Weekly Roundup 137: A Curated Linkfest For The Smartest People On The Web
Apologies for the delay, I was a volunteer at a conference.
Handpicked to satisfy your intellectual curiosity!
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Fascinating Geography Lecture On The International Oil Complex – via Global Sociology Blog– Keep in mind the petro-state as rentier state in the oil complex as state-owned companies make Exxon and others, as Watts say, look like little start-ups. And who says rent-based means corruption, bloated and inefficient operations dedicated to managing surplus.
How the Middle Ages Were Built: 1300-1408 – via Fora.Tv– England’s economic success peaked in 1300 amidst a riot of architectural excess and was followed by a series of disasters which lasted much of the fourteenth century. Yet against a catastrophic background English architectural individualism flourished and out of radically changed social structures an architectural consensus emerged
Our Future Brain Power – via Fora.tv– Just how near are we to using our brains routinely to control machines for work or leisure purposes? Will we be able to improve the performance of our existing brains? Have advances in neuroscience, neural network modeling and the physical sciences led us to the point where it could soon be possible to create artificial, nanoscale brains and where might such technology lead us?
Most Important Reads:
How Khan Academy Is Changing the Rules of Education – via Wired– Khan’s videos are anything but sophisticated. He recorded many of them in a closet at home, his voice sounding muffled on his $25 Logitech headset. But some of his fans believe that Khan has stumbled onto the secret to solving education’s middle-of-the-class mediocrity. Most notable among them is Bill Gates, whose foundation has invested $1.5 million in Khan’s site. “I’d been looking for something like this—it’s so important,” Gates says. Khan’s approach, he argues, shows that education can truly be customized, with each student getting individualized help when needed.
Rick Bookstaber On Linkedin, Weak Ties, And Network Theory– via Rick Bookstaber- Weak links are a key source of stability and resilience in networks. They are the conduit for sources of information and support while not being essential to the network’s function. By definition, a weak link is one that is not integrated into a network; it can be broken without affecting the function of the network Their value derives in part from being unessential, and, for that matter, low maintenance. Having sets of strongly linked networks that are then linked to one another through weak links is an attractive structure for survivability.
The Man of Numbers: How Fibonacci Changed the World – via Brainpickings– Imagine a day without numbers — how would you know when to wake up, how to call your mother, how the stock market is doing, or even how old you are? We live our lives by numbers. They’re so fundamental to our understandig of the world that we’ve grown to take them for granted. And yet it wasn’t always so. Until the 13th century, even simple arithmetic was mostly accessible to European scholars. Merchants kept track of quantifiables using Roman numerals, performing calculations either by an elaborate yet widespread fingers procedure or with a clumsy mechanical abacus. But in 1202, a young Italian man named Leonardo da Pisa — known today as Fibonacci — changed everything when he wrote Liber Abbaci, Latin for Book of Calculation, the first arithmetic textbook of
The Collapse of the Railway Mania & the Birth of Accounting – via Paul Kedrosky -It is well known that the great Railway Mania in Britain in the 1840s had a great impact on accounting. This paper contributes a description and analysis of the events that led to the two main upheavals in accounting that took place then, and of the key role played by Robert Lucas Nash in those events. He was a pioneer in accounting and ﬁnancial analysis, providing studies on the ﬁnancial performance of railways that were more penetrating and systematic than those available to the public from any one else. His contemporaries credited him with precipitating a market crash that led to one of two dramatic changes in accounting practices that occurred in the late 1840s. Yet his contributions have been totally forgotten. The collapse of the Railway Mania provides interesting perspectives on the development of capital markets. The accounting revolution was just one of the byproducts of the collision of investors’ rosy proﬁt expectations with cold reality. Shareholders’ struggles to understand, or, more precisely, to avoid understanding, the inevitability of ruin, have many similarities to the events of recent ﬁnancial crashes. The Railway Mania events thus provide cautionary notes on what even penetrating accounting and ﬁnancial analysis reports can accomplish. Railway share price behavior suggests that Nash’s contributions had a much smaller eﬀect than his contemporaries gave him credit for.
Phil Tetlock: Predicting Tsunamis – via Falkenblog- Later, Tetlock notes that statistical models outperform alternatives, but ‘have an unfortunate tendency to work well until they don’t.’ This, supposedly, is a deep thought. What Tetlock seems to lament is the absence of perfect foresight, because dominant approaches he finds poor. This isn’t a very logical conclusion, because he is making the best the enemy of the good here.
