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You are attending a conference or other event which brings together a large group of people vaguely acquainted but not tightly connected. There is a dinner where there are many tables seating 6-8 people each. There is no assigned seating. Assuming you care about whom you will sit with, what is your strategy for finding a place to sit?
- To the extent possible, the high-status people will contract early and grab a table to themselves. This is usually possible because in groups like this it is the high-status people who are most likely to know each other well.
- Low-status people often prefer to sit with higher-status people, so they tend to play the waiting game and hop in on a table with some open seats. This usually turns out to be a bad idea (dull and awkward conversation) but it takes a few bad experiences to figure this out. By that time the lesson is irrelevant because your status has improved.
- Middle-status people have learned to care less about the status of those they dine with. And they are not yet so visible that everyone wants to sit with them just out of status-mongering. So their optimal strategy is to move early and find an empty table and sit there. They will be joined by people who are really interested in them and those are the people you want to sit with.
- The latter is generally my strategy. However, usually people don’t want to sit with me. Consistent with the logic of the strategy, this is optimal when it happens.
- There is must be something unique about weddings because there is almost always assigned seating.
- The closer people are to being total strangers the stricter the status ranking becomes, in my experience. Without anything to go on, it boils down to attractiveness. A strict, linear status ranking leads to unraveling as everyone waits to join the best table. This is when assigned seating is necessary. But I don’t think this explains weddings.
The question is ripe for experimental research.
That’s the question taken up at Wired’s GeekDad blog. My third-grader gets weekly “homework” which is supposed to teach her cursive writing. I am sure that a lot of time is being wasted. But I am not sure that it’s cursive that should go. Handwritten text is losing its practical purpose, so if we are going to retire something, perhaps the fancy stuff should surive.
Its one of the many novel ideas from David K. Levine: the non-journal. You write your papers and you put them on your web site. Congratulations, you just published! Ah, but you want peer review. The editors of NAJ just might read your self-published paper and review it. We supply the peer-review, you supply the publication. Peer-review + publication = peer-reviewed publication. That was easy.
(NAJ is an acronym that stands for NAJ Ain’t a Journal.)
Its been around for a few years with pretty much the same set of editors. Its gone through some very active phases and some slow periods. David is trying to breathe some new life into NAJ by rotating in some new editors. So far so good. Arthur Robson is a new editor and he just reviewed a very cool paper by Emir Kamenica and Matthew Gentzkow called “Bayesian Persuasion.”
The paper tells you how a prosecutor manages to convict the innocent. Suppose that a judge will convict a defendant if he is more than 50% likely to be guilty and suppose that only 30% of all defendants brought to trial are actually guilty. A prosecutor can selectively search for evidence but cannot manufacture evidence and must disclose all the evidence he collects. The judge interprets the evidence as a fully rational Bayesian. What is the maximum conviction rate he can achieve?
The answer is 60%. This is accomplished with an investigation strategy that has two possible outcomes. One outcome is a conclusive signal that the defendant is innocent. Since the judge is Bayesian, the innocent signal occurs with probability zero when the defendant is actually guilty. The other outcome is a partially informative signal. If the prosecutor designs his investigation so that this signal occurs with probability 3/7 when the defendant is innocent (and with probability 1 when guilty) then
- conditional on this signal, the defendant is 50% likely to be guilty (we can make it strictly higher than 50% if you like by changing the numbers slightly)
- 3/7 of the innocent and all of the guilty will get this signal. (3/7 times 70%) + 30% = 60%.
The paper studies the optimal investigation scheme in a general model and uses it in a few applications.
One of the major bones of contention derives from just how good this year has been. The Rioja is the only wine-producing region in Spain that bears the label DOC (denominación de origen de calidad), and therefore is subject to especially stringent controls regarding quantity and quality of production. Each farmer may sell a certain amount of grapes, no more, depending on the amount of land under cultivation.
