- The extraordinary doing the ordinary.
- Amazon reviews of binders for the purposes of being full of women.
- Intellectually what I took away from this is the interesting observation that the deaf have a different sign for masturbation depending on whether its a man or woman doing it.
- Psychedelic commercials for Hostess Twinkies.
- “In response to your request for a meeting, well, I think I can read between the lines on that one.”
My academic home page (http://faculty.wcas.northwestern.edu/~jel292/) is looking outdated. I need something new and a little more professional. Do you know anybody who designs websites for academics? Could you recommend anyone? An example of their work would be helpful.
Meanwhile here’s The Bad Plus playing with Bill Frisell at Newport. Amazing stuff.
What is Organic Raspberry Fruit Spread?
Organic can modify a single noun like raspberry. The resultant unit can then itself be used as a modifier of fruit spread. That would yield [[organic raspberry] [fruit [spread]]], denoting a fruit spread of the organic raspberry type. Perfectly grammatical; nothing amiss.
The difference is that the stuff referred to by this description needn’t fully satisfy the stringent conditions for being an organic product. Only the raspberries need to pass. And sure enough, the label on Nature’s Promise Organic Raspberry Fruit Spread says:
INGREDIENTS: ORGANIC SUGAR, ORGANIC RASPBERRIES, WATER, FRUIT PECTIN, CITRIC ACID, CALCIUM CHLORIDE.
SOME years ago, executives at a Houston airport faced a troubling customer-relations issue. Passengers were lodging an inordinate number of complaints about the long waits at baggage claim. In response, the executives increased the number of baggage handlers working that shift. The plan worked: the average wait fell to eight minutes, well within industry benchmarks. But the complaints persisted.
Puzzled, the airport executives undertook a more careful, on-site analysis. They found that it took passengers a minute to walk from their arrival gates to baggage claim and seven more minutes to get their bags. Roughly 88 percent of their time, in other words, was spent standing around waiting for their bags.
So the airport decided on a new approach: instead of reducing wait times, it moved the arrival gates away from the main terminal and routed bags to the outermost carousel. Passengers now had to walk six times longer to get their bags. Complaints dropped to near zero.
Sound the alarms: Another instance of “architectural plagiarism” is quickly developing in China. As Zaha Hadid begins work on her 11th building in China this year–the Wangjing Soho shopping center–a group of Chongqing developers is hurrying to complete a shopping complex that parrots the proportions and facade of the Soho almost exactly. The controversy has resulted in a bizarre competition that pits the original author against the copycat architects in a race to see who can complete the structures first.
Chilote chuck: Courtney Conklin Knapp
In June of 1988 in Sweden it was announced that survivorship benefits, a sort of government provided life insurance paid to a wife whose husband dies, would be discontinued. There was one interesting exception: an unmarried couple with a child together born before the change could take up survivorship insurance if they married before Jan 1 1990. The spike in new marriages in the graph shows the response to this incentive.
That’s the basis for Petra Persson‘s job market paper. Petra points out that the spike is somewhat mysterious because for all of these couples the promise of survivorship insurance wasn’t enough to induce them to marry previously and only when the option was going to disappear did they exercise it.
Of course some of these new marriages were couples that planned eventually to marry (and take up benefits) and who moved their marriage date earlier. But Petra credibly demonstrates that a large proportion of these marriages were marriages that never would have happened had the reform not been announced. What explains those “extra” marriages?
Petra’s theory is that these couples were still uncertain about whether they were a good match and were planning to live together longer before deciding later whether to marry. After the reform was announced this option to wait and see was no longer costless and therefore many of these couples rushed into a marriage that, given enough time, they might have eventually decided against.
There’s an alternative story that fits equally well. Consider a couple where there is no uncertainty at all about whether the match is good: its a bad match and that’s why they are not married. (Or it could be that they are perfectly happy together but just see no value in being legally wed.) This couple optimally plans to wait until the husband is close to death and then (if he hasn’t married somebody else) get married in order to take up survivorship insurance. Now once the reform is announced that option is removed and they re-optimize and marry December 31, 1989. Many of these are extra marriages because if they waited he might die unexpectedly or marry somebody else.
