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Must Watch Videos:
Lecture Collection: Robert Sapolsky and Human Behavioral Biology - via Neuroantrhopology- Robert Sapolsky, Stanford professor of biology and neurology and author of Why Zebras Don’t Get Ulcers and other wonderful science books, is now ready to teach you human behavioral biology! Stanford has just posted his entire Human Behavioral Biology course from Spring 2010 on YouTube!
What Does a Government Shutdown Mean? - via Miller McCune- Passports, park admissions and poo are among Miller-McCune’s list of 10 things that will be affected if the budget-less U.S. government shuts down this weekend.
Fascinating Thoughts On Entrepreneurship: Success, and Farming vs. Mining - via Call me Fishmeal- Now, you’ve probably figured out I’m not actually talking about mining or farming: this is a metaphor for running a software company. You can either see founding a company as something you’re doing because you want to produce good software, or you can see it as something you do so you can sell your stock and make a killing and move on.
New Book: Future Babble: It’s Hard to Make Predictions Especially About The Future - via Reason -In Future Babble, Gardner acknowledges his debt to political scientist Phililp Tetlock, who set up a 20-year experiment in which he enrolled nearly 300 experts in politics. Tetlock then solicited thousands of predictions about the fates of scores of countries and later checked how well they did. Not so well. Tetlock concluded that most of his experts would have been beaten by “a dart-throwing chimpanzee.” Tetlock found that the experts wearing rose-tinted glasses “assigned probabilities of 65 percent to rosy scenarios that materialized only 15 percent of the time.” Doomsters did even worse: “They assigned probabilities of 70 percent to bleak scenarios that materialized only 12 percent of the time.”
The trials of Kaplan Higher Ed and the education of The Washington Post Co - via Washington Post- The Education Department is now imposing stringent new conditions on the federal student loans that have become the lifeblood of for-profit schools, including Kaplan. Heavy lobbying keeps pushing back the release date of one especially controversial proposal, but other regulations are already biting: Last week, many traditional colleges mailed acceptances to their picks from among record numbers of applicants; Kaplan’s new enrollments, by contrast, have plunged by nearly half.
5 Must-Read Books on Error & the Science of Being Wrong - via Brain pickings – The intricate mechanisms of the human mind are endlessly fascinating. We’ve previously explored various facets of how the mind works — from how we decide to what makes us happy to why music affects us so deeply — and today we’re turning to when it doesn’t: Here are five fantastic reads on why we err, what it means to be wrong, and how to make cognitive lemonade out of wrongness’s lemons.
How to Get a Real Education – via WSJ- I understand why the top students in America study physics, chemistry, calculus and classic literature. The kids in this brainy group are the future professors, scientists, thinkers and engineers who will propel civilization forward. But why do we make B students sit through these same classes? That’s like trying to train your cat to do your taxes—a waste of time and money. Wouldn’t it make more sense to teach B students something useful, like entrepreneurship?
The Gagosian Effect – via WSJ- How the powerful art dealer uses his global network of galleries and blue-chip clients to fetch ever higher prices for his artists. Can it last?
‘Less Than Human’: The Psychology Of Cruelty - via NPR – Before I get to work explaining how dehumanization works, I want to make a preliminary case for its importance. So, to get the ball rolling, I’ll briefly discuss the role that dehumanization played in what is rightfully considered the single most destructive event in human history: the Second World War. More than seventy million people died in the war, most of them civilians. Millions died in combat. Many were burned alive by incendiary bombs and, in the end, nuclear weapons. Millions more were victims of systematic genocide. Dehumanization made much of this carnage possible.
“Reoccurring Financial Crises in the United States” - via Upenn – The economic history of the United States is riddled with financial crises and banking panics. During the nineteenth-century, eight major such episodes occurred. In the period following World War II, some believed that these crises would no longer happen, and that the U.S. had reached a time of everlasting financial stability and sustainable growth. The Savings and Loans Crisis of the 1980s, the 2001 dot-com bust and the 2007 housing bubble that led to the current global financial crises demonstrate that these phenomena are still reoccurring. Regulators and policy makers should keep aware of the recurrence of such crises.
Mark Cuban, Success & Motivation- via blogmaverick – With the great response to Shark Tank (fridays on ABC 8pm/7pm…shameless plug)..I wanted to repost my Success and Motivation series because it answers most of the email questions I get from the show..
