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Via Barker, a pointer to a theory from evolutionary psychology that tears are a true signal that the person crying is vulnerable and in need.

Emotional tears are more likely, however, to function as handicaps. By blurring vision, they handicap aggressive or defensive actions, and may function as reliable signals of appeasement, need or attachment.

Usually you should be skeptical that signaling is evolutionarily stable.  For example if tears convince another that you are defenseless then there is an evolutionary incentive to manipulate the signal.  Convince someone you are defenseless and then take advantage of them.

A typical exception is when the signal is primarily directed toward a family member.  Family members have common interests because they share genes.  Less incentive to manipulate the signal means that the signal has a better chance of being stable.  And babies of course have few other ways of communicating needs.

Of course children eventually do start manipulating the signal.  They learn before their parents do that they are becoming self-sufficient but they still have an incentive to free-ride on the parents’ care.  Fake tears appear.  But this is a temporary phase until the parents figure it out.  Not surprisingly, once the child reaches adulthood, crying mostly stops:  Nature takes away a still-costly but  now-useless signal.

What is the point of a big speech outlining your intentions when everybody already knows that when push comes to shove you are just going to do what’s in your interest?  Usually such a speech is all about the reasons for your stated intentions.  If you can change people’s minds about the facts then you can change their minds about your intentions.

But the public facts are already that, public.  There’s no changing minds about those.  At best you can change minds about how you perceive the public facts or about facts that only you know.  But here we are in the realm of private, unverifiable information and any speech about that is pure cheap talk.  You will invent facts to support whatever intentions you would like people to believe.

Except for two wrinkles.

  1. Making up a coherent set of facts that support your case and survive scrutiny is not easy.  On the other hand, the truth is always a coherent set of facts.
  2. You can only say things that you can think of.  That’s a small subset of the set of all things that could possibly be true and the truth is always in that subset.

Together these imply that cheap talk always reveals information.  It reveals that the story you are telling is one of the few coherent stories you could think of.  And if that story is complicated enough it becomes more and more likely that this is the only story that complicated that a) is coherent and b) you could think of.  Since the truth always satisfies a) and b), this makes it ever more likely that what you are saying is the truth.

This is why when we want to change minds we make elaborate speeches full of detail.  It convinces the listener that we are telling the truth.  And this is why when we want to be inscrutable the listener will pepper us with questions in order to require so much detail that only the truth will work.

About twice a year the Chicago “classic rock” station does something strange.  Instead of its regular programming sequence, it sets aside about a week to play through all the greatest songs in alphabetical order.  And this is advertised as a big event, a restoration of order out of chaos that the audience has apparently been desperate for since the last time they did it.  They are at it again this week and in between “Boys of Summer” and “Brain Damage/Eclipse” I started to wonder why this was thought to be a good marketing strategy.

  1. There is the possibility of coordination failure between audience and programmer at certain time slots.  If everybody tuning in at noon is expecting late 70’s prog rock then they better play that or lose their audience.  The A to Z is a way to break the trap.
  2. It works as a commitment not to repeat a song for a whole week.
  3. It’s really just a negotiation tactic with the program director.  The station proves publicly that the program director’s choice of playlist on a daily basis is completely irrelevant to the listeners.
  4. The station is just pruning its library and it takes a week to do that every 6 months.  While they are at it, they might as well play the songs that made the cut.
  5. It gets the listeners into the game of predicting the next song.  (They just played “Back Door Man” by the doors.  We know “Back in the USSR” is coming soon.  Is there anything in between that we are forgetting?  Let’s stay tuned and find out!)

If it is any one of the demand-side explanations (like 2 and 5) there is a residual puzzle.  Presumably listeners have some given satiation point for classic rock and this trick is just getting them to inter-temporally substitute their listening.  They listen more now, less later.  Why is that good for the station?

I think the answer has to do with the convex value of advertising.  Advertisers’ willingness to pay increases more than proportionally with the size of the audience.  This is due to “bandwagon” and “water cooler” effects.  (Michael Chwe has a paper about this.)  With that in mind the station would prefer everyone listen this week and nobody listen next week rather than half and half.

