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““In Science you need to understand the world; in business you need others to misunderstand it.”
Important Infographic: Global Obseity from 1980-thru-Today!
Egypt: The Distance Between Enthusiasm and Reality - via Stratfor @ Seth’s Posterous- What we see is that while Mubarak is gone, the military regime in which he served has dramatically increased its power. This isn’t incompatible with democratic reform. Organizing elections, political parties and candidates is not something that can be done quickly. If the military is sincere in its intentions, it will have to do these things. The problem is that if the military is insincere it will do exactly the same things. Six months is a long time, passions can subside and promises can be forgotten.
George Lakoff: What Conservatives Really Want - via Political- Conservatives believe in individual responsibility alone, not social responsibility. They don’t think government should help its citizens. That is, they don’t think citizens should help each other. The part of government they want to cut is not the military (we have 174 bases around the world), not government subsidies to corporations, not the aspect of government that fits their worldview. They want to cut the part that helps people. Why? Because that violates individual responsibility.
Malcolm Gladwell: What College Rankings Really Tell Us – via The New Yorker – The U.S. News & World Report’s annual “Best Colleges” guide is run by Robert Morse, whose six-person team operates out of a small office building in the Georgetown neighborhood of Washington, D.C. Over the years, Morse’s methodology has steadily evolved, and the ranking system looks a great deal like the Car and Driver methodology. It is heterogeneous. It aims to compare Penn State—a very large, public, land-grant university with a low tuition and an economically diverse student body—with Yeshiva University, a small, expensive, private Jewish university. The system is also comprehensive. Discusses suicide statistics. There’s no direct way to measure the quality of an institution, so the U.S. News algorithm relies instead on proxies for quality—and the proxies for educational quality turn out to be flimsy at best. Describes the reputation score and reputational biases. Mentions Michael Bastedo. Jeffrey Stake, a professor at the Indiana University law school, runs a Web site called the Ranking Game, which demonstrates just how subjective rankings are. There are schools that provide a good legal education at a decent price, and, by choosing not to include tuition as a variable, U.S. News has effectively penalized those schools for trying to provide value for the tuition dollar. The U.S. News ranking turns out to be full of these kinds of implicit ideological choices. It gives twice as much weight to selectivity as it does to efficacy.
Want to Influence people? Tell them stories: People remember stories not details- BPS- Evolutionary theories concerning the origins of human intelligence suggest that cultural transmission might be biased toward social over non-social information. This was tested by passing social and non-social information along multiple chains of participants. Experiment 1 found that gossip, defined as information about intense third-party social relationships, was transmitted with significantly greater accuracy and in significantly greater quantity than equivalent non-social information concerning individual behaviour or the physical environment. Experiment 2 replicated this finding controlling for narrative coherence, and additionally found that information concerning everyday nongossip social interactions was transmitted just as well as the intense gossip interactions. It was therefore concluded that human cultural transmission is biased toward information concerning social interactions over equivalent non-social information.
Jurors Less Likely to Convict Defendants Wearing Glasses, Say Lawyers - via ABA – The study also found an “interaction effect” between the defendant’s race and eyeglasses. The African American defendants were rated as more attractive and more friendly when wearing glasses, but the white defendants were not. Both black and white defendants were rated as less threatening when wearing eyeglasses, but the effect was more pronounced for African American defendants.
Understanding Influence Networks! - via Uclouvain – Some behaviors, ideas or technologies spread and become persistent in society, whereas others vanish. This paper analyzes the role of social influence in determining such distinct collective outcomes. Agents are assumed to acquire information from others through a certain sampling process that generates an influence network, and they use simple rules to decide whether to adopt or not depending on the observed sample. We characterize, as a function of the primitives of the model, the diffusion threshold (i.e., the spreading rate above which the adoption of the new behavior becomes persistent in the population) and the endemic state (i.e., the fraction of adopters in the stationary state of the dynamics). We find that the new behavior will easily spread in the population if there is a high correlation between how influential (visible) and how easily influenced an agent is, which is determined by the sampling process and the adoption rule. We also analyze how the density and variance of the out-degree distribution affect the diffusion threshold and the endemic state.
