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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.
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.)
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.
There is a story in the Wall Street Journal about user ratings on web sites such as Amazon or eBay. It seems that raters are unduly generous with their stars.
One of the Web’s little secrets is that when consumers write online reviews, they tend to leave positive ratings: The average grade for things online is about 4.3 stars out of five.
And some users are fighting back:
That’s why Amazon reviewer Marc Schenker in Vancouver has become a Web-ratings vigilante. For the past several years, he has left nothing but one-star reviews for products. He has called men’s magazine Maxim a “bacchanalia of hedonism,” and described “The Diary of Anne Frank” as “very, very, very disappointing.”
I have noticed that Amazon reviewers are highly polarized with 5 stars being the most common with 1 star reiews coming in second. And in fact it makes a lot of sense. Say you think that a product is over-rated at 4.3 stars and you think that 4 stars is more appropriate. If there are more than just a few ratings, then to bring the average down to 4 you would have to give the lowest possible rating.
Once enough ratings have already been counted, subsequent raters will be effectively engaging in a tug of war. Those that want to raise the average will give 5 stars and those that want to reduce it will give 1.
I have a simple system for organizing recipes. I try out recipes I find in cookbooks, blogs, magazines, whatever. When one hits I do the following.
- Take a picture of it.
- Write down a list of the ingredients I wouldn’t typically have stocked.
- Email the above plus a link to the recipe (or what page in what cookbook) to myself.
Because the time you really need recipes is when you are shopping and you see, say some really good looking okra and you need to know what else to get. You pull out your iPhone, you search for okra in your mail folders, you get a picture and a list of ingredients. You go home and cook.
The picture is absolutely key. Think of your cookbooks at home. Which recipes do you most often cook? Its the ones with the beautiful photos in the middle of the book. The photo reminds you how yummy its going to be. Wouldn’t you love to cook this tonight?
Remember the browser wars? Resistance to open web standards, and “best viewed in Internet Explorer.” Remember “polluted java?” Here are paragraphs that caught my eye from ars technica’s overview of Google Wave.
In September, Google released Chrome Frame, a plugin for Internet Explorer that makes it possible for Microsoft’s browser to use Chrome’s rendering engine. Microsoft was not happy about this sudden but inevitable betrayal. Google later revealed that Wave was one of the catalysts that compelled them to launch the Chrome Frame project.
The developers behind the Wave project struggled to make Wave work properly in Microsoft’s browsers, but eventually determined that the effort was futile. Internet Explorer’s mediocre JavaScript engine and lack of support for emerging standards simply made the browser impossible to accommodate. In order to use Wave, Internet Explorer users will need to install Chrome Frame.
While we are on the subject I highly recommend the ars technica piece on Google Wave. In addition to lots of detail on the technology and implementation, it talks about Google’s commitment to open standards, open source, and decentralization. I came away less worried.
I have not been invited yet to try the beta.
Mindhacks discusses a surprising asymmetry. Journalists discussing sampling error almost always emphasize the possibility that the variable in question has been under-estimated.
For any individual study you can validly say that you think the estimate is too low, or indeed, too high, and give reasons for that… But when we look at reporting as a whole, it almost always says the condition is likely to be much more common than the estimate.
For example, have a look at the results of this Google search:
“the true number may be higher” 20,300 hits
“the true number may be lower” 3 hits
There are two parts to this. First, the reporter is trying to sell her story. So she is going to emphasize the direction of error that makes for the most interesting story. But that by itself doesn’t explain the asymmetry.
Let’s say we are talking about stories that report “condition X occurs Y% of the time.” There is always an equivalent way to say the same thing: “condition Z occurs (100-Y)% of the time” (Z is the negation of X.) If the selling point of the story is that X is more common than you might have thought, then the author could just as well say “The true frequency of Z may be lower” than the estimate.
So the big puzzle is why stories are always framed in one of two completely equivalent ways. I assume that a large part of this is
- News is usually about rare things/events.
- If you are writing about X and X is rare, then you make the story more interesting by pointing out that X might be less rare than the reader thought.
