Why MIT Students Finish in 5 Years and Everyone Else in 6

February 12, 2012 in Uncategorized | Tags: , | by | 9 comments

(It used to be 4 and 5.)

A student in her 5th year who doesn’t have a stellar job market paper is always tempted to stay another year and try to produce something better. This is the ex post incentive of an individual student.

But ex ante the department as a whole would like to enforce a commitment for all students to go on the market in 5, even those whose job market paper at that stage leaves something to be desired. The basic reason is risk aversion. Every year they spend in grad school they produce another signal for the market. Good signals improve their prospects but bad signals make them worse. They would avoid the additional risk by committing to stay only 5 years rather than 6.

Now consider a student whose job market paper in year 5 leaves something to be desired. If she stays another year and produces a good paper, then although she is better off, she raises the bar for her colleagues and thereby strengthens their incentives to stay another year. A department policy that strongly incentivizes students to finish in 5 is needed to prevent the implied unraveling.

But that’s MIT.  Then there’s everybody else. Students in other departments have to compete with MIT students for top jobs. At a department like Yale, only the best students will be able to compete for top jobs and this makes them risk loving not risk averse. Instead of wanting to minimize signals, the best Yale students want to produce enough signals in hopes that at least one of them is good enough to give them a shot at a top department job.

So one should expect funding, TAships, and face time with advisors to drop after 5 years at MIT but continue into the 6th year at Yale.  (Note: I have no data on this.)

The Sequential Urinal Game

February 9, 2012 in Uncategorized | Tags: , , | by | 6 comments

Great prelim question:

 To provide some interpretation, consider a set of equidistant urinals in a washroom and men who enter the room sequentially. Men dislike to choose a urinal next to another urinal which is already in use. If no urinal providing at least basic privacy is available, each man prefers to leave the room immediately. Each man prefers larger distances to the next man compared to smaller distances. The men enter the bathroom one by one in rapid succession, so men will only consider the privacy they have after no further men decides to use a urinal (e.g., the privacy the first man enjoys before the second man enters is too short to influence the first man’s utility).

One of the paper’s main results is that maximizing throughput (Beavis!) of a washroom may, paradoxically, entail restricting total capacity.  Consider a wall lined with 5 urinals.  The subgame perfect equilibrium has the first gentleman take urinal 2 and the second caballero take urinal 5.  These strategies are pre-emptive moves that induce subsequent monsieurs to opt for a stall instead out of privacy concerns.  Thus urinals 1, 3, and 4 go unused.  If instead urinals 2 and 4 are replaced with decorative foliage, and assuming that gentleman #1 is above relieving himself into same, then the new subgame perfect equilibrium has him taking urinal 1, and urinals 3 and 5 hosting the subsequently arriving blokes.  See the example on page 11.

Free cowboy hat tip:  Josh Gans

How Many Jobs Did Bain Capital Create Under Mitt Romney?

February 9, 2012 in art of office politics, economics, gossip | by | 9 comments

The answer is tantalizingly close and yet just out of reach.  An interested reader can find some of the relevant information here, in a Deutsche Bank prospectus for potential investors in Bain Capital. On pages 16 and 17, the prospectus lists all the investments made by Bain Capital from 1984-1998, roughly the time that Mitt Romney ran the company.  For example, their 1984 investment of $2 million in Key Airlines led to an annual return of 52.9%. It does not tell you how much money investors made because you would have to subtract off Bain’s fees which this Table does not have (other parts of the prospectus may help you to do that). The thing that is impossible to work out is the employment impact of Bain’s investments. The prospectus does not say anything about that issue. But the names of the companies are listed in the left hand column. So, it might be possible to work out what happened to these companies via a web search and come up with some answers.

If someone had the time and the ability to do that, it would be very interesting I think.  I’d certainly be interested in the answer.

I Like The Question More Than My Lame Answers

February 8, 2012 in Uncategorized | Tags: , | by | Leave a comment

“Improvisational theater” always means comedy.  There doesn’t seem to exist any improvisational tragedy/drama.  Why?  I don’t think its because improvised drama would not be as interesting or entertaining as improvised comedy.