Tetlock is fond of grouping experts into hedgehogs and foxes: ‘the fox knows many things but the hedgehog knows one big thing.’ The experts with modest but real predictive insight were the foxes, but sometimes not. In an interview Tetlock was asked whether he was a hedgehog or a fox, and replied, ‘both!’, as if everyone else would not also choose this description, highlighting the futility of his schema. Tetlock greatly admires Nassim Taleb, another who, ironically, criticizes pundits who make lots of nonfalsifiable predictions and selectively report their record. I think this highlights Nietzsche’s warning that ‘He who fights with monsters should look to it that he himself does not become a monster.’ In other words, people who make a life out of criticizing overconfidence, dogma, hate, hypocrisy, are often filled with overconfidence, dogma, hate, and hypocrisy.
Economics should not be divorced from morality – via Rationally Speaking – I simply do not buy the fundamentalist (yes, I’m using the term on purpose) libertarian idea that economics is all there is or that should count in pretty much all human transactions and social problems. The hallmark of a just society is precisely that it does consider issues of intrinsic rights — not just to life and property, as the libertarians would have it — but also to health, education, housing and jobs. The whole point of living in a structured society, as opposed to Hobbes’ war of all against all, is so that our lives are not going to be ‘solitary, poor, nasty, brutish and short.’ Which means that what [Larry] Summers dismisses as ‘social concerns’ really ought to be central to the way we structure our societies. Economic systems ought to
Peer Pressure Influences or Definitions of Value – via Sagepub– Social influence—individuals’ tendency to conform to the beliefs and attitudes of others—has interested psychologists for decades. However, it has traditionally been difficult to distinguish true modification of attitudes from mere public compliance with social norms; this study addressed this challenge using functional neuroimaging. Participants rated the attractiveness of faces and subsequently learned how their peers ostensibly rated each face. Participants were then scanned using functional MRI while they rated each face a second time. The second ratings were influenced by social norms: Participants changed their ratings to conform to those of their peers. This social influence was accompanied by modulated engagement of two brain regions associated with coding subjective value—the nucleus accumbens and orbitofrontal cortex—a finding suggesting that exposure to social norms affected participants’ neural representations of value assigned to stimuli. These findings document the utility of neuroimaging to demonstrate the private acceptance of social norms.
The New Generation Of Molecular Tools– via Edge.Org– A combination of cheap DNA synthesis, freely accessible databases, and our ever-expanding knowledge of protein science is conspiring to permit a revolution in creating powerful molecular tools.
The CIA’s Secret Sites in Somalia – via LongReads– In the eighteen years since the infamous “Black Hawk Down” incident in Mogadishu, US policy on Somalia has been marked by neglect, miscalculation and failed attempts to use warlords to build indigenous counterterrorism capacity, many of which have backfired dramatically. At times, largely because of abuses committed by Somali militias the CIA has supported, US policy has strengthened the hand of the very groups it purports to oppose and inadvertently aided the rise of militant groups, including the Shabab.
Fairness & Prosperity: The Rise of Inequality in the UK– via TUC– The UK is a far more unequal society now than it was 30 years ago, and three-quarters of the public agree that the gap between rich and poor in the UK is too high. But if policymakers were to enact policies to reduce inequality, would this jeopardise the UK’s economic performance? This Touchstone Extra pamphlet reviews the latest evidence on the relationship between inequality and economic performance across countries and finds no support for the idea that there is a ‘trade-off’ between inequality and prosperity. Indeed, there is strong evidence that countries with higher inequality have worse performance on a range of health and social outcomes. The report also discusses theories that can rationalise these findings, and recommends policies which would help reduce inequality from its current very high level in the UK.
We, the people, who make mistakes–economists included – via Citation Needed– There are at least two non-trivial ways to define rationality. One is in terms of an ideal agent’s actions–i.e., rationality is what a decision-maker would choose to do if she had unlimited cognitive resources and knew all the information relevant to a given decision. Well, okay, maybe not an ideal agent, but at the very least a very smart one. This is the sense of rationality in which you might colloquially remark to your neighbor that buying lottery tickets is an irrational thing to do, because the odds are stacked against you. The expected value of buying a lottery ticket (i.e., the amount you would expect to end up with in the long run) is generally negative, so in some normative sense, you could say it’s irrational to buy lottery tickets.