This year the grapes have been wildly abundant, and it is estimated that some 80 million kilograms have been left on the vine because they exceeded the quotas permitted for sale. Indeed, due to the weather conditions during harvest week, the grapes left on the vine are probably the very finest quality ones. For economically-pinched farmers, it is a blow to the heart to see those grapes left for the birds, and many demand to be allowed to sell the surplus as well, despite DOC regulations. Others claim this would flood the market and imperil the status of the DOC product.
The story is here.
The Boston Globe has an interesting article about the unique playout of the creationist/Darwinist debate in the Islamic world.
Unlike in the West, creationist beliefs are not associated in the Muslim world with religious fundamentalism, but instead are often espoused by members of the mainstream intellectual elite – liberals, by their own lights, who see the expansive, scientific-sounding claims of creationism as tracing a middle way between the guidance of religion and the promise of modern science. Critics of the movement fear that this makes it more likely that creationism will find its way into policies there, especially when the theory of evolution is portrayed among Muslim thinkers, as it often is, as an instrument of Western intellectual hegemony.
Despite my vast legion of Twitter followers, every one of my attempts to start a new trending topic has failed to catch on. Now I think I understand why.
Suppose that your goal is to coordinate attention on a topic that seems to be on a lot of minds. Attention is a scarce resource and you have only a limited number of topics you can highlight. But suppose, as with Twitter, you see what everyone is talking about. How do you decide which topics to point to?
You probably shouldn’t just count the total number of people talking on a given subject, counting everyone equally. You might think that you would instead give extra weight to the few people that everyone is listening to. Because whatever they say is more likely to be interesting to many, and will soon be on many minds. On Twitter, those would be the people with the most followers. But there is a strong case for doing the opposite and giving extra weight to people with few followers, especially people who are relatively isolated in the social network. This is not out of fairness (or pity) but actually as the efficient way to use your scarce resource.
Efficient coordination means making information public so that not just everyone knows it, but everyone knows that everyone knows it (etc.) If we all have to choose simultaneously what to focus our attention on and we want to be part of the larger conversation, then it matters what we think others are going to focus their attention on. Coordinating attention thus requires making it public what people are talking about.
Suppose we have two topics that are getting a lot of attention, but topic A is being discussed by well-connected individuals and topic B is being discussed more by a diverse group of isolated individuals. Topic A is already public because when you see it discussed by a central figure you know that all other of her followers are seeing it to. Topic B therefore has more to gain from elevating it to the status of trending topic, which immediately makes it public.
I always knew that my Twitter followers were among the wisest. Now I see the true depth of their wisdom. By adding to my follower numbers, they reduce the weight of my comments in the optimal weighting scheme thus ensuring that the crazy things I say will be ingored by the larger network. Join the cause.
Summer is over. But that’s old news. My buddy Dave maintained a tradition of polling us for the album of the summer around the time that the season was drawing to a close. Of course in SoCal, summer never really ends, but at some point you have to start climbing the fence to get into the neighborhood pool and that’s as good a demarcation line as any.
The album of the summer is not necessarily one that came out that summer. Its not even necessary that you listened to it that summer. But it should be the album that will always remind you of that summer whenever you hear it. This summer I had my midlife crisis and the background music was Seven Swans by Sufjan Stevens.
I spent the first 25 years of my life a few miles from the Pacific Ocean and never really learned to surf. I am a fine body surfer and boogie boarder but around the time that most of my buddies got into surfing I was spinning my wheels playing chess (I suck.) I turned 40 last fall and now I live on the shores of Lake Michigan. There’s no surf here.
Fortunately I spend a month in California in the summer and this summer it was time to learn. My buddy Dave gave me a surfboard. It’s about twice as tall as me and weighs more than my 8 year old. Its also about 5 inches thick which made it impossible for me to get my arm around it to carry it like a regular cool surfer dude. I looked like a dork carrying it on my head.