  1. Its just selection.  People become comedians because they are funny in real life.  To be funny in real life you have to know how to create humor out of the random events that happen around you.  People become dramatic actors if they are good at understanding and reflecting dramatic themes in text.
  2. Its just training.  Improvisation is what you practice if you want to do comedy.  Its not a useful skill for dramatic actors (absent an already existing market for improvising tragedians.)
  3. Improvisation is by its nature funny.  Seeing something you don’t expect is usually going to be funny even if it is nominally tragic.  Like slipping on a banana peel.  So improvised tragedy is just a contradiction in terms.
  4. To make drama work the players must have a high degree of coordination in terms of the development of the story and that is too hard to achieve through improvisation.  By contrast, absurd plotlines add to the comedic effect of improvisation.
  5. Improvised drama would indeed be no worse than improvised comedy but that’s not the relevant comparison.  It would be much worse than scripted drama.  In other words drama has a larger range of quality than comedy and to hit the highs you need a script.
  6. Improvisation inevitably breaks the fourth wall.  The audience is wondering “can they do it?” and the actors are self-consciously playing on that tension.  Breaking the fourth wall tends to heighten comedy but cheapen drama.

(Plundered from a conversation I had with Chris Romeo.)

The Poison Touchdown

February 8, 2012 in Uncategorized | Tags: , | by | 8 comments

Let’s join Harvard Sports Analysis for the post-mortem:

But no one knew that his score would decide the game. Before he ran the ball in, the Giants had 0.94 win probability (per Advanced NFL Stats). After the play, the Giants’ win probability dropped to 0.85. Had he instead taken a Brian Westbrook or Maurice Jones-Drew-esque knee on the goal line, the Giants would have had a 0.96 win probability. Assuming the Patriots used their final time out, the Giants would have had 3rd and Goal from the 1-yard line with around 1:04 left to play. At this point, the Giants could either attempt to score a touchdown or take a knee. Assuming the touchdown try was unsuccessful or that Eli Manning kneeled, the Giants could have let the clock run all the way down to 0:25 before using the Giants’ final time out. With 4th and Goal from the 2 with 25 seconds left to play, the Giants would have a 0.92 win probability, 0.07 higher than after Bradshaw scored the touchdown of his life.

I am not sure about all this though.  Shouldn’t Bradshaw have just stood there on the 1 (far away enough that he can’t be pushed in) and then cross over at the last second?

Law Of Unforeseen Consequences: Airline Baggage Fees

February 8, 2012 in Uncategorized | by | 3 comments

The usual examples we give for the law of unforeseen consequences involve government intervention. For example, rent control helps people who manage to get apartments at subsidized rates. But supply dries up so many people won’t manage to rent. (They will buy a house they can’t afford and cause a mortgage crisis!) But the law of unforeseen consequences should equally apply to the private sector. There is less scrutiny of the private sector by the media. Plus it is hard to get information as it is not in the public domain. Sometimes, the policies adopted by forms are public and we can all see the law operate:

An entire cottage industry has emerged for products that help people evade the baggage-check fees, according to Kate Hanni, director of FlyersRights.org, a consumer group that represents airline passengers. Ms. Hanni uses vacuum-seal bags inside her carry-on bags, she said; the bags, which shrink down to a compact package when air is pulled out by a vacuum cleaner, allow her to fit considerably more items in a carry-on than would normally be possible.

“I can fit three times the amount of clothes in a carry-on than I used to be able to,” she said.

There is also the Scottevest line of travel clothing in which trench coats, vests and other garments are made with large built-in pockets that allow people to carry everything from folded shirts to an iPad.

“You can fit all of your folded shirts, iPad, cellphone, iPod, sunglasses, camera, passport, keys — you can put everything in the jacket that you would put in a carry-on,” Ms. Hanni said. “It’s sort of sweet justice.”

Plus we have more people with carry ons, delays as they board the plane and gate check their bags etc. etc. Surely, some effects were foreseen but were they all?

Save Your Money For The General

February 7, 2012 in Uncategorized | Tags: , | by | 4 comments

Candidates S and R are competing in the opposing party’s primary, and your candidate awaits the winner in the general election. Your candidate beats S in the general election with probability s and beats R in the general election with probability r<s.  You would like S to win the primary since s>r. But S is currently the underdog, he beats R in the primary with only probability p. Should you spend money to help S?

Every percentage point you can add to S’s chance of winning the primary increases your candidate’s odds in the general election by s-r < 1.

(you win the general election with total probability ps + (1-p) r. an increase in p by one unit increases this probability by s-r.)

If you save your money for the general election, every percentage point you add to your own chance of winning raises your own chance of winning by, well, 1 percentage point.

  1. The same analysis goes through with any number of candidates in the primary.  So you can add G and P and it won’t change anything.
  2. This is about the marginal value of influencing a 1 percent change in the election probabilities.  That value is larger in the general election.  But there may be differences in the marginal cost of influencing a primary versus the general.
  3. In particular, if the primary is a three-candidate race there may be a lumpy return on your investment.  For example, if you increase s by a little bit that could cause G to drop out of the race and then hope that a big chunk of his probability of winning goes into increasing p.
  4. However, with G currently at about 3% probability at Intrade, at most you can get 3 times s-r.  For this to outweigh the 1 you get from the general it must be that s-r > 33%

Tyler Cowen On High-Frequency Trading

February 7, 2012 in Uncategorized | Tags: , | by | 2 comments

He seems to have mixed feelings:

There are three lanes, with the left two lanes narrowing into one.  A slight bit further ahead, the traffic from Gallows Road merges into the right lane, map here.

