Handpicked to satisfy your intellectual curiosity!
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Video: Conan O’Brien Talks To Darmouth Grads About Failure - via Deadline-
A Brief History of the Corporation: 1600 to 2100 - via Ribbonfarm.com- On 8 June, a Scottish banker named Alexander Fordyce shorted the collapsing Company’s shares in the London markets. But a momentary bounce-back in the stock ruined his plans, and he skipped town leaving £550,000 in debt. Much of this was owed to the Ayr Bank, which imploded. In less than three weeks, another 30 banks collapsed across Europe, bringing trade to a standstill. On July 15, the directors of the Company applied to the Bank of England for a £400,000 loan. Two weeks later, they wanted another £300,000. By August, the directors wanted a £1 million bailout. The news began leaking out and seemingly contrite executives, running from angry shareholders, faced furious Parliament members. By January, the terms of a comprehensive bailout were worked out, and the British government inserted its czars into the Company’s management to ensure compliance with its terms.
How the low probability of being wealthy keeps the American dream going- via Kedrosky- Income skew supports American exceptionalism, the idea that the U.S. is different, because look at what happens to successful people here, unlike elsewhere. “That could be me,” is the story people tell themselves, a story that causes them to vote for fewer structural supports, the sort of thing that could get in the way of their achieving the American Dream, or so the story goes. In short, the skew in U.S. income is a feature, not a bug. It is an essential myth in which people in this country believe, one that reinforces exceptionalism, identity and entrepreneurial opportunity. It creates the perception of an economic lottery, one that you too could win, if only you worked hard enough and long enough. Further, and more than a little worryingly, it has positive feedback, in that the more skewed incomes become the more the lottery effect is reinforced. Bad income news is good news, and worse income news is even better news.
The Indignity of Industrial Tomatoes - via Gilt Taste- If you have ever eaten a fresh tomato from a grocery store or restaurant, chances are good that you have eaten a tomato much like the ones aboard that truck. Florida alone accounts for one-third of the fresh tomatoes raised in the United States, and from October to June, virtually all the fresh-market, field-grown tomatoes in the country come from the Sunshine State, which ships more than one billion pounds every year. It takes a tough tomato to stand up to the indignity of such industrial scale farming, so most Florida tomatoes are bred for hardness, picked when still firm and green (the merest trace of pink is taboo), and artificially gassed with ethylene in warehouses until they acquire the rosy red skin tones of a ripe tomato.
Video: Target’s Anti-Union Video for New Employees- via Sociological Images-
The Humpty-Dumpty Problem: Understanding and Piecing Complex Systems: Even when we understand their parts, living things are hard to put back together - via American Scientist- The publication in 1637 of René Descartes’ Discourse on the Method of Rightly Conducting One’s Reason and of Seeking Truth in the Sciences changed the practice of science forever. In it, he poured the foundations of modern science by putting forth two powerful and interrelated theses. The first embraced reductionism as a way of knowing: Descartes committed himself to “divide each of the difficulties under examination into as many parts as possible, and as might be necessary for its adequate solution,” and to “conduct my thoughts in such order that, beginning with those objects that are simplest and most readily understood, I might ascend little by little, and, as it were, step by step, to the knowledge of the more complex.” Later in the same work, he deployed one of the most durable metaphors of Western intellectual thought: He argued that the body was best thought of as a machine.
Video: Ted Talk- Medicine’s future? There’s an app for that - via Ted- At TEDxMaastricht, Daniel Kraft offers a fast-paced look at the next few years of innovations in medicine, powered by new tools, tests and apps that bring diagnostic information right to the patient’s bedside.
The psychology of expert predictions - via Mind Hacks- This week’s edition of BBC Radio 4 All in the Mind has a fantastic section on the psychology of knowledgeable predictions that bursts lots of bubbles about the power of experts but also discusses how to make more accurate predictions.
Obsessive Consumption: Life in a Material World, Illustrated - via Brain Pickings- How a visual record of consumerism is paving the way for mindful consumption.
Nobel Laureates Have Their Say on Accomplishment - via Nobelorg- During autumn 2010, ten Nobel Laureates have answered seven questions ranging from admiration, hopes, inventions, accomplishments to what they are doing to make the world a better place.
Is debt, the enemy of the future - via Boston.com – Economic crises are complicated, but they often boil down to one simple problem: debt. Writing in The American Prospect, the economist Robert Kuttner argues that we’re approaching our debt the wrong way. We tend to think about debt in moral terms: We want to know who’s responsible for building it up, and to make them repay. That’s fine for normal debts, but it doesn’t make sense for crisis-level debt. Debt crises, Kuttner writes, create a struggle “between the claims of the past and the potential of the future.” Forgiveness, not repayment, is the only way forward.