- It is more natural to frame a story about the rareness of X by saying “X is rare, but less rare than you think” rather than “the lack of X is common, but less common than you think.”
But the more I think about symmetry the less convinced I am by this argument. Anyway I am still amazed at the numbers from the google searches.
The most important development in the way we interact on the web will come when a system of micropayments is in place. The big difficulties are coordination problems and security. The strongest incentive to build and control a massive social network is that it will enable Facebook to host a micropayments economy within its closed environment, solving both the coordination problem and a big part of the security problem.
Here’s the future of Facebook. You will subscribe to your friends. A subscription costs you a flow of micropayments. Your friends will include the likes of Tyler Cowen, The Wall Street Journal, gmail, Jay-Z, Harry Potter and the Deathly Hallows, etc.
Remember that the next time you hear somebody say that there is no way to monetize Facebook or Twitter.
We all work for google now. Previous posts on reCAPTCHA here and here. beanie bow: lance fortnow.
Suppose I want to send you an email and be sure that it will not be caught in your spam filter. What signal can I use to prove to you that my message is not spam? It must satisfy (at least) two requirements.
- It should be cheaper/easier for legitimate senders to use than for spammers.
- It should be cheap overall in absolute terms.
The first is necessary if the signal is going to effectively separate the spam from the ham. The second is necessary if the signal is going to be cheap enough for people to actually use it.
It is easy to think of systems that meet the first requirement but very hard to think of one that also satisfies the second. Now researchers at Yahoo! have an intriguing new idea that has received a great deal of attention, CentMail. According to this article, Yahoo! is planning to roll it out soon.
The sender pays a penny to have a trusted server to affix an electronic “stamp” to the message. Given that spammers could not afford to pay even one cent per message given the massive volume of spam, the receiver can safely accept any stamped message without running it through his spam filter.
Now here is the key idea. The penny is paid to charity. How could this matter? Because most people already make sizable donations to charity every year, they can simply route these donations through CentMail making the stamps effectively free. Thus, condition 2 is satisfied.
The first question that comes to mind is the titular one. (Settle down Beavis.) Remember, we still have to worry about condition 1 and whatever magic we use to make it cheap for legitimate email better not have the same effect on spam. But just like you, any spammer who makes donations to charity will be able to send a volume of spam for free. Apparently the assumption is that spam=evil and evildoers do not also contribute to charity. And we must also assume that Centmail doesn’t encourage entry into the spamming business by those marginal spammers for whom the gift to charity is enough to assuage their previous misgivings.
But these seem like reasonable assumptions. The more tricky issue is whether the 1 penny will actually deter spammers. It is certainly true that at current volume levels, the marginal piece of spam is not worth 1 penny. But for sure there is still a very large quantity of spam that is worth significantly more than 1 penny. For proof, just take a look in your snailbox. Even at bulk rates the cost of junk-mail advertising is several pennies per piece. With Centmail your Inbox would have at least as much stamped spam as the amount of junk mail in your snailbox.
This leads to the crucial questions. Any system of screening by monetary payments should be viewed with the following model in mind. First, ask how many pieces of spam you would expect to receive per day at the specified price. Next, ask how many spam you are willing to receive before you turn on your spam filter again. If the first number is larger than the second, then the system is not going to substitute for spam filtering and this undermines the reason to opt-in in the first place. For Centmail and me these numbers are 50 and 1.
Now continued spam filtering won’t necessarily destroy the system’s effectiveness. The stamp can be used in conjunction with standard filtering rules to reduce the chance your ham gets classified as spam. Then the question will be whether this reduction is enough to induce senders to adopt the setup costs of opting in.
Finally there is no reason theoretically that the total volume of spam would be reduced. Providing spammers with a second, higher class of service might only add to their demand.
The NY Times has an article about a new wave of independent films and their marketing.
When “The Age of Stupid,” a climate change movie, “opens” across the United States in September, it will play on some 400 screens in a one-night event, with a video performance by Thom Yorke of Radiohead, all paid for by the filmmakers themselves and their backers. In Britain, meanwhile, the film has been showing via an Internet service that lets anyone pay to license a copy, set up a screening and keep the profit.