Many people from the far left lane merge “unethically,” driving ahead as far as they can, and then asking to be let in at the near-front of the queue.  The traffic from Gallows Road, coming on the right, merges ethically, as it is a simple feed of two lanes nto one.  They have no choice as to when the merge is, although de facto the construction of the intersection puts many of them ahead of the Rt.50 drivers.

The left lane merge is slightly quicker than the right lane merge, in part because not everyone is an unethical merger.  Yet it is more irksome to drive in the left lane, because you feel, correctly, that people are taking advantage of you (unless you are an unethical merger yourself, which I am not).

In recent times, I have switched my choice to the right lane.

Lying Convincingly

February 6, 2012 in art of office politics | by | 5 comments

I am reading Robert Trivers’  The Logic of Deceit and Self-Deception. It is a lot of fun and incredibly interesting – my wife keeps on nabbing it, she is enjoying it so much.

His main thesis is simple: In our evolutionary past, we had to lie a lot to get ahead, to deal with parent-offspring conflict etc. We are better liars if we can convince ourselves that we are not liars. Hence, this leads to self-deception. I was reminded of the strength of this claim today.

I set an old question to my students (not one of my own but inherited from the past cohorts of teachers). This question has been used recently by many fellow teachers and it has been taught by TAs.  I happened to look at the historical answer to the question and found a mistake. And the topic had not really been covered in class. A student then came to ask me about precisely this question. I decided to pretend the answer in the answer key was right – it would only have confused him more if I had gone into the right answer and I had not taught the subtlety in class, I rationalized to myself. A few minutes later he came back and asked me why the answer wasn’t in fact the one I had found earlier. I was found out. I told him his answer was correct too.

But the question and (incorrect) answer had been posed unchanged for 8 or so years without anyone pointing out the answer was wrong. Why was it discovered now? I suppose the student who spotted the right answer could be quite smart – and he is. But there are many smart students in previous generations who never found the right answer.

So, my explanation is really the Trivers’ explanation. I did not lie convincingly. My doubts about the answer manifested themselves somehow to the student. He investigated further and cracked the problem. In previous years, the teachers were convinced the answer was right and never even questioned it. They never had to lie because they truly believed they were telling the truth, just like the Trivers’ thesis on self-deception. Students left convinced. If they had doubts, they stifled them.

The student who spotted the error will be on the PhD market soon. I will write him a strong letter.

Why Its Too Hot Inside In The Winter (And Too Cold In the Summer)

February 6, 2012 in Uncategorized | Tags: | by | 5 comments

Scott Ogawa has the floor:

Consider [a] heterogeneous group of people who have different internal temperatures. In the Summer, people who are really hot complain a lot to the building manager, since building is [the] only source of cool. People who are really cold do not complain so much since there is always the “outside option” (literally) as relief. Things switch in the Winter. A complaint-minimizing building manager will jack the heat up in the Winter, and the A/C in the Summer.
I have no data, and it is tough to trust how things “feel” since we are not the best judges of absolute temperature. Nevertheless, I have heard many folks say the temperature inside big buildings always seems negatively correlated with outside temperature, which is extra strange given this costs more than a positive correlation.

Scott’s solution is something like this:  since people differ in their hot/cold preferences you want some variation in the temperature inside.  Most buildings aim for uniformity.  If half of the building is warm and the other half is cool, people will pick their favorite side of the building.  Keeping the mean temperature constant but adding a mean-preserving spread raises overall welfare due to sorting.

Selling Downton Abbey (Series 2)

February 5, 2012 in economics, teaching | by | Leave a comment

Diehard Downton Abbey fans didn’t watch the SuperBowl, preferring the trials and tribulations of Matthew and Mary to the seesawing fortunes of Tom and Eli. Series 2 has already been shown in the U.K., as well as a Xmas special. For those who could not work out how to set up their computer to mirror British I.P.addresses and watch it on streaming video, the wait has been long. How can they get their Downton Abbey fix? They could get the British DVD version and have it shipped. But will it work on their DVD player? But do not worry, the producers are going to give the fans a relaxing spliff – series 2 is coming out on DVD is the US on Feb 7.  Cunning on two levels.