Why We Learn & The Value of College - via New Yorker – I could have said, “You are reading these books because you’re in college, and these are the kinds of books that people in college read.” If you hold a certain theory of education, that answer is not as circular as it sounds. The theory goes like this: In any group of people, it’s easy to determine who is the fastest or the strongest or even the best-looking. But picking out the most intelligent person is difficult, because intelligence involves many attributes that can’t be captured in a one-time assessment, like an I.Q. test. There is no intellectual equivalent of the hundred-yard dash. An intelligent person is open-minded, an outside-the-box thinker, an effective communicator, is prudent, self-critical, consistent, and so on. These are not qualities readily subject to measurement.
Keeping up with the Joneses: Status projection as symbolic self-completion - via EJSP-We studied the incidence and correlates of status projection—use of material possessions to emphasize social status to others—among 100 adolescents in a historical context of rising affluence. Participants listed 10 possessions, rated each for its value as a status symbol, and chose five to discuss with another participant in a forthcoming interaction. Participants selected especially those of their possessions that they had rated higher in status value (p < .001). This effect was stronger among those reporting upward or downward change in their families’ socioeconomic status (p < .05), greater actual-ideal self-discrepancies (p < .05), and stronger commitment to materialistic values (p < .01); moreover, the effect of changing status was stronger among higher materialists (p < .05). These results indicate that people self-complete through presenting their possessions selectively to others, and they help to clarify the precise role of identity commitment in symbolic self-completion.
Varieties and Commonalities of Capitalism - via Max Planck- The paper reviews the origins of the comparative study of capitalism and of the diverse approaches applied to it in contemporary political economy. It distinguishes four models accounting for differences in the institutional make-up of national capitalist economies, which it refers to as the social embeddedness, power resource, historicalinstitutionalist, and rationalist-functionalist model, respectively. Special attention is given to the rationalist-functionalist account of capitalist variety and its reception in the research literature. The paper concludes with remarks on the likely effect of the global financial crisis after 2007 on theories of political economy in general and of “varieties of capitalism” in particular. It argues that in future the commonalities and interdependencies of national capitalisms deserve and are likely to receive more attention than their differences.
Celebrity Culture and The American Dream- via Global Sociology Blog – Karen Sternheimer’s Celebrity Culture and The American Dream is a good book to add to an introduction to sociology course if you want to give your students a good sense of how sociology analyzes culture and media. This is a work of public sociology. The audience for this book is not the academic / sociology professionals but the general public interested in social issues and the focus on celebrities should be a winner in that regard.
A Blindspot in Economics: Unjustified Claims About Reality & Much More- via Freakynomics- Why do some economists producing sophisticated, intelligent work end up supporting claims about the real world that can seem – at times – bizarre and clearly unsupported by evidence? (And for those who disagree that this is the case – what would be an example where this clearly happens?)
Dan Ariely Interview - via There Are Free Lunches- Behavioral Economist and New York Times Bestselling Author Dan Ariely met with Qualtrics to discuss behavioral economics, his research, and what his findings mean for researchers around the world. A portion of the interview is published here. We know you will enjoy it.
Curious about how you would have faired in the famous marshmallow test? Hulu might have a clue - via Nudge Blog – If you’re a reader of the Nudge blog, you know all about Walter Mischel’s marshmallow test. (References to it are popping up in media everywhere these days.) Maybe you are curious how you might have done on the test if it had been you and one of his assistants at the Stanford lab decades ago. Would you have had the self-control to hold out for the second marshmallow?
Video: Mit World – From Ridiculous to Brilliant: Why We Play at Work - via MIT- The American workplace might be better off if it borrowed some concepts from a typical kindergarten classroom, including bins with toys, and unstructured time with friends. Two partners from IDEO, a global power in design and branding, discuss the importance of play in their creative process, and offer techniques that other organizations could profit from.
Decision Making/ Behavioral Economics/Psychology/ Risk:
The Brain on Trial: Neurocience & The Law – via The Atlantic- Advances in brain science are calling into question the volition behind many criminal acts. A leading neuroscientist describes how the foundations of our criminal-justice system are beginning to crumble, and proposes a new way forward for law and order.
The Neurobiology of Panic- Via Intrepid Insights- There are few experiences more terrifying than a panic attack. These extreme and sudden episodes of intense fear are often accompanied by physical symptoms such as chest pain, heart palpitations, shortness of breath, dizziness, or abdominal distress. And unless treated, recurring panic disorders can incapacitate an individual physically, mentally, and even socially.
Why we laugh - via Deric Bownds- The key to the authors’ success is that they locate humor within recent cognitive science and evolutionary theory. To aid survival, our brains constantly and covertly use heuristics to generate expectations about what we will experience next, but we would be too inventive for our own good if we did not regularly search for and remove discrepancies between our expectations and our experiences. The immediate incentive to look for such discrepancies and thereby to reduce error comes from the pleasure of discovering a mistake in a currently harmless active belief that was introduced covertly. That pleasure is mirth, and humor is what produces it. Thus, humor is “a cognitive cleanup mechanism” that stains with mistaken belief before washing out the error (as in “I wondered why the Frisbee was getting bigger, and then it hit me.”). Laughter is then a public signal of our ability to clean up our minds. Because such cognitive prowess is useful, it attracts mates—both friends and sexual partners—and spreads throughout the world.