But I can’t imagine a better board to learn on. Its more like a canoe than a surf board. It was hilarious to me looking at all of these really cool surfer guys sitting on their tiny little boards that sunk from the weight until they were submerged nearly to their shoulders. Meanwhile I could dip my toes in the water as I lounged around on my Steve Behre (pronounced berry) cruise liner waiting for waves. Dave said “It’s massive, its dangerous, and its embarrassing but just in terms of having fun surfing… the next one’s going to be a lot better.” Thanks Dave.
I got myself a wet suit. The water stays around 70F in San Diego in August so I probably could have got by without one but (again relying on Dave’s advice) since I was going to be surfing in the morning and since, thanks to Steve Behre, my most temperature-sensitive parts would be afloat and exposed to the morning air, I broke down got myself a spring suit. When I tried it on, the dude at the surf shop (Rusty’s in Del Mar) says “Its a little loose in the arms, but you’ll grow into it.” He either thought I was 13 years old or he could just tell that I was going to grow tremendous muscles from paddling.
So I was set. Every morning at 5AM I would start my day with these objects:
You will notice the Advil which is pretty much indispensible when you are a 40 year old man trying to paddle a barge through crashing waves by yourself in the dark. OK not exactly dark, but I was in the water every morning before sunrise. I would surf until about 7:30 and then head back to the apartment, usually before the kids were awake. Parenting advice: arriving at breakfast with your wetsuit on and harrowing surf tales makes you the coolest Dad in the world. Not to mention the tremendous muscles.
I stood up the very first day. Fleetingly. By the end of the first week I could consistently catch waves and stand. They were small waves thankfully. I was bragging to my buddy Storn and then I got this email back.
If you are just standing in front of the whitewater after the wave has broken then it doesn’t technically count. (Not that it isn’t fun.)
How did he know?? In my defense, the Steve Queen-Behre was almost impossible to turn. I guess that’s the tradeoff. Storn came down from the Bay Area and he brought his board, which while still technically a longboard was about half the width and weight of mine.
We swapped boards and I could actually get my arm around his (that’s me on the left.) Didn’t catch any waves though. Turns out that if you want a surfboard with some degree of maneuverability, you also have to paddle with some finesse. I put that on the todo list for next summer and went back to my trusty Steve Buoy. (When you can’t catch a wave you can’t ride the last one all the way in. “The paddle of shame” is what Storn called it.)
That day was the only time I surfed in daylight so I had Jennie bring the camcorder. Here’s some shredding on video.
Not video of me, mind you, Jennie was too busy making drip castles with the kids. Anyway, I don’t need help from no jet-ski. By the end of the month I could turn and ride the shoulder.
Sufjan Stevens was in my CD rotation that whole month. It’s a powerful album and one that was made to be played before sunrise. In your rented Toyota Sienna with a boat strapped to the top:
What’s your album of the summer?
We all know about generic drugs and their brand-name counterparts. The identical chemical with two different prices. Health insurance companies try to keep costs down by incentivizing patients to choose generics. You have a larger co-pay when you buy the name brand. Except when you don’t:
Serra, a paralegal, went to his doctor a few months ago for help with acne. She prescribed Solodyn. Serra told her he’d previously taken a generic drug called minocycline that worked well. The doctor told him that the two compounds are basically the same, but that you have to take the generic version in the morning and the evening. With Solodyn, you take one dose a day.
Serra told her that if the name-brand medicine was going to cost a lot more, he’d prefer the generic. “And then she presented this card,” he says. She explained that it was a coupon, and that he should give it to the pharmacist for a break on his insurance copay.
Without the card, Serra’s copay would have been $154.28. But when he got to the pharmacy, he presented his card. “They went to ring it up at the register,” he remembers. “And when it came up, the price was $10.”
NPR has the story. Chupulla chuck: Mike Whinston.
In a much-discussed post at one of my favorite blogs, Language Log, Mark Liberman christens a new game:
We might call this the Pundit’s Dilemma — a game, like the Prisoner’s Dilemma, in which the player’s best move always seems to be to take the low road, and in which the aggregate welfare of the community always seems fated to fall. And this isn’t just a game for pundits. Scientists face similar choices every day, in deciding whether to over-sell their results, or for that matter to manufacture results for optimal appeal.