First, there is plenty of time to have it shipped and get it in time for Valentine’s Day for your loved one. (Reminder to self – get the dvd asap)

Second, and more dastardly, the rabid fans can get to watch all the episodes yet to be shown on PBS (and maybe even the Xmas special?). The timing is perfect. Release it any later and people will have seen the end and fewer people will buy it. Release it any earlier and PBS will not pay as much for the TV rights. Someone’s thinking back in England – probably a working class guy who would have been a footman in Downton Abbey days but now runs ITV.

Sordid Links

February 3, 2012 in Uncategorized | by | Leave a comment

  1. Letter from an emancipated slave to his old master.  Kottkeification.
  2. Pronunciation manual.
  3. Djokovic-Nadal.
  4. Reliving Ned Ryerson.
  5. Snot.

Tom Sargent On Why Greece Is Not Too Big To Fail?

February 3, 2012 in Uncategorized | by | Leave a comment

In a very interesting WSJ article (I managed to read it without a subscription), Tom Sargent writes:

Did the federal government do the right thing in refusing to bail out the states in the early 1840s? By doing so, the federal government reset its reputation vis-a-vis the states, telling them in effect not to expect it to underwrite their profligacy. In the short run, that cost the federal government substantially in terms of its reputation with its own creditors. Federal credit abroad suffered along with state credit. But in the long run, the decision exposed state governments to continuing market discipline, making future crises and requests for federal bailouts less likely.

If the federal government had chosen to bail out the states a second time, it probably would have taken greater control over state taxes and revenues in order to prevent yet another bailout situation. Refusal to bail out the states was thus a pivot point in sustaining a federal system in the United States. It led the states to discipline themselves by rearranging their constitutions in ways designed to allow them to retain freedom and responsibility for taxing and spending within their borders.

Europeans today might be tempted to say “yes” to bailouts. Or they might also recall a time when Americans preserved their own federal system by saying “no.”

Give Me Placebos Or Give Me Death

February 2, 2012 in Uncategorized | Tags: , | by | 3 comments

If you take your placebos on time and never miss a “dose” you are less likely to die.

Here’s the big finding: in the placebo group of 1174 patients, the people who took all of their placebo pills on time (the good adherers), were significantly less likely to die than the patients who missed lots of doses. People who took over 75% as directed were 40% less likely to die than those with less than 75% adherence

Neuroskeptic has the story, and it appears not to be simply because healthy people are also more responsible, they controlled for measures of health.

Chicken Everywhere: Gingrich And Santorum In The Republican Primaries

February 2, 2012 in art of office politics, teaching, tongue in cheek | by | 3 comments

Gingrich, Santorum (and I guess also Ron Paul) keep splitting the conservative vote in the Republican primaries. Romney gets through because of the split.

Gingrich and Santorum are playing a dynamic version of Chicken (a war of attrition) with budget constraints.  With complete information, a war of attrition has the player with the lower budget dropping out immediately in equilibrium.  He knows that eventually there will be a penultimate stage where the player with the bigger budget will definitely fight because he knows he will be the only player left standing the next and final period and hence will win the prize with certainty.  The player with the dwindling budget might as well drop out and save his money at the penultimate stage. But then we can backward induct to the pen-penultimate stage etc. and the player with the smaller budget drops out immediately.

This solution relies on a lot of rationality and complete information. Both of these are suspect in the Republican primaries. On the one hand Gingrich seems to be in the better financial position. He has a billionaire bankrolling him, Santorum does not. But on he other hand, the billionaire might not want to waste money on a lost cause. And it appears Santorum does have more money in the bank than Gingrich because he does have some support. And both men display the mixture of nutty self-belief and guile that is characteristic of politicians. Plenty of reason for the race to go on for along time.

Perhaps too long for Obama supporters. I think they should prefer Gingrich as the Republican candidate in the general election not Romney. In Florida, Romney showed that he has strong support among moderates. Moderates are the key to victory in the general election. A Democratic billionaire has to pitch in, help out the casino billionaire and bankroll the Gingrich SuperPac. They can do this by setting up an anonymous company with a PO box, keep their identity hidden and sign over a check. A big enough donation should trigger a Santorum exit as in analysis above. Then, it’s Romney vs Gingrich the rest of the way (with fringe support for Paul).

Trays

February 2, 2012 in Uncategorized | by | 13 comments

Cheap Talk is 3 years old today. It feels good. And I am very glad that you are reading.

I try to write three posts per week that are either original ideas or interpretations of research that involves a little original thinking.  These usually come Monday-Tuesday-Wednesday in the morning.  In the afternoon I post a link or a little thought for fun, nothing heavy.  On Thursday I try to revisit a theme, like Thoughts Left Lying Around, or post some reaction to something on another blog. And then on Friday I post the Sordid Links.

