Weekly Roundup 101: A Curated Linkfest For The Smartest People On The Web
Handpicked to satisfy your intellectual curiosity!
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Must Read Articles!!!
SciVee-The You Tube Of Science & Scholarly Papers– Videos of Scientists Presenting their latest research
Patience and Finance – By Andrew Haldane – via Sahil & Value Investing World -In the East, it is said:
“One moment of patience may ward off great disaster One moment of impatience may ruin a whole life” [Chinese Proverb] In the West, it is said: “I often make more money when I am snoozing than when I am active” [Warren Buffett] These observations have common conceptual roots. Underlying both lies patience. Patience, or its alter ego impatience, is a key factor shaping inter-temporal decisions. Whether to save or spend, trade or invest, work or quit, stick or twist. As such, patience has important implications for the evolution of economic and social systems. This paper considers the role of patience in decision-making, in particular financial decision-making. Patience is not static; it evolves. This paper brings together lessons from economics, history, psychology, neurology, sociology to assess patience and its implications for the evolution of economic and financial systems.
Best Science Writers in 2010 – Via SuperScholar – Scientists are perhaps the most influential people in the world today. They are responsible not only for the great practical advances in medicine and technology, but they also give us a deep understanding of what the world is and how it works. Their role in shaping the worldview of our culture is unrivaled.
The Talented Mr. Young: Profile of a Con Artist – via Longform – Alan Young has been running the same scam for years; posing as a member of the Temptations and smooth-talking his way into luxury hotel rooms and prostitutes. Despite his clear charm, he admits he has “no skills other than being a con man.”
How to Set the Bullshit Filter When the Bullshit is Thick – via Wired – Many of us consider science the most reliable, accountable way of explaining how the world works. We trust it. Should we? John Ioannidis, an epidemiologist, recently concluded that most articles published by biomedical journals are flat-out wrong. The sources of error, he found, are numerous: the small size of many studies, for instance, often leads to mistakes, as does the fact that emerging disciplines, which lately abound, may employ standards and methods that are still evolving. Finally, there is bias, which Ioannidis says he believes to be ubiquitous. Bias can take the form of a broadly held but dubious assumption, a partisan position in a longstanding debate (e.g., whether depression is mostly biological or environmental) or (especially slippery) a belief in a hypothesis that can blind a scientist to evidence contradicting it. These factors, Ioannidis argues, weigh especially heavily these days and together make it less than likely that any given published finding is true.
Trying To Do Too Much: Why Multitasking Fails – via SciAm – When we do two things at the same time, our brain divides the work in half, literally: each hemisphere concentrates on one task, reports a study in the April 16 issue of Science. Researchers measured brain activity in volunteers performing letter-pairing tests. When subjects had to deal with two streams of letters, concurrently performing two pairing tasks, the activity in one half of the brain corresponded to one task, and the activity in the other half corresponded to the other task. The study might explain why people are notoriously poor at doing three or more things simultaneously. After two tasks, we run out of hemispheres.
Video: Charlie Munger Pick-A Short History of Nearly Everything: Bill Bryson – via Fora.tv – Celebrated author Bill Bryson will give a lecture in the Great Hall at the Guildhall in honour of the 350th anniversary of the Royal Society. Bill Bryson is the internationally bestselling author of many books, including Mother Tongue, Notes from a Big Country, The Life and Times of the Thunderbolt Kid and A Short History of Nearly Everything, which was shortlisted for the Samuel Johnson Prize, won the Aventis Prize for Science Books in 2004 and was awarded the Descartes Science Communication Prize in 2005.
Miguel’s Favorite Articles
What We Can Learn From The Stock Market Genius That Wall Street Loves to Ignore – via MoneyMorning – here’s a reason Money Morning’s Martin Hutchinson is so good at anticipating changes in the global financial markets – he has an intimate understanding of market history. Many of those insights are detailed in his new book, “Alchemists of Loss,” in which he also profiles some of the leading thinkers throughout history. One of the most brilliant was stock-market genius Benoit B. Mandelbrot, the subject of today’s column.