(Aside on the game name game: when I was a first-year PhD student at Berkeley, Matthew Rabin taught us game theory. As if to remove all illusion that what we were studying was connected to reality, every game we analyzed in class was given a name according to his system of “stochastic lexicography.” Stochastic lexicography means randomly picking two words out of the dictionary and using them as the name of the game under study. So, for example, instead of studying “job market signaling” we studied something like “rusty succotash.” I wonder if any of our readers remember some of the game names from that class.)
(Stay tuned for my next Matthew Rabin story which will involve a hackey sack and a bodily fluid.)
There is indeed a strong incentive for pundits to distort what they say, and it has the flavor of contrarianism. Its based on an old paper by Prendergast and Stole (requires JSTOR sorry. Support Open Access publishing.) Suppose that what pundits want is to convince the world that they are smart. (Perhaps they want to influence policy. They will be influential later only if they can prove they are smart today. So today the details of what they are saying matters less than whether what they are saying is perceived to be smart.)
The thing about being really smart is that it means you are talking to people who aren’t as smart as you. (Sandeep faces this problem all the time.) So they can’t verify whether what you are saying is really true (especially when we are talking about climate change policies where if we ever do find out who was right, it will be well past the time that punditry is a profitable enterprise.) But one thing the audience knows is that smart pundits can figure out things that lesser pundits cannot. That means that the only way a smart pundit can demonstrate to his not-so-smart audience that he is smart is by saying things different than what his lesser colleagues are saying, i.e. to be a contrarian.
Swoopo.com has been called “the crack cocaine of auction sites.” Numerous bloggers have commented on its “penny auction” format wherein each successive bid has an immediate cost to the bidder (whether or not that bidder is the eventual winner) and also raises the final price by a penny. The anecdotal evidence is that, while sometimes auctions close at bargain prices, often the total cost to the winning bidder far exceeds the market price of the good up for sale. The usual diagnosis is that Swoopo bidders fall prey to sunk-cost fallacies: they keep bidding in a misguided attempt to recoup their (sunk) losses.
Do the high prices necessarily mean that penny auctions are a bad deal? And do the outcomes necessarily reveal that Swoopo bidders are irrational in some way? Toomas Hinnosaar has done an equilibrium analysis of penny auctions and related formats and he has shown that the huge volatility in prices is in fact implied by fully rational bidders who are not prone to any sunk-cost fallacy. In fact, it is precisely the sunk nature of swoopo bidding costs that leads a rational bidder to ignore them and to continue bidding if there remains a good chance of winning.
This effect is most dramatic in “free” auctions where the final price of the good is fixed (say at zero, why not?) Then bidding resembles a pure war of attrition: every bid costs a penny and whoever is the last standing gets the good for free. Losers go home with many fewer pennies. (By contrast to a war of attrition, you can sit on the sidelines as long as you want and jump in on the bidding at any time.) Toomas shows that when rational bidders bid according to equilibrium strategies in free auctions, the auction ends with positive probability at any point between zero bids and infinitely many bids.
So the volatility is exactly what you would expect from fully rational bidders. However, Toomas shows that there is a smoking gun in the data that shows that real-world swoopo bidders are not the fully rational players in his model. In any equilibrium, sellers cannot be making positive profits otherwise bidders are making losses on average. Rational bidders would not enter a competition which gives them losses on average.
In the following graph you will see the actual distribution of seller profits from penny auctions and free auctions. The volatility matches the model very well but the average profit margin (as a percentage of the object’s value) is clearly positive in both cases. This could not happen in equilibrium.
I heard an interview with Reggie Jackson and Bob Gibson (former baseball greats) on NPR’s Fresh Air this weekend. They spent a lot of time talking about pitching inside and “brushing back” hitters. Reggie Jackson, a hitter, conceded that these were “part of the game.”