The article is about the variety of roll-your-own distribution and marketing campaigns employed by filmmakers who lack studio backing. But the lede is buried:
Famous fans like Courtney Love were soon chattering online about the film. And an army of “virtual street teamers” — Internet advocates who flood social networks with admiring comments, sometimes for a fee, sometimes not — were recruited by a Web consultant, Sarah Lewitinn, who usually works the music scene.
Here is wikipedia on street teams. The origin is traced back to the KISS army, a grass-roots fan club that aggressively promoted the band KISS and later “vertically integrated” with the KISS marketing machine where they had access to exclusive promotional merchandise.
Today you can hire a consultant to assemble a street team to promote your band, movie, (hmmm… blog?), … A good consultant will find (or make) fans with a selected personality type, street-cred, and social network and organize them into a guerilla marketing squad armed with swag.
Virtual street teams operate in online social networks. Presumably then, actual people are no longer required. A good consultant can manufacture online identities, position them in a social network, getting Twitter followers and Facebook friends and cultivate the marketing opportunities from there. You can imagine the pitch: “We can mobilize 10,000 follower-tweets per day…”
Here is the web site of ForTheWin.com, the agency of Sara Lewitinn who coordinated the virtual street team for the film Anvil! The Story of Anvil.
For The Win! is an cooperative of club urchins and nightlife denizens charged with the task of defending the best of pop culture from the daily onslaught of the whack. At night we comb the streets in search of the best fashion, art, music, and movies New York City has to offer. By day we make sure we spread the word to the world by any and all means necessary of the internet to it’s biggest platforms without skipping a step or taking anything for granted. Each of our campaigns is as unique as the artist it represents.
Note they also count Slighly Stoopid, Electrocute, and The Pet Shop Boys (!) as clients.
Developer Kalid Shaikh has been banned from the iPhone App Store. By conventional welfare measures this would seem to be a big blow to efficiency:
As the MobileCrunch article points out, a search at AppShopper.com shows 854 apps by Shaikh. The majority of Shaikh’s apps seemed to be data on a specific subject simply pulled from the web without providing any other original or unique content. Most apps were priced at $4.99 and this banishment could represent lost sales of thousands of dollars per day. Shaikh reportedly has admitted that the goal was not to produce valuable apps but to focus on monetization instead. All of Shaikh’s apps have already been removed from the App Store and can no longer be purchased.
Perhaps conventional welfare measures would need to be amended in this case. Note however, that removing one large supplier of what is essentially spam from the App Store will not affect the equilibrium quantity of spam. (And this is not Apple’s stated reason for removing him.)
Millions of internet users who use Skype could be forced to find other ways to make phone calls after parent company eBay said it did not own the underlying technology that powers the service, prompting fears of a shutdown.
Why are there firms? A more flexible way to manage transactions would be through a system of specific contracts detailing what each individual should produce, to whom it should be delivered and what he should be paid. It would also be more efficient: a traditional firm makes some group of individuals the owners and a separate group of individuals the workers. The firm is saddled with the problem of motivating workers when the profits from their efforts go to the owners.
The problem of course is that most of these contracts would be far too complicated to spell out and enforce. And without an airtight contract, disputes occur. Because disputes are inefficient, the disputants almost always find some settlement which supplants the terms of the contract. Knowing all of this in advance, the contracts would usually turn out to be worthless. The strategy of bringing spurious objections to existing contracts in order to trigger renegotiation at more favorable terms is called holdup. The holdup problem is considered by some economic theorists to be the fundamental friction that shapes most of economic organization.
Case in point, Skype and eBay. eBay acquired the Skype brand and much of the software from the founders, JoltId, but did not take full ownership of the core technology, instead entering a licensing agreement which grants Skype exclusive use. Since that time, Skype has become increasingly popular and a strong source of revenue for eBay. Now eBay is being held up. JoltId claims that eBay has violated the licensing agreement, citing a few obscure and relatively minor details in the contract. Litigation is pending.