Gossip influences vision – via Psychologist- The kind of negative tittle-tattle that appears daily in the tabloids seems to bear little merit. But experts believe that historically, paying attention to such gossip played an important role in our survival chances, such that today negative hearsay continues to bias our visual system. Eric Anderson at Northeastern University in Boston and his colleagues have shown this in a new study that paired photos of neutral faces with lines of positive, negative or neutral gossip, and presented these to 61 participants on-screen (Science: tinyurl.com/4xy3ss6). Typical lines of gossip were ‘threw a chair at his classmate’, ‘helped an elderly woman with her groceries’ and ‘passed a man on the street’. Each face was paired four times with its designated nugget of social information. These faces were then presented in a binocular rivalry paradigm with pictures of houses. This means that using a piece of a equipment called a stereoscope, a face was presented exclusively to one eye and a house exclusively to the other, which would have led the two images to compete for access to the participant’s conscious awareness. For the participants, a fluctuating perceptual experience would then have ensued, first one image seen, then the other, and back again until the trial finished after 10 seconds.
Insecurity and stress at work on the rise? – via The Psychologist- Stress and mental health remain taboo subjects in the workplace, according to a new campaign by Mind. For their ‘Taking Care of Business’ initiative, the charity commissioned the polling group Populus to complete an online survey of over 2000 people in employment in England and Wales. Among the stand-out results, 41 per cent said they felt stressed at work, two thirds felt under more pressure because of the financial downturn, yet one in five said they felt mentioning stress would risk being made redundant, and 41 per cent said stress was a taboo topic at work.
The motivation to diet in young women: Fear is stronger than hope- via EJSP- This research examined the relative impact of a hoped-for, thin body and a feared, overweight body on weight-loss dieting (WLD) motivation. We hypothesised that the women most motivated to engage in WLD would report a higher similarity to, and a higher cognitive availability of, a feared, overweight body. In study 1, WLD motivation was operationalized as WLD intention and in study 2 as a food choice (chocolate bar versus low-fat snack bar). As expected, those most similar to the feared body and who had a highly available overweight body had the greatest intention to engage in WLD, and were more likely to choose a low-fat snack over a chocolate bar. The implications of our findings for future research as well as the development of eating pathology in college women are discussed.
Fooled By Fluency - via PsyFiBlog- There’s a huge variety of research that shows how ease of processing information – fluency – distorts judgements. So, for instance, rhyming aphorisms seem more true than non-rhyming aphorisms. Hence a stitch in time saves nine but too many cooks don’t spoil the broth. And, of course, sell in May and go away feels right, while selling your losers and running your winners is rather harder to follow.
Inappropriate Confidence and Retirement Planning - via JBDM- Financial decisions about investing and saving for retirement are increasingly complex, requiring financial knowledge and confidence in that knowledge. Few studies have examined whether direct assessments of individuals’ confidence are related to the outcomes of their financial decisions. Here, we analyzed data from a national sample recruited through RAND’s American Life Panel, an Internet panel study of US adults aged 18–88 years. We examined the relationship of confidence with self-reported and actual financial decisions, using four different tasks, each performed by overlapping samples of American Life Panel participants. The four tasks were designed by different researchers for different purposes, using different methods to assess confidence. Yet, measures of confidence were correlated across tasks, and results were consistent across methodologies. Confidence and knowledge showed only modest positive correlations. However, even after controlling for actual knowledge, individuals with greater confidence were more likely to report financial planning for retirement and to successfully minimize fees on a hypothetical investment task. Implications for the role of confidence in investment behavior (even if it is unjustified) is discussed.
Mating Interest Improves Women’s Accuracy in Judging Male Sexual Orientation – via Sagepub- People can accurately infer others’ traits and group memberships across several domains. We examined heterosexual women’s accuracy in judging male sexual orientation across the fertility cycle (Study 1) and found that women’s accuracy was significantly greater the nearer they were to peak ovulation. In contrast, women’s accuracy was not related to their fertility when they judged the sexual orientations of other women (Study 2). Increased sexual interest brought about by the increased likelihood of conception near ovulation may therefore influence women’s sensitivity to male sexual orientation. To test this hypothesis, we manipulated women’s interest in mating using an unobtrusive priming task (Study 3). Women primed with romantic thoughts showed significantly greater accuracy in their categorizations of male sexual orientation (but not female sexual orientation) compared with women who were not primed. The accuracy of judgments of male sexual orientation therefore appears to be influenced by both natural variations in female perceivers’ fertility and experimentally manipulated cognitive frames.
Can Collectivism Promote Bribery? - via Sagepub- Why are there national differences in the propensity to bribe? To investigate this question, we conducted a correlational study with cross-national data and a laboratory experiment. We found a significant effect of the degree of collectivism versus individualism present in a national culture on the propensity to offer bribes to international business partners. Furthermore, the effect was mediated by individuals’ sense of responsibility for their actions. Together, these results suggest that collectivism promotes bribery through lower perceived responsibility for one’s actions.