Our Behavioral Responses To Natural Disasters:– viax- Catastrophic events can dramatically alter existing social and economic relationships. The consequences can be long-lasting and give rise to heterogeneity of behavior across populations. We investigate the impact of a large negative shock on altruism, trust and reciprocity in 30 small Honduran communities diversely affected by Hurricane Mitch in 1998. We conduct a survey of communities and behavioral experiments three and four years after the event. We find that the mean and variance of behavior are nonlinearly related to the severity of the weather shock affecting the community. Also, there is a substitution away from formal local organizations to informal arrangements.
Decision Making/ Behavioral Economics/Psychology/ Risk/ Sciences:
How to Build a Better Learner – via SciAm– Benasich is one of a cadre of researchers employing brain-recording techniques to understand the essential processes that underlie learning. The new science of neuroeducation seeks the answers to questions that have always perplexed cognitive psychologists and pedagogues.
Dan Ariely: Teachers cheating and Incentives– via Predictably Irrational – In recent years there seems to have been a surge in academic dishonesty across many high schools (a lot of it has been showing up in the last few weeks). No doubt this can be explained in part by 1) increased vigilance and reporting, 2) greater pressure on students to succeed, and 3) the communicable nature of dishonest behavior (when people see others do something, whether it’s tweaking a resume or parking illegally, they’re more likely to do the same). But, I also think that a fourth, and significant, cause in this worrisome trend has to do with the way we measure and reward teachers.
How much deception is there in social psychology? – via Decision Science News- Subjects were (a) misled about the purpose of the study, (b) told that they would receive a vitamin injection when, in fact, they received an injection of epinephrine, (c) misinformed regarding the somatic effects of the drug, and (d) misled through fake equipment to believe that their physiological responses were no longer measured when in fact they were. In addition, (e) a doctor also faked the administration of a comparable injection to (f) a confederate, who then (g) proceeded to act in a bizarrely “euphoric” fashion to create a context for subjects’ perceptions of the drug’s effects. In a footnote the authors noted that (h) the medical school’s ethics committee did not allow them to introduce an anger manipulation as well. On top of all this, a complete debriefing of subjects was postponed for several weeks until all of the subjects had been tested.
Why Does Time Fly? -SciAm– A recent study by van Wassenhove and colleagues is beginning to shed some light on this problem. This group used a simple experimental set up to measure the “subjective” experience of time. They found that people accurately judge whether a dot appears on the screen for shorter, longer or the same amount of time as another dot. However, when the dot increases in size so as to appear to be moving toward the individual — i.e. the dot is “looming” — something strange happens. People overestimate the time that the dot lasted on the screen. This overestimation does not happen when the dot seems to move away. Thus, the overestimation is not simply a function of motion. Van Wassenhove and colleagues conducted this experiment during functional magnetic resonance imaging, which enabled them to examine how the brain reacted differently to looming and receding.
The reward of a good joke: neural correlates of viewing dynamic displays of stand-up comedy. – via PubMed– Humor is enjoyable, yet few studies to date have reported that humor engages brain regions involved in reward processing (i.e., the mesolimbic reward system). Even fewer have investigated socially relevant, dynamic displays of real actors telling jokes. Instead, many studies have focused on responses to static cartoons or written jokes in isolation. In the present investigation, we used functional magnetic resonance imaging (fMRI) to examine brain activation in response to video clips of comedians performing stand-up comedy, a more socially relevant task than reading jokes or cartoons in isolation. Participants watched video clips of eight stand-up comedians, half female/half male, that were prerated by a separate group of participants from the same population as eliciting either high or low levels of amusement, thereby allowing us to control for comedian attributes and comedic style. We found that high-funny clips elicited more activation in several brain regions involved with reward responses, including the nucleus accumbens, caudate, and putamen. A regression with participants’ own ratings of humor revealed similar activity in reward areas as well as in regions involved in theory of mind. These findings indicate that dynamic social displays of humor do engage reward responses. The rewarding nature of humor may help explain why it is so valued socially.