Power Laws, Chaos, Mathematics & War – via Economist- Lewis Fry Richardson, a British scientist, published what was probably the first rigorous analysis of the statistics of war. Richardson had spent seven years gathering data on the wars waged in the century or so prior to his study. There were almost 300 of them. The list runs from conflicts that claimed a thousand or so lives to the devastation of the two world wars. But when he plotted his results, he found that these diverse events fell into a regular pattern. It was as if the chaos of war seemed to comply with some hitherto unknown law of nature. At first glance the pattern seems obvious. Richardson found that wars with low death tolls far outnumber high-fatality conflicts. But that obvious observation conceals a precise mathematical description: the link between the severity and frequency of conflicts follows a smooth curve, known as a power law. One consequence is that extreme events such as the world wars do not appear to be anomalies. They are simply what should be expected to occur occasionally, given the frequency with which conflicts take place.
Does Education Correlate with Patience – via Rand – I examine whether education increases patience. Admission decisions in a public college in Mexico are determined through a lottery. I find that applicants who were successful in the draw were more likely to study in the following years. I surveyed the applicants to this college almost two years after the admission decision was made and measured their time preferences with a series of hypothetical inter-temporal choice questions. I find that individuals who were successful in the admission lottery were, on average, more patient. I argue that this evidence points towards a causal effect of education on time preferences.
The Montessori Mafia - via WSJ- We can change the way we’ve been trained to think. That begins in small, achievable ways, with increased experimentation and inquisitiveness. Those who work with Mr. Bezos, for example, find his ability to ask “why not?” or “what if?” as much as “why?” to be one of his most advantageous qualities. Questions are the new answers.
The Pringle as Technology - via Atlantic – You might think from the commercial that people were impressed by the newfangled chips, but they weren’t. The Times’ story notes that Pringles were actually a flop until the 1980s when P&G came out with new flavoring and a fresh marketing campaign. I wouldn’t be surprised if there was a more subtle dynamic playing out, too, in which Americans acceptance of ultraprocessed foods made it easier for these bizarrely uniform chips to find consumers willing to eat them.
Could Politics Be Hard-Wired? - via National Republic – Republicans and Democrats remained implacably opposed over the budget right up to the shutdown deadline this week. They can’t agree on how to improve health care, on defense spending, or even on what the American people want most. Could the differences be biological?
Intellectual Prostitution and the Myth of Objectivity in Journalism - via Truth Dig – In this rotten business of freelance magazine writing there’s almost no assignment in which the issue of objectivity fails to rise up like the miasma it is. Any writer who puts his mind on the matter knows that no human being is objective, which is the reason writers sit down at the page in the first place. The writer, an inherently subjective force, will not be divorced from the writing, though God knows there are quacks in the news business who are trying. Computers might achieve this end. Also, certain types of house cats are objective: They know exactly what the truth is, and it is them.
When Journalists Do Primary Research - via Bad Science – But if they are going to engage in primary research, and make dramatic causal claims – as they have done in this story – to the nation, I don’t think it’s too much to ask that they familiarise themselves with proper work that’s already been done, and consider alternative explanations for the numbers they’ve found.
Embracing the Radical: How Uncertainty Breeds Extremism- via SciAm-Feeling uncertain about who you are and what you want to do with your life? Such doubt may lead you to sympathize with a radical or extremist group, according to a new study in the Journal of Experimental Social Psychology. Groups that rally around radical beliefs may provide a searching person with the sense of self and social identity they are lacking.
Redesigning Banking with Behavioral Economics in Mind - via MIT – A bank was once primarily a place—a building with marble floors and high counters that you’d enter to deposit or retrieve your money. Cash machines and online banking moved the experience away from the lobby, but those were only extensions of the traditional ways banks thought about business. So when Josh Reich and Shamir Karkal, two MBA students at Carnegie Mellon University, went looking for ways to innovate in banking, they decided to start from the other direction, designing the mobile and online banking experience first and building the business around that.
Little Havana’s chess connection vies for the national crown - via Miami Dade College and Harvard University do not often compete. But last December, four local men sat across a table from four The MDC Sharks, who have had a club for four years, beat Harvard, which has been playing competitive chess since 1874. Fluke? The very next day the Miamians defeated Yale. Score: 4-0.