You can see the whole list (up to now) here.

Here’s an interesting experiment I would like to see.  Look at adults who learned a second language as a child from one of their parents.  For example, the father speaks only English but the mother speaks English and Hungarian.  English is the standard language outside of the home.

Profile the personalities of the parents.  Now have a Hungarian speaker interview the subject and profile his personality and separately have an English speaker profile the subject’s personality.  Is the subject’s personality different in the two languages and is he more like his mother when speaking Hungarian?

  1. Alinea’s menu illustrated with Jelly Bellies.
  2. Researching salvia by watching YouTube trip videos.

From Barking Up The Wrong Tree:

What determines reciprocity in employment relations? We conducted a controlled field experiment and tested the extent to which cash and non-monetary gifts affect workers’ productivity. Our main finding is that the nature of the gift, not its monetary value, determines the prevalence of reciprocal reactions. A gift in-kind results in a signicant and substantial increase in workers’ productivity. An equivalent cash gift, on the other hand, is largely ineffective or even though an additional experiment showed that workers would strongly favor the gift’s cash equivalent.

It probably has nothing to do with reciprocity.  If I pay you money you have to share it with your family and then buy a car out of your share.  If I give you a car it is all yours.

This logic also often provides a psychology-free explanation of the endowment effect.  You are willing to pay at most $10,000 for a car.  But if I give you that car for free and offer to buy it back from you, you require $20,000, because you will get to keep only half of that money.

(inspired by discussions with my Behavioral Economics class.)

Update: See Ben’s comment below for another variation on the theme which also came up in class.  If you have present-biased preferences you have an endowment effect because cash will be shared with future selves, whereas instantaneous consumption is all for your present self.

Tyler (you can call him T, you can call him C, you can call him TC, you can call him Professor TC, you can call him Dr. Ty, you can call him Ty Cow, you can call him Tyce, you can call him T-Dice, you can call him Dr. T Dice Disco Dorang…) asks how California might redesign its constitution.

The underlying problem here is that California is simply a beautiful place to live.  It’s not just the climate, or the people, or the geography.  It’s that something floating around in the air that just makes you happy all the time you are there.  And then the second problem is that there is free entry.

So it really doesn’t matter what you do with the constitution.  You can fix the referendum system, you could change the budget process,  you could turn the government into Singapore.  But that only means that something else has to get hosed to bring the quality of life again back down to the level that maintains the zero-rent equilibrium condition with free entry.

Given that the question boils down to which part of California do you want to screw up in order to achieve that?  This is mostly a distributional question.  Bad state government saps rents in one way.  Give those back and bad local governments will do just fine to take up the slack.

Of course all that is really required for equilibrium is that the quality of life of the marginal resident (or resident-to-be) is sufficiently low.  This is completely consistent with high average quality of life but its not clear to me why a well-functioning government would be better at achieving such a distribution than the one they’ve got now.  That is, who but the marginal resident is more affected by high taxes and dysfunctional government?

(The cheapest way to target the marginal resident is to make it infinitely costly to enter.  But that gives huge rents to those lucky enough to live there already and the temptation to take those away would be too great for any government.)

People have analyzed strategic thinking long before the academic field of game theory started in the 1950s.  I argue that Jane Austen’s six novels, among the most widely beloved in the English language, can be understood as a systematic analysis of strategic thinking.  Austen’s novels do not simply provide interesting “case material” for the game theorist to analyze, but are themselves very ambitious and wide-ranging theoretically, providing insights not yet superseded by modern social science.

That is the abstract of a talk that Michael Chwe will give at UCLA on April 23.  Unfortunately for those of us who can’t attend, there doesn’t seem to be a paper available.  But Michael Chwe is an extremely creative and broad-minded theorist so you can bet that it’s going to be good.  And if we can’t read his thoughts on Jane Austen, there’s always Michael’s paper “Why Were the Workers Whipped?  Pain in a Principal-Agent Model.”