Neuroimaging Love – Romance Is More Scientific Than You Think – via Science 2.0 – Do you fall in love using your heart or your brain? It depends. For your brain, says a new discovery that won’t discourage drug use by Syracuse University Professor Stephanie Ortigue, falling in love elicits the same euphoric feeling as using cocaine, but it also affects intellectual areas of the brain. That’s a pretty big endorsement of the brain being number one in romance. So if love is in the brain and not the heart, is there ‘love at first sight’ after all? The science says yes, according to the researchers, who found falling in love only takes about a fifth of a second.
Being in Someone Else’s Head is Exhausting – via Psychology – More and more research suggests that our brains have difficulty differentiating between observing an action and actually participating in it. Empathy, for example, seems to hinge in part on our ability to “take on” another’s emotions through vicarious experience. I always think of this when watching a comedian fall flat. I can feel the embarrassment as if I’m standing there on stage looking at a room full of blank stares.
Bill Gates on USA vs Ancient Rome – via The Gates Notes – Although the U.S. has faced significant challenges in recent decades, Vaclav Smil points out in a new book why comparisons with the decline of the Roman Empire fall short. Vaclav Smil has written another very informative book called “Why America is Not a New Rome.” This is the third book of his to come out this year. I have previously reviewed and recommended both of the others, which focus on energy. Although energy is not the primary topic of this book, Smil still does his normal, thorough, fact-driven logical job on this topic
Asch’s conformity study without the confederates – via BPS Research – With the help of five to eight ‘confederates’ (research assistants posing as naive participants), Solomon Asch in the 1950s found that when it came to making public judgments about the relative lengths of lines, some people were willing to agree with a majority view that was clearly wrong.
The Resource Curse: Does the Emperor Have No Clothes? – Plawtoic – Over 1.5 billion people live in countries whose economies are dependent on the revenue from natural resource exports. With growing demand from China and other emerging markets, the demand for minerals and oil will continue to increase. And prices will increase even further in response to the accelerated depletion of these non-renewable resources. What effect will mushrooming reliance on oil and minerals have on commodity exporters’ politics, legal institutions, and economics?
Sex and Money on the Brain – via Neuroskeptic – Now twenty years later a team of French neuroscientists have followed up on this observation with a neuroimaging study: The Architecture of Reward Value Coding in the Human Orbitofrontal Cortex. Sescousse et al note that people like erotic stimuli, i.e. porn, and they also like money. However, there’s a difference: porn is, probably, a more “primitive” kind of rewarding stimulus, given that naked people have been around for as long as there have been people, whereas money is a recent invention.
Video: Open Education for an Open World– via Mit – In Charles M. Vest’s expansive vision, scientists and engineers around the world are creating a “meta university” as they increasingly share ideas and build on common knowledge. Technology enables this integration of minds, leading us toward “an era better called brain circulation,” he says.
Getting Lost in Buildings – via Sagepub – People often get lost in buildings, including but not limited to libraries, hospitals, conference centers, and shopping malls. There are at least three contributing factors: the spatial structure of the building, the cognitive maps that users construct as they navigate, and the strategies and spatial abilities of the building users. The goal of this article is to discuss recent research on each of these factors and to argue for an integrative framework that encompasses these factors and their intersections, focusing on the correspondence between the building and the cognitive map, the completeness of the cognitive map as a function of the strategies and individual abilities of the users, the compatibility between the building and the strategies and individual abilities of the users, and complexity that emerges from the intersection of all three factors. We end with an illustrative analysis in which we apply this integrative framework to difficulty in way-finding.
So, what makes you happy? – via NeurRealism – Research on the factors increasing or decreasing happiness has been of interest to psychologists and economists alike. Early research indicated that, contrary to our intuition, that major life events such as winning the lottery did not change our long-term ratings of our happiness. In other words, after a major life change, you will experience a temporary change in your happiness, but will return to being as happy as before the event. Such findings led to the set-point hypothesis that stated that each of us has an innate level of happiness, and that outside events, even large ones, don’t have a major influence on that set point.