This theory (like Petra’s) also explains some other facts. For example, conditional on the husband not dying shortly after the reform the divorce rate for these marriages was unusually high. And even after controlling for everything a private insurance company would use to assess risk, takeup of the survivorship insurance via marriage is a good predictor of earlier-than-expected death.
I wonder what we could look for in the data to distinguish the two theories.
It’s a great paper and there’s lots more in there, you should definitely take a look. If I were making a list this year (I am not) Petra would definitely be on it. (Check out her paper on information overload.)
Take three siblings equally spaced in age. Here’s an advantage the second child has over the third.
When the oldest learns something new, the second will have a chance to learn a little of it alongside. For example, say the parents are teaching the oldest algebra in the car while on vacation (dreadful parents for sure.) All three siblings will be listening but the second, being older than the youngest is going to grasp more of it.
Now when the second reaches the same age that the oldest was at the time of the algebra lesson, the second will be more advanced than the oldest was as a result of the spillovers from the original lesson. The parents will know this and they will appropriately scale up the lesson. It will go faster and it will be more advanced. As a result the lesson will be less accessible to the youngest child than the original lesson to the oldest was to the second. The third child will benefit less from the spillovers than the second child did.
This process implies that the human capital of the second will closely track the oldest and diverge from the youngest so that parental investments tailored to the current human capital level of the oldest will have benefit the second more than the youngest by an ever increasing differential. And investments tailored to the level of the second will be too advanced to benefit the youngest.
Now the original assumption was that the siblings are equally spaced in age. Suppose instead that the two youngest are close in age and the oldest is much older. Then there will be little scope for spillovers from the oldest to the second. The second will have to be taught everything from scratch and now the youngest is going to receive the only spillovers. So the larger gap in age between the oldest and the second the smaller the advantage of the second over the third. And for a large enough gap the advantage reverses.
The Observer‘s panel of stock-picking professionals has been undone in our 2012 investment challenge by a ginger feline called Orlando who spent time paw-ing over the FT.
The Observer portfolio challenge pitted professionals Justin Urquhart Stewart of wealth managers Seven Investment Management, Paul Kavanagh of stockbrokers Killick & Co, and Schroders fund manager Andy Brough against students from John Warner School in Hoddesdon, Hertfordshire – and Orlando.
Each team invested a notional £5,000 in five companies from the FTSE All-Share index at the start of the year. After every three months, they could exchange any stocks, replacing them with others from the index.
By the end of September the professionals had generated £497 of profit compared with £292 managed by Orlando. But an unexpected turnaround in the final quarter has resulted in the cat’s portfolio increasing by an average of 4.2% to end the year at £5,542.60, compared with the professionals’ £5,176.60.
While the professionals used their decades of investment knowledge and traditional stock-picking methods, the cat selected stocks by throwing his favourite toy mouse on a grid of numbers allocated to different companies.
The final seconds are ticking off the clock and the opposing team is lining up to kick a game winning field goal. There is no time for another play so the game is on the kicker’s foot. You have a timeout to use.
Calling the timeout causes the kicker to stand around for another minute pondering his fateful task. They call it “icing” the kicker because the common perception is that the extra time in the spotlight and the extra time to think about it will increase the chance that he chokes. On the other hand you might think that the extra time only works in the kickers favor. After all, up to this point he wasn’t sure if or when he was going to take the field and what distance he would be trying for. The timeout gives him a chance to line up the kick and mentally prepare.
What do the data say? According to this article in the Wall Street Journal, icing the kicker has almost no effect and if anything only backfires. Among all field goal attempts taken since the 2000 season when there were less than 2 minutes remaining, kickers made 77.3% of them when there was no timeout called and 79.7% when the kicker was “iced.”
So much for icing? No! Icing the kicker is a successful strategy because it keeps the kicker guessing as to when he will actually have to prepare himself to perform. The optimal use of the strategy is to randomize the decision whether to call a timeout in order to maximize uncertainty. We’ve all seen kickers, golfers, players of any type of finesse sport mentally and physically prepare themselves for a one-off performance. The mental focus required is a scarce resource. Randomizing the decision to ice the kicker forces the kicker to choose how to ration this resource between two potential moments when he will have to step up.