Video: The Lost Interview with Bruce Lee - Brainpickings- A priceless gem from the fine folks at The Internet Archive: Bruce Lee’s only existing television interview, from 1971.
Want to save your relationship? Let your partner Eyeball the Forbidden Fruit (i.e. someone else) - via Freakonomics -The students who were told to focus away from the attractive individuals reported “being less satisfied and committed to their current relationship partner. These same participants were more accepting of infidelity in their relationship, more likely to remember the attractive faces from the task and more apt to pay attention to new attractive faces.” As DeWall puts it: “Deciding for yourself to avoid attractive relationship alternatives can enhance relationship well-being. Our investigation, however, demonstrates that implicitly preventing people from attending to desirable relationship alternatives may undermine, rather than bolster, the strength of that person’s romantic relationship.”
Is China Building Its Own Panama Canal? - via IBD -Today, something much more dramatic is happening. China’s Development Bank is prepared to splash out $7.6 billion to build a whole new railroad “dry canal” on the Colombian side of the isthmus for the China Railway Group to ship goods from Asia to the Atlantic side of the fast-growing South American continent.
Do women like things better if they’re expensive? - via Bakadesuyo – Disclosing the high price before tasting the wine produces considerably higher ratings, although only from women.
Expanding Waistlines Around the World - via Freakonomics – Obesity is far from just an American problem. These nifty maps from the Economist display average BMI for males around the world in 1980 and 2008, and the percentage change. The maps demonstrate that “Polynesia aside, obesity was a rich-world phenomenon in 1980. By 2008 the rich world had itself expanded, bringing obesity to groups within countries that were previously considered poor, such as Brazil and South Africa. During that period, the prevalence rate of obesity among men doubled to nearly 10%. One country has stubbornly resisted this trend. For all its dynamism since India opened up its economy in 1990, its men have on average become even thinner. The study suggests that Congo is the thinnest country in the world, and Nauru the fattest.”
Movies, Music, & Publishing- Risky Business Becomes Riskier: A New Playbook for How Artists Are Compensated - via Knowledge at Wharton- Making a living as an artist has never been easy – whether in film, music or publishing. But the digital revolution — and to a lesser extent, the global economic crisis of the last two years — is transforming the business of content creation. One of the biggest shifts is in how filmmakers, musicians and writers are compensated. There is an evolving relationship between creator and publisher in which the artist bears a larger percentage of the upfront costs for the production and marketing of his or her work. In this new world, artists’ pay is based to a greater degree on how their product sells in the marketplace, a change that has major implications for the content creators themselves, large firms like Hollywood studios and music labels, and consumers.
Economic History: How The World’s Serial Defaulter , Spain, embedded risk & return centuries ago. – Philip II of Spain accumulated debts equivalent to 60% of GDP. He also defaulted four times on his short-term loans, thus becoming the first serial defaulter in history. Contrary to a common view in the literature, we show that lending to the king was profitable even under worst-case scenario assumptions. Lenders maintained long-term relationships with the crown. Losses sustained during defaults were more than compensated by profits in normal times. Defaults were not catastrophic events. In effect, short-term lending acted as an insurance mechanism, allowing the king to reduce his payments in harsh times in exchange for paying a premium in tranquil periods.
The Surprising Link Between Light Pollution and Cancer - via Good -There are plenty of arguments against lighting the night sky: It wastes energy, blots out stars and messes with the nocturnal habits of animals in a big way. Now there’s another reason, one that could go a long way toward convincing humans that whatever sense of safety is conferred by nighttime lighting, it isn’t worth the risk. It turns out that light pollution may be a cancer risk.
Pseudoscience masquerading as neuroscience”: Is there “a growing academic obsession with soundbites and ‘impact’”? - via Brains on Purpose- The famous philosopher Karl Popper once noted that genuine science and pseudoscience are difficult to distinguish. To the uninitiated they can look the same, sound the same and smell the same. If we ourselves, the so-called “experts”, actively conspire to mix fantasy and reality, what hope can the public have of learning about genuine scientific discoveries?
