Weekly Roundup 143: A Curated Linkfest For The Smartest People On The Web
Handpicked to satisfy your intellectual curiosity!
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Most Important Reads:
Self Control = Destiny: Steven Pinker- The Sugary Secret of Self-Control – via NYT– Ever since Adam and Eve ate the apple, Ulysses had himself tied to the mast, the grasshopper sang while the ant stored food and St. Augustine prayed “Lord make me chaste — but not yet,” individuals have struggled with self-control. In today’s world this virtue is all the more vital, because now that we have largely tamed the scourges of nature, most of our troubles are self-inflicted. We eat, drink, smoke and gamble too much, max out our credit cards, fall into dangerous liaisons and become addicted to heroin, cocaine and e-mail.
Half of Americans have a sugary drink daily – via CDC– Health officials say half of Americans drink a soda or sugary beverage each day – and some are downing an awful lot.
The Great Bank Robbery: Nassim Nicholas Taleb and Mark Spitznagel – via Project Sydicate – For the American economy – and for many other developed economies – the elephant in the room is the amount of money paid to bankers over the last five years. In the United States, the sum stands at an astounding $2.2 trillion for banks that have filings with the US Securities and Exchange Commission. Extrapolating over the coming decade, the numbers would approach $5 trillion, an amount vastly larger than what both President Barack Obama’s administration and his Republican opponents seem willing to cut from further government deficits.
Christakis Speaks to Harvard Freshmen about Social Networks – via Situationist- Harvard College freshmen got their first taste Aug. 26 of the world of ideas awaiting them over the next four years in a talk by Professor Nicholas Christakis, who argued that human social networks have the power to spread obesity — or happiness — like contagion.
Tastes, Castes, and Culture: The Influence of Society on Preferences – via World Bank – Economists have traditionally treated preference as exogenously given. Preferences are assumed to be influenced by neither beliefs nor the constraints people face. As a consequence, changes in behaviour are explained exclusively in terms of changes in the set of feasible alternatives. Here the authors argue that theopposition to explaining behavioural changes in terms of preference changes is ill-founded, that the psychological properties of preferences render them susceptible to direct social influences, and that the impact of “society” on preferences is likely to have important economic and social consequences.
Steve Keen: Behavioral Finance Lectures – via Value Investing World- Steve Keen is lecturing on Behavioral Finance at the University of Western Sydney this semester. He’s recording all of his lectures and posting them online. The second, expanded edition of his book (Debunking Economics – Revised and Expanded Edition: The Naked Emperor Dethroned?) comes out in October. Below are links to his posts and lectures that he’s put up so far. I’ll add new links to this post as they become available.
Ten Things Everyone Should Know About Time– via Discover – “Time” is the most used noun in the English language, yet it remains a mystery. We’ve just completed an amazingly intense and rewarding multidisciplinary conference on the nature of time, and my brain is swimming with ideas and new questions. Rather than trying a summary (the talks will be online soon), here’s my stab at a top ten list partly inspired by our discussions: the things everyone should know about time. [Update: all of these are things I think are true, after quite a bit of deliberation. Not everyone agrees, although of course they should.]
Does the Socratic method really help people learn? – via Bakadesuyo– Socratic questioning is demonstrated in a number of coach–coachee dialogues with accompanying commentary. Finally, it is emphasized that asking good Socratic questions is indispensable to the practice of effective coaching.
More Biases: The Influence of Units vs Numbers – via JSTOR– Quantitative changes may be conveyed to consumers using small units (e.g., change in delivery time from 7 to 21 days) or large units (1–3 weeks). Numerosity research suggests that changes are magnified by small (vs. large) units because a change from 7 to 21 (vs. 1–3) seems larger. We introduce a reverse effect that we term unitosity: changes are magnified by large (vs. small) units because a change of weeks (vs. days) seems larger. We show that numerosity reverses to unitosity when relative salience shifts from numbers to units (study 1). Then, arguing that numbers (units) represent a low-level (high-level) construal of quantities, we show this reversal when mind-set shifts from concrete to abstract (studies 2–4). These results emerge for several quantities—height of buildings, time of maturity of financial instruments, weight of nutrients, and length of tables—and have significant implications for theory and practice.