The Psychology of Throwing in the Towel - via APS- The fact is, it’s hard to cheer for giving up, throwing in the towel. So it’s no wonder this never-say-die attitude has made such an appealing plot line for dime novels and Hollywood. But is it really good psychology? Or might there be times when it really is better to simply walk away?
Is medical school an empathotoxin? – via Mind Hacks- Medical school seems to have a profound negative effect on empathy according to a research review just published in Academic Medicine.
Are teenagers’ brains similar to those of drug addicts? - via Bakadesuyo- Galvan noted that the response pattern of teen brains is essentially the same response curve of a seasoned drug addict. Their reward center cannot be stimulated by low doses—they need the big jolt to get pleasure.
Incentives, belief in incentives, the left, the right and moral hazard - via Knowing & Making – Several old political problems turn out to be based on the same underlying question. Here are some examples. Should we tax the rich more? The “yes” argument says rich people need the money less (that is, poor people’s utility from wealth is higher), and wealth partly arises from luck and therefore is a legitimate target for taxation. The “no” argument says that if people expect to be taxed when they’re rich (and receive handouts when they’re poor) they have less incentive to earn wealth, and therefore less wealth will be produced by society.
Shame and honor drive cooperation - via Deric Bownds – Can the threat of being shamed or the prospect of being honoured lead to greater cooperation? We test this hypothesis with anonymous six-player public goods experiments, an experimental paradigm used to investigate problems related to overusing common resources. We instructed the players that the two individuals who were least generous after 10 rounds would be exposed to the group. As the natural antithesis, we also test the effects of honour by revealing the identities of the two players who were most generous. The non-monetary, reputational effects induced by shame and honour each led to approximately 50 per cent higher donations to the public good when compared with the control, demonstrating that both shame and honour can drive cooperation and can help alleviate the tragedy of the commons.
Which is Better: A Glass Half-Full or Half-Empty?: How Optimism Leads to Irrational Justifications and Bad Decisions - via Associated Content – [Much of the focus of 13.7 Billion Years has been to highlight the bad decisions that humans make that have had detrimental effects such as species extinction, loss of biodiversity, animal abuse and the degradation of public health and the environment. For the month of June, the weekday series "Gray Matters " will take a look at research that has shed light on the inner workings of the mysterious and frustratingly complex marvel that is the human brain. The future health of the planet depends largely on the actions that mankind collectively makes -- actions that are ultimately the result of billions of individual choices made every day, at every moment. But in order to start making better choices, it's important to figure out how and why choices are made in the first place.]
Good news and bad for a popular willpower-enhancing strategy - via BPS Research – In rich countries, temptation is never far and many of us struggle to achieve our long-term aims of moderation, dedication and fidelity. An increasingly popular strategy for regaining control is to form so-called implementation intentions. Rather than having the vague goal to eat less or exercise more, you spell out when, where and how you will perform a given activity, and rehearse that thought regularly. For example, “when in the cafeteria at lunch I will buy orange juice rather than cola”. A more specific variant is to form an ‘if-then’ plan, as in “if it is a Tuesday morning, then I will go for a run,” and again, this is rehearsed mentally on a regular basis.
What Is Social Psychology, Anyway? - via Edge.org- One of the basic assumptions of the field is that it’s not the objective environment that influences people, but their constructs of the world. You have to get inside people’s heads and see the world the way they do. You have to look at the kinds of narratives and stories people tell themselves as to why they’re doing what they’re doing. What can get people into trouble sometimes in their personal lives, or for more societal problems, is that these stories go wrong. People end up with narratives that are dysfunctional in some way.
When Golfers Overthink: The Science Behind the Choke - via NYT- Golf may be a four-letter word, but the curse of the game comes in five letters: choke. It is largely an unspoken word in golf, one rarely uttered on broadcast television. It has little favor in the recreational golf world as well. Any number of euphemisms spring up to describe evident failure under pressure — a putt is said to have been misread or a chip misjudged — but in the back of every golfer’s mind is a tacit understanding of what has happened.
This Is Your Brain On Ads: Advertising affects you even when you’re not really paying attention – via SciMind-For decades, social scientists have tried to determine how TV advertising affects the children and teenagers who watch them. Do commercials make kids more materialistic? Are fast-food ads responsible for childhood obesity rates?
Imagination Can Influence Perception - via Aps- Imagining something with our mind’s eye is a task we engage in frequently, whether we’re daydreaming, conjuring up the face of a childhood friend, or trying to figure out exactly where we might have parked the car. But how can we tell whether our own mental images are accurate or vivid when we have no direct comparison? That is, how do we come to know and judge the contents of our own minds?
The Prejudice Hormone: Oxytocin, Known for Encouraging Bonding, May Underlie Bias: - via SciAm- Oxytocin is known as the “love hormone” because it encourages trust, cooperation and social bonding. But these effects may exist only for members of your own clan, according to a study published in January in the Proceedings of the National Academy of Sciences USA. Psychologists at the University of Amsterdam found that Dutch men who inhaled oxytocin were more likely to associate positive words, such as joy and laughter, and complex positive emotions, such as hope and admiration, with Dutch people than with Germans or Arabs.