Improving people’s memory by punishing their correct answers – via BPS Research – A well-established finding in psychology is that successfully retrieving information from memory serves to consolidate the storage of that information. Each time your brain’s filing clerk tracks down the right information, the more likely he is to find it another time. Psychologists call this the testing effect – practising retrieval of information is far more effective than simply re-studying that same material.
Short- and long-term benefits of cognitive training – via Pnas– Does cognitive training work? There are numerous commercial training interventions claiming to improve general mental capacity; however, the scientific evidence for such claims is sparse. Nevertheless, there is accumulating evidence that certain cognitive interventions are effective. Here we provide evidence for the effectiveness of cognitive (often called “brain”) training. However, we demonstrate that there are important individual differences that determine training and transfer. We trained elementary and middle school children by means of a videogame-like working memory task. We found that only children who considerably improved on the training task showed a performance increase on untrained fluid intelligence tasks. This improvement was larger than the improvement of a control group who trained on a knowledge-based task that did not engage working memory; further, this differential pattern remained intact even after a 3-mo hiatus from training. We conclude that cognitive training can be effective and long-lasting, but that there are limiting factors that must be considered to evaluate the effects of this training, one of which is individual differences in training performance. We propose that future research should not investigate whether cognitive training works, but rather should determine what training regimens and what training conditions result in the best transfer effects, investigate the underlying neural and cognitive mechanisms, and finally, investigate for whom cognitive training is most useful.
How Do Income and Its Components and Perception Relate to Alienation? – via Wiley– This study examines the relationship between individuals’ financial reality and alienation—a psychological state that negatively affects employee performance. Using hierarchical regression to analyze 311 questionnaires completed by full-time employees, income-related variables were found to explain a substantial part of the variance in alienation. A negative relationship between income and alienation was identified, but was moderated by the value that individuals attributed to money and was related to pay satisfaction. Pay composition had an independent effect on alienation: Higher control over amount of income and a recent increase in income were related to lower levels of alienation beyond the effect of income level. Potential practices to reduce alienation include spreading wage increases, enhancing pay transparency, and linking pay to performance.
Pressure to conform – survey of tight and loose cultures. – via Deric Bownds-Overall, they found that societies exposed to contemporary or historical threats, such as territorial conflict, resource scarcity, or exposure to high levels of pathogens, more strictly regulate social behavior and punish deviance. These societies are also more likely to have evolved institutions that strictly regulate social norms. At the psychological level, individuals in tightly regulated societies report higher levels of self-monitoring, more intolerant attitudes toward outsiders, and paying stricter attention to time. In this multilevel analysis, ecological, historical, institutional, and psychological variables comprise a loosely integrated system that defines a culture.
Research on Relative Preferences – via Falkenblog– An economist at the University of Bonn has shown that test subjects who receive a given reward for a task enjoy it significantly more if other subjects fail or do worse—a finding that upends traditional economic theories that absolute reward is a person’s central motivation.
“What about me?” Perceptions of exclusion and Whites’ reactions to multiculturalism. – via PsychNet– A 5-study investigation of reactions of dominant group members (i.e., White Americans) to diversity (relative to racial minority reactions) provides evidence of implicit and explicit associations between multiculturalism and exclusion and of a relationship between perceived exclusion and reactions to diversity. In Study 1, Whites but not racial minorities were faster in an implicit association task at pairing multiculturalism with exclusion than with inclusion. This association diminished in Study 2 through a subtle framing of diversity efforts as targeted toward all groups, including European Americans. In Study 3, in a “Me/Not Me” task, Whites were less likely than minorities to pair multiculturalism concepts with the self and were slower in responding to multiculturalism concepts. Furthermore, associating multiculturalism with the self (Study 3) or feeling included in organizational diversity (Study 4) predicted Whites’ endorsement of diversity and also accounted for the oft-cited group status difference in support for diversity initiatives. Study 5 showed that individual differences in need to belong moderated Whites’ interest in working for organizations that espouse a multicultural versus a color-blind approach to diversity, with individuals higher in need to belong less attracted to organizations with a multicultural approach. Overall, results show that the purportedly “inclusive” ideology of multiculturalism is not perceived as such by Whites. This may, in part, account for their lower support for diversity efforts in education and work settings
Does taking her husband’s name cost a woman half a million dollars? – via Bakadesuyo- A woman who took her partner’s name or a hyphenated name was judged as more caring, more dependent, less intelligent, more emotional, less competent, and less ambitious in comparison with a woman who kept her own name. A woman with her own name, on the other hand, was judged as less caring, more independent, more ambitious, more intelligent, and more competent, which was similar to an unmarried woman living together or a man. Finally, a job applicant who took her partner’s name, in comparison with one with her own name, was less likely to be hired for a job and her monthly salary was estimated [euro]861,21 lower (calculated to a working life, [euro]361.708,20).