Not coincidentally, eBay has publicly stated its intention to spinoff Skype and take it public, a sale that would bring a huge infusion of capital to eBay at a time when it is reinventing its core business. That sale is in turn being heldup because Skype is worthless without the license from JoltId. This puts JoltId in an excellent bargaining position to renegotiate for a better share of those spoils. (On the other hand, had Skype not done as well as it did, JoltId would not have such a large share of the downside.)
Whatever were the long-run total expected payments eBay was going to make to JoltId in return for exclusive use of the technology, it should have paid that much to own the technology outright, become an integrated firm, and avoided the holdup problem.
And don’t worry. You got your Skype. Holdup may change the terms of trade, but it is in neither party’s interest to destroy a valuable asset.
To remind you, reCAPTCHA asks you to decipher two smeared words before you can register for, say, a gmail account. One of the words is being used to test whether you are a human and not a computer. The reCAPTCHA system knows the right answer for that word and checks whether you get it right. The reCAPTCHA system doesn’t know the other word and is hoping you will help figure it out. If you get the test word right, then your answer on the unkown word is assumed to be correct and used in a massive parallel process of digitizing books. The words are randomly ordered so you cannot know which is the test word.
Once you know this, you many wonder whether you can save yourself time by just filling in the first word and hoping that one is the test word. You will be right with 50% probability. And if so, you will cut your time in half. If you are unlucky, you try again, and you keep on guessing one word until you get lucky. What is the expected time from using this strategy?
Let’s assume it takes 1 second to type in one word. If you answer both words you are sure to get through at the cost of 2 seconds of your time. If you answer one word each time then with probability 1/2 you will pass in 1 second, with probability 1/4 you will pass in 2 seconds, probability 1/8 you pass in 3 seconds, etc. Then your expected time to pass is
Is this more or less than 2? Answer after the jump.
CAPTCHAs are everywhere on the web now. They are the distorted text that you are asked to identify before being allowed to register for an account. The purpose is to prevent computer programs from gaining quick access to many accounts for nefarious purposes (spam for example.)
reCAPTCHA piggy-backs on CAPTCHA. You are asked to identify two words. The first is a standard CAPTCHA. If you enter the correct word you identify yourself as a human. The second is a word that has been optically scanned from a book that is being digitized. It has found its way into this reCAPTCHA because the computer doing the optical character recognition was not able to identify it. If you have identified yourself as a human via the first CAPTCHA, your answer to the second word is assumed to be correct and used in the digital translation. You are digitizing the book.
According to Wikipedia 20 years of the New York Times archive has been digitized with the help of reCAPTCHA. And, “provides about the equivalent of 160 books per day, or 12,000 manhours per day of free labor.”
The first reaction to this is obvious. The labor is not free. In fact it costs exactly 12,000 man hours. Lots of things can be produced with 12,000 man hours. Lots of leisure can be consumed in 12,000 hours. Is digitizing the New York Times the best use of this people-time? On top of that the reCAPTCHA is a tax which reduces the quantity of online accounts transacted and that is a deadweight loss.
But it is just a few seconds of your time right? Something about that seems to change the calculation. I bet most people would say that they don’t mind giving away two seconds of their time. Part of this is due to an illusion of marginal vs total. People are tempted to treat the act as a gift of two seconds of their time in return for a whole digitized library. But in fact they are giving away two seconds of their time for one digitized word.
A second part of this is due to a scale illusion. You may successfully convince said reCAPTHArer that she is just getting a tiny fraction of the book for her two seconds but she will probably still say that she is happy with that. But if you ask her whether she is willing to contribute 1000 seconds for 500 words, probably not. And, to take increasing marginal costs out of the question, if you asked her whether she thought digitizing the New York Times is worth how many thousands of woman-hours of (dispersed) ucompensated labor she again might start to see the point.
But still, not everybody. And I think there must be some sound rationale underneath this. I would not argue that digitizing books is the necessarily the highest priority public good, but the mechanism is inherently linked to deciphering words. True, we could require everyone who signs up at Facebook to donate 1 penny to fight global warming but A) it is never possible to know exactly what “1 penny toward fighting global warming” means whereas there is no way to redirect my contribution if I decipher a word. That is not a liquid asset. And B) two seconds of most people’s time is worth less than 1 penny (we are talking about Facebook users remember) and we don’t have a micro-payments system in place to go down to fractions of pennies.