The hidden behavioral tax from a tight budget: Lessons from late-night Walmart- via Nudge – On the eve of each new month, a consumer ritual unfolds at Walmarts around the country. At around 11 p.m. “customers start to come in and shop,” Walmart’s CEO of U.S. Business Bill Simon told a conference of investors last year (pdf of transcript here). Shoppers fill their carts with staples. Baby formula, milk, bread, and eggs. They browse until midnight when their government electronic benefits cards activate. Walmart’s dead-of-night sales zoom well above its daily average over the month. Retailers have long known about this phenomenon, commonly called the “paycheck cycle,” in which cash-strapped consumers make big purchases when they get paid and are forced to cut back to the bone later in the cycle until the next paycheck arrives. In this tough economy, said Simon, the paycheck cycle is “extreme.” It can affect Americans at all income levels, but at the end of the month, that extremity is most crushing to the poor and the working class.
What Drives Obesity? An Economist Takedown of The Economist - via Freakonomics- Okay, I’m not arguing that my aging is causing higher obesity. Rather, when you see a variable that follows a simple trend, almost any other trending variable will fit it: miles driven, my age, the Canadian population, total deaths, food prices, cumulative rainfall, whatever.
What People Want From Their Professionals: Attitudes Toward Decision-making Strategies- via JBDM- Attitudes toward four types of decision-making strategies—clinical/fully rational, clinical/heuristic, actuarial/fully rational, and actuarial/heuristic—were examined across three studies. In Study 1, undergraduate students were split randomly between legal and medical decision-making scenarios and asked to rate each strategy in terms of the following: (i) preference; (ii) accuracy; (iii) fairness; (iv) ethicalness; and (v) its perceived similarity to the strategies used by actual legal and medical professionals to make decisions. Studies 2 and 3 extended Study 1 by using a more relevant scenario and a community sample, respectively. Across the three studies, the clinical/fully rational strategy tended to be rated the highest across all attitudinal judgments, whereas the actuarial/heuristic strategy tended to receive the lowest ratings. Considering the two strategy-differentiating factors separately, clinically based strategies tended to be rated higher than actuarially based strategies, and fully rational strategies were always rated higher than heuristic-based strategies. The potential implications of the results for professionals’ and those affected by their decisions are discussed.
What Happens in the Brain as It Loses Consciousness: 3-D Movie Constructed - via Science Daily – For the first time researchers have been able to watch what happens to the brain as it loses consciousness. Using sophisticated imaging equipment they have constructed a 3-D movie of the brain as it changes while an anaesthetic drug takes effect.
Testing Improves Memory – via APS- “We’ve known for over 100 years that testing is good for memory,” says Kent State University psychology graduate student Kalif Vaughn. Psychologists have proven in a myriad of experiments that “retrieval practice”—correctly producing a studied item—increases the likelihood that you’ll get it right the next time. “But we didn’t know why.”
Consequences of accepting versus confronting patronizing help for the female target and male actor - Via EJSP- Three studies examined how a woman’s reaction to a man’s benevolently sexist offer of help affected observers’ perceptions. Results suggest a dilemma for women: A woman who accepted benevolently sexist help was perceived as warm but incompetent and less suited for a competence-related job (management consultant), whereas a woman who declined help and asserted her independence as a woman was perceived as competent but cold and less suited for a warmth-related job (day care worker). By contrast, observers viewed the male help-offerer especially favorably (warmer, more competent, and more qualified as a management consultant) when the female target accepted (versus confronted) his patronizing offer. But only perceivers who endorsed benevolent sexism showed these effects. Implications for challenging benevolent sexism are discussed.
Fluent English Speakers Translate into Chinese Automatically - via APS- Over half the world’s population speaks more than one language. But it’s not clear how these languages interact in the brain. A new study, which will be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, finds that Chinese people who are fluent in English translate English words into Chinese automatically and quickly, without thinking about it.
The centrality of social image in social psychology - via EJSP-Social image, or the views that others have of us and our groups, plays a role in a wide array of psychological processes, including impression management, interpersonal relationships, mate selection, intragroup and intergroup processes, the experience and expression of emotion, gender differences in behavior, and the construction and maintenance of social status. The 13 papers included in this special issue reflect the centrality of social image in these and other social–psychological processes. Five major themes integrate this diverse selection of papers: (i) self-presentation of social image; (ii) culture-specific conceptions of social image; (iii) the role of social image in emotion; (iv) respect and status as reflections of social image; and (v) the influence of social image on ingroup and outgroup perceptions. Taken together, these papers illustrate the importance of social image for understanding the complexities of human behavior and point to new ways to study this important topic.