There is a mundane sense in which this is true, namely that not even the best pitcher has flawless control and sometimes batters get hit. But Reggie was even talking about intentional beanballs. In what sense is this part of the game?
The penalty for throwing inside is that, if you hit the batter, he gets a free base. (And your teammate might get beaned at the next opportunity.) The problem is that this penalty trigger is partly controlled by the opposition. Other things equal it gives the batter an incentive to stand a bit closer to the plate. In order to discourage this, the pitcher must establish a reputation for throwing inside when a batter crowds the plate. In that sense, intentionally throwing at the hitter is unavoidable strategy, part of the game.
So, one way to short-circuit this effect is to change the condition for giving a free base to something that is exogenous, i.e. independent of any choice made by the batter. For example, the batter gets a free base any time the ball sails more than some fixed distance inside of the plate, whether or not it actually hits the batter. Modern technology could certainly detect this with minimal error.
Whatever the merits of the claims made about Fox News by Obama’s communications team, it can be good strategy to pick a fight with your critics. To the very long list of reasons, add this one. If you can make them so angry that they lose the will to say anything at all nice about you, then you have won a major victory. For then they will have lost all (remaining) credibility.
Net neutrality refers to a range of principles ensuring non-discriminatory access to the internet. A particularly contentious principle urges prohibition of “managed” or “tiered” internet service wherein your internet service provider is permitted to restrict or degrade service. ISPs argue that without such permission they are unable to earn sufficient return on investment in network capacity and would be deterred from making such improvements.
One argument is based on congestion. Managed service controls congestion, raising the value to users and allowing providers to capture some of this value with access fees. This is a logical argument and one I will take up in a later post, but here I want to discuss another aspect of managed service: price discrimination.
Enabling providers to limit access, say by bandwidth caps, opens the door to “tiered” service where users can buy additional bandwidth at higher prices. This generally raises profits and so we should expect tiered service if net neutrality is abandoned. What effect does the ability to price discriminate have on an ISP’s incentive to invest in capacity?
It can easily reduce that incentive and this undermines the industry argument against net neutrality. Here is a simple example to illustrate why. Suppose there is a small subset of users who have a high willingness to pay for additional bandwidth. Under net neutrality, all users are charged the same price for access, and none have bandwidth restrictions. An ISP then has only two choices. Set a high price and sell only to the high-end users, or set a low price and sell to all users. When the high-end users are relatively few, profits are maximized with low prices and wide access. It is reasonable to think of this as describing the present situation.
Suppose tiered access is now allowed. This gives the ISP a new range of pricing schemes. The ISP can offer a low-price service plan with a bandwidth cap alongside a high-priced unrestricted plan. As we vary the cap associated with the low-end plan, we can move along a continuum from no cap at all to a 100% cap. These two extremes are equivalent to the two price systems available under net neutrality.
Often one of these in-between solutions will be more profitable than either of the two extremes. The reason is simple. The bandwidth cap makes the low-end plan less attractive to high-end users and as a result the ISP can raise the price of un-capped access to high-end users. It’s true that low-end users will pay less for capped service but often the trade-off is favorable to the ISP and total profits increase.
The upshot of this is that total bandwidth is lower, not higher, when an ISP unconstrained by net-neutrality uses the profit-maximizing tiered-service plan. Couched in the industry’s usual terms, the ISP’s incentive to increase network capacity is in fact reduced by moving away from net neutrality.
(Of course it can just as easily go the other way. For example, it may be that presently only the high-end users are being served because to lower price enough to attract the low end users, the ISP would lose too much profit from the high-end. In that case, allowing tiered service would induce the ISP to raise capacity and offer a capped service to previously excluded low-end users without significantly reducing profits from the high-end. Note however, this is not typically how industry lobbyists frame their argument.)
Sara Silverman wants to end world hunger (and get those disturbing images off her 48inch plasma TV). Her solution: sell the Vatican and use the proceeds to feed the world.