What personality trait best predicts who will be overweight? – via Bakaesuyo- Impulsivity was the strongest predictor of who would be overweight, the researchers found. Study participants who scored in the top 10 percent on impulsivity weighed an average of 22 lbs. more than those in the bottom 10 percent, according to the study.
Negotiation as a form of persuasion: Arguments in first offers. – via Psyc Net – In this article we examined aspects of negotiation within a persuasion framework. Specifically, we investigated how the provision of arguments that justified the first offer in a negotiation affected the behavior of the parties, namely, how it influenced counteroffers and settlement prices. In a series of 4 experiments and 2 pilot studies, we demonstrated that when the generation of counterarguments was easy, negotiators who did not add arguments to their first offers achieved superior results compared with negotiators who used arguments to justify their first offer. We hypothesized and provided evidence that adding arguments to a first offer was likely to cause the responding party to search for counterarguments, and this, in turn, led him or her to present counteroffers that were further away from the first offer.
When authoritarianism meets religion: Sacrificing others in the name of abstract deontology – via EJSP- Authoritarianism is a stable construct in terms of individual differences (social attitudes based on personality and values), but its manifestations and behavioral outcomes may depend on contextual factors. In the present experiment, we investigated whether authoritarianism is sensitive to religious influences in predicting rigid morality. Specifically, we investigated whether authoritarians, after supraliminal religious priming, would show, in hypothetical moral dilemmas, preference for impersonal societal norms even at the detriment of interpersonal, care-based prosociality toward proximal persons and acquaintances in need. The results confirmed the expectations, with a small effect size for the religious priming × authoritarianism interaction. In addition, these results were specific to participants’ authoritarianism and not to their individual religiosity. The interaction between authoritarian dispositions and religious ideas may constitute a powerful combination leading to behaviors that are detrimental for the well-being and the life of others, even proximal people, in the name of abstract deontology.
Do we like stores that charge us a membership fee better than ones that don’t? – via Bakadesuyo- We suggest that the presence of membership fees can lead consumers to infer a “fees -> savings” link, spurring them to increase their spending independent of the actual savings afforded by such clubs.
The Bilingual Advantage: Second Language Increases Cognitive Ability – via SciAm- Many parents would like their children to master a second language, but few kids in this country do. Only 9 percent of adults in the U.S. are fluent in more than one language. In Europe that figure is closer to 50 percent. “The United States is a long way from being the multilingual society that so many of our economic competitors are,” said U.S. Secretary of Education Arne Duncan at a meeting on foreign-language education last December.
When the Powerful Feel Incompetent, the Rest of Us Feel Their Wrath – via NeuroNarrative- You’re sitting at your desk when the phone rings. It’s your boss and he wants to see you in his office. You’re not sure why – nothing in particular comes to mind that would put you in his crosshairs. In fact, you’ve actually been doing a great job lately. Even your boss’s boss mentioned that you were doing outstanding work in a staff meeting the other day, right in front of everyone, including your boss. What could possibly be the problem?
Business/ Entrepreneurship/Finance/ Investing:
Stop Blaming Wall Street:It isn’t the reason our economy is in shambles. – Via The New Republic-IF FACTORS OTHER than financialization are principally responsible for America’s long-term economic ills, there are important implications for what Washington should do. First, the primary focus should be on reviving American industry, which includes everything from machine tool factories to software producers and from auto companies to biotech labs. Doing that will entail modifying our arrangement with Asia. Making these kinds of changes can be difficult, but it has happened before—during Reagan’s second term and in the first two years of Clinton’s presidency, when the United States got tough with its trading partners and subsidized innovation and growth.
Euphemisms for Morally Disengaged Managers – via PsyFiBlog- Presentation is at least as important as content and don’t let anyone tell you otherwise: words matter, deeply and importantly. Just not in a very nice way. Whatever we do we accompany with a logic of self-justification which is frequently built on an architecture of euphemisms designed to support such behaviour, no matter how immoral and unethical it might be. This is part of a psychological process known as moral disengagement, and is key to understanding why corporations go bad and their managers believe they’ve done nothing wrong.
