is responsible for my death. For many days I have harboured a wish and have had doubts about how people hang themselves. So just I am trying to get to the bottom of the matter by hanging myself. No one should be held responsible for my death. I love you Bava, I love you dad, mom and my sisters. I love you Saran. Thanks for everything Athama.’
-Amruthavalli
Hood hello: nimbupani.
Are prejudices magnified depending on the language being spoken? An experiment based on a standard Implicit Association Test suggests yes.
In an Implicit Association Test pairs of words appear in sequence on a screen. Subjects are asked to classify the relationship between the words and then the time taken to determine the association is recorded. In this experiment the word pairs consisted of one name, either Jewish or Arab, and one adjective, either complimentary or negative. The task was to identify these categories, i.e. (Jewish, good); (Jewish, bad); (Arab, good); (Arab, bad).
The subjects were Israeli Arabs who were fluent in both Hebrew and Arabic.
For this study, the bilingual Arab Israelis took the implicit association test in both languages Hebrew and Arabic to see if the language they were using affected their biases about the names. The Arab Israeli volunteers found it easier to associate Arab names with “good” trait words and Jewish names with “bad” trait words than Arab names with “bad” trait words and Jewish names with “good” trait words. But this effect was much stronger when the test was given in Arabic; in the Hebrew session, they showed less of a positive bias toward Arab names over Jewish names. “The language we speak can change the way we think about other people,” says Ward. The results are published in Psychological Science, a journal of the Association for Psychological Science.
Nice. But this leaves open the possibility that, since Hebrew is the second language, all response times in the Hebrew treatment were increased simply making it harder to see the bias. I would still prefer a design like this one.
Balaclava bluster: Johnson.
Yesterday on the NPR hourly newscast the lead-in to the barefoot bandit story was this “A man allegedly known as the barefoot bandit…” Perhaps I had too much time on my hands (I had a doctor’s appointment and they always go like this: Step 1) you are 30 minutes too early Step 2) please wait for an additional hour in a room with no AT&T reception Step 3) Stop wasting our time, your blood pressure is 120 over 70, go away and never come back) but this struck me as a strange way to phrase it.
Journalists apparently have a self-imposed rule that suspects should be “alleged” to have done whatever they are suspected of, at least until they are convicted. Presumably this is to avoid prejudging guilt. Now, since this guy was just picked up, the rule applies and he is “allegedly” something. But allegedly what? “Allegedly known as the barefoot bandit.” Is it a crime to be known as the barefoot bandit? And is that what he is accused of?
OK, there were some crimes committed and all of these crimes are thought to have been committed by the same person and that, so far unidentified, person has been given a proxy identity “the barefoot bandit.” Now we are trying to find the barefoot bandit. The linguistic complication is that since “the barefoot bandit” is not a real identity you cannot say that someone “is” the barefoot bandit. Whoever this criminal is, he is “AKA (*also* known as) the barefoot bandit.” We are not literally looking for someone who is called the barefoot bandit, as if that by itself is a crime. We are looking for the person who committed the crimes which have been grouped together by that heading.
So we are looking for the person who (not by his own choice has come to be) “known as the barefoot bandit.” And now we have to somehow fit the “allegedly” in there in order to comply with the journalistic moral code. That’s the problem and the NPR copyeditor seems to have just stuck them together without trying to parse the final product.
Probably he didn’t have the spare time afforded by a futile doctor’s appointment. Or if he did, he had no iPhone reception to make the necessary changes before the newscast went live.
You firmly believe that the sun will rise every morning. Then one day you awake and the sun does not rise. What are you to believe now? You have basically two alternatives. One is to go on believing that the sun will rise every morning by rationalizing today’s exception. There could have been a total eclipse this morning. Perhaps you are dreaming. The other choice is to conclude that you were wrong and the sun does not rise every morning.