Time flies with music whatever its emotional valence – via Science Direct – The present study used a temporal bisection task to investigate whether music affects time estimation differently from a matched auditory neutral stimulus, and whether the emotional valence of the musical stimuli (i.e., sad vs. happy music) modulates this effect. The results showed that, compared to sine wave control music, music presented in a major (happy) or a minor (sad) key shifted the bisection function toward the right, thus increasing the bisection point value (point of subjective equality). This indicates that the duration of a melody is judged shorter than that of a non-melodic control stimulus, thus confirming that “time flies” when we listen to music. Nevertheless, sensitivity to time was similar for all the auditory stimuli. Furthermore, the temporal bisection functions did not differ as a function of musical mode.
Does cheering really increase the likelihood your team will win? – via Bakadesuyo – As crowd noise is a valid cue, referee decisions are strongly influenced by crowd noise.
Does seeing the word “sale” make you less likely to comparison shop? – via Barking Up The Wrong Tree – . We find that subjects search less in both treatments with discounts. Hence, we conclude that retailers can use this framing effect in order to reduce the competitiveness in their market, since decreased search intensities dampen competitive pressure.
Are risk aversion and impatience related to cognitive ability? – via Bakadesuyo – We find that lower cognitive ability is associated with greater risk aversion, and more pronounced impatience. These relationships are significant, and robust to controlling for personal characteristics, educational attainment, income, and measures of credit constraints. We perform a series of additional robustness checks, which help rule out other possible confounds.
Need a Break? Depends on Your Concept of Willpower – via Aps – Do you ever find yourself burning the candle at both ends? Friends may tell you to slow down or take a break but new findings, published in Psychological Science, challenge the long-held theory that willpower is a limited resource that needs to be replenished by rest. The Stanford team of Veronika Job, Carol Dweck and Greg Walton suggest the urge to refresh is all in your head. They’ve found that a person’s mindset and personal beliefs about willpower determine how long and how well they’ll be able to work on a tough mental exercise.
The impact of music festival attendance on young people’s psychological and social well-being – via Sage – Although the social, emotional, physical and cognitive benefits of engagement in music are well known, little research has been conducted on the psychological benefits of music in the context of music festivals. This article draws on theoretical constructs from the field of positive psychology to interpret the impact of music festival attendance on participants’ psychological and social well-being. Qualitative and quantitative data were collected from a focus group and questionnaire survey with young festival-goers aged 18–29 years. Four facets of the music festival experience were identified that were associated with well-being outcomes. These are explored and discussed with reference both to participants’ focus group comments and statistical analysis of questionnaire responses. A conceptual model is presented in order to guide further research in this area, and enable both festival organizers and attendees to take optimal advantage of the potential of music festivals to impact positively on young adults’ psychological and social well-being.
Two Languages, Two Personalities? Examining Language Effects on the Expression of Personality in a Bilingual Context – via Sage – The issue of whether personality changes as a function of language is controversial. The present research tested the cultural accommodation hypothesis by examining the impact of language use on personality as perceived by the self and by others. In Study 1, Hong Kong Chinese-English bilinguals responded to personality inventories in Chinese or English on perceived traits for themselves, typical native speakers of Chinese, and typical native speakers of English. Study 2 adopted a repeated measures design and collected data at three time points from written measures and actual conversations to examine whether bilinguals exhibited different patterns of personality, each associated with one of their two languages and the ethnicity of their interlocutors. Self-reports and behavioral observations confirmed the effects of perceived cultural norms, language priming, and interlocutor ethnicity on various personality dimensions. It is suggested that use of a second language accesses the perceived cultural norms of the group most associated with that language, especially its prototypic trait profiles, thus activating behavioral expressions of personality that are appropriate in the corresponding linguistic-social context.
Speakers with a foreign accent are perceived as less credible – and not just because of prejudice – via BPS Research – Speakers with a foreign accent are perceived as less believable than native speakers. A new study shows this isn’t just because of prejudice towards ‘outsiders’. It also has to do with the fluency effect, one manifestation of which is our tendency to assume that how easily a message is processed is a mark of its truthfulness. The effort required to understand an accented utterance means that the same fact is judged as less credible when uttered by an accented speaker, compared with a native speaker. This remains true even if the accented speaker is merely passing on a message from a native speaker.