If you ice with probability zero he knows to focus all his attention when he first takes the field. If you ice with probability 1 he knows to save it all for the timeout. The optimal icing probability leaves him indifferent between allocating the marginal capacity of attention between the two moments and minimizes his overall probability of a successful field goal. (The overall probability is the probability of icing times the success probability conditional on icing plus the probability of not icing times the success probability conditional on icing.)
Indeed the simplest model would imply that the optimal icing strategy equalizes the kicker’s success probability conditional on icing and conditional on no icing. So the statistics quoted in the WSJ article are perfectly consistent with icing as part of an optimal strategy, properly understood.
But whatever you do, call the timeout before he gets a freebie practice kick.
From Ian Millhiser at ThinkProgress:
As of this writing, every single state except Hawai’i has finalized its vote totals for the 2012 House elections, andDemocrats currently lead Republicans by 1,362,351 votesin the overall popular vote total. Democratic House candidates earned 49.15 percent of the popular vote, while Republicans earned only 48.03 percent — meaning that the American people preferred a unified Democratic Congress over the divided Congress it actually got by more than a full percentage point. Nevertheless, thanks largely to partisan gerrymandering, Republicans have a solid House majority in the incoming 113th Congress.
A deeper dive into the vote totals reveals just how firmly gerrymandering entrenched Republican control of the House. If all House members are ranked in order from the Republican members who won by the widest margin down to the Democratic members who won by the widest margins, the 218th member on this list is Congressman-elect Robert Pittenger (R-NC). Thus, Pittenger was the “turning point” member of the incoming House. If every Republican who performed as well or worse than Pittenger had lost their race, Democrats would hold a one vote majority in the incoming House.
Hence, the Democrats need a +7% swing to regain the House given the current structure of House districts.
From a Politico article about the fiscal cliff:
“For many Republicans, a cliff dive means blaming President Barack Obama for a big tax hike in the short term and then voting to cut taxes for most Americans next month. That’s an easier sell back home in Republican-heavy districts than a pre-cliff deal that raises taxes on folks making over $250,000 or $400,000, extends unemployment benefits and does little if anything to curb entitlement spending. If they back a bad deal now, they run the risk of facing primary challenges in two years.
For Democrats, the cliff is better than setting a rich man’s cutoff in the million-dollar range — or worse yet, extending the Bush tax cuts for all earners — and slashing Medicare and Social Security to appease Republicans. They, too, see an advantage in negotiating with Republicans who will feel freed from their promise not to vote to raise taxes once the rates have already gone up….
Another analogy: It’s a Nash equilibrium. John Nash, subject of “A Beautiful Mind,” the Oscar-winning film that revolved around game theory, explained how players act in a multiplayer game. Put simply, if each player understands his adversaries’ strategies, no one will alter their own course. Right now, Obama, Boehner and Reid are locked in on a course for the cliff, and there’s no obvious solution that would make any of them switch directions.”
In the next story, they will superimpose electoral incentives on the Nash demand game!
“JPMorgan Chase & Co. (JPM) asked more than 2,000 current and former employees to contribute to a settlement with the U.K.’s tax authority over their use of an offshore trust for bonus payments, according to a person briefed on the situation…..
People who used JPMorgan’s trust told the FT they were asked to participate in a so-called blind auction, in which they would volunteer to pay a tax rate of their choosing.
If the auction fails to generate enough money to fund the settlement, people who submitted less than the average bid would be excluded from the deal and face a 52 percent tax rate when the trust’s assets are liquidated, the newspaper said.
People who don’t wish to participate can try to fight the government’s demand, the person briefed on the situation said.”
The rules of the auction are not 100% clear from the article. Taken at face value, there is the possibility of multiple coordination equilibria. If I expect everyone else to contribute a lot but not enough to pay off the tax debt, then I will contribute a lot too to avoid the 52% tax. If I expect everyone to contribute a little, so will I hoping people who decided not to participate or contributed less than the average bid will bear the punishment. Finally, if I expect total contributions to exceed the tax debt, I will contribute zero. Uncertainty about everyone’s willingness to pay, deep pockets etc will generate randomness and perhaps refine equilibria but leave open the possibility of multiplicity. Also, there will be positive probability that the auction does not fully recompense the tax authorities. This is also true in mixed strategy equilibria of the complete information game.