“I’m ashamed because of you, so please, don’t do that!”- via EJSP- The present research investigated the role that threat to social image and self-conscious emotions play in reaction to deviance. In three studies, participants were invited to imagine themselves in a situation in which they were bystanders of a deviant behavior. We manipulated the threat to the in-group’s social image through the deviant group membership (Study 1), the visibility of the deviant behavior to a third party (Study 2), and the stereotype salience of the deviant behavior (Study 3). Social image concerns, emotional reactions, and intention of sanctioning the deviant were measured. The results revealed that the situations in which the threat to the social image of the group was high provoked the greater intentions to sanction the deviant. Moreover, intentions were accounted for by the more intense shame and embarrassment (but not guilt) reported by the participants when faced with a group-threatening situation. The findings indicate that reactions to deviance are highly dependent on the damage caused to the group’s social image and on self-conscious emotions.
Chemical Imbalances and Mental Illness? Go for the Placebo with Side Effects- via PLOS- Chemical imbalances is our most recent folk theory of mental illness in the Western world. A focus on doctors and therapists doing, rather than on how healing happens, is the corollary – the imbalance, whether chemical or psychoanalytic, needs to be corrected. Both of these are rich arenas for medical anthropology, and I particularly hope people will dig into work on how healing and placebos work.
Inattentional Blindness in Urban Areas- via Paul Kedrosky -We simulated the Boston incident by having subjects run after a confederate along a route near which three other confederates staged a fight. At night only 35% of subjects noticed the fight; during the day 56% noticed.
Neuroplasticity Revisited- Neuroskeptic- Overall, though, she had made a “magnificent” recovery despite losing a large chunk of her brain. I’ve previously been skeptical of some of the stronger claims of neuroplasticity or “brain remodelling”, but some parts of the brain are more plastic than others and the prefrontal cortex seems to be one of the most flexible.
Entrepreneurship/ Business/ Finance/ Investing:
A risky currency? Alleged $500,000 Bitcoin heist raises questions - via Ars Technica- itcoin, the decentralized virtual currency whose value has skyrocketed in recent weeks, faced a key test Monday as a veteran user reported that Bitcoins worth hundreds of thousands of dollars had been stolen from his computer. Ars Technica was unable to independently verify the user’s story, and he did not respond to our request for an interview. But whether the story is true or not, it highlights a major disadvantage of the currency’s much-touted lack of intermediaries. Bypassing middlemen frees users from government meddling and bank fees. But it also deprives them of the benefits those intermediaries provide, including protection against theft and fraud.
Understanding Greece’s Plan for Private participation – via Interfluidity-If I understand the current impasse, much of the trouble is about how to engineer “private participation” in the losses that lenders to Greece and other debtors must eventually bear. The Eurocrats have decided they cannot allow Greece simply to default and impose haircuts on all of its creditors, and they cannot prevent a default by covering Greece’s solvency gap with public sector transfers alone. Despite European leaders’ best efforts to obfuscate and obscure transfers, creditor-state publics know they will be saddled with the lion’s share of these losses. They demand that private sector lenders bear at least a portion of the costs. Yet, there is no way to force a private bondholder to accept anything less than payment in full and on-time without that act constituting a default, thereby triggering the legal controversies and dangerous precedents that the Eurocrats are struggling to avoid.
Corruption and economic growth: A meta-analysis of the evidence on low-income countries and beyond - via MPRA -Corruption is a symptom and outcome of institutional deficiency, with potentially adverse effects on economic growth. This paper aims to provide a synthesis of the existing evidence on the relationship between corruption and economic growth – controlling for effect type, data sources, and country groupings. Using 32 key search terms and 43 low-income country names, we searched in 20 electronic databases and obtained 1,002 studies. Initial screening on the basis of PIOS (Population-Independent Variable-Outcome-Study Design) criteria and critical evaluation on the basis VRA (Validity-Reliability-Applicability) criteria led to inclusion of 115 studies for analysis. We conduct a meta-analysis of the empirical findings in 72 empirical studies, using fixed-effect and random-effect weighted means and testing for significance through precision-effect tests (PETs). Our findings indicate that corruption has a negative effect on per-capita GDP growth overall. We also report that corruption is relatively more detrimental in mixed countries as opposed to low-income countries only and that indirect effects of corruption on growth (through the human capital and public finance channels) are larger than its direct effects.
Groupon from revenues to earnings: Operating, financing and capital expenses... – via Musings On Markets- The bottom line, though, is that from a valuation perspective, reclassifying acquisition costs is a mixed blessing. For growing companies like Groupon, it can make the earnings look more positive, but it will also increase the capital invested at these companies (because the acquisition costs will be capitalized). It can alter perspectives on whether the company is actually profitable and creating value: the key profitability number in the long term is not the operating margin but the return on invested capital and Groupon has just admitted that it invests a lot more capital than people realize in what it spends to acquire customers.
The New Sociology of Markets – via Sociological Imagination- In contrast to the ahistorical, price-taking, utility-maximizing, omniscient actors which fill the abstract models of neoclassical economics (what Coase (1988: 19) mockingly called “blackboard economics”), economic sociologists have made vast improvements in the study of actually existing markets. Fourcade (2007) breaks the sociology of markets down into three primary camps: network analysts, field analysts, and performativists. While the sociology of markets is most associated with the embeddedness program of Granovetter (1985), this is probably the least “sociological” of the three camps. As Krippner (2001) has persuasively shown, network analysts commandeered Polanyi’s concept of embeddedness and gave it a new meaning making it synonymous with network ties. For reasons explained in the short answer below (See #1), this essay will focus on the other two camps – field analysts and performativists.