The Allais Paradox – via Wired – Maurice Allais, a Nobel prize winning economist, died earlier this month. In this post, I’m going to focus on one of his many intellectual contributions, as it profoundly influenced modern psychology. It’s known as the Allais Paradox, and it was first outlined in a 1953 Econometrica article. Here’s an example of the paradox: Suppose somebody offered you a choice between two different vacations. Vacation number one gives you a 50 percent chance of winning a three-week tour of England, France and Italy. Vacation number two offers you a one-week tour of England for sure.
When in doubt, shout – why shaking someone’s beliefs turns them into stronger advocates – via Discover – You don’t have to look very far for examples of people holding on to their beliefs in the face of overwhelming evidence to the contrary. Thousands still hold to the idea that vaccines cause autism, that all life was created a few thousand years ago, and even that drinking industrial bleach is a good idea. Look at comment threads across the internet and you’ll inevitably find legions of people who boldly support for these ideas in the face of any rational argument.
Walking could protect brain against shrinking, US research says – via Guardian – Old man walking on an anonymous street Walking could protect the brain against shrinking, US researchers have found. The historian George Macaulay Trevelyan wrote in 1913 that he had two doctors: “My left leg and my right”. Now a report appears to show that the simple medicine of putting one foot in front of another is a potential defence against dementia and Alzheimer’s. Walking may protect the brain against shrinking and preserve memory in the elderly, according to research by US neurologists who monitored 300 volunteers over 13 years. The data lends statistical authority to anecdotal findings, including the legendary perambulations of Alfred Wainwright, Benny Rothman and the Guardian’s Harry Griffin. Although very different in character – a grump, a communist warrior and an ex-brigadier – they lived for a combined total of 268 years thanks, in their own estimation, to lives spent largely on foot and outdoors.
How the Search for Your Life’s Work is Making Your Working Life Miserable – via Study Hacks – This story is important because it emphasizes that one of the most universal and powerful ideas in modern society, that the key to workplace happiness is to follow your passion, has a surprisingly humble origin. What began as a quip jotted down on a blackboard grew into the core principle guiding our thinking about work. “What color is my parachute?”, we now ask, confident that answering this question holds the answer to The Good Life.
Is democracy really worth it? – via Economic Logic – The empirical evidence on the economic impact of democracy is really mixed. While the literature tends to show that democratization is good for the poorest economies, the opposite is true for rich ones. My hunch is that the poorest economies are in such a state because of massive mismanagement, in particular corruption, and a democracy can avoid the brunt of this.
Until Death Do Us Part? The economics of short-term marriage contracts – via Ideas – “Until death do us part”. Common wisdom considers that marriages will last forever, as the default length of a marriage is the total remaining lifespan of the spouses. This paper aims at questioning the prevailing marriage contracts, by exploring the conditions under which short-term contracts would be more desirable. Using a two-period collective household model, we show that, under a large interval of values for household production technology parameters and individual preference parameters, short-term marriage contracts, if available, would dominate long-term contracts. Moreover, the recent equalization of bargaining power within the household is shown to make short-term contracts even more desirable than in the past.
Online herding and lemming-like cascades – via Herd – “Social influence drives both offline and online human behavior. It pervades cultural markets, and manifests itself in the adoption of scientific and technical innovations as well as the spread of social practices”
Risk & Psychiatry – via Frontiers Psych – Most commentators link the emergence of the word and concept of ‘risk’ with maritime activity during the pre-modern period. The early meaning referred to the perils of the natural world that could befall a voyage and therefore excluded the idea of human fault and responsibility. This way of considering risk changed with modernity and was influenced by the notion, emerging from the Enlightenment, that the key to human progress and social order is an objective knowledge of the world through scientific exploration and rational thinking. This assumes that the social and natural worlds follow laws that may be measured, calculated and therefore predicted.
When Firefighters Don’t Fight – via Predictably Irrational – Recently, a flaming trashcan ignited a house in Tennessee. Local authorities were notified and a crew of firefighters rushed to the scene to put out the fire just in time.