MIT Bloggers and Sorkin Take Down a Derivatives Study - via CJR – A Chamber-backed group commissioned a report from an outfit called Keybridge Research to show that derivatives legislation would cost jobs. Keybridge dutifully did so, coming up with 130,000 jobs that “could” be lost if firms are forced to put up collateral for derivatives trades.
An Important Psychological Test Most Of You Will Fail - via Splintered Mind- The famous Wason Selection Task runs like this: You are to imagine four cards, each with a number on one side and a letter on the other side. Of two cards, you see only the letter side and you don’t know what’s on the number side. Of the other two cards, you see only the number side and don’t know what’s on the letter side. Imagine the four cards laid out as follows:
Altruism: Signalling Corporate Fitness – via PsyFi Blog – Variations on the Prisoner’s Dilemma game are widespread in financial studies. The idea is that two people are faced with a dilemma: if they both support each other and stay silent they get a short sentence, if they both rat on each other they both go to jail for several years but if one of them spills the beans while the other one doesn’t then the latter is banged up for a long time and the other goes free. On a single shot basis it doesn’t pay to be cooperative.
Economic History: The original sin that started only later: How Austria-Hungary’s paper debt turned golden, 1870s – 1913 – via York – Conventional wisdom has that most countries were not able to issue debt denominated in domestic currency before World War I. We show that Austria-Hungary had a vast external paper debt until the 1870s; only then became foreign residents reluctant to hold unsecured debt. Austria-Hungary attempted to counteract the repatriation of paper debt by issuing gold debt. As a result, the external debt became increasingly “golden” but the dual monarchy was a net exporter of capital in the period 1880-1913. This suggests that Austria-Hungary had been free from original sin initially but began to be affected by it in the 1870s. Based on a reconstruction of the balance-ofpayments, we then demonstrate that a strong export performance and large remittances from emigrants counteracted capital exports and interest payments abroad and made gold standard adherence feasible.
Does being creative harm your chances of becoming CEO - via Bakadesuyo- In sum, we show that the negative association between expressing creative ideas and leadership potential is robust and underscores an important but previously unidentified bias against selecting effective leaders.
Video: A Rare Look Inside Pixar Studios - via OpenCulture – Since 1995, Pixar has released a steady stream of award-winning animated films. First came Toy Story, then Finding Nemo, Monsters, Inc., The Incredibles, and most recently Toy Story 3. (You can revisit Pixar’s classics in this wonderful little tribute video.) Getting inside Pixar Studios has never been easy. But last week The New York Times pulled it off, producing a six minute video that takes you through the studios designed by Steve Jobs himself, and inside Pixar’s patented animation process – a process that combines more traditional and cutting-edge elements.
What personality inventories tell us about how we’re all just like one another - via Citation Needed – …it’s just a nice reminder that most of us are not really very good at evaluating where we stand in relation to other people, at least for many traits (for more on that, go read Simine Vazire’s work). The nominal midpoint on most personality scales is usually quite far from the actual median in the general population. This is a pretty big challenge for personality psychology, and if we could figure out how to get people to rank themselves more accurately relative to other people on self-report measures, that would be a pretty huge advance. But it seems quite likely that you just can’t do it, because people simply may not have introspective access to that kind of information.
Mortgage Backed Securities How Important Is Skin In The Game – via Seth’s Posterous- Financial reform legislation passed by Congress in 2010 requires mortgage originators to retain some loss exposure on the mortgages they securitize. Recent research compares the performance of mortgage-backed securities for different types of issues in which originators retain different degrees of loss exposure. The findings suggest that retention of even modest loss exposure by originators reduces moral hazard and is associated with significantly lower loss rates on these securities. Many analysts believe that, during the housing boom of the 2000s, the widespread securitization of residential mortgages fundamentally altered the incentives of key players in the loan origination and funding process. A basic problem with the originate-to-distribute model of lending is that mortgage originators and the sponsors of mortgage-backed securities (MBS) have too little “skin in the game,” these critics argue. In contrast to traditional lending, in which vertically integrated lenders own and service the loans they originate, securitization involves different agents performing different services, often for fees that are unrelated to the performance of the securitized mortgage loans. A resulting danger is that originators and sponsors pay too little attention to the riskiness of the mortgages they originate or place into pools they sponsor.