When I look back at all of the little ideas I have posted here I am pretty proud. Take a look at the vapor mill tag.  There are some real research ideas there, quite a few in fact.  It’s amazing to think that without this blog that many ideas would have just gone to waste.  (Assuming that blogging them is not a waste.) Makes me think that more people should write blogs.

There have been times when I wondered how long I am going to be able to keep this up.  This is not a current events blog, I don’t usually get material from the news, just thoughts that happen at random times and places.  Eventually I have to run out of those.  But there’s no sign of that yet.  I have a pretty safe stock of ideas written down that I flip through at night when I am sitting down to write.  I had one just today.

One bummer over the past year is that Google crippled Google Reader and as a result there has been a noticeable sag in the number of rss views.  We have over 3,000 subscribers through Google Reader but I think that a lot of people stopped using it after the downgrade.  There’s something new called Google Currents for mobile devices.  I set up Cheap Talk there but I don’t think many people are using that yet.  It’s pretty nice though, you should check it out.

I have three papers now that are based on ideas that would not exist if it were not for the blog.  That’s pretty cool.

Blogging Something I Know Nothing About

February 1, 2012 in Uncategorized | Tags: , | by | 4 comments

Naked CDS.  Let me define it first.  A Credit Default Swap (CDS) is a bet that some debtor, say the government of Argentina, is going to default on their debt. When you buy a CDS you are buying a claim to a payment made in the event that there is a default.  When you sell a CDS you are betting that there will be no default and you won’t have to make that payment.

The conventional role of a CDS is an insurance instrument.  If you hold Argentinian bonds and are worried about default, you can buy CDS to insure against that risk.  (In the event of default you are out one bond but you get compensation in the form of your CDS payout.) Naked CDS refers to an unconventional role:  selling a CDS contract to someone who doesn’t actually hold the bond.

There is a very interesting argument that naked CDS can poison the financial well, and I believe it is in this paper by Yeon-Koo Che and Rajiv Sethi.  (I haven’t actually read the paper but I discussed it with Ahmad Peivandi and I think I get the gist of it.  Fair warning:  don’t assume that what follows is an accurate account of the paper, but whether or not it is accurate, it’s an interesting argument.)

Suppose that Argentina needs to issue new bonds in order to roll over its debt. The market for these bonds consists of people who are sufficiently optimistic that Argentina is not going to default.  Such people have a demand for bets on the solvency of the Argentinian government.  Argentina wants to capitalize on this demand.

In a world without naked CDS the government of Argentina has market power selling bets.  You  make your bet by purchasing the bonds.   Market power enables the  Argentinian government to mark up the price of its bonds, selling to the most optimistic buyers, and thus raise more capital for a given issue.  This reduces the chance of a default.

A market for naked CDS creates an infinitely elastic, perfectly competitive supply of bets.  Someone who is optimistic that there will be no default can now bet their beliefs by selling a naked CDS rather than purchasing bonds.  If the Argentinian government tries to exercise its market power, they will prefer to trade competitively priced CDS bets instead.  Thus, the market for naked CDS destroys the government’s market power completely.  There are welfare effects of this.

  1. The downside is that the government is less likely to raise enough to roll over its debts and therefore more likely to default.
  2. But the upside is that people get to make more bets.  Without competition from CDS, there are people who are willing to bet at market prices but are excluded due to the exercise of market power.  This deadweight loss is eliminated.

But how you evaluate these welfare effects turns on your philosophical stance on the meaning of beliefs.  One view is that differences in beliefs reflect differences in information and market prices reflect the aggregated information behind all of the traders’ beliefs. If competition drives the price of bonds down it is because it allows the information behind the pessimists’ beliefs to be incorporated.  If you hold this view you are less concerned about 1 because investors who would have bought bonds at marked-up prices must have been at least partially fooled.

Another view is that beliefs are just differences of opinion, more like tastes than information.  If the price of beer is low that doesn’t make me like beer any less. If this is your view then you really worry about 1 because those pessimists who drive the price down aren’t any better informed than the optimists. The concern about 1 is a rationale for banning naked CDS. But by the same argument you also care a lot about 2. Every bet between people with different beliefs, people who agree to disagree, is a Pareto improvement.

The bottom line is that arguments against naked CDS based on 1 probably also need to account for 2.

If By Whiskey

January 31, 2012 in Uncategorized | Tags: , | by | 1 comment

A famous speech from Noah S. “Soggy” Sweat, delivered on the floor of the Mississippi State Legislature, on the possible end to alcohol prohibition in that state.