This is good, but only second best. The buyer who values the Vatican the most is in fact its current occupant. So selling the Vatican would lower its value. (It is true that the new owner knows he can sell it back to the Pope and takes this into account when deciding how much to offer. However, this adds needless transaction costs, plus the Pope will have bargaining power in the resale which would not be internalized by the buyer.)
A better idea is to give the Vatican directly to the poor and allow then to charge the Pope rent. Subject to this small ammendment, I wholly endorse the following (although the bit about the Holocaust may require the consent of more than just Ms Silverman and me.)
Nobel Laureate Eric Maskin gives an extended interview at The Browser arguing that economic theory was indeed equipped to see and understand the roots of the financial crisis. Its a unique interview because Eric picks 5 or so academic articles, discusses them in detail and weaves together a story of the crisis based on these. The story has some standard ingredients: bank runs, moral hazard, liquidity crises, and contagion. He illustrates each of these with a specific paper. The story also has some non-standard ingredients, such as leverage cycles described in a paper by Fostel and Geanakoplos.
The interview concludes thusly,
Q: So policymakers, especially people in Congress, need to read these papers.
A: Yes, or at least understand what’s in them. I think most of the pieces for understanding the current financial mess were in place well before the crisis occurred. If only they hadn’t been ignored. We’re not going to eliminate financial crises altogether, but we can certainly do a better job of preventing and containing them.
Highly recommended.
An old paper by Akerlof modeled procrastination in a simple way. Suppose that doing a task today involves costs that are more salient today than the costs that would be incurred from doing the task tomorrow. (Hyperbolic discounting is the modern way of introducing this disparity.) And suppose you are naive in that you are bad at predicting your behavior in the future. Then every day you will make an optimal plan for when to do the costly task and every day your optimal plan will be to do it tomorrow. So it will never get done.
Unless there is a deadline. The day of the deadline you will know that the task will not get done tomorrow if you don’t do it today, so that is the day when you will finally do it. Ryan Sager describes an experiment with a similar finding. In fact the same effect holds with enjoyable tasks, not just pure costs. (Jennie and I never visited many of the tourist sites of San Francisco until a month before we moved away from the Bay Area.)
Take an experiment conducted by two marketing professors, Suzanne Shu and Ayelet Gneezy, set to be published in a forthcoming issue of the Journal of Marketing Research (and written up in the May Atlantic by Virginia Postrel). Shu and Gneezy gave 64 undergraduates coupons for a slice of cake and a beverage at a local French pastry shop. Half got a certificate that expired in three weeks, half got one that expired in two months. While students were sure they were more likely to use the certificate with the more generous timeframe, the results were clear: The shorter timeframe made the students much more likely to redeem their certificates; 10 of the 32 students (31%) redeemed the three-week certificates, only two of the 32 students (6%) redeemed the two-month certificates.
You can imagine that the coupon is lost with some probability every day until it is used. Thus, the longer deadline means less chance of getting to the moment of truth. Here is a link to the original research.
I read the Nobel “Scientific Background” to find out what her research is about. Turns out a much better summary is the video here at EatMeDaily.
Not game theory, but research about and even within games. Hit or miss:
One of the most high-profile projects (and most obvious recent failures) was Indiana University’s Arden: The World Of William Shakespeare, which reportedly had a grant of $250,000. It was an experimental MMO which came about via the work of Professor Ed Castronova, author of Synthetic Worlds. Castronova wondered whether the creation of a genuinely educational MMO was possible, and set up the student development project to find out. Having spent thousands of dollars on Arden it was shut down. Castronova cited “a lack of fun”.
via BoingBoing.
This prize is long overdue. The theory of the firm is one of the big ideas in economics and as far as I can tell the Nobel committee was right to trace it back to Williamson.
A firm is a container for a bunch of highly idiosyncratic, repeated, informal transactions. A great thought experiment is to wonder why these transactions are not conducted through a market, making the firm dissolve away. Instead of giant firms building and selling cars, why aren’t there a bunch of tiny firms each doing a tiny part with all of their interaction governed by the market or by contract? There are three main reasons why.