The stock market hates dirty air – via Boston.com -One of the main arguments against regulating air pollution is that the regulations hurt business. But, in an ironic twist, a new study suggests that the pollution itself hurts business where it arguably counts most: the stock market. Analyzing daily index returns from several stock exchanges over a 10-year period, the authors of the study found that stock returns were generally lower on days with poor air quality ratings in the vicinity of the stock exchange. The effect is significant: Trading stocks based on day-to-day air quality ratings might have allowed you to beat the annual return on the S&P 500 by several percentage points.
Video & Article: What does behavioral economics look like in a marketing campaign? Draftfcb has some answers - via Nudge Blog – Today’s behavioral economists haven’t become marketers, but the discipline’s work is now finding its way back into marketing as a framework to systematically and strategically think about crafting clever campaigns. The advertising agency Draftfcb is one place where behavioral economics ideas are percolating through more than a few minds. Some of these thoughts have started appearing in a series of video blogs under the title “Lessons in Marketing to Crazy People.”
A New Investing Strategy: The Other Side of Value - via Empirical Finance Blog – “Profitability, as measured by gross profits-to-assets, has roughly the same power as book-to-market predicting the cross-section of average returns. Profitable firms generate significantly higher average returns than unprofitable firms, despite having, on average, lower book-to-markets and higher market capitalizations. Controlling for profitability also dramatically increases the performance of value strategies. These results are difficult to reconcile with popular explanations of the value premium, as profitable firms are less prone to distress, have longer cashflow durations, and have lower levels of operating leverage, than unprofitable firms. Controlling for gross profitability explains most earnings related anomalies, as well as a wide range of seemingly unrelated profitable trading strategies.”
Social Media: What happens when your life is torn open? - via wired – On this future network, we will all know what everyone is doing all the time. It will be the central intelligence agency for 21st century life. As Don Tapscott and Anthony D Williams argue in their 2010 book Macrowikinomics, today’s “age of network intelligence” represents a “turning point in history” equivalent to the Renaissance. They are, in a sense, right. On today’s internet everything we do — from our use of ecommerce, location services and email to online search, advertising and entertainment — is increasingly open and transparent. And it is this increasingly ubiquitous social network — fuelled by our billions of confessional tweets and narcissistic updates — that is invading the “sacred precincts” of private and domestic life.
Is oxytocin truly a universal social panacea? – via DR Shock – Oxytocin only improved empathetic accuracy in less socially proficient individuals not in more socially proficient individuals. Oxytocin does not acts as a universal prosocial enhancer that can render all people social-cognitive experts. This is against my hypothesis but nevertheless more in relation to reality that oxytocin is not the new social drug we thought it to be.
My, What a Big Salad You Have: When people see health food as larger, they are more likely to want to eat it- via SciAm- revious research suggests that people are more likely to choose foods perceived as “bigger” at mealtimes. So if you’re trying to eat better, try flipping through the veggie chapter in a cookbook rather than sitting through the junk food ads on TV—seeing pictures of nutritious items could influence your choices.
Being Multilingual Helps with Multitasking - via SciAm- At a session of the annual meeting of the American Association for the Advancement of Science, researchers discussed some of the benefits of being multilingual, such as heightened focus and better multitasking. Cynthia Graber reports
China, Treasuries, and US - via Reuters- As the U.S. Federal Reserve grappled with the aftershocks of financial crisis, the Chinese, like many others, suffered huge losses from their investments in American financial firms — from Lehman Brothers to the Primary Reserve Fund, the money market fund that broke the buck. The cables, obtained by WikiLeaks, show that escalating Chinese pressure prompted a procession of soothing visits from the U.S.Treasury Department. In one striking instance, a top Chinese money manager directly asked U.S. Treasury Secretary Timothy Geithner for a favor.
Is there a particular kind of lighting that makes you want to buy things? - via Bakadesuyo- Overall, participants indicated that they preferred advertisements with leftward lighting and were more likely to purchase these products in the future than when the same products were lit from the right. Findings are consistent with previously observed leftward lighting biases and suggest that advertisements with a leftward lighting bias might be more effective.