Rent-Seeking Origins of Central Banks:The Case of the Federal Reserve System - via Mendelu- What were the purposes for establishment of central banks? Central banks are historically relatively young organizations. Their main purposes are to regulate money supply through interest rates, regulate the banking sector and act as a lender of last resort to banking sector during the time of financial crises. Historical evidence suggests that in the second half of 19th century in the USA private clearing houses were able to provide the banking sector with similar services. In this paper, we follow such evidence and provide Public Choice explanation for establishment of central banks. On the historical example of establishment of the Federal Reserve System we show that the motivation for establishment of the Federal Reserve System might be rather political instead of economic. More precisely, we argue that the Federal Reserve System was established to allow the American Federal Government to control rentdistribution through money supply control and banking sector regulation.
This is not the way I’d imagined Bill Gates… A rare and remarkable interview with the world’s second richest man - via Daily Mail- I never took a day off in my twenties. Not one. And I’m still fanatical, but now I’m a little less fanatical. I play tennis, I play bridge, I spend time with my family. I drive myself around town in a normal Mercedes. I’ve had a Lexus. The family has a Porsche, which is a nice car that we sometimes take out. We have a minivan and that’s what we use when it’s the five of us. My eldest daughter rides horses, so we go to a lot of three-day shows. The kids are a big part of my schedule.’
HBS Cases: KFC’s Explosive Growth in China - via Harvard- Homogenization has made it easy for fast-food joints to circle the globe, spitting out carbon copies of themselves, their burgers, and their fries along the way. But in the most populous country in the world, a fast-food giant stepped off the conveyor belt and found unprecedented success by being different, not by being the same.
The Tax Benefit of Income Smoothing - via CEPR- A worker can contribute pre-tax dollars to a private pension plan. Under a progressive tax, this feature reduces income taxes. Ippolito (1986} argues that an individual in 1979 can reduce lifetime taxes by 20%. We re-examine his analysis using the complete time-series of US income tax history and find that the tax benefit of income smoothing is much smaller.
China investors: beware of inequality – By Edward Chancellor - via Value Investing World- Should investors care about how the economic pie is divided up? In general, they are likely to be well-disposed to a certain amount of inequality. Corporate managers need incentives if they are to maximise returns on capital. Adam Smith’s invisible hand only operates if people are allowed to pursue their private gain. Incentives foster innovation. Few iPhone users will begrudge Steve Jobs’s vast fortune. Furthermore, as Keynes observed of 19th century Britain, inequality begets savings which in turn generate capital investment and economic growth.
Financial Cycles: What? How? When? - via CEPR -This paper provides a comprehensive analysis of financial cycles using a large database covering 21 advanced countries over the period 1960:1-2007:4. Specifically, we analyze cycles in credit, house prices, and equity prices. We report three main results. First, financial cycles tend to be long and severe, especially those in housing and equity markets. Second, they are highly synchronized within countries, particularly credit and house price cycles. The extent of synchronization of financial cycles across countries is high as well, mainly for credit and equity cycles, and has been increasing over time. Third financial cycles accentuate each other and become magnified, especially during coincident downturns in credit and housing markets. Moreover, globally synchronized downturns tend to be associated with more prolonged and costly episodes, especially for credit and equity cycles. We discuss how these findings can guide future research on various aspects of financial market developments.
The Persistence of Employee 401(k) Contributions Over a Major Stock Market Cycle: Evidence on the Limited Power of Inertia on Savings Behavior - via UpJohn Research- Many middle-income workers save for retirement through 401(k) plans. This study addresses the concern that low account balances of older workers may indicate that these vehicles are not sufficient to insure adequate retirement savings. In particular, the study shows that workers are not persistent (continuing once a worker has started) in contributing, and a weak stock market exacerbates the problem.
The Sickness Beneath the Slump – By Robert Shiller - via Value Investing World- THE origins of the current economic crisis can be traced to a particular kind of social epidemic: a speculative bubble that generated pervasive optimism and complacency. That epidemic has run its course. But we are now living with the malaise it caused.
Search Diversion, Rent Extraction and Competition - via Harvard- Retailers, search engines, shopping malls and other intermediaries often deliberately design their physical layouts or e-commerce sites in order to divert customers’ attention away from the products they were initially looking for, with hopes that they’ll buy a bunch of other products, too. This paper explores various incentives for so-called “search diversion” in a couple of scenarios—when stores internalize their affiliation decisions with intermediaries, and when competition is introduced among intermediaries.
The appropriate use of risk models: Part I - via Voxeu- Risk models are at the heart of the financial sector’s self-monitoring as well as supervision by regulators. This column, the first of two, addresses the question of how risk models are misused in practice by practitioners and supervisors alike. This misuse causes risk management to fail when it is most needed.