The Willful Blindness of Rupert Murdoch – via Huffington Post– After every institutional debacle, the arguments are the same: it was just a few bad apples. Nobody at the top is to blame. A few rogue, or over-zealous employees just went off piste. Then the full scale of the debacle emerges and another face-saving fiction emerges: no one could possibly have seen this coming. Both arguments were wrong in Abu Ghraib, at Enron, WorldCom, BP, Countrywide and Lehman Brothers and both are wrong today at News International.
Wall Street’s Euthanasia of Industry – via Michael Hudson– Somebody has to lose when loans go bad. In this case, it is taxpayers. Governments have taken these bad loans onto their own balance sheet, so that bondholders and big creditors to these banks (typically foreigners) would not lose. But it is very expensive for governments to take on obligations to pay bad debts – that is, negative equity where the debt is higher than the collateral assets are worth. So now, having spent enormous sums to make sure that bankers and bondholders don’t lose a penny, governments are trying to balance their budgets by cutting off spending throughout the “real” economy. In other words, governments have sacrificed the economy so that the financial sector won’t take a loss. And even worse, the governments have left the bad real estate debts, personal debts, education debts and credit card debts on the books. So the “real” economy is being shrunk by debt deflation, while tax policy is being steered to benefit the financial sector.
Unheeded Lessons: What Did We Fail to Learn from the Financial Crisis? – via Wharton– Nearly two years after the financial meltdown of September 2008, is the global economy any less risky? Or do the conditions that led to the crisis still persist? These questions and more were at the heart of a conference titled, “Global Risk: New Perspectives and Opportunities,” organized at Wharton by Penn Lauder CIBER (Center for International Education and Research) and Santander Universities. The consensus: We managed to respond to the immediate threats, but the longer-term drivers of instability are still active.
Don’t Cede Control: Why You Need to Cut out Middle Men in Negotiations – via Mark Suster@ Both Sides of The Table– We need them all. Yet a critical mistake I see many entrepreneurs make is that they hand over too much control to their third-parties. They outsource the critical negotiations and “trust their advisors to handle the details.” Middle Men need to be led by you, not the other way around. And a key point is that when it comes down to “negotiations” you need to turn up your personal heat and dial back the middle man.
A Study on Analysts: – Via Research Puzzle– Furthermore, what results is “a gross mischaracterization of the analyst’s job function,” with it being thought of as creating earnings estimates and issuing recommendations. Those two tasks now rank at the bottom of the heap in terms of the things clients want from the Street, yet they still get virtually all of the attention from academics — and from bloggers and tweeters and the mainstream media. Rarely has a high-profile job been so misunderstood by so many (partially because the firms themselves perpetuate that focus).
Can you detect financial misreporting by analyzing the way a CEO speaks? – via Bakadesuyo- Applying the software to CEO speech, we find that vocal dissonance markers are positively associated with the likelihood of irregularity restatements. The diagnostic accuracy levels are 11% better than chance and of similar magnitude to models based solely on financial accounting information.
All Things Insider: Decoding Inside Information – via HBS- Using a simple empirical strategy, we decode the information in insider trading. Exploiting the fact that insiders trade for a variety of reasons, we show that there is predictable, identifiable “routine” insider trading that is not informative for the future of firms. Stripping away the trades of routine insiders leaves a set of information-rich trades by “opportunistic” insiders that contain all the predictive power in the insider trading universe. A portfolio strategy that focuses solely on opportunistic traders yields value-weighted abnormal returns of 82 basis points per month, while the abnormal returns associated with routine traders are essentially zero. Further, opportunistic insiders predict future firm-specific news, as well as announcement returns around future analyst forecasts, management forecasts, and earnings announcements, while routine traders do not. The most informed opportunistic traders are local non-senior insiders, who come from geographically concentrated, poorly governed firms. Lastly, opportunistic traders are significantly more likely to have SEC enforcement action taken against them, and reduce their trading following waves of SEC insider trading enforcement. JEL Classification: Insider trading, information flow, asset prices
Juicing up the Accrual Anomaly – via Empirical Finance– In the literature, accruals are often defined as net income less cash from operations, and are typically scaled by total assets so they are comparable across various assets. Starting with Sloan (1996), the literature has found that this very simple variable can create a very interesting long/short strategy (long low accrual, short high accrual) that produces fairly compelling returns.