First, its costly to use the market. If the chassis firm is going to be buying axles from the axle firm all the time, it would save transaction costs by just integrating. Then it can “procure” axles with a memo.
Second, the contracts would be impossibly complicated and unwieldy. Imagine writing a complete blueprint for the car, breaking it down into individual instructions for every actor who is supposed to contribute, laying out the timing when each party is supposed to arrive and do his part, describing payments as a function of the performance of each interdependent action, etc. That is probably already impossible, but imagine you could do that. Now suppose that a supply shock requires you to use different materials for the chassis. This would require a coordinated change in many parts of the car, to keep structural integrity, balance, etc. The entire volume of contracts would have to be re-written.
The third reason is the one that adds richness to the theory of the firm. Most of the transactions that occur within firms require parties to make investments that only make sense within the context of that specific firm. The party making the investment has little or no option to recover the value of the investment outside the firm. When the chassis firm contracts with the firm building auto bodies, it writes down minute specifications that must be met. The bodies produced could not be sold to any other chassis maker. The firm building auto bodies must invest in the machinery that can make these specific bodies. Once sunk that investment has no value outside of the specific relationship with the chassis firm.
The reason this adds richness to the theory is that it explains which transactions must be encompassed within firms. Transactions that require relation-specific investments would be crippled if conducted across firm boundaries. Once the die is cast for building these specific auto bodies, the chassis firm has no reason to pay a price that compensates for the sunk cost because there is no outside option. This hold-up problem implies that the auto body firm has poor incentives to make the investment in the first place, unless it integrates with the chassis firm and becomes a claimaint to the profits of the integrated firm.
I never heard of her.
A city in Taiwan is trying to keep the streets clean by offering cash for collected dog poo.
City officials in Taichung, which has a population of one million, said on Wednesday the environmental protection bureau would give vouchers worth 100 Taiwan dollars ($3) for every kilo of dog poo collected. In areas of the city especially affected, the reward will be for every half-kilo.
In related news, Taichung is witnessing a sudden surge in demand for high-fiber dog food which is now being sold in convenient single-serving sizes priced at 99 Taiwan dollars.
Here, via Michael Nielsen. For example:
- Twitter’s user growth is no longer accelerating. The rate of new user acquisition has plateaued at around 8 million per month.
- Over 14% of users don’t have a single follower, and over 75% of users have 10 or fewer followers.
- 38% of users have never sent a single tweet, and over 75% of users have sent fewer than 10 tweets.
- 1 in 4 registered users tweets in any given month.
- Once a user has tweeted once, there is a 65% chance that they will tweet again. After that second tweet, however, the chance of a third tweet goes up to 81%.
- If someone is still tweeting in their second week as a user, it is extremely likely that they will remain on Twitter as a long-term user.
- Users who joined in more recent months are less likely to stop using the service and more likely to tweet more often than users from the past.
Here is a pie-chart:
Have I mentioned that you should be following me on twitter? (I am talking to you Sandeep.)
You can make pizza at home if you have an oven that will break 500F. And if you can, you should. Its easy to make good pizza and its fun. You need a pizza stone, peel, and a good stand mixer to do the kneading. Some things I have learned over time.
- Start with margherita (tomato sauce, mozzarella, basil). Once you make a good margherita you will realize there is not much point in making anything else.
- Use mozzarella di bufalo. It truly makes a big difference (naturally though there is variation in quality.)
- To make the sauce, use canned, peeled, san marzano tomatoes, remove the seeds and puree. Simmer in a skillet until there is no visible water pooling in the sauce and it sticks to a spoon. This takes longer than you would expect so be patient. (You do this while the dough is rising.) Add only salt. No garlic, no onion, etc.
- No-knead dough recipes are popular recently and they work for many things but not pizza dough. Yes it is convenient, but there is a simple reason it doesn’t work. To form gluten without kneading you add a lot more water than you normally would. Pizza cooks very fast. That short time is not enough to get enough moisture out of the dough to get the bite that you want on the edges. Water holds the temperature of the dough down because water cannot be raised above boiling temperature (think about it.)