Perhaps what we have here is a unique opportunity to utilize a public-goods contribution mechanism that transparent and non-manipulable and guarantees to each contributor that he will not be free-ridden on: everyone else is committed to the same contribution.
There has been a run on one of the largest banks in an economics-themed online role-playing game called Eve. The event merited an article at the BBC. The run was triggered when Ricdic, an executive of the bank made off with a large sum of virtual lucre and exchanged it for real-world cash.
Eve Online has about 300,000 players all of whom inhabit the same online universe. The game revolves around trade, mining asteroids and the efforts of different player-controlled corporations to take control of swathes of virtual space.
It has now emerged that Ricdic used the cash to put down a deposit on a house and to pay medical bills.
“I’m not proud of it at all, that’s why I didn’t brag about it,” Ricdic told Reuters. “But you know, if I had to do it again, I probably would’ve chosen the same path based on the same situation.”
Apparently, the bank had tremendous reserves and has so far withstood the run. Here is more information. Either real-world bank regulators have something to learn from Eve or the other way around because here is Ricdic’s comeuppance:
Ricdic has now been thrown out of the game as trading in-game cash for real money is against Eve Online’s terms and conditions.
The rules governing play within Eve would not have sanctioned Ricdic if he had simply stolen the cash and used it in the game, nor if he had bought kredits with real dollars.
Fedora Flourish: BoingBoing
In case you have not been following the catfight, let me get you up to speed. Chris Anderson wrote a book called Free. I haven’t read it, but it apparently says “all your ideas are belong to us” because the price of ideas is crashing to zero. Malcom Gladwell says “please don’t let my employer read that”…I mean, “No its not.”
Let’s have a model. There are tiny ideas and big ideas. The tiny ideas are more like facts, or observations or experiences. They are costless to produce but costly to communicate. They are highly decentralized in that everybody produces their own heterogenous tiny ideas. The big ideas are assembled from a large quantity of tiny ideas. Different people have different production technologies for producing big ideas from small ones. These could differ just in cost, or also in terms of the quality of big ideas that are produced, it changes the story a little but doesn’t change the economics.
Start with a world where the marginal cost of communicating a tiny idea to another individual is large. Then the equilibrium market structure has big-idea producers who incur the high cost of acquiring tiny ideas, assemble them into big ideas and communicate the big ideas to the masses for a price. This market structure sustains high prices for big ideas and sustains entry by big-idea specialists.
Now suppose the marginal cost of communicating the tiny ideas shrinks to zero. Then an alternative for end users is to assemble their own big ideas for their own consumption out of the tiny ideas they acquire themselves for close to nothing. The cost disadvantage that the typical end user has is compensated by his ability to customize his palette of tiny ideas and resulting big ideas to complement his idiosyncratic endowment of other ideas, tastes, etc. The price of big ideas crashes. Former producers of big ideas exit the market. This is all efficient.
An important implication of this model is that the products that Anderson expects to be free are not the products Gladwell produces. So when Gladwell says that this is absurd because the economics do not support big ideas being sold at a price of zero, he is right. But that is because the big ideas are not being sold at all, and this is all efficient.
Apparently we have arrived at the long run and we are not dead.
Do you remember the Microsoft anti-trust case? The anti-trust division of the US Department of Justice sought the breakup of Microsoft for anti-competitive practices mostly centering around integrating Internet Explorer into the Windows operating system. In fact, an initial ruling found Microsoft in violation of an agreement not to tie new software products into Windows and mandated a breakup, separating the operating systems business from the software applications business. This ruling was overturned on appeal and evnetually the case was settled with an agreement that imposed no further restrictions on Microsoft’s ability to bundle software but did require Microsoft to share APIs with third-party developers for a 5 year period.