Manual of Ideas Interview with Guy Spier - via MOI
Army of Altruists: Neither egoism or altruism are a natural urge - via Sleepykid – They in fact arise in relation to each other and neither would be conceivable without the market.
How News Corp got lost in Myspace - via Reuters – As Rupert Murdoch stepped into the Grand Ballroom of San Francisco’s Palace Hotel at the Web 2.0 conference in October 2007, the developers and engineers who packed the room fell into a respectful hush. It was the sort of greeting usually reserved for one of their own tech heroes, not a 76-year-old media mogul. Sitting cross-legged on a red leather couch, Murdoch looked relaxed in an open-necked shirt. Next to him sat Chris De Wolfe, the co-founder of Myspace, the social network that News Corp’s chairman had acquired for $580 million two years earlier.
Debt Markets During the Crisis: Failure to see the big picture led to a breakdown – via Kelogg – The financial crisis that provoked the Great Recession had severe effects on debt markets, including the corporate bond and mortgage-backed securities markets. The effects included a huge premium on liquidity, the loss of capital, and rising risk for counterparties, the partners in debt market transactions.
Two Narcissists Are Better Than One (or Three): Self-obsessed individuals are not more creative in general, but they may impress when competing with a like mind – via Sci Am- The experimenters found that having two narcissists in a group produced more creative results than a group with none, because their competitiveness sparked more brainstorming. But when more than two narcissists were in a group, the opposite happened—hypercompetitiveness scuttled the group’s productivity.
Are The Most Murderous Countries: Safer Than You Think? - via Atlantic- This January I flew to Acapulco, Mexico. I was there a few days before sailing on the Queen Elizabeth up to Los Angeles as a guest of Cunard Cruise Lines. Not surprisingly, almost everyone I told mentioned something about crime, murders, drug gangs, or beheadings.
How to Beat Wall Street Once and for All - via Good – For instance, says Haque, if they wanted to, a group of concerned citizens could divest from big banks en masse and collapse them (an organization called Move Your Money is already advocating just that). He argues that contrary to what most of us may feel in the wake of the financial crisis, customers are far more powerful than banks. And unless Americans learn that lesson quickly, he says, they can “kiss the future goodbye.”
How kind we are & evolution – via NYT- There’s been a shift in how we think about human evolution. Years ago, people tended to see evolution as a competition for survival of the fittest. But now there is more emphasis on the gentler virtues. People survive because they are really good cooperators. Research into hunter-gatherer cultures has contributed to this new understanding. People once believed that early humans lived in small kinship circles and fought to pass along their common genes.
The Bank of Facebook: Currency, Identity, Reputation- via Emergent by Design – How will Facebook and the global economy interact in the future? There has been much speculation recently about the role Facebook Credits could play in becoming a global virtual currency, and even the possibility of Facebook becoming a bank. In many ways, it already is becoming a bank – just not in the traditional sense. Facebook is harnessing the power of the social graph, and has certainly adopted an expanded definition of what ‘currency’ means. It’s time for the rest of us to hop on board.
Greased Palm Psychology: Collectivism and Bribery - via APS- Bribery is condemned in most cultures; but it is more common in some countries than in others. Is poverty, political instability, or lax regulation to blame? A new study published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, suggests a surprising contributor: Collectivism—a culture that downplays individual self-determination and stresses interdependence and shared responsibility. “Collectivism may promote bribery by diffusing responsibility,” says Professor Nina Mazar, who conducted the study with Professor Pankaj Aggarwal, also at the University of Toronto’s Joseph L. Rotman School of Management. Collectivism may allow individuals to sidestep their personal morality and do business in ways they know to be wrong.
The Empire Is Dead, Long Live the Empire! Long-Run Persistence of Trust and Corruption in the Bureaucracy – via IZA – Do empires affect attitudes towards the state long after their demise? We hypothesize that the Habsburg Empire with its localized and well-respected administration increased citizens’ trust in local public services. In several Eastern European countries, communities on both sides of the long-gone Habsburg border have been sharing common formal institutions for a century now. Identifying from individuals living within a restricted band around the former border, we find that historical Habsburg affiliation increases current trust and reduces corruption in courts and police. Falsification tests of spuriously moved borders, geographic and pre-existing differences, and interpersonal trust corroborate a genuine Habsburg effect.