I am starting a new club.  Charter membership is hereby bestowed upon everyone who would never be in a club that would have them as a member.  You may quit for $100.

(By the way, I asked around nobody wants you in the club consisting of the complement of my club.)

Agatha Christie didn’t decide who did it until most of the story was already written.

I always assumed she just knew who did it, in the same way that, well, a murderer knows exactly who they want to kill. Certainly, at the end of her books, she always made you feel that the story couldn’t have happened any other way. It had only ever seemed otherwise because you couldn’t see it. But it turns out that for many of her books, Christie often ran through multiple scenarios for the victim, the method of death, and the identity of the murderer. Curran finds that even the denouement of Endless Night, in which you innocently follow the narrator until you find in the last few pages that he is the murderer, was one of the later parts of the plot to be sorted out.

Isn’t that the easiest way to do it?  Just like multiplying numbers is easier than factoring, it would be simpler to take some facts as given and thread a murder plot through them than to start with the plot and think up facts that fit.  After all it is supposed to be a surprise in the end.  Writing the facts before you know the mystery ensures you don’t give away the surprise.  via kottke.

Is solving a coordination problem part of libertarian paternalism?

In a complicated undertaking, the FDA would analyze the salt in spaghetti sauces, breads and thousands of other products that make up the $600 billion food and beverage market, sources said. Working with food manufacturers, the government would set limits for salt in these categories, designed to gradually ratchet down sodium consumption. The changes would be calibrated so that consumers barely notice the modification.

Here is the link.  I guess this is the theory: if all foods have less salt then our taste buds adjust.  (This seems true anecdotally.  Is it really?)  So there is at least some small coordinated reduction in salt that would make everyone better off.  But this only works if you prevent unraveling at the individual level.  I.e. ban salt shakers.

Trilby trill:  Doktor Frank.

She, like many artists, doesn’t want to raise the price of her concert tickets even though there is excess demand.  By keeping the price low she allows fans who could not afford the market clearing price to see her concerts.  She is effectively paying to allow them to enjoy her shows.  Does this make her an altruist?

A textbook argument against, but one that is wrong, is the following.  At the low price there is a market for ticket scalpers.  Ticket scalpers will raise the price to the market-clearing level.  Those fans who would sell their tickets to scalpers reveal that they prefer the money to the tickets.  And they get the money in exchange for the tickets. Likewise those that buy tickets from scalpers reveal that they value the tickets more than the money. So the secondary market makes everyone better off.  So if Miley Cyrus were truly an altruist she would allow this to happen rather than paying a price to prevent it.

The problem with the argument is that it works only because the ticket scalper was unanticipated.  If all parties knew that tickets would sell at the market clearing price then the “true fans” that Miley is targeting would never actually get a ticket in the first place and this would make them worse off.  They would never get a ticket either because they couldn’t afford it, or if they were originally allocated by lottery, the additional rents would attract more entrants to that lottery.

So we can’t argue that Miley is not an altruist.  But we can argue that Miley’s refusal to raise prices is perfectly consistent with profit maximization.  Here is a model.  A fan’s willingness to pay to see Miley Cyrus in concert is a function of who else is there.  It’s more fun if she is singing to screaming pre-teen girls because they add to the experience.  It’s no fun if she is singing to a bunch of rich parents and their kids who don’t know how to cut loose.

With this model, no matter how much Miley would like to raise the price to take advantage of excess demand, she cannot.  Because the price acts as a screening instrument.  Higher prices select a less-desirable composition of the audience, lowering willingness to pay.  The profit maximizing price is the maximum she can charge before this selection effect starts to reduce demand.  At that price and everywhere below there is excess demand.

This is related to a paper by Simon Board on monopolistic pricing with peer effects.

I buy these bags of hardwood charcoal from Whole Foods.  They are sewn closed at the top and a little thread hangs out at one end.  Every so often I grab the thread, offer a prayer to the grilling gods and pull; and the most beautiful thing happens:  the thread unravels end to end and the bag is open.  And if this has ever happened to you, the sound of it, the feel of it, and the pure joy of being admitted entrance, at a subconscious level all remind you of your other favorite thing to unzip.