The Eclectic Mix:
GeoAnalytics for the Masses - via GEOIQ- The core mission of GeoCommons is bringing the power of geography to the masses. First we focused on making data more accessible, then quality cartographic visualization of data, and today we’ve added geographic analysis of data. Over Christmas we blogged about the “12 Analytics of Christmas” we’d built for GeoIQ. We are celebrating Christmas in June bringing all those analytics and more to GeoCommons. Now anyone can run analysis on their data and share it with the world. GeoCommons has a variety of geoprocessing and statistical analysis tools available for anyone to use. If you aren’t familiar with the lingo – geoprocessing capabilities allow you do geographic queries like aggregate customers by zipcode, or find all the houses within one mile of a metro stop. Statistical analysis tools let you look at things like the difference between two time time periods, or run a correlation between two data sets. We have tutorials and user manuals to step you through all the new capabilities. Also there are step by step videos and guides for each new analysis feature embedded at the point you are choosing it. The focus across the board is to make geographic analysis as accessible to as many people as possible.
Teen Brain Data Predicts Pop Song Success – via Medical News Today- “We have scientifically demonstrated that you can, to some extent, use neuroimaging in a group of people to predict cultural popularity,” says Gregory Berns, a neuroeconomist and director of Emory’s Center for Neuropolicy.
On Self-Experimentation - via Permutations- Seth Roberts is an interesting psychologist. He seems to have built up quite a following from non-academics, as well as academics, due to self-experimentation. Seth notes self-experimentation has several advantages over mainstream academic approaches. 1) Time: the self-experimenter doesn’t have to deal with coordinating with lots of people so she can rapidly and easily perform one experiment after another. 2) Freedom: the self-experimenter has freedom to study whatever she wants. and 3) Motivation: the self-experimenter has more reason to study something that matters and get the answer right.
Preparing for x-topia: A digital divide of a different kind - via Economist- Over the past two decades the planet has weaved the web into a digital nervous system that connects people and amplifies insights at a rate of change we humans are ill equipped to comprehend. As a result, we find ourselves facing a digital divide of a different kind. This divide is not about the haves or have-nots in terms of access, but the know and know-nots in terms of survival. Given that each individual’s ability to process and store information has remained relatively constant over time, how do we begin to bridge a digital divide where technology is proliferating, information is exploding, time is compressing and change is accelerating?
Video Ted Talk: Haunting photos of polar ice - via Ted- Photographer Camille Seaman shoots icebergs, showing the world the complex beauty of these massive, ancient chunks of ice. Dive in to her photo slideshow, “The Last Iceberg.”
Kids of Color Consume a Lot More Media Than White Kids - via Good- A new study at Northwestern University found a huge difference between the amount of media white and nonwhite kids consume. Minority children ages 8 to 18 consume an average of 13 hours of media content a day—about 4-and-a-half hours more than their white counterparts. In the last ten years, this number has doubled for black children and quadrupled for Hispanics.
Video: Uncommon Knowledge: Thomas Sowell - via Fora.tv- Thomas Sowell has studied and taught economics, intellectual history, and social policy at institutions that include Cornell University, UCLA, and Amherst College. Now a senior fellow at the Hoover Institution, Sowell has published more than a dozen books, the latest of which is a revised and expanded second edition of Economic Facts and Fallacies.
“Some things are believed because they are demonstrably true. But many other things are believed simply because they have been asserted repeatedly,” states Sowell in his latest book. Here, he demolishes some accepted “facts,” ranging from housing (“The biggest economic fallacy about housing is that ‘affordable housing’ requires government intervention”) to race and economics (“Race doesn’t account for difference in black-white income”) to race and culture (“the current fatherless families so prevalent among contemporary blacks are not a ‘legacy of slavery.’”)
Botnet Busters - via Business Week – When Microsoft and Pfizer got fed up with the nastiest junk e-mail blaster on the Web, they called Silicon Valley’s cybercrime vigilante
Kinect Hackers Are Changing the Future of Robotics – via Wired- For 25 years, the field of robotics has been bedeviled by a fundamental problem: If a robot is to move through the world, it needs to be able to create a map of its environment and understand its place within it. Roboticists have developed tools to accomplish this task, known as simultaneous localization and mapping, or SLAM. But the sensors required to build that map have traditionally been either expensive and bulky or cheap and inaccurate. Laser arrays cost a few thousand dollars and weigh several pounds, and the images they capture are only two-dimensional. Stereo cameras are less expensive, lighter, and can construct 3-D maps, but they require a massive amount of computing power. Until a reasonably priced, easier method could be designed, autonomous robots were trapped in the lab.
Rags to Rags – Riches to Riches - via Online Schools- American society prides itself on being a meritocracy, particularly with the fruition of the ‘American Dream’ being achieved by individuals from all types of backgrounds. Success today typically involves some form of higher education, to expand intellectual capacity and to hone one’s skill-set. However, the highest quality education is not the most easily accessible. This infographic takes a look at how the elite tend to fare well, and how the disadvantaged aren’t provided the same opportunities.
Microsoft: The Mobile Commerce Revolution – via Cool Infographics