Today, all of the players in that case are mostly irrelevant. AOL, Netscape, Redhat. Java. Indeed, Microsoft itself is close to irrelevance in the sense that any attempt today at exploiting its operating system market power to extend its monopoly would cause at most a short-run adjustment period before it would be ignored.
Microsoft was arguing at the time that it was constantly innovating to maintain its market position and it was impossible to predict from where the next threat to its dominance would appear. Whether or not the first part of their claim was true, the second part certainly turned out to be so. It is hard to see a credible case that the Microsoft anti-trust investigation, trial, and settlement played anything more than a negligible role in bringing us to this point. Indeed the considerations there, focusing on the internals of the operating system and contracts with hardware manufacturers, are orthogonal to developments in the market since then. The operating system is a client and today clients are perfect substitutes. The rents go to servers and servers live on the internet unconstrained by any “platform” or “network effects”, indeed creating their own.
The lesson of this experience is that in a rapidly changing landscape, intervention can wait. Even intervention that looks urgent at the time. Almost certainly the unexpected will happen that will change everything.
I read news mostly through an rss reader. The Wall Street Journal syndicates only short excerpts of their articles and if I click through I get a truncated version of the article follwed by a friendly invitation to subscribe to the journal in order to view the rest of the article. It looks like this.
But its not hard to get the full text of the article. I just use google and type in the title of the article. The first link I get is a link to the full text, no subscription required. I always explained this to myself using a simple market-segmentation idea. WSJ will not give their content away to someone who is browsing their site directly because that person has revealed a high value for WSJ content. Someone who is googling has revealed that they are looking for relevant content, without regard to source. There is more competition for such a user so the price is lower.
But today I noticed that bing, Microsoft’s new search engine, does not get the same special treatment. If I bing “At Chicken Plant, A Recession Battle,” the link provided leads to the same truncated article as my rss reader. Since users have free entry across search platforms I can’t see any reason why bing-searchers (bingers?) would be systematically different than googlers in terms of the economics above. Therefore I am giving up on my theory. What are the alternatives?
- Google has a contract with WSJ?
- WSJ would like to shut out googlers too but finds it hard to shut off a service that users have come to expect. Knowing this, they are keeping bingers out from the outset.
- The game between content providers has multiple equilibria. On the google platform they are playing the users’ preferred equilibrium. On the bing platform they have coordinated on their preferred equilibrium.
- Google has figured out a secret back-door that bing hasn’t found and WSJ just hasn’t gotten around to closing.
Ok the ideas are gettng more and more lame. I am stumped.
Incidentally, there was an article in the New York Times about DOJ investigations of Google, and a Google PR offensive:
“Competition is a click away,” Mr. Wagner says. It’s part of a stump speech he has given in Silicon Valley, New York and Washington for the last few months to reporters, legal scholars, Congressional staff members, industry groups and anybody else who might influence public opinion about Google.
“We are in an industry that is subject to disruption and we can’t take anything for granted,” he adds.
I believe that the study referred to in this CNN piece is pure noise. (Don’t bother watching it. Bottom line: 1 in 5 teens admits to “sexting.”) But that doesn’t mean that it carries no information. The mere fact that this claim would be repeated, at the expense of the marginal piece of news, turns pure noise into information.
Although men and women follow a similar number of Twitter users, men have 15% more followers than women. Men also have more reciprocated relationships, in which two users follow each other. This “follower split” suggests that women are driven less by followers than men, or have more stringent thresholds for reciprocating relationships. This is intriguing, especially given that females hold a slight majority on Twitter: we found that men comprise 45% of Twitter users, while women represent 55%. To get this figure, we cross-referenced users’ “real names” against a database of 40,000 strongly gendered names.
Even more interesting is who follows whom. We found that an average man is almost twice more likely to follow another man than a woman. Similarly, an average woman is 25% more likely to follow a man than a woman. Finally, an average man is 40% more likely to be followed by another man than by a woman. These results cannot be explained by different tweeting activity – both men and women tweet at the same rate.