Can Rob Kalin Scale Etsy? – via Inc- This is the effect that Etsy has on just about everyone. Yes, a lot of stuff on Etsy is junk; but it’s strangely compelling junk. (For proof, head to the Sold section of Regretsy.com and check out the Chicken Poncho and the Goat Coat, which went for $15 and $29, respectively.) Yes, Etsy’s marketing promises reek of New Age hucksterism, but then again, the company is also wonderfully new and idealistic. And huge: Etsy has five million monthly visitors; the next closest competitor, ArtFire, has 500,000, according to comScore. “They would have to do something horrible to mess it up,” says Maguire. “Etsy has lived through two different management styles—and it grew all the same. The community is there. It’s not going anywhere.” At the end of January, I met Eileen Tepper, an actress who has been working at a law firm and selling $22 crocheted hats on Etsy to make ends meet. Tepper, an Etsy member since 2005, told me that most of the sellers she knows are disappointed by the company’s latest social networking initiatives. “A lot of users are angry,” she says. “They want Etsy to be a venue to sell things; they don’t want it to be Facebook.”
China’s Property Bubble Hits The Grave - via Stingy Investor – China’s notorious property bubble is spreading to the grave, as the same speculative frenzy and soaring prices that plagued the housing market now haunt its crowded cemeteries.
The Evolution of Prejudice - via SciAm- Psychologists have long known that many people are prejudiced towards others based on group affiliations, be they racial, ethnic, religious, or even political. However, we know far less about why people are prone to prejudice in the first place. New research, using monkeys, suggests that the roots lie deep in our evolutionary past. Yale graduate student Neha Mahajan, along with a team of psychologists, traveled to Cayo Santiago, an uninhabited island southeast of Puerto Rico also known as “Monkey Island,” in order to study the behavior of rhesus monkeys. Like humans, rhesus monkeys live in groups and form strong social bonds. The monkeys also tend to be wary of those they perceive as potentially threatening.
Why do people believe in fate? - via Bakadesuyo- To examine this issue, widowed individuals (N = 414) from a large-scaled panel study were followed for the 4 years before and after the loss by using a latent growth model. Results showed that belief in external control led to a considerably smaller decline in life satisfaction and higher scores in the year of the loss. Thus, although usually regarded as a risk factor, belief in external control seems to act as a protective factor for coping with the death of a spouse.
Dan Ariely: The Rationality of One-Star Reviews - via Predictably Irrational – hen publisher Hachette Book Group set its price for Michael Connelly’s latest suspense thriller, The Fifth Witness, it decided to charge $14.99 for the Kindle version and $14.28 for the hardback version, a difference of $0.71.
How to seem telepathic: - via Bakadesuyo- People can have difficulty intuiting what others think about them at least partly because people evaluate themselves in more fine-grained detail than observers do. This mismatch in the level of detail at which people construe themselves versus others diminishes accuracy in social judgment. Being a more accurate mind reader requires thinking of oneself at a higher level of construal that matches the observer’s construal (Experiments 1 and 2), and this strategy is more effective in this context than perspective taking (Experiments 3a and 3b). Accurately intuiting how others evaluate themselves requires the opposite strategy—thinking about others in a lower level of construal that matches the way people evaluate themselves (Experiment 4). Accurately reading other minds to know how one is evaluated by others—or how others evaluate themselves—requires focusing one’s evaluative lens at the right level of detail.
Beggars can’t be choosers, and, even worse for beggars, choosers don’t like beggars, according to a new study - via Boston.com- People watched a six-minute video depicting a man engaging in a series of mundane activities in his apartment. Before watching the video, some people were told to note when the man made a choice; other people were told to note when the man touched an object. After watching the video while paying attention to choice, people were less supportive of affirmative action, banning harmful products, taxing fuel-inefficient cars, and requiring energy-saving insulation, and more supportive of legalizing marijuana and expanding adoption to unmarried parents. They were also more likely to blame people for their own bad outcomes (e.g., heart attack, car accident). In fact, in a choice frame of mind, there was no difference between liberals and conservatives on these attitudes. In a related experiment comparing Americans to Indians, researchers found that Americans, but not Indians, had less empathy for a poor child in a choice frame of mind.