My friends, I had not intended to discuss this controversial subject at this particular time. However, I want you to know that I do not shun controversy. On the contrary, I will take a stand on any issue at any time, regardless of how fraught with controversy it might be. You have asked me how I feel about whiskey. All right, here is how I feel about whiskey:

If when you say whiskey you mean the devil’s brew, the poison scourge, the bloody monster, that defiles innocence, dethrones reason, destroys the home, creates misery and poverty, yea, literally takes the bread from the mouths of little children; if you mean the evil drink that topples the Christian man and woman from the pinnacle of righteous, gracious living into the bottomless pit of degradation, and despair, and shame and helplessness, and hopelessness, then certainly I am against it.

But, if when you say whiskey you mean the oil of conversation, the philosophic wine, the ale that is consumed when good fellows get together, that puts a song in their hearts and laughter on their lips, and the warm glow of contentment in their eyes; if you mean Christmas cheer; if you mean the stimulating drink that puts the spring in the old gentleman’s step on a frosty, crispy morning; if you mean the drink which enables a man to magnify his joy, and his happiness, and to forget, if only for a little while, life’s great tragedies, and heartaches, and sorrows; if you mean that drink, the sale of which pours into our treasuries untold millions of dollars, which are used to provide tender care for our little crippled children, our blind, our deaf, our dumb, our pitiful aged and infirm; to build highways and hospitals and schools, then certainly I am for it.

This is my stand. I will not retreat from it. I will not compromise.

Vueltiao vibe:  Adriana Lleras-Muney.  Here is Wikipedia.

Behavioral Biases And Investment

January 31, 2012 in teaching | by | Leave a comment

B School Profs looking for “war stories” read McKinsey Quarterly more religiously than the Quarterly Journal of Economics.  The stories are just stories because there is no effort at identification and data come from surveys rather than payoff based decision making. This does not make for research in the academic sense.  Here is a claim in a recent article (free registration required):

Most executives, the survey found, believe that their companies are too stingy, especially for investments expensed immediately through the income statement and not capitalized over the longer term. Indeed, about two-thirds of the respondents said that their companies underinvest in product development, and more than half that they underinvest in sales and marketing and in financing start-ups for new products or new markets

Why aren’t companies investing?  Decision making biases says the survey:

Executives who believe that their companies are underinvesting are also much more likely to have observed a number of common decision biases in those companies’ investment decision making. These executives also display a remarkable degree of loss aversion—they weight potential losses significantly more than equivalent gains.

I wish there was a crisp anecdote (e.g. “When I moved to General Mills, I did not introduce Choco-Honey-Nutto-Organic Cheerios – even though it did great is focus groups – because in my last job I got burned when I okayed perfumed Pampers and it stank in the marketplace.”)

Really, You Don’t Already Know Why Questions Are Rhetorical?

January 30, 2012 in Uncategorized | Tags: , | by | 4 comments

Start with a world without rhetorical questions. All questions are interpreted as being genuinely inquisitive. You are considering doing X and someone comes up to you and says “Why on Earth would you want to do X?”

Now two things happen. First, since all questions are genuinely inquisitive, you take his question literally and you start thinking of an answer. Why indeed do you want to do X?  The second thing that happens is that, again because the question is genuine, you learn that it’s not obvious to your inquisitor that X is the right thing to do.

That’s compelling information if you happened to be wondering whether X is in fact the right thing to do.  And no matter how successful you are at coming up with an answer as to why on Earth you want to do X, that information will make you at least slightly less sanguine about doing X.

And that is why you can’t have a world without rhetorical questions.  Because in a world without rhetorical questions, questions are effective rhetoric.  Indeed a world without rhetorical questions maximizes the rhetorical value of a question.

In a world where all questions are interpreted as genuine queries, someone who is not genuinely inquisitive but in fact has an agenda most effectively erodes your confidence in X by saying “Why on Earth would you want to do X?”  And so questions spontaneously become rhetorical devices.

As these devices are used more and more, the questions are taken less and less literally.  In equilibrium the incentive to convert rhetorical arguments into questions continues right up until the point where questions have no rhetorical value over and above just saying outright “X sucks.”

That doesn’t mean that rhetorical questions die away.  They must continue to be used just frequently enough so that their value is just degraded enough so that nobody has any (strict) incentive to use them any more than that.

(Drawing:  Something About Relationships from www.f1me.net)

What Happens When You Stretch?

January 30, 2012 in Uncategorized | Tags: , | by | Leave a comment

This is something I have wondered about for a long time.