Everything You Need to Know About Complexity – via Arxiv – The term complexity derives etymologically from the Latin plexus, which means interwoven. Intuitively, this implies that something complex is composed by elements that are difficult to separate. This difficulty arises from the relevant interactions that take place between components. This lack of separability is at odds with the classical scientific method – which has been used since the times of Galileo, Newton, Descartes, and Laplace – and has also influenced philosophy and engineering. In recent decades, the scientific study of complexity and complex systems has proposed a paradigm shift in science and philosophy, proposing novel methods that take into account relevant interactions.
Five Differences Between Ecological and Economic Networks – via Arxiv – Ecological and economic networks have many similarities and are often compared. However, the comparison is often more apt as metaphor than a direct equivalence. In this paper, five key differences are explained which should inform any analysis which compares the two.
Robert Cialdini and the Weapons of Influence – via Psyfi Blog- “Well here, again, Cialdini does a magnificent job at this, and you’re all going to be given a copy of Cialdini’s book. And if you have half as much sense as I think you do, you will immediately order copies for all of your children and several of your friends. You will never make a better investment.”; Charlie Munger on The Psychology of Human Misjudgement.
How stupid people make fools of us all – via Mind Our Decisions – People are so familiar with survival of the fittest, we often forget there are situations that favor the weakest.
Decision Making/ Behavioral Economics/Psychology/ Risk/ Sciences:
In practice, Correlation Implies Causation – via Falkenblog– Of course, everyone knows the cliche that correlation does not imply causation, but in practice any correlation that fits into a narrative is seen as evidence of that theory. This NBER paper by Currie and Tekin argues foreclosures lead to a variety of bad health outcomes–sort of like the symptoms of chronic fatigue syndrome. It’s a joke, but sure got a lot of play over the past few days because it’s so darn helpful to some people. See the attached graph, which underlies their findings. The NBER, like the American Economic Association, is a pretty official, bureaucratic, PC trade institution that wants to be relevant and respected.
How where you live affects the life you prefer. Or not. – via SciAm- One might expect to see people prefer dimensions that reflect the country they live in. For example, people who live in safe countries might value safety because it is an ingrained cultural norm – so they rank it higher. Alternatively, one might expect to see people prefer dimensions that their country is lacking. For example, people who live in countries with poor access to healthcare might prioritize health – so they rank it higher. So which is it – do your ideas of the better life emerge because or despite of the country you live in? Turns , the data shows neither pattern consistently.
Does Fear of embarrassment control us? – via Stats Blog- The person you are talking to has food in their teeth. Do you tell them or ignore it to avoid a potentially uncomfortable situation? According to new research, whether you say something or not may be associated with your own feelings regarding embarrassment.The study was small, consisting of only 84 college students. Participants received the opportunity to help an experimenter by pointing out she had ink on her face. Some were told that the experimenter had an interview to go to following the experiment, while others were not. Some participants shared the room with the experimenter and someone else in the study, while others had one-on-one interaction.
People Think The “Typical” Member Of A Group Looks Like Them – via Aps– What does a typical European face look like according to Europeans? It all depends on which European you ask. Germans think the typical European looks more German; Portuguese people think the typical European looks more Portuguese. That’s the conclusion of a new study which will be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science. The results shed light on how people think about groups they belong to.
Business/ Entrepreneurship/Finance/ Investing:
Jason Zweig – Flash Tax: Why Levies on High-Speed Trading Won’t Work – via WSJ- Last month, French President Nicolas Sarkozy and German Chancellor Angela Merkel proposed placing a transaction tax on European financial markets—in hopes of raising desperately needed revenue and perhaps reining in speculators and high-speed traders. That day, the shares of publicly traded stock exchanges such as NYSE Euronext and Nasdaq OMX Group dropped by up to 11%, although they later recovered.