But like that other thing it almost never works out that way and it seems to be determined by nothing more than pure randomness.  When it fails you can try yanking in either direction or unraveling it by hand for a bit to get it started but to no avail.  Eventually you have to get the scissors.

So I am asking you, dear readers.  Does anybody know what is the trick to get these threaded seams to unravel?  (I already tried plying it with tequila.)

What explains Jamiroquai?  How can an artist be talented enough to have a big hit but not be talented enough to stay on the map?  You can tell stories about market structure, contracts, fads, etc, but there is a statistical property that comes into play before all of that.

Suppose that only the top .0001% of all output gets our attention. These are the hits.  And suppose that artists are ordered by their talent, call it τ.  Talent measures the average quality of an artist’s output, but the quality of an individual piece is a draw from some distribution with mean τ.

Suppose that talent itself has a normal distribution within the population of artists.  Let’s consider the talent level τ which is at the top .001 percentile.  That is, only .001% of the population are more talented than τ.  A striking property of the normal distribution is the following.  Among all people who are more talented than τ, a huge percentage of them are just barely more talented than τ.  Only a very small percentage, say 1% of the top .001% are significantly more talented than τ, they are the superstars. (See the footnote below for a precise statement of this fact.)

These superstars will consistently produce output in the top .0001%.  They will have many hits.  But they make up only 1% of the top .001% and so they make up only .00001% of the population.  They can therefore contribute at most 10% of the hits.

The remaining 90% of the hits will be produced by artists who are not much more talented than τ.  The most talented of these consist of the remaining 99% of the top .001%, i.e. close to .001% of the population.  With all of these artists who are almost equal in terms of talent competing to perform in the top .0001%, each of these has at most a 1 in 10 chance of doing it once.  A 1 in 100 chance of doing it twice, etc.

_____________________

(*A more precise version of this statement is something like the following.  For any e>0 as small as you wish and y<100% as large as you wish, if you pick x big enough and you ask what is the conditional probability that someone more talented than x is not more talented than x+e, you can make that probability larger than y.  This feature of the normal distribution is referred to as a thin tail property.)

Is it a superstition that babies born in a Year of the Dragon will have good luck?  The Taiwanese government wanted to dispell the superstition.

The demographic spike in 1976 was sufficiently large that governments decided to issue warnings in 1987 against having babies in Dragon years because of the problems they caused for the educational system, particularly with respect to finding teachers and classroom space. Editorials were issued that claimed no special luck or intelligence for Dragon babies and a government program in Taiwan was designed to alert parents to the special problems faced by children born in an unusually large cohort (Goodkind, 1991, p. 677 cites multiple newspaper accounts of this).

But the effort failed and another spike was seen in 1988.  Why?  Because the dragon superstition is true. In this paper by Johnson and Nye, among Asian immigrants to the US, those born in Dragon years are compared to those born in non-Dragon years.  Dragon babies are more successful as measured in terms of educational attainment.  And the difference is larger than the corresponding difference for other US residents.

And of course it turns out that this is due to the self-fulfilling nature of the superstition.  Asian Dragon babies have parents who are more successful and they are more likely to have altered their fertility timing in order to have a baby in a Dragon year.  Is this because the smarter parents were more likely to be dumb enough to believe the superstition?

Or is it because of statistical discrimination?  Since the Dragon superstition is true, being a Dragon is a signal of talent and luck.  Unless these traits are observable without error, even unlucky and untalented Dragons will be treated preferentially relative to unlucky and untalented non-Dragons.  Smart parents know this and wait until Dragon years.

Thanks to Toomas Hinnosaar for the pointer.

This weekend we attended a charity auction for my kids’ pre-school.  What does a game theorist think about at a charity auction?