When the muscle is stretched, so is the muscle spindle (see section Proprioceptors). The muscle spindle records the change in length (and how fast) and sends signals to the spine which convey this information. This triggers the stretch reflex (also called themyotatic reflex) which attempts to resist the change in muscle length by causing the stretched muscle to contract. The more sudden the change in muscle length, the stronger the muscle contractions will be (plyometric, or “jump”, training is based on this fact). This basic function of the muscle spindle helps to maintain muscle tone and to protect the body from injury.

One of the reasons for holding a stretch for a prolonged period of time is that as you hold the muscle in a stretched position, the muscle spindle habituates (becomes accustomed to the new length) and reduces its signaling. Gradually, you can train your stretch receptors to allow greater lengthening of the muscles.

Some sources suggest that with extensive training, the stretch reflex of certain muscles can be controlled so that there is little or no reflex contraction in response to a sudden stretch. While this type of control provides the opportunity for the greatest gains in flexibility, it also provides the greatest risk of injury if used improperly. Only consummate professional athletes and dancers at the top of their sport (or art) are believed to actually possess this level of muscular control.

This clarified a lot for me.

Consider The Equilibrium

January 29, 2012 in Uncategorized | Tags: , , , | by | 15 comments

Jonah Lehrer didn’t:

In many situations, such reinforcement learning is an essential strategy, allowing people to optimize behavior to fit a constantly changing situation. However, the Israeli scientists discovered that it was a terrible approach in basketball, as learning and performance are “anticorrelated.” In other words, players who have just made a three-point shot are much more likely to take another one, but much less likely to make it:

What is the effect of the change in behaviour on players’ performance? Intuitively, increasing the frequency of attempting a 3pt after made 3pts and decreasing it after missed 3pts makes sense if a made/missed 3pts predicted a higher/lower 3pt percentage on the next 3pt attempt. Surprizingly [sic], our data show that the opposite is true. The 3pt percentage immediately after a made 3pt was 6% lower than after a missed 3pt. Moreover, the difference between 3pt percentages following a streak of made 3pts and a streak of missed 3pts increased with the length of the streak. These results indicate that the outcomes of consecutive 3pts are anticorrelated.

This anticorrelation works in both directions. as players who missed a previous three-pointer were more likely to score on their next attempt. A brick was a blessing in disguise.

The underlying study, showing a “failure of reinforcement learning” is here.

Suppose you just hit a 3-pointer and now you are holding the ball on the next possession. You are an experienced player (they used NBA data), so you know if you are truly on a hot streak or if that last make was just a fluke. The defense doesn’t. What the defense does know is that you just made that last 3-pointer and therefore you are more likely to be on a hot streak and hence more likely than average to make the next 3-pointer if you take it. Likewise, if you had just missed the last one, you are less likely to be on a hot streak, but again only you would know for sure. Even when you are feeling it you might still miss a few.

That means that the defense guards against the three-pointer more when you just made one than when you didn’t. Now, back to you. You are only going to shoot the three pointer again if you are really feeling it. That’s correlated with the success of your last shot, but not perfectly. Thus, the data will show the autocorrelation in your 3-point shooting.

Furthermore, when the defense is defending the three-pointer you are less likely to make it, other things equal. Since the defense is correlated with your last shot, your likelihood of making the 3-pointer is also correlated with your last shot. But inversely this time:  if you made the last shot the defense is more aggressive so conditional on truly being on a hot streak and therefore taking the next shot, you are less likely to make it.

(Let me make the comparison perfectly clear:  you take the next shot if you know you are hot, but the defense defends it only if you made the last shot.  So conditional on taking the next shot you are more likely to make it when the defense is not guarding against it, i.e. when you missed the last one.)

You shoot more often and miss more often conditional on a previous make. Your private information about your make probability coupled with the strategic behavior of the defense removes the paradox. It’s not possible to “arbitrage” away this wedge because whether or not you are “feeling it” is exogenous.

Where Should I Stay (and Eat/Drink) In Arlington Virginia?

January 28, 2012 in Uncategorized | Tags: | by | 13 comments

I will be there Feb 13-14, and I need to book a hotel. Never been there before. Here is a list of hotels to choose from along the Orange Metro Line,  I care more about the neighborhood (walking/hanging/restaurant scene, breakfast joint) than the hotel. Any suggestions?

Sordid Links

January 27, 2012 in Uncategorized | by | Leave a comment

  1. Bone luge
  2. Sex in space (with video)
  3. Juan Epstein has died.  (Watch for James Woods in the clip.)
  4. If there’s grass on the field…

The BEPress Journals Have Sold Out

January 26, 2012 in Uncategorized | Tags: | by | 2 comments

As reported by Josh Gans:

I was directed to a paper by Mark McCabe and Chris Snyder (here is what used to be the link). It was a paper published in the BE Press journal Economic Analysis and Policy and it was a model of academic journal prices. To my surprise, I couldn’t access it. It was subscriber only. The reason: BE Press’s journals had been acquired by de Gruyter and obviously they had changed the policy.