The Eclectic Mix:
From Technologist to Philosopher – via The Chronicle– How does someone become a technologist? In my case, it happened in college. I was an undergraduate at Columbia University, reading and discussing what were once unrepentantly called “the classics.” I really wanted to understand what the great thinkers thought about the great questions of life, the human condition, the whole metaphysical stew. And the problem was: We didn’t seem to be making much progress.The great questions of philosophy have a way of defying easy resolution. Confronting them, we all seemed like such feeble thinkers—students and teachers and dead white males alike. We make mistakes, we are prone to inconsistencies, we equivocate. This was very frustrating to an impatient undergraduate.
Clayton Christiensen- Five Discovery Skills that Distinguish Great Innovators – via HBS- In their new book, The Innovator’s DNA, authors Jeff Dyer, Hal Gergersen, and Clayton M. Christensen build on the idea of disruptive innovation to explain how and why the Steve Jobses and Jeff Bezoses of the world are so successful. This excerpt from Chapter One summarizes the five discovery skills that distinguish innovative entrepreneurs and executives from run-of-the-mill managers.
How Much Does Global Warming Cost? – via Miller McCune– A new report suggests that the social cost of carbon — the economic damage done by one ton of carbon dioxide emissions — could be drastically higher than government agencies have estimated.
Compulsive Gamblers Combine Impulsiveness with Irrationality – via SciAm– Compulsive gamblers seeking treatment were more impulsive and more likely to be superstitious than were non-gamblers.
Confirmation Bias and Art – via SciAm– If we are defining confirmation bias as a tendency to favor information that confirms our previously held beliefs, it strikes me as ironic to think that it is almost exclusively discussed as a hindrance to knowledge and better decision-making, or as an aid to argumentation and persuasion as reinforced by Mercier and Sperber. With such a broad definition, I think it also explains our aesthetic judgments. That is, just as we only look for what confirms our scientific hypotheses and personal decisions, we likewise only listen to music and observe art that confirms our preconceived notions of good and bad aesthetics. Put differently, confirmation bias influences our aesthetic judgments just as it does any other judgment.
Peer pressure influences our memories – via Deric Bownds– Fascinating observations from Edelson et al., who examine how our accurate initial memories of an event can be be changed by hearing different accounts from others. They find that activity in the hippocampus and amygdala brain regions involved in memory can vary, depending on how our memory has been shaped by interacting with others.
We sit near people who look like us – via BPS Research – The next time you’re in an audience, turn to the person sat next to you and take a good look. That’s what you look like, that is. Scary eh? Sean Mackinnon and his research team have shown that people sit next to people who resemble themselves. The effect is more than just people of the same sex or ethnicity tending to aggregate – a phenomenon well documented by earlier research. The new finding could help explain why it is that people so often resemble physically their friends and romantic partners (known as “homophily”) – if physically similar people choose to sit near each other, they will have more opportunities to forge friendships and romances.
‘Brain Bugs’: Cognitive Flaws That ‘Shape Our Lives’- via Leadonyoung– “They didn’t evolve to deal with that circumstance,” says neuroscientist Dean Buonomano. “And humans suffer some of the same consequences of living in a time and place we didn’t evolve to live in. … And by peering into the brain, we can learn a lot about why we are good at some things and why we are not very good at others.”
Approving reinforces low-effort behaviors – via Less Wrong– In addition to “liking” to describe pleasure and “wanting” to describe motivation, we add “approving” to describe thoughts that are ego syntonic. A heroin addict likes heroin. He certainly wants more heroin. But he may not approve of taking heroin. In fact, there are enough different cases to fill in all eight boxes of the implied 2x2x2 grid (your mileage may vary).
The Most Isolated Man On The Planet– via Slate- The most isolated man on the planet will spend tonight inside a leafy palm-thatch hut in the Brazilian Amazon. As always, insects will darn the air. Spider monkeys will patrol the treetops. Wild pigs will root in the undergrowth. And the man will remain a quietly anonymous fixture of the landscape, camouflaged to the point of near invisibility.