  1. There is a “silent auction” (sealed bid), followed by a live auction (open outcry).  How do you decide which items to put in the live auction?
  2. The silent auction is anonymous, so items with high signaling value should be moved to the live auction.  A 1 week vacation in Colorado sold for less than $1000 (who would want to signal that they don’t already have their own summer home?) wheras a day of working as an assistant at Charlie Trotter’s sold for $2500.
  3. There is a raffle.  You sell those tickets at the door when people are distracted and haven’t started counting how much they have spent yet.  But what price do you set?
  4. The economics of the charity auction are such that vendors with high P-MC markups can donate a high value item (high P) for a low cost (low MC).  This explains why the items usually have a boutique quality to them.
  5. In the silent auction, you write down your bids with a supplied pen on the bid sheet.  Sniping is pervasive.  Note for next year:  bring a cigarette lighter.  You make your last minute bids and then melt the end of the pen just enough to stop the ink from flowing.
  6. When you are in suburban Winnetka on Chicago’s North Shore, for which kind of item is the winner’s curse the strongest: art or sports tickets/memorabilia?
  7. One of the live auction side-events is a pure signaling game where you are asked to give an amount of money to a special fund.  They start with a very high request and after everyone who is willing to give that much has raised their hand, they continually lower the request.  I think this is the right timing.  With the ascending version the really big donors will give too early.
  8. How do you respond when asked to pay to enter a game with the rules to be announced later?  Answer:  treat it like a raffle.  Surprise answer:  A chicken will be placed in a cage.  The winner of the game is the player whose number the chicken poops on.

That didn’t turn out to be such a good idea.  Someone forgot to put a lid on the cage and the chicken, well-versed in the hold-up problem, found a way to use his monopoly power:

The game of chicken

That is an actual-use, signed and engraved hockey stick from Patrick Kane of the Chicago Blackhawks.  It subsequently sold for over $1000.  The chicken was unharmed and eventually spent the evening perched on a rafter high above the proceedings threatening to select a winner directly.

  1. Twitter’s plan to make money.
  2. The herb that even Julia Child would pick off her plate and throw on the floor.
  3. Some valuable thoughts on Fair Trade coffee.

About a year ago I posted a link to a YouTube video of the Golden Balls “Split or Steal” game, hailing it as a godsend for teachers of game theory and the Prisoners’ Dilemma.  That video has made its way around the web in the year since and I sat down to prepare my introductory game theory lecture yesterday looking for something new.

Well, it turns out that now there are many, many new videos of Split or Steal on YouTube and you can spend hours watching these.  Here is my favorite and the one I used in class today.

I also heard from Seamus Coffey who has analyzed the data from Split or Steal games and finds:

  • Women are more cooperative than men, non-whites more than whites, the old more cooperative than the young.
  • There is more cooperation between opposite-sex players than when the players are of the same sex.
  • The young don’t cooperate with the old, and the old discriminate even more against the young.
  • Blonde women cooperate a lot.  Men cooperate less with blondes than with brunettes.

Here is a link to a paper by John List who looks at similar patterns in the game Friend or Foe.

We noticed that professional golfers today have ads on their hats, sleeves, collars, belt-buckles, shoes, etc. while in the past few had more than one or two ads.  At an individual level this makes sense but collectively it shows that the PGA would do better to centralize their negotiations with advertisers.

When Phil Mickleson considers selling another ad he has to lower his price.  He trades off the additional sale versus the reduction in the price to decide whether it is worth it.  He doesn’t take into account how his increased supply lowers the price of ads for all PGA golfers.  When this negative externality is not internalized, the PGA as a whole sells too many ads.  PGA-wide ad revenue would increase if they could negotiate ads as a group rather than individually.

Why don’t they?  In the short-term it would be simple.  Each golfer reports the ad revenue he is currently earning.  Then an agent for the PGA negotiates with advertisers to sell a block of ads and distributes them optimally across golfers.  This optimization would not only involve keeping quantity low but it would also take into account complementarity between golfer and ad, screen time, diversification, etc.  Then, the total ad revenue would be shared among the players in some way that gives each player at least as much as he was earning individually.  Since total revenue would be higher, there would be money left over to divide up in some way.