To increase contributions and guarantee success, the auction should specify that everyone who contributes more than the average bid will escape the 52% tax if total contributions are lacking. Then, people will submit more than the average just to be safe. Then, the average expected bid will go up. Then, they’ll submit even more etc.
Here’s what I presented on Friday in Cambridge:
And here’s what I presented on Saturday in Chicago:
In any negotiation, you first want to prepare the ground so that failing to make an agreement creates a situation that your counterparty absolutely hates–that even what is from their perspective a bad deal is better from their standpoint than no deal–and so that failing to make an agreement creates a situation that you rather like–so that only what is from your perspective a very good deal is better than no deal…
With respect to the debt ceiling, however, no effort has been made to prepare the ground at all: no steps have been taken to signal what actions the administration will take after the debt ceiling has been reached that will make the situation one that Republican politicians will hate and that Democratic politicians can live with. And without such a strategy in place, the Obama administration has no bargaining power on the debt ceiling.
Here’s my rationale: There are two negotiations going on. The Obama administration would like to resolve the fiscal cliff deal in their favor as soon as possible. The Republicans are worried that the tax increases that will ensue if negotiations fail will rebound to their disadvantage. They know that they will have more leverage in the debt limit negotiations that will soon follow. Hence, they are more likely to concede in the fiscal cliff negotiations if they think they will be in strong position in the debt limit negotiations. If Obama explores constitutional solutions to the debt limit increase that sidelines the House, this will impact the fiscal cliff negotiations. Then, the Republicans will be less likely to concede the middle class tax cut now and bargain about entitlements later because they will believe they have less leverage later.
Therefore, Obama should not bring up any exit option from the debt limit negotiations. No trillion dollar platinum coin should be invoked right now. Of course, when the debt limit does come up, the coin comes out. Ha ha.
But we can take this one step further in the usual hall-of-mirrors style of game theory. The Republicans know all the analysis above and have done it themselves. Hence, they know they will have no leverage in the debt limit negotiations as Obama will then pull out the platinum coin from his pocket. Hence, the only leverage they have is via holding up the middle class tax cut. Hence, Obama is in a weak position in the fiscal cliff negotiations and in a strong position in the debt limit negotiations. Of course, his threat point is the fiscal cliff taxes, sequesters etc. but at the risk of causing a recession next year. So, really, in superrational backward induction world, everyone has the analysis backwards – Obama weak now, strong later.
But hold on, this is not only assuming a lot of backward induction but also certainty that the platinum coin or some other constitutional fix works. We cannot be sure. Hence, the Republicans do have some leverage in the debt limit negotiations. Their wiggle rom comes from this uncertainty. But then we are back at square one!
Or we can throw up our hands, say this is all too complicated, and stick with my simpler rationale…..
From the blog of The Socialist Party of Great Britain, via Markus Mobius:
What Shapley and Roth had in fact worked on was how to allocate resources to needs in a non-market context. As the Times went on to say, they worked out in theory (Shapley) and practice (Roth) how to match ‘doctors to hospitals, students to dorm rooms and organs to transplant patients,’ adding ‘such matching arrangements are essential in most Western countries where organ-selling is illegal, and the free market cannot do the normal work of resource allocation’ (like allocating organs to those who can pay the most).
And this:
So, we really are talking about a non-market way of allocating resources. As socialism will be a non-market society where the price mechanism won’t apply to anything, the winners’ research will be able to be used for certain purposes even after the end of capitalism; which is not something that can be said of the work of most winners of the Nobel Prize for Economics.
No doubt it would continue to be used to allocate organs to transplant patients and students to rooms. In fact, this last could be extended to allocating housing to people living in a particular area. While they may not get their first choice, people would get something for which they had expressed some preference and that corresponded to their needs and circumstances. It might even help answer Bernard Shaw’s question, ‘Who will live on Richmond Hill in socialism?’ Since socialism will be a non-market society the answer can’t be, as it is under capitalism today, ‘those who want to and who can afford to.’ This would not only be ‘repugnant’ but impossible.
Next week Drew, Oliver and Eric do it “Gangnam Style”.
From the blog (?) notes.unwieldy.net:
The average New York City taxi cab driver makes $90,747 in revenue per year. There are roughly 13,267 cabs in the city. In 2007, NYC forced cab drivers to begin taking credit cards, which involved installing a touch screen system for payment.