Financial Complexity, Part 1 – via Aleph Blog– The intellectual origins of the global financial crisis (GFC) can be traced back to blind spots emanating from within conventional financial theory. These blind spots are distorted reflections of the perfect market assumptions underpinning the canonical theories of financial economics: modern portfolio theory; the Modigliani and Miller capital structure irrelevancy principle; the capital asset pricing model and, perhaps most importantly, the efficient market hypothesis. In the decades leading up to the GFC, these assumptions were transformed from empirically (con)testable propositions into the central articles of faith of the ideology of modern finance: the foundations of a widely held belief in the self-correcting nature of markets and their consequent optimality as mechanisms for the allocation of society’s resources. This ideology, in turn, exerted a profound influence on how we regulate financial markets and institutions.
Can too much capital be risky? – via Jayanth Varma- An IMF working paper by Perotti, Ratnovski and Vlahu (PRV) published earlier this month argues that higher bank capital may not only fail to reduce risk taking, but may have an unintended effect of enabling banks to take more tail risk without the fear of breaching the minimal capital ratio in non-tail risky project realizations. PRV argue that the traditional minimum capital requirement must be supplemented with a maximum capital requirement (realistically, in the form of special attention devoted to banks with particularly high capital) in order to assure that they are not taking tail risk.
The God Clause and the Reinsurance Industry – via Business Week– Consumers don’t tend to know what reinsurance is because it never touches them directly. Reinsurers, massively capitalized and often named after the places where they were founded—Cologne Re, Hannover Re, Munich Re, Swiss Re—make their living thinking about the things that almost never happen and are devastating when they do. But even reinsurers can be surprised. And the insurers who make up their market put them on the hook for everything, for all the risks that stretch the limits of imagination. This is what the industry casually refers to as the “God clause”: Reinsurers are ultimately responsible for every new thing that God can come up with. As losses grew this decade, year by year, reinsurers have been working to figure out what they can do to make the God clause smaller, to reduce their exposure. They have billions of dollars at stake. They are very good at thinking about the world to come.
Capitalism – What Comes Next? – via Thought Economics– In this exclusive interview, we speak to Nobel Prize Winning Economist, Edmund Phelps (Director of the Columbia University Center on Capitalism & Society and the McVickar Professor of Political Economy at Columbia University). We look at the story of modern capitalism, the benefits it has brought, and the challenges it has created. We explore the ‘post crisis’ economy, the role of government in society, the relationship between capitalism and conflict, the role of oil in our society and look at what needs to be done to ‘fix’ our global economy, and the science of economics itself.
Paul Graham: The Patent Pledge – Y Comb – I’ve never been 100% sure whether patents help or hinder technological progress. When I was a kid I thought they helped. I thought they protected inventors from having their ideas stolen by big companies. Maybe that was truer in the past, when more things were physical. But regardless of whether patents are in general a good thing, there do seem to be bad ways of using them. And since bad uses of patents seem to be increasing, there is an increasing call for patent reform. The problem with patent reform is that it has to go through the government. That tends to be slow. But recently I realized we can also attack the problem downstream. As well as pinching off the stream of patents at the point where they’re issued, we may in some cases be able to pinch it off at the point where they’re used.
The Eclectic Mix:
Visual Complexity: Mapping Patterns for the Information Age – via Brain Pickings– Data visualization is a running theme of visual literacy here, and Manuel Lima has been one of its biggest advocates since 2005 when, shortly after graduating from the Parson School of Design, he launched VisualComplexity — an ambitious portal for the visualization of complex networks across a multitude of disciplines, from biology to history to the social web. This month marks the highly anticipated release of Visual Complexity: Mapping Patterns of Information — a rigorously researched, beautifully designed, thoughtfully curated anthology of the world’s most compelling work at the intersection of these two relatively nascent yet increasingly powerful techno-cultural phenomena, network science and information visualization.