The “rational” (i.e. Bayesian) reaction is to weigh your prior belief in the alternatives. Yes, to believe that you are dreaming despite many pinches, or to believe that a solar eclipse lasted all day would be to believe something near to absurdity, but given your almost-certainty that the sun would always rise we are already squarely in the exceptional territory of events with very low subjective probability. What matters is the relative proportion of that low total probability made up of the competing hypotheses: some crazy exception happened, or the sun in fact doesn’t always rise. It would be perfectly understandable, indeed rational if you find the first much more likely than the second. That is, even in the face of this contradictory evidence you hold firm to your belief that the sun rises and infer that something else truly unexpected happened.
Cognitive dissonance is a family of theories in psychology explaining how we grapple with contradictory thoughts. It has many branches, but a prominent one and perhaps the earliest, suggests that we irrationally discard information that is in conflict with our preconceived ideas. It began with a study by Leon Festinger. He was observing a cult who believed that the Earth was going to be destroyed on a certain date. When that date passed and the Earth was not destroyed, some members of the cult interpreted this as proof they were right because it was their faith that saved humanity. This was the leading example of cognitive dissonance.
My preamble about Bayesian inference shows that when we see people who are rigid in their beliefs and we conclude that they are irrationally ignoring information, it is in fact we who are jumping to a conclusion. All we can really say is that we disagree with their prior beliefs and in particular the strength of those beliefs. Somehow though it is much less satisfying to just disagree with someone than to say that they are acting irrationally in the face of clear evidence.
Now, watch this video, especially the part that starts at the 3:00 mark. When this guy experiences his moment of cognitive dissonance, what is the rational resolution?
- Beverage assortment must include thoughtful assortment of meads and bendy straws.
- Sad Keanu.
- Very early Talking Heads playing Psycho Killer.
- 70’s rock stars photographed with their parents. (via Marbury.)
- Marvin Gaye sings The Star Spangled Banner. (This by itself justifies the whole revolutionary war.)
- I just hope it’s me.
- Tired, yeah right, a likely excuse.
- Are civil wars more often North vs South than East vs West? Put differently, based on the boundaries that have survived until today, are countries, on average, wider than they are tall?
- Which will arrive first: the ability to make a digital “mold” of distinctive celebrity voices or the technology allowing celebrities to map the digital signature of their voice in order to claim property rights?
- The hard `r` in Spanish and other languages creates a natural syncopation because the r usually occupies the downbeat, as in “sagrada” or “cortado”
- Syncopation adds a dimension to music because brain tickles as it tries to make sense of two times at once.
- Among European soccer nations, the closer to Africa the fewer black players on the national team.
Usually you order a bottle of wine in a restaurant and the waiter/wine guy opens it and pours a little for you to taste. Conventionally, you are not supposed to be deciding whether you made a good choice, just whether or not the wine is corked, i.e. spoiled due to a bottling mishap or bad handling. In practice this itself requires a well-trained nose.
But in some restaurants, the sommelier moves first: he tastes the wine and then tells you whether or not it is good.
Suspicions are not the only reason some people object to this practice. Others feel they are the best judges of whether a wine is flawed or not, and do not appreciate sommeliers appropriating their role.
We should notice though that it goes two ways. There are two instances where the change of timing will matter. First there is the case where the diner thinks the wine is bad but the sommelier does not. Here the change of timing will lead to more people drinking wine that they would have rejected. But that doesn’t mean they are worse off. In fact, diners who are sufficiently convinced will still reject the wine and a sommelier whose primary goal is to keep the clientele happy will oblige. But more often in these cases just knowing that an expert judges the wine to be drinkable will make it drinkable. On top of this psychological effect, the diner is better off because when he is uncertain he is spared the burden of sticking his neck out and suggesting that the wine may be spoiled.
But the reverse instance is by all accounts the more typical: diners drinking corked bottles because they don’t feel confident enough to call in the wine guy. I have heard from a master sommelier that about 10% of all bottles are corked! Here the sommelier-moves-first regime is unambiguoulsy better for the customer because a faithful wine guy will reject the bottle for him.