During payment, the user is presented with three default buttons for tipping: 20%, 25%, and 30%. When cabs were cash only, the average tip was roughly 10%. After the introduction of this system, the tip percentage jumped to 22%.
He calculates that the tip nudge increased cab revenues by $144,146,165 per year.
According to multiple Fox sources, Ailes has issued a new directive to his staff: He wants the faces associated with the election off the air — for now. For Karl Rove and Dick Morris — a pair of pundits perhaps most closely aligned with Fox’s anti-Obama campaign — Ailes’s orders mean new rules. Ailes’s deputy, Fox News programming chief Bill Shine, has sent out orders mandating that producers must get permission before booking Rove or Morris…Inside Fox News, Morris’s Romney boosterism and reality-denying predictions became a punch line. At a rehearsal on the Saturday before the election, according to a source, anchor Megyn Kelly chuckled when she relayed to colleagues what someone had told her: “I really like Dick Morris. He’s always wrong but he makes me feel good.”
For law journals at least:
IT IS A COMMON PRACTICE among law review editors to demand that authors support every claim with a citation. These de- mands can cause major headaches for legal scholars. Some claims are so obvious or obscure that they have not been made before. Other claims are made up or false, making them more diffi- cult to support using references to the existing literature.
Legal scholars need a source they can cite when confronted with these challenges. It should be something with an impressive but ge- neric title. I offer this page, with the following conclusion: If you have been directed to this page by a citation elsewhere, it is plainly true that the author’s claim is correct. For further support, consult the extensive scholarship on the point.1
The footnote, of course points to the article itself.
Mortarboard motion: Justin Wolfers
Because talking takes time. And how much time it takes to talk depends in large part on how much time it takes to think of what you are going to say. The time spent reveals how much thinking you did. Here’s where truthtelling distinguishes itself. The time it takes to tell the truth is just the time it takes to remember what actually happened.
The time it takes to lie is the time it takes to invent a lie, check that its consistent with the facts, and invent all of the subsequent lies you are going to have to tell in order for your whole story to hang together.
Last summer, archaeologists working in the central courtyard of Estonia’s Karksi Castle uncovered a 50-centimeter-thick layer of rich black dirt. As the researchers dug deeper, they realized they had discovered the remains of the castle’s first garbage pit. Preserved inside was a snapshot of what the first inhabitants of Karksi Castle—dozens of German knights and their servants—had eaten and discarded more than 800 years before.
The pit’s wet soil had preserved a wide variety of objects, such as hazelnuts, fish scales, animal bones, and hemp seeds, says archaeologist Heiki Valk of the University of Tartu in Estonia. But what surprised Valk most was what wasn’t in the garbage. “The early material is very strange—there’s absolutely no local pottery,” he says. “The colonists came with a lifestyle that didn’t fit the local environment at all. They were a little island, with everyday life just like it was in Germany.”
By Ivo Welch. Here is the abstract:
This paper analyzes referee recommendations in two settings: The first setting is a prestigious finance conference, in which a computer algorithm matched referees to papers based only on shared expertise. The second setting is the standard journal process, with data from eight prominent economics and finance journals (ECMTA, JEEA, JET, QJE, IER, RAND, JF, RFS). Despite referee selection differences, the data suggest similar referee behavior in both settings. First, referees display only modest consensus. Second, referees disagree not only about scales (a referee mean effect), but also about the relative ordering of papers. Third, the bias measured by the average generosity of the referee on other papers is about as important in predicting a referee’s recommendation as the opinion of another referee on the same paper.
In sum, the typical referee report consists roughly of one part signal of some referee- agreeable objective attribute of the paper and two parts (referee-specific) noise. In turn, the noise itself consists roughly of one part referee-mean effect (bias) and two parts unidentified effects or noise.
The random selection of referees removes this potential objection.
Its 61F today in Chicago and its going to push 70 tomorrow. According to my phone it will drop down to normal seasonal temperatures by the end of the week but according to my phone that downward trend has been expected for each of the last three weeks and it hasn’t happened. My phone hasn’t identified the structural change yet.
That got me thinking about some indices of global warming that weather forecasters might want to start tracking.