And this makes Twitter different than other social networks:
These results are stunning given what previous research has found in the context of online social networks. On a typical online social network, most of the activity is focused around women – men follow content produced by women they do and do not know, and women follow content produced by women they knowi
(See the article here. via MR.) Actually this may not be stunning at all because there is probably a very simple explanation for both observations. Twitter is a one-way social network. If I want to follow you I do not need your permission. Unless you block everybody and require followers to ask permission.
Regardless of the social network, women are less willing than men to allow unsolicited followers and so they are more inclined to require permission. So for example if I just randomly selected 100 Twitter users to follow, there will be many of those 100 whom I will be unable to follow because they require permission. Most of those will be women. Thus, on Twitter the ratio between the number of followers of a random woman to the number of followers of a random man will be smaller than the same ratio on, say, Facebook. And everybody will follow more men on Twitter than on Facebook.
Google determines quality scores by calculating multiple factors, including the relevance of the ad to the specific keyword or keywords, the quality of the landing page the ad is linked to, and, above all, the percentage of times users actually click on a given ad when it appears on a results page. (Other factors, Google won’t even discuss.) There’s also a penalty invoked when the ad quality is too low—in such cases, the company slaps a minimum bid on the advertiser. Google explains that this practice—reviled by many companies affected by it—protects users from being exposed to irrelevant or annoying ads that would sour people on sponsored links in general. Several lawsuits have been filed by would-be advertisers who claim that they are victims of an arbitrary process by a quasi monopoly.
What is the distortion? One example would be an advertiser who is targeting a very select segment of the market and expects few to click through but expects a lot of money from those that do. This advertiser is willing to pay a lot but may be excluded on quality score. So one view is that Google is transferring value from high-paying niche consumers to the rest of the market.
However, for every set of keywords there is another market. Google would optimally lower the quality penalty on searches using keywords that reveal that the searcher is really looking for a niche product. With this view the quality score is a mechanism for preventing unraveling of an efficient market segmentation.
The article is in Wired and it looks at Hal Varian, chief economist at Google.
Here is a nice article (via The Browser) theorizing about why Wikipedia works. The apparent puzzles are why people contribute to this public good and why it withstands vandalism and subversion. The first puzzle is no longer a puzzle at all, even us economists now accept that people freely give away their information and effort all the time. But no doubt others have just as much motivation, or more, to vandalize and distort, hence the second puzzle.
The article focuses mostly on the incentives to police which is the main reason articles on say, Barack Obama, probably remain neutral and factual most of the time. But Wikipedia would not be important if it were just about focal topics that we already have dozens of other sources on. The real reason Wikipedia is as valuable a resource as it is stems from the 99.999% of articles that are on obscure topics that only Wikipedia covers.
For example, Barbicide.
These articles don’t get enough eyeballs for policing to work, so how does Wikipedia solve puzzle number two in these cases? The answer is simple: a vandal has to know that, say, John I of Trebizond exists to know that there is a page about him on Wikipedia that is waiting there to be vandalized. (I just vandalized it, can you see where?)
There are only two classes of people who know that there exists a John I of Trebizond (up until this moment that is.) Namely, people who know something useful about him and people who want to know something useful about him. So puzzle number 2 is elegantly sidestepped by epistemological constraints.
Let’s try a little (thought) experiment in verbal short-term memory. First, find a friend. Then, find a reasonably complex sentence about 45 words long …Now call your friend up on the phone, and have a discussion about the topic of the article. In the course of this conversation, slip in a verbatim performance of the selected sentence. Then ask your friend to write an essay on the topic of the discussion. … How likely is it that the selected sentence will find its way, word for word, into your friend’s essay?
In case you haven’t guessed, the question is rhetorical and the article (from LanguageLog, a great blog) is referring to Maureen Dowd’s plagiarism. It is a fallacy though to focus only on the probability of the scenario you are trying to reject. What matters is the relative probability of that scenario with the alternative scenario, namely that Maureen Dowd would bother (intentionally) lifting word for word a paragraph which is not particularly insightful or cleverly written from a popular blog at the risk of being called a plagiarizer.
When something happens that has two very unlikely explanations, picking one of those explanations is mostly driven by your priors.