The problem is how to manage this over time.  In order to keep a majority of players willing to go along with it, they will have to be promised at least as much as their autarky value.  But the most recent public information about that value was recorded just before they entered the cooperative agreement.  Over time that information depreciates as players rise and fall and new players arrive.

But privately, each individual player would be able to estimate their ad revenues should he go it alone.  When the players bargain over shares, each individual player will exaggerate his earnings potential and insist on compensation for his outside option.  When public information is weak enough, these demands can add up to more than the group can earn, at which point bargaining breaks down and autarky prevails.

When you are competing to be the dominant platform, compatibility is an important strategic variable.  Generally if you are the upstart you want your platform to be compatible with the established one.  This lowers users’ costs of trying yours out.  Then of course when you become established, you want to keep your platform incompatible with any upstart.

Apple made a bold move last week in its bid to solidify the iPhone/iPad as the platform for mobile applications.  Apple sneaked into its iPhone OS Developer’s agreement a new rule which will keep any apps out of its App Store that were developed using cross-platform tools. That is, if you write an application in Adobe’s Flash (the dominant web-based application platform) and produce an iPhone version of that app using Adobe’s portability tools, the iPhone platform is closed to you.  Instead you must develop your app natively using Apple’s software development tools.  This self-imposed-incompatibility shows that Apple believes that the iPhone will be the dominant platform and developers will prefer to invest in specializing in the iPhone rather than be left out in the cold.

Many commentators, while observing its double-edged nature, nevertheless conclude that on net this will be good for end users.  Jon Gruber writes

Cross-platform software toolkits have never — ever — produced top-notch native apps for Apple platforms…

[P]erhaps iPhone users will be missing out on good apps that would have been released if not for this rule, but won’t now. I don’t think iPhone OS users are going to miss the sort of apps these cross-platform toolkits produce, though.  My opinion is that iPhone users will be well-served by this rule. The App Store is not lacking for quantity of titles.

And Steve Jobs concurs.

We’ve been there before, and intermediate layers between the platform and the developer ultimately produces sub-standard apps and hinders the progress of the platform.

Think about it this way.  Suppose you are writing an app for your own use and, all things considered, you find it most convenient to write in a portable framework and export a version for your iPhone.  That option has just been taken away from you.  (By the way, this thought experiment is not so hypothetical.  Did you know that you must ask Apple for permission to distribute to yourself software that you wrote?) You will respond in one of two ways.  Either you will incur the additional cost and write it using native Apple tools, or you will just give up.

There is no doubt that you will be happier ex post with the final product if you choose the former.  But you could have done that voluntarily before and so you are certainly worse off on net.  Now the “market” as a whole is just you divided into your two separate parts, developer and user.  Ex post all parties will be happy with the apps they get, but this gain is necessarily outweighed by the loss from the apps they don’t get.

Is there any good argument why this should not be considered anti-competitive?

My memory is not so good but it seems to me that professional golfers didn’t used to look so much like race cars.

Perhaps they have been consulting with auction theorists.  Selling ad space on your shirt is like a multi-unit auction but with an interesting twist.  Like any auction you want to insist on a reserve price to keep revenues high.  The reserve acts as a threat not to sell unless bids are high enough and this induces more agressive bidding.  Normally this leads to under-supply, just as a textbook monopolist restricts output to keep prices high.

But here’s the twist.  After you have sold the ad on your hat, your auction for an ad on your lapel is a threat against the advertiser on your hat.  If you sell an ad on your lapel it’s going to take some focus off the hat.

That means it is in both yours and the hat-advertiser’s interest to have him bid for the lapel ad.  Yours because more competition is better, and his because he wants to keep the competitors off your lapel.  Now think about how your reserve price for the lapel-auction works.  Just as before, for the new bidders it is an inducement to bid higher.  But for the hat-guy it’s an inducement to lower his bid for your lapel.  If you set a high reserve then he can safely lose the auction for your lapel and expect that nobody else will win, which for him is just as good as winning.