Shiller tops the poll. Igal Hendel garnered 5 votes.
- According to my mother, this doesn’t make it any less gross.
- Reason #17 I stick to the groomed parts. (via meanderings.)
- Babies, insurance, and dragons.
Since I am willing to pay $X that means my opportunity cost of not buying is -$X, thus my willingness to pay is indeed $X. That appears to be what Google CEO Eric Schmidt is saying in the following deposition transcript talking about Google paying X=$1.65 billion for YouTube, a $1billion premium over what he estimated YouTube to be worth. From an article at cnet.
Baskin: So you orally communicated to your board during the course of the board meeting that you thought a more correct valuation for YouTube was $600 million to $700 million; is that what you said, sir?
Mancini objects to characterization of the testimony.
Schmidt: Again, to help you along, I believe that they were worth $600 million to $700 million.
Baskin: And am I correct that you were asking your board to approve an acquisition price of $1.65 billion; correct?
Schmidt: I did.
Mancini objects.
Baskin: I’m not very good at math, but I think that would be $1 billion or so more than you thought the company was, in fact, worth.
Mancini objects.
Schmidt: That is correct.
Later…
Baskin: Can you tell us what reasoning you explained?
Schmidt: Sure, this is a company with very little revenue, growing quickly with user adoption, growing much faster than Google Video, which was the product that Google had. And they had indicated to us that they would be sold, and we believed that there would be a competing offer–because of who Google was–paying much more than they were worth. In the deal dynamics, the price, remember, is not set by my judgment or by financial model or discounted cash flow. It’s set by what people are willing to pay. And we ultimately concluded that $1.65 billion included a premium for moving quickly and making sure that we could participate in the user success in YouTube.
It is one of the most basic premises of economics and decision theory. If you give a decision-maker better information about the consequences, he will make better choices.
This principle underlies one of the least controversial forms of paternalism: subsidizing information to improve welfare. It is uncontroversial because unlike policies which restrict or direct behavior, it doesn’t take a stand on what is good for the decision-maker. More information helps her achieve her desired outcomes, whatever they may be.
In New York City, fast food chains were required to conspicuously publish calorie counts for all of their offerings. This will enable customers to make better decisions, presumably in terms of health consequences. According to the theory, any change in behavior in response to the new information is evidence that the policy was a success. It reveals that people made use of the information.
…when the researchers checked receipts afterward, they found that people had, in fact, ordered slightly more calories than the typical customer had before the labeling law went into effect, in July 2008.
Here is the conclusion drawn by an author of the study:
“I think it does show us that labels are not enough,” Brian Elbel, an assistant professor at the New York University School of Medicine and the lead author of the study, said in an interview.
My mother tells me that where she lives there are cameras that will catch you if you don’t come to a complete stop at the octagonal sign. Your license plates will be photographed and you will be sent a bill in the mail. The fine is close to $500. That’s a lot more than I remember it.
Quiz: suppose the technology improves for detecting whether a violation has taken place. Should the fine increase, decrease or stay constant?
From Not Exactly Rocket Science:
In the Old English of Beowulf, seven different rules competed for governance of English verbs, and only about 75% followed the “-ed” rule. As the centuries ticked by, the irregular verbs became fewer and far between. With new additions to the lexicon taking on the standard regular form (‘googled’ and ’emailed’), the irregulars face massive pressure to regularise and conform.
Today, less than 3% of verbs are irregular but they wield a disproportionate power. The ten most commonly used English verbs – be, have, do, go say, can, will, see, take and get – are all irregular. Lieberman found that this is because irregular verbs are weeded out much more slowly if they are commonly used.
To get by, speakers have to use common verbs correctly. More obscure irregular verbs, however, are less readily learned and more easily forgotten, and their misuse is less frequently corrected. That creates a situation where ‘mutant’ versions that obey the regular “-ed” rule can creep in and start taking over.
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