Better to plagiarize more reliable sources:
After Fitzgerald learned that French composer Maurice Jarre had died, he immediately went to Jarre’s Wikipedia page, inserted some fake quotations, and waited to see if they would be picked up by news organizations. His experiment worked better than he ever imagined, as evidenced by this correction from The Guardian:
Fitzgerald’s experiment might sound familiar to espionage buffs. It was a variation on the “barium meal,” a term used by the British intelligence service MI5 to describe a process used to expose a leak or a mole: different versions of similar information would be fed to several sources and then you’d wait to see which version leaked, or ended up in enemy hands. Track it back and, voila, you’ve got the culprit. Tom Clancy called it the “canary test” in his novels—or at least that’s what a Wired.com journalist wrote after reading it on this Wikipedia page. (See how it works?)
NB: most likely this story is completely made up. (That would make it an even better story right?)
The Privacy Act of 1974 does regulate how the government uses information about citizens, and it allows people to find out what the government knows about them and has done with that information. But the act does not apply to data collected by outside companies, such as social networks. This issue has come up in recent years because government agencies increasingly use data brokers like ChoicePoint for various sorts of investigations that are not subject to Privacy Act protection. There have been proposals to broaden the act to account for new technologies, but none has gotten much interest from Congress so far.
This article mostly just repeats paranoia about government using social networking sites, but its still worth reading for the legal context.
WiFi on airlines is coming. On some airlines it is already here. This article talks about a few of the providers and discusses service plans and pricing options.
“Yes, broadband is coming. We’re sitting there asking, ‘Who pays? Is it the airlines or the customers? And what will they pay? What is the right technology? … When does all of this happen?’ We’re in weird economic times,” Moeller said.
Its interesting that in high-end hotels the WiFi is paid for by the guest whereas in the cheap hotels the WiFi is free. So far this pattern is playing out on the airlines too with JetBlue offering free WiFi and others charging hefty fees. Of course it is not truly free so the way to understand this is that on airlines with business travelers it makes sense to charge a high price at the expense of excluding the cheapskates. On the low-cost airlines revenue is maximized by setting a low price that virtually everyone is willing to pay. If everyone is paying the price then it saves on transaction costs by rolling it into the airfare. And it makes us feel good to be told that it is “free.”
Every news story about airline WiFi has the obligitory porn reference.
As for the possibility of passengers offending their seat-mates by surfing for inappropriate content, Blumenstein said nine months of Wi-Fi availability on American yielded no such incidents. Still, airlines including American, Delta and United have requested screening for potentially offensive content, he said.
This is never going to be a problem. There is a key complementary activity and the ban on that activity is easily enforced. Without the complementary activity there will be no demand for porn.
- The music of H1N1
- Justice Souter retiring?
- Hobbits.
- DOJ investigating Google Books settlement.
I previously speculated on what it means when you don’t like your friends’ friends. Now to take it one step further, what does it mean when you belong to a Twitter cycle? Unlike facebook and other social-networking sites, Twitter is a directed graph: you follow your friends but they don’t have to follow you. A cycle is a chain of Twitters that loops back on itself: i.e. 1 follows 2, 2 follows 3,…,n-1 follows n, n follows 1.
What does it say about you and your friends if you follow Jane, who doesn’t folow you but instead follows her friend Jack, who doesnt follow Jane but instead follows you?
Anyone belong to a Twitter cycle? What is the largest Twitter cycle?
If we start with an arbitrary Twitter user and “move up” the graph from followers to leaders (follow-ees?) we must eventually either hit a cycle or a single user who sits on top of his domain. Who are these people?
“If [the spammers] are really able to write a programme to read distorted text, great – they have solved an AI problem,” says von Ahn. The criminal underworld has created a kind of X prize for OCR.
Reading the ubiquitous CAPTHCAs (those smeared words that are often impossible for even humans to read) is a big incentive to design new optical character recognition algorithms. I don’t understand the article’s connection to “Turing tests” but the economics are interesting. Spam is an inefficient way to provide incentives for research, it would be better to just use cash. But since they are going to try to spam us anyway (the cash just adds to the incentive), we might as well keep the cash and reward them with spam.
Cheap Talk 