Unless the incentive problem gets in the way. Because if the sommelier is believed to be an expert acting in good faith, then he never lets you drink a corked bottle. You rationally infer that any bottle he pours for you is not spoiled, and you accept it even if you don’t think it tastes so good. But this leads to the Shady Sommelier Syndrome: As long as he has the tiniest regard for the bottom line, he will shade his strategy at least a little bit, giving you bottles that he judges to be possibly, or maybe certainly just a little bit, corked. You of course know this and now you are back to the old regime where, even after he moves first, you are still a little suspicious of the wine and now its your move. And your bottle is already one sommelier-sip lighter.
You have probably heard about the science that shows how incompetent people are overconfident. Here is a nice article which cuts through some of the hype and then presents a variety of ways to debunk the finding as a statistical illusion. (Which comes as a relief to me, but perhaps a little late.) Let me give you an even easier way, one that is related to the “regression toward the mean” idea given in the article. First, here is the finding summarized in a graph.
Suppose you have competent and incompetent people in equal proportions. They will take a test which will give them a score ranging from 0 to 4. The competent people score a 3 on average and they know this. The incompetent people score 1 on average and they know this. Due to idiosyncratic features of the test, the weather, etc. each subject’s actual score is random and it will range from one less to one more than their average.
You ask everyone to predict their outcome. The incompetent people predict a score of 1 and the competent people predict a score of 3. These are the best predictions. Then they take the test. The actual scores range from 0 to 4. Everyone who scored 0 predicted a score of 1, everyone who scored 4 predicted a score of 3, and the average prediction of those who scored 2 is about 2.
Trilby tribute: Marginal Revolution.
If you play tennis then you know the coordination problem. Fumbling in your pocket to grab a ball and your rallying partner doing the same and then the kabuki dance of who’s gonna pocket the ball and who’s going to hit first? Sometimes you coordinate, but seemingly just as often the balls are simultaneously repocketed or they cross each other at the net after you both hit.
Rallying with an odd number of balls gives you a simple coordination device. You will always start with an unequal number of balls, and it will always be common knowledge how many each has even if the balls are in your pockets.
I used to think that the person holding 2 or more should hit first. That’s a bad convention because after the first rally you are back to a position of symmetry. (And a convention based on who started with two will fail the common knowledge test due to imperfect memory, especially when the rally was a long one.)
Instead, the person holding 1 ball should hit first. Then the subgame following that first rally is trivially solved because there is only one feasible convention.
By the way, this observation is a key lemma in any solution to Tyler Cowen’s tennis ball problem.
Of course this works with any odd number of balls. But five is worse. It becomes too hard to keep track of so many balls and eventually you will lose common knowledge of the total number of balls in rotation.
How often do you and your friends agree?
According to recent work by Winter Mason, Duncan Watts, and myself [Sharad Goel], you probably don’t know them as well as you think. In particular, we found that when friends disagree on a political issue, they are unaware of that disagreement about 60% of the time. Even close friends who discuss politics are typically unaware of their differences in opinions.
You probably can guess my reaction. (Or at least you think you can.) Since I am always right, and my friends are right more often than they are wrong, I am right to assume that they agree with me more often than not.
It turns out that my distant friends are right just about as often as my close friends:
people consistently overestimate the likelihood that their friends agree with them on political issues. Notably, even though close friends (so-called strong ties[1]) are in reality more likely to agree with one another than distant friends, people do not appropriately adjust their perceptions. In other words, though we think close and distant friends are about equally likely to agree with us on political issues, in reality we are much more likely to agree with close friends.
I am very interested in this kind of survey work because I think that people do overestimate how similar they are to the rest of the world and I think it has important consequences. But perhaps for different reasons than these authors are emphasizing.
At the margin people are too reluctant to express themselves because they assume that what they have to say is obvious. But in fact the obvious thing is exactly what you want to say. Because the more obvious the thought the more likely it is uniquely yours and the more valuable it is to others.
Cheap Talk 