Going on a Diet? Start Paying in Cash – via Economix- Paying with credit or debit cards makes people more likely to make impulsive, unhealthy food purchases, according to a new study in The Journal of Consumer Research.
Using Cost Argument to Push Price Increases – via iterative path -Prices of commodities from sugar, wheat, cocoa to cotton are on the rise. Brands from Starbucks to Sara Lee to garment makers are starting to state their intention to pass on cost increases to customers. In a recent interview, CEO of Kroger, David Dillon said this about this cost argument made by brands,
Interview: Influence Is Like Flowers and Candy – via HardCourtLessons- Without question, leadership and influence go hand in hand with another. The most effective leaders are those that posses the ability to lead those around them from one place to the next.
Will shoppers pay more for stuff they can touch? – via Nudge – We’ve been getting a few emails about the recent CalTech study (gated here) that finds that consumers are willing to pay as much as 50 percent more for goods they can see and touch versus ones they can only look at with pictures or imagine with words. It’s an interesting study, but the Nudge blog is cautious about extrapolating too much from it. For example, it doesn’t warrant drawing clear implications about online vs. brick-and-mortar retailers, specifically why the latter can automatically charge higher prices.
How to Push Past the Pain, as the Champions Do – via Uveal Blues – And that is one of the secrets of elite athletes, said Mary Wittenberg, president and chief executive of the New York Road Runners, the group that puts on the ING New York City Marathon. They can keep going at a level of effort that seems impossible to maintain. “Mental tenacity — and the ability to manage and even thrive on and push through pain — is a key segregator between the mortals and immortals in running,” Ms. Wittenberg said. The mentality was I will do whatever it takes to win,” he added. “I was totally willing to have the worst pain. I was totally willing to do whatever it takes to win the race.”
Economics, psychology and the history of consumer choice theory – via Cambridge Journal of Economics – This paper examines elements of the complex place/role/influence of psychology in the history of consumer choice theory. The paper reviews, and then challenges, the standard narrative that psychology was ‘in’ consumer choice theory early in the neoclassical revolution, then strictly ‘out’ during the ordinal and revealed preference revolutions, now (possibly) back in with recent developments in experimental, behavioural and neuroeconomics. The paper uses the work of three particular economic theorists to challenge this standard narrative and then provides an alternative interpretation of the history of the relationship between psychology and consumer choice theory
The methodologies of neuroeconomics – via Inforworld- We critically review the methodological practices of two research programs which are jointly called ‘neuroeconomics’. We defend the first of these, termed ‘neurocellular economics’ (NE) by Ross (2008), from an attack on its relevance by Gul and Pesendorfer (2008) (GP). This attack arbitrarily singles out some but not all processing variables as unimportant to economics, is insensitive to the realities of empirical theory testing, and ignores the central importance to economics of ‘ecological rationality’ (Smith 2007). GP ironically share this last attitude with advocates of ‘behavioral economics in the scanner’ (BES), the other, and better known, branch of neuroeconomics. We consider grounds for skepticism about the accomplishments of this research program to date, based on its methodological individualism, its ad hoc econometrics, its tolerance for invalid reverse inference, and its inattention to the difficulties involved in extracting temporally lagged data if people’s anticipation of reward causes pre-emptive blood flow.
Latitudes not Attitudes: How Geography Explains History – via History Today – Many reasons have been given for the West’s dominance over the last 500 years. But, Ian Morris argues, its rise to global hegemony was largely due to geographical good fortune.