Indeed I checked, and I cannot access my own article unless I am prepared to pony up $45.  The moral of the story is if you think you are publishing in an Open Access journal but your article is not licensed to the public, the publisher has no commitment not to eventually sell it to somebody else who will not honor the original deal.  I think the editor of that journal should resign.

Note well:  Theoretical Economics is a true Open Access journal.  Published articles are publicly licensed under Creative Commons and nobody has the right to close access ever, nor can they acquire that right.  It also happens to be the top field journal in economic theory.

Mr. 50 Cent’s Incentive Scheme For The Giants In The Superbowl

January 26, 2012 in gossip, tongue in cheek | by | 1 comment

Hot off the presses from the Hollywood Gossip:

[T]he rapper quickly accepted when a follower named MyBestAssets made him an offer regarding his hometown Giants and the New England Patriots.

It’s unclear who MyBestAssets is, what those assets are, and what the extent of her relationship with Chelsea Handler’s ex is. But she’s apparently a Pats fan.

“Lets bet. If the Giants lose the Superbowl, u must post ur d*ck on the twitter. If they win, I’ll post my boobs & face. Bet?” she wrote. 50 quickly went all in on that.

“Ok It’s a bet. See your d*ck on twitter Feb 5. Lol” she wrote.

LOL indeed. This is definitely the most unusual wager we’ve heard of, which is saying something, as certain THG staff members have bet on the coin toss. The coin toss.

Anyway, let’s go Giants. We really don’t need to see that.

I’m a Pats supporter but I now I have some reason to be happy if the Giants win.

Score One For Lamarck

January 25, 2012 in Uncategorized | Tags: | by | Leave a comment

Acquired traits passed on to descendants:

“In our study, roundworms that developed resistance to a virus were able to pass along that immunity to their progeny for many consecutive generations,” reported lead author Oded Rechavi, PhD, associate research scientist in biochemistry and  at CUMC. “The immunity was transferred in the form of small viral-silencing agents called viRNAs, working independently of the organism’s genome.”

An interesting theoretical explanation:

According to the CUMC researchers, Lamarckian inheritance may provide adaptive advantages to an animal. “Sometimes, it is beneficial for an organism to not have a gene expressed,” explained Dr. Hobert. “The classic, Darwinian way this occurs is through a mutation, so that the gene is silenced either in every cell or in specific cell types in subsequent generations. While this is obviously happening a lot, one can envision scenarios in which it may be more advantageous for an organism to hold onto that gene and pass on the ability to silence the gene only when challenged with a specific threat. Our study demonstrates that this can be done in a completely new way: through the transmission of extrachromosomal information. The beauty of this approach is that it’s reversible.”

Beanie bow:  Courtney Conklin Knapp

Ali G and Newt Gingrich

January 25, 2012 in Uncategorized | by | Leave a comment

Maureen Dowd provides the reminder.  Impressive that Newt does not lose his temper or cease to take Ali G seriously.

A Better Role For Journals

January 24, 2012 in Uncategorized | Tags: | by | 10 comments

The way it works now is you write a paper then you send it to a journal and they review it and decide whether to publish it.  The basic unit is the paper.  What if we made the author the basic unit?  Instead of inviting submissions, Econometrica invites applications for the position of author.  Some number of authors are accepted and they can write whatever they want and have it published in Econometrica. The term would be temporary, maybe 1 year.

Wouldn’t it be wonderful to just write the paper you want to write, not the paper that the referees want you to write?  The quality of papers would unambiguously increase.  After all, your acceptance is a done deal, anything you write will be published, why bother writing anything less than the most interesting idea that is currently on your mind.

Quality control is achieved by rotating in the authors currently writing the most interesting stuff. Once the current slate of authors is chosen, there is no need anymore for referees or editors.   But if you want peer review, you can have that too.  Anyone wishing to prepare a referee report is invited to do so, they can even do it anonymously if they want and even make it open to the public.  The journal might even want to append the reports onto the published paper.

Come to think of it, these journals already exist:  blogs.  Cheap Talk invites you to apply to be an author guest blogger.  (Past and current holders of this position include Roger Myerson, Lones Smith and Jeroen Swinkels.)

Bruce Bueno De Mesquita On The Colbert Report

January 24, 2012 in art of office politics | by | 1 comment

BBdM gets surprisingly soft treatment.