Body Language and Persuasion: A Scientific Approach - via Inside Influence- Everywhere you look—cable news shows, men’s and women’s magazines, bookstores, and even bestseller lists—there are people from all walks of life, claiming to be experts in body language. Many of these individuals insist that they are one of the enlightened few to have a deep understanding of the secrets of how to influence others with nonverbal communication.
Has Goodwill Accounting Gone Bad? - via Empirial Finance – Looks like the combination of low profitability and high goodwill lead to crappy returns via the future goodwill impairment channel: -15.6% to be exact! Managers simply do not want to release bad news until they absolutely must!
Unrealistic Idealization Prevents the Decline of Marital Satisfaction - via Sagepub- This article examines whether unrealistically viewing a romantic partner as resembling one’s ideal partner accelerates or slows declines in marital satisfaction among newlyweds. A longitudinal study linked unrealistic idealization at the time of marriage to changes in satisfaction over the first 3 years of marriage. Overall, satisfaction declined markedly, a finding that is consistent with past research. However, seeing a less-than-ideal partner as a reflection of one’s ideals predicted a certain level of protection against the corrosive effects of time: People who initially idealized their partner the most experienced no decline in satisfaction. The benefits of idealization remained in analyses that controlled separately for the positivity of partner perceptions and the possibility that better adjusted people might be in better relationships.
Description–experience Gaps: Assessments in Other Choice Paradigms - via Wiley- Researchers have become increasingly interested in the description–experience gap or the finding that people respond differently to the same quantitative information depending on whether it is described or experienced. Most studies on the gap have focused on binary choices between a safe option and a risky option and have compared decisions made from description alone versus experience alone. We review studies examining other decision-related phenomena—probability learning, the sunk-cost effect, choices in a repeated-trials prisoner’s dilemma, and base-rate neglect—with an experience-based approach that often includes conditions combining description and experience. In probability learning, the sunk-cost effect and a repeated-trials prisoner’s dilemma, participants come closer to behaving optimally when description and experience are simultaneously available than when experience alone is available. In studies of base-rate neglect, participants respond similarly under conditions of description alone and experience alone. Studies with nonhuman animals strengthen the generality of our conclusions regarding the sunk-cost effect and suggest a potential cause of base-rate neglect: a prior experience of having been rewarded for matching like items.
Attitudes to Risk and Roulette - via BIU- Who plays roulette in a casino? Since the expected return to playing is negative, the obvious answer would appear to be risk lovers. But this is not necessarily the case. Thus, a risk averse consumer may decide to set aside a given sum as a conceptual “entrance fee”, enter the casino (where there is no entrance fee) and play with his entrance money either until he loses it all or until he decides to leave with money left over or even a profit, whichever occurs first. It has even been suggested by Mobilia (1993) 2, using a rational addiction framework, that such risk averse gamblers may even be addicted. Since Mobilia’s model does not involve any explicit considerations of risk, we do not deal with the addiction issue here. In this paper, we present an empirical framework for determining whether or not customers at the roulette wheel are risk averse or risk loving.
Predicting Lotto Numbers- via KU- We investigate the “law of small numbers” using a unique panel data set on lotto gambling. Because we can track individual players over time, we can measure how they react to outcomes of recent lotto drawings. We can therefore test whether they behave as if they believe they can predict lotto numbers based on recent drawings. While most players pick the same set of numbers week after week without regards of numbers drawn or anything else, we find that those who do change, act on average in the way predicted by the law of small numbers as formalized in recent behavioral theory. In particular, on average they move away from numbers that have recently been drawn, as suggested by the “gambler’s fallacy”, and move toward numbers that are on streak, i.e. have been drawn several weeks in a row, consistent with the “hot hand fallacy”.
With the Changing of the Seasons: Dopamine and Mood Cycles – via SA -Winter blues, spring fever—most of us take seasonal changes in mood for granted. According to a new study, the cause might be the seasons tinkering with the chemicals in our brain. As reported in the November 3 Journal of Neuroscience, researchers at the National Institute of Mental Health found evidence of seasonal differences in dopamine—a chemical messenger involved in motivation, pleasure, movement and learning.
School of Business Timeline - via Infographic Showcase