This leads you to set a lower reserve on your lapel than you otherwise would.  In effect this is a threat to the hat-hawker that if he doesn’t bid high enough to keep your lapel clean, you are going to put someone else’s logo there.  That is, you are over-supplying ads (relative to the situation in which the ads had no spillovers.)

When these principles are put to use, two kinds of outcomes can occur.  If there is a high enough bidder you will sell exclusive advertising to that bidder.  If not, you will sell lots of little ads to little bidders.

While we are on the subject, here are recent prices for apparel real-estate.

  1. Princess Leia meets Jerry Garcia
  2. The gift card multiplier
  3. Fox News firing on all cylinders

A new paper by Bollinger, Leslie, and Sorenson studies Starbuck’s sales data to assess the effects of New York City’s mandatory calorie posting law.  Here is the abstract:

We study the impact of mandatory calorie posting on consumers’ purchase decisions, using detailed
data from Starbucks. We find that average calories per transaction falls by 6%. The effect is almost
entirely related to changes in consumers’ food choices—there is almost no change in purchases of beverage calories. There is no impact on Starbucks profit on average, and for the subset of stores located close to their competitor Dunkin Donuts, the effect of calorie posting is actually to increase Starbucks revenue. Survey evidence and analysis of commuters suggest the mechanism for the effect is a combination of learning and salience.

And this bit caught my eye:

The competitive effect of calorie posting highlights the distinction between mandatory vs. voluntary posting. It is important to note that our analysis concerns a policy in which all chain restaurants, not just Starbucks, are required to post calorie information on their menus. Voluntary posting by a single chain would result in substantively different outcomes, especially with respect to competitive effects.

A natural response to these laws is that if it were in the interests of consumers, vendors would voluntarily post calorie counts.  But if consumers are truly underestimating calories, then unilateral posting by a single competitor would backfire.  Consumers would be shocked at the high calorie counts at Starbucks and go somewhere else where they assume the counts are lower.

It’s as if someone at the New York Times scanned this blog, profiled me, and assembled an article that hits every one of my little fleemies:

(Follow closely now; this is about the science of English.) Phoebe and Rachel plot to play a joke on Monica and Chandler after they learn the two are secretly dating. The couple discover the prank and try to turn the tables, but Phoebe realizes this turnabout and once again tries to outwit them.

As Phoebe tells Rachel, “They don’t know that we know they know we know.”

Literature leverages our theory of mind.

Humans can comfortably keep track of three different mental states at a time, Ms. Zunshine said. For example, the proposition “Peter said that Paul believed that Mary liked chocolate” is not too hard to follow. Add a fourth level, though, and it’s suddenly more difficult. And experiments have shown that at the fifth level understanding drops off by 60 percent, Ms. Zunshine said. Modernist authors like Virginia Woolf are especially challenging because she asks readers to keep up with six different mental states, or what the scholars call levels of intentionality.

And they even drag evolution into it.

To Mr. Flesch fictional accounts help explain how altruism evolved despite our selfish genes. Fictional heroes are what he calls “altruistic punishers,” people who right wrongs even if they personally have nothing to gain. “To give us an incentive to monitor and ensure cooperation, nature endows us with a pleasing sense of outrage” at cheaters, and delight when they are punished, Mr. Flesch argues. We enjoy fiction because it is teeming with altruistic punishers: Odysseus, Don Quixote, Hamlet, Hercule Poirot.

Cordobés address:  Marcin Peski.

Frances Xu wrote to me:

Someone asked me why evolution lets a bee die after it stings.  I don’t seem to have a good theory. I have a bad one: it shows that bees are of a crazy type, so people are more afraid of them. Just wonder if you have any thoughts on this.

There are two ways to phrase the question.  First, why would a bee sacrifice its life to sting me.  Second, why would Nature design the bee so that it dies after it stings?   The answer to the second question is that after stinging the bee’s life is not worth living.  The answer to the first is that it wasn’t worth much before either.