Why Some Body Fat is More Dangerous – via BioSpace– Researchers have discovered biological indicators that help explain why some obese people develop chronic diseases such as diabetes and heart disease, and others do not. The researchers looked specifically at the body fat of people with metabolic syndrome—a condition characterized by increased blood pressure, high fasting blood-sugar levels, excess abdominal fat, and abnormal cholesterol levels. They found the fat cells released biomarkers associated with insulin resistance and chronic inflammation, conditions often leading to diabetes and cardiovascular disease.
CIA shifts focus to killing targets – via Washington Post– In the decade since the Sept. 11, 2001, attacks, the agency has undergone a fundamental transformation. Although the CIA continues to gather intelligence and furnish analysis on a vast array of subjects, its focus and resources are increasingly centered on the cold counterterrorism objective of finding targets to capture or kill.
Portugal’s jobless graduates flee to Africa and Brazil – via BBC- Thousands of young unemployed professionals are escaping Portugal’s crippling economic crisis by finding jobs in former colonies, such as Brazil and Angola. The reversal of traditional migration patterns is fuelling talk of a “lost generation”.
Monoculture: How Our Era’s Dominant Story Shapes Our Lives – via Brain Pickings- That’s exactly what F. S. Michaels explores in Monoculture: How One Story Is Changing Everything — a provocative investigation of the dominant story of our time and how it’s shaping six key areas of our lives: our work, our relationships with others and the natural world, our education, our physical and mental health, our communities, and our creativity.
Have Social Networks Crossed Tipping Points – via Harvard – For the first time, half of all adults in the United States said they used a social networking site, according to a survey released on Friday by the Pew Research Center.
Countries at risk of paying the greatest economic costs for disasters – via Institute for Risk & Hazard– A new report has ranked 196 countries according to their levels of economic risk to natural disasters. Published by Maplecroft, a private risk research firm based in Bath, UK, the report ranks countries according to their economic exposure to hazards, including earthquakes, tsunamis, volcanoes and landslides, along with other factors such as socioeconomic resilience. While the results certainly provide some depth in understanding countries that are most economically vulnerable to hazards, the impact of disasters can hardly be expressed in economic terms alone. Data for the report (from 2005-2010) was derived from the World Bank, International Monetary Fund and the Central Intelligence Agency in the US, according to AFP. Here are the top eleven countries classified as ‘extreme’ and ‘high’ risk’ of paying the greatest economic costs for disasters:
Statisticians as a tribe – via Flowing Data – Peter Curran for BBC Radio 4 puts the tribe of statisticians under the anthropological microscope. At the Royal Statistical Society Awards and Summer Reception, Curran interviews a number of statisticians on what they do and what statistics is really about. I mainly post this though for the part where he whispers about what he is seeing as if he were in a jungle studying a tribe of monkeys. Cracked me up.
Videos of The Week:
Steve Jobs On Starting With The Customer Experience – via Brad Feld – The punch line happens early when he says “you’ve got to start with the customer experience and work backwards for the technology.” It’s five minutes long and worth watching, if only to see how incredibly durable Jobs’ philosophy has been over the past 15 years.
Ted Talk – Can we make things that make themselves? – via TED.com– MIT researcher Skylar Tibbits works on self-assembly — the idea that instead of building something (a chair, a skyscraper), we can create materials that build themselves, much the way a strand of DNA zips itself together. It’s a big concept at early stages; Tibbits shows us three in-the-lab projects that hint at what a self-assembling future might look like.
Vinod Khosla says get rid of experts and invent the future you want – via Venture Beat- He said entrepreneurs will catch a lot of criticism for ignoring the experts and yet they should plow forward anyway. Khosla, founder of venture firm Khosla Ventures, is one of the most successful venture capitalists of our time, having invested in companies such as Cerent, Juniper Networks, and Corvis. Yet his attitude is pretty anti-establishment when it comes to independent thinking, which he believes is essential for entrepreneurship.
Flow of Money into Bernie Madoff’s Funds – via Visually
The American Debt Crisis Infographic – via Infographic Showcase
10 Recession Proof Careers – via Online Grad Programs