- The flipflop index: How late in the season will I still be putting on flipflops to take out the recycling? Current value: Dec 2 and counting.
- The Giro index: How many times will I have to go back into the crawl space to get the kids bike helmets out because there is yet another day of bike-friendly temperatures? Current value: 3.
- The Christmas/tennis index: How many days will I play tennis outside in view of christmas trees for sale in the neighboring lot? Current value: 1 as of tomorrow morning.
- Tulip index: How many times will we have to buy another supply of tulip bulbs and not plant them because I threw away the last pile thinking that Winter had finally put a stop to that cycle of self-deception? Current value: I learned my lesson last year.
Any others? These data will be updated as the season (supposedly) progresses.
Via Matt Yglesias:
The self-correcting ticket price.
It’s clear that lots of sports franchises suffer from suboptimal ticket-pricing schemes. Between games that feature many empty seats, games that sell out entirely, and the ability of scalpers to obtain profits on the secondary market, money is obviously being left on the table. The University of Minnesota is trying an interesting idea with its new Golden Ticket pricing concept that for $75 lets you attend all nine Big Ten men’s basketball matchups.
But with a catch.
The catch is that if you go to a game and Minnesota loses, then your pass expires.
The idea is that demand is low for games against weak opponents so Golden Ticket holders will fill the empty seats. They will find it too risky to attend the games against strong opponents freeing up supply to accomodate the increased demand for those games.
Coonskin curl: Mark Witte.
Here is an email I got from the Romney campaign:
You’ve stepped up
Sandeep,This week, supporters from all over the country heeded our call to raise $7 million in 7 days to bring our message into new states. Because of you we have reached our goal in just 5 days and are now on air, sharing our plan to create 12 million new jobs.
Thank you for believing it’s time for real change, and that America can do better than the last four years.
Now, with 3 days left we are asking you to dig a little deeper to support our effort to raise $2 million by tonight.
Here is one from the Obama campaign:
Hey
Sandeep –
This is in your hands now.
Chip in $141, and let’s go win.
Turns out the Hey worked better in randomized trials and so they went with it.
From Schelling’s seminal Essay on Bargaining:
A potent means of commitment, and some-times the only means, is the pledge of one’s reputation. If national representatives can arrange to be charged with appeasement for every small concession, they place concession visibly beyond their own reach. If a union with other plants to deal with can arrange to make any retreat dramatically visible, it places its bargaining reputation in jeopardy and thereby becomes visibly incapable of serious compromise. (The same convenient jeopardy is the basis for the universally exploited defense, “If I did it for you I’d have to do it for everyone else.”) But to commit in this fashion publicity is required. Both the initial offer and the final outcome would have to be known; and if secrecy surrounds either point, or if the outcome is inherently not observable, the device is unavailable.
Grover’s Pledge has been signed by 219 members of the House and 39 Senators.
Kunz was a sociologist at Brigham Young University. Earlier that year he’d decided to do an experiment to see what would happen if he sent Christmas cards to total strangers.
And so he went out and collected directories for some nearby towns and picked out around 600 names. “I started out at a random number and then skipped so many and got to the next one,” he says.
To these 600 strangers, Kunz sent his Christmas greetings: handwritten notes or a card with a photo of him and his family. And then Kunz waited to see what would happen.
But about five days later, responses started filtering back — slowly at first and then more, until eventually they were coming 12, 15 at a time. Eventually Kunz got more than 200 replies. “I was really surprised by how many responses there were,” he says. “And I was surprised by the number of letters that were written, some of them three, four pages long.”
The premise of this article is that people feel compelled to reciprocate your generosity. And once you know that, you can take advantage of it.
Exhibit A: those little pre-printed address labels that come to us in the mail this time of year along with letters asking for donations.
Those labels seem innocent enough, but they often trigger a small but very real dilemma. “I can’t send it back to them because it’s got my name on it,” Cialdini says. “But as soon as I’ve decided to keep that packet of labels, I’m in the jaws of the rule.”
The packet of labels costs roughly 9 cents, Cialdini says, but it dramatically increases the number of people who give to the charities that send them. “The hit rate goes from 18 to 35 percent,” he says. In other words, the number of people who donate almost doubles.
The article also touches on doctors, waiters, and Hare Krishnas.