Video: Pbs Documentary – Nova – Take a dazzling architectural journey inside those majestic marvels of Gothic architecture, the great cathedrals of Chartres, Beauvais and other European cities. Carved from 100 million pounds of stone, some cathedrals now teeter on the brink of catastrophic collapse. To save them, a team of engineers, architects, art historians, and computer scientists searches the naves, bays, and bell-towers for clues. NOVA investigates the architectural secrets that the cathedral builders used to erect their towering, glass-filled walls and reveals the hidden formulas drawn from the Bible that drove medieval builders ever upward
Exclusive Interview: Greenstone Value Opportunity Fund – via Distressed Debt Investing – A few months ago, I received in my inbox the 1Q 2010 letter for the Greenstone Value Opportunity Fund. Not only were their returns spectacular but also their largest position at the time was Tronox, a company we did a distressed debt research piece on earlier in the year. Needless to say, with their candor, their value investing mindset, and their ability to see the forest through the trees in a number of highly complicated situations, I was incredibly impressed. I reached out to founders Chris White and Tim Stobaugh, and asked them a number of questions in the interview below. I was split the interview into two parts, and will post the second part later in the week. Enjoy!
Financing Risk and Bubbles of Innovation – via Working Knowledge – While start-up firms are key to any technological revolution, they also run a high risk of failure. To that end, investors often provide limited capital in several careful stages, gaining confidence in a firm before doling out another round of funding. However, these investors still face the possibility that other investors won’t provide follow-on funding, even when the firm’s prospects remain sound. That’s a big risk for individual investors who can’t afford to fund a new firm all by themselves, and whose investment will flounder if others don’t invest, too. Research by HBS professors Ramana Nanda and Matthew Rhodes-Kropf explores why future investors may not fund the project at its next stage even if the fundamentals of the project have not changed. Key concepts include:
Two Faces: Demystifying the Mortgage Electronic Registration System’s Land Title Theory – via SSRN – Hundreds of thousands of home foreclosure lawsuits have focused judicial scrutiny on the Mortgage Electronic Registration System (“MERS”). This Article updates and expands upon an earlier piece by exploring the implications of state Supreme Court decisions holding that MERS is not a mortgagee in security agreements that list it as such. In particular this Article looks at: (1) the consequences on land title records of recording mortgages in the name of a purported mortgagee that is not actually mortgagee as a matter of law; (2) whether a security agreement that fails to name an actual mortgagee can successfully convey a property interest; and (3) whether county governments may be entitled to reimbursement of recording fees avoided through the use of false statements associated with the MERS system. This Article concludes with a discussion of steps needed to rebuild trustworthy real property ownership records.
Explaining the Housing Bubble – via SSRN – There is little consensus as to the cause of the housing bubble that precipitated the financial crisis of 2008. Numerous explanations exist: misguided monetary policy; government policies encouraging affordable homeownership; irrational consumer expectations of rising housing prices; inelastic housing supply. None of these explanations, however, is capable of fully explaining the housing bubble, much less the parallel commercial real estate bubble. This Article posits a new explanation for the housing bubble. It demonstrates that the bubble was a supply-side phenomenon, attributable to an excess of mispriced mortgage finance: mortgage finance spreads declined and volume increased, even as risk increased, a confluence attributable only to an oversupply of mortgage finance. The mortgage finance supply glut occurred because markets failed to price risk correctly due to the complexity and heterogeneity of the private-label mortgage-backed securities (MBS) that began to dominate the market in 2004. The rise of private-label MBS exacerbated informational asymmetries between the financial institutions that intermediate mortgage finance and MBS investors. The result was overinvestment in MBS that boosted the financial intermediaries’ profits and enabled borrowers to bid up housing prices. Despite mortgage securitization’s inherent informational asymmetries, it is critical for the continued availability of the long-term fixed-rate mortgage, which has been the bedrock of American homeownership since the Depression. The benefits of securitization, therefore, must be reconciled with the need for economic stability. The Article proposes the standardization of MBS to reduce complexity and heterogeneity in order to rebuild a sustainable, stable housing finance market based around the long-term fixed-rate mortgage.
Are State Public Pensions Sustainable? Why the Federal Government Should Worry About State Pension Liabilities – Via ssrn – This paper analyzes the flow of state pension benefit payments relative to asset levels and contributions. Assuming future state contributions fund the full present value of new benefits, many state systems will run out of money in 10-20 years if some attempt is not made to improve the funding of liabilities that have already been accrued. The expected shortfalls raise the possibility that the federal government will be faced with a decision as to whether to bail out states driven to insolvency by their pension programs.