The queen honeybee uses sperm stored from her maiden flight to fertilize and lay eggs.  Time seems to be the only binding constraint on how many bees she can bring to life.  There is no opportunity cost because her capacity is essentially unlimited.   This means that the marginal bee has close to zero net marginal value for the colony.

The marginal bee’s value at birth incorporates the value of stinging together with the value of all of the other services it contributes to the colony.  When the bee loses its stinger it loses its ability to sting and its value to the colony drops a discrete amount.  Now its value to the colony is negative.  The cost in terms of demand on colony resources for survival outweighs the benefits.

At this point it is optimal for the colony that the bee should die.

Now if the bee were genetically identical to the colony then its interests would align perfectly and it would therefore also be in the bee’s interest to die.  In fact the bee is genetically identical only to a component of the colony:  those other bees produced from the sperm of the same drone.  (Roughly 15 drones mate with the queen.)  Since the bee’s contribution to the colony is presumably shared by all bees, this means in fact that the bee has even less incentive to go on living.

The final variable is whether the bee could expect someday to mate with a new queen and get his genes into a new colony.  That prospect would give the bee reason to live.  But worker bees are sterile.

Drones are not.  And drones don’t die when they sting.  (update: drones don’t have stingers.)

The phamily kind.  Let’s say you are hiding something from your husband.  For example, let’s say that you are trying to teach your husband a lesson about putting things “in their right place” and you hide his newly-arrived tomato seeds.  Its time to germinate them indoors to be ready for a mid-May transplanting and he comes to you and says

H:  I found the seeds.

Y:  You did?

H:  Yep.  Were they there all the time? I am sure I looked there.

Y:  I thought you would have.  That’s where you always put stuff.  You never put stuff in the right place.

H:  I always put stuff there?  Like what?

Y:  Like remember you put X and Y and Z there and I couldn’t find them?

H:  Ahh yes, X, Y and Z, I remember them well.  Thanks for telling me where my tomato seeds are.

If I have a jug of milk that is close to its expiration date and another, newer and unopened, jug of milk I will use up the old milk before opening the new one.

But if I have a batch of coffee that was roasted 2 weeks ago and a new, fresher batch comes in, I will open the new batch and save the old batch to be used up after the newer one is done.

The difference derives from shape of their expiration curves. Milk stays relatively fresh for a while and then rapidly deteriorates. It’s freshness curve is concave. Coffee quality deteriorates quickly after roasting and then stays relatively constant after that. 2 month old coffee is just as agreeable as 5 days old but both are much worse than 1 day old. Coffee’s freshness curve is convex.

The shape of the expiration curve determines whether you like or dislike mean-preserving spreads in the age profile of your stash. Convexity means you would choose 1/2-new 1/2-old over all-medium. Concavity means you have the opposite preference.

What are the expiration curves of other things?

Convex: eggs, bananas, significant others (except mine of course, she gets fresher with age.)

Concave: vegetables, bread, co-authors, this blog post

  1. WTF1: The gene that makes you gullible.
  2. Distressed Assets?

Rats in the lab learn to play best-responses in a repeated prisoner’s dilemma.  The rats were given rewards according to which of two compartments each walks into, and these rewards were structured as in a Prisoner’s dilemma.  First the rats were given a “training session” where they learned the payoff function.  Then the strategy of one rat was manipulated as the experimenters manually placed the rat into compartments before the other rat made his choice.

When the control rat played a random strategy, the experimental rat mostly “defected” but when the control rat played a reciprocating strategy (Tit-for-tat), the experimental rat not only learned to cooperate but also how to invite escape from a punishment phase.

It may not be entirely surprising that rats cooperated in the Prisoner’s Dilemma.  After all, animals often cooperate in nature to altruistically serve the group, whether that means hunting in packs to get more meat, or a surrogate mother animal adopting an abandoned baby to boost the pack’s numbers.  Still, there’s no direct evidence that shows rats grasp the concept of direct reciprocity.  Given that the rats in this study changed their strategy based on the game their opponent was playing, and cooperation rates were only high when the rats played against a tit-for-tat opponent, the authors showed, perhaps for the first time, that rats directly reciprocate.