The Confirmation Bias – The Case of Green-Nano-Cyber-Tech Corporation - via Market Psych- The Confirmation Bias is the tendency to seek out and interpret all information as supporting what you WANT to be right.
Musings On Markets: Dividend Policy - via Aswath Damodaran – The best way to describe dividend policy at most US and European companies is that dividends are sticky. Put differently, the dividend per share this year at most companies will be set at either last year’s level or will be a little bit more. Cutting dividends is viewed as an action of last resort, when all else has been tried and failed. If you combine the reluctance to cut dividends with their stickiness, it is no wonder that dividend changes lag earnings changes. In fact, a study, by John Lintner in 1956, of how US companies set dividends came to almost exactly the same conclusions, showing how little dividend policy has changed over the decades. This policy, in turn, can be traced back to the origins of stock markets: stocks were sold to investors as bonds with price appreciation, and the larger and more stable the dividends, the better the stock was considered to be. Growth was viewed as icing on the cake.
The Psychology of Hiring - via Psychology Today – If I’m the hiring manager, the best way you can mitigate my risk aversion is by showing me how comfortably confident you are: that you have the skills, experience, interpersonal acumen and other traits required to handle a difficult position in my organization. Said another way, best available evidence so far indicates that you’re targeting the right job. To not provide you an opportunity to compete for this position would be pure, shortsighted stupidity on my part.
Do Babies Learn From Baby Media? - via PsychScience -In recent years, parents in the United States and worldwide have purchased enormous numbers of videos and DVDs designed and marketed for infants, many assuming that their children would benefit from watching them. We examined how many new words 12- to 18-month-old children learned from viewing a popular DVD several times a week for 4 weeks at home. The most important result was that children who viewed the DVD did not learn any more words from their monthlong exposure to it than did a control group. The highest level of learning occurred in a no-video condition in which parents tried to teach their children the same target words during everyday activities. Another important result was that parents who liked the DVD tended to overestimate how much their children had learned from it. We conclude that infants learn relatively little from infant media and that their parents sometimes overestimate what they do learn.
Video: Brains in love – This is Your Brain on Love: Why Him? Why Her? - via Channel N – The brain’s reward systems and neurobiological changes during romantic love, as studied by neuroanthropologist Helen Fisher. Fisher gives an entertaining talk outlining her research, her online dating site and personality types, and how people create their own “love maps” while biology plays a big role behind the poetry. Great talk and Q&A, archived as part of WGBH’s special
How to Stop the Rise in Food Price Volatility - via Policy Pointers – This US bulletin examines the developing world’s vulnerability to food price shocks
How the Economic and Financial Crisis is Affecting Children and Young people in Europe - via Policy Pointers -This 7-page study describes how the economic crisis has had a heavy impact on the daily lives of millions of European people, most particularly on families, children and young people
Is eHarmony Scientific? - via Discovery – And what about the science? It seems that Neil Clark Warren, the marriage and relationship expert behind eHarmony, has not published any research in peer-reviewed journals on the subjects of marriage or relationships. A 2011 search of several academic databases (including PsycInfo and MedLine) did not reveal a single article published by Neil Clark Warren on those subjects.
Man Caves and Mom Caves - via Sociology Blog – According to an article in the New York Daily News, the newest trend in home design and consumerism is the Mom Cave, a place for moms to retreat to have some quiet time. This is in contrast to an earlier trend of Man Caves, where men have a refuge to celebrate all things masculine including sports, cars, and bodily functions. What can these “two trends” tell us about our society?
Alcohol & Agression - via Brain Blogger – A recent study published in the Journal of Studies on Alcohol and Drugs found a positive correlation between alcohol dose and aggression in human subjects. Aggressiveness was measured by shock intensity and duration administered to one’s “opponent” in a competitive reaction-time task. The opponents were fictional and no actual shocks were administered. Essentially, the more alcohol one drank, the more frequent and longer shocks they applied. This finding was observed throughout both genders.
Celebrity Debt Infographic
– Via Clear Debt