Handpicked to satisfy your intellectual curiosity!
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Most Important Reads:
The Cognitive Science of Rationality – via Less Wrong- The last 40 years of cognitive science have taught us a great deal about how our brains produce errors in thinking and decision making, and about how we can overcome those errors. These methods can help us form more accurate beliefs and make better decisions.
Thomas Gilovich Lecture: Will People Believe Anything? The Psychology of Gullibility - via Science Stage- the latest research on experiences such as seeing order in randomness, superstition, and wishful thinking, as well as many other human frailties. Gilovich also discussed how to cultivate more sound reasoning and effective decision-making.
Bahrain Boils Under the Lid of Repression – via NYT-“The situation is a tinderbox, and anything could ignite it at any moment,” said Ali Salman, the general secretary of Al Wefaq, Bahrain’s largest legal opposition group. “If we can’t succeed in bringing democracy to this country, then our country is headed toward violence. Is it in a year or two years? I don’t know. But that’s the reality.”
Yes The Teenage Brain is Different - via National Geographic- H/T LongReads- Moody. Impulsive. Maddening. Why do teenagers act the way they do? Viewed through the eyes of evolution, their most exasperating traits may be the key to success as adults.
The late American jobs machine – via Considering The Evidence- The U.S. labor market is in bad shape. The great recession and its aftermath are the chief culprits, of course, but the sputtering began earlier. In the 1970s, 1980s, and 1990s employment increased so rapidly that our economy was sometimes referred to as the “great American jobs machine.” In the early and mid 2000s that ended. Richard Freeman and William Rodgers were among the first to draw attention to the shift. In 2005, well into the recovery following the 2001 recession, they noted the anemic job growth relative to prior recoveries and wondered if the labor market had changed fundamentally.
The evolution of data products: The data that drives products is shifting from overt to covert. - via Oreily Radar- In “What is Data Science?,” I started to talk about the nature of data products. Since then, we’ve seen a lot of exciting new products, most of which involve data analysis to an extent that we couldn’t have imagined a few years ago. But that begs some important questions: What happens when data becomes a product, specifically, a consumer product? Where are data products headed? As computer engineers and data scientists, we tend to revel in the cool new ways we can work with data. But to the consumer, as long as the products are about the data, our job isn’t finished. Proud as we may be about what we’ve accomplished, the products aren’t about the data; they’re about enabling their users to do whatever they want, which most often has little to do with data.
The Dark Side of the Placebo Effect: When Intense Belief Kills – via The Atlantic & H/T LongReads- While people of all cultures experience sleep paralysis in similar ways, the specific form and intensity it takes varies from one group to the next
Charles Mackay’s Own Extraordinary Delusions & the railway mania - Odlyzko – Mackay’s story provides another example of a renowned expert on bubbles who decides that “this time is different.” His moves through a sequence of delusions help explain the length and damage of the Railway Mania. He was a free market and technology enthusiast, and faced many issues that are important today, such as government ownership or regulation, interconnection, standardization, structural separation, and analogs to net neutrality. A crushing national debt and high unemployment in an economy pulling out of a deep depression (and in perceived danger of falling into another one) were very important in shaping attitudes towards railway expansion. The analogies and contrasts between Mackay’s time and ours are instructive.
Saving Europe with sovereign equity – via Interfluidity- One way to think about the European financial crisis is that it is a matter of capital structure. Countries like the United States and Great Britain are equity-financed, while countries like Greece, France, and Germany are debt-financed.  There is no question that some European countries have very real problems. But there is also no question that no matter how badly a country may be arranged, nations cannot be “liquidated”. A “bankrupt” state must be reorganized. If Greece were a firm, a bankruptcy court would not sell critical assets at fire-sale prices, as Greece’s creditors sometimes idiotically demand. Instead, a bankruptcy court would convert debt claims that are unpayable, or whose payment would impair the long-term value of the enterprise, into equity claims whose value would depend upon restoring the underlying enterprise to health.
Futures Impossible : a new methodology to study world events - via Boing Boing- To a decision-maker in business or government, simply describing such impossible future scenarios is not helpful in the absence of a methodology for detecting, understanding, and mitigating their practical effects. What is needed is a deeper grid that can be used as an overlay to highlight radical discontinuities in technology, geopolitics, social behavior or economic patterns. We believe that such a tool needs to be developed if we want to survive the new realities where worldviews collide at an accelerated pace.
Milton Friedman’s grand illusion – via Physics of Finance- Three years ago I wrote an Op-Ed for the New York Times on the need for radical change in the way economists model whole economies. Today’s General Equilibrium models — and their slightly more sophisticated cousins, Dynamic Stochastic General Equilibrium models — make assumptions with no basis in reality. For example, there is no financial sector in these model economies. They generally assume that the diversity of behaviour of all an economy’s many firms and consumers can be ignored and simply included as the average behaviour of a few “representative” agents.
Everything thing you wanted to know about think tanks – via BBC- The guiding idea at the heart of today’s political system is freedom of choice. The belief that if you apply the ideals of the free market to all sorts of areas in society, people will be liberated from the dead hand of government. The wants and desires of individuals then become the primary motor of society.
Defining Evil- via Chronicle of Higher Ed- Evil is all too often analyzed at too high a level of abstraction. If theologians tell us that evil is what human beings do in the absence of God, they face the difficult tasks of defining God’s essence. Philosophers who conceptualize evil as a disturbance in the natural order of the universe must wrestle with the nature of the universe, not to mention the meaning of order. Contemporary neuroscientists who view evil as a product of faulty hard-wiring in our brains do not always know what is taking place in our minds. There are times and places when discussions of the theology or the metaphysics of evil are appropriate. But there are also times when they can get in the way of knowing what to do when we are confronted with terrorists who fly planes into buildings or enforcers of ethnic solidarity who rape and kill those whose land they covet.
What marks the transition from novice to expert? – via Bakadesuyo- We predict and find a shift from positive to negative feedback as people gain expertise. We document this shift in a variety of domains including feedback on language acquisition, pursuit of environmental causes, and use of consumer products. Across these domains, novices sought and responded to positive feedback, and experts sought and responded to negative feedback. We examine a motivational account for the shift in feedback: positive feedback increased novices’ commitment and negative feedback increased experts’ sense that they were making insufficient progress.
Think video games make you smarter? Not so fast… - via Invisible Gorilla Blog- Walter Boot, Daniel Blakely and I have a new paper that just appeared in Frontiers in Psychology this week (link) that argues for similarly serious flaws in many of the studies underlying the popular notion that playing action video games enhances cognitive abilities. The flaws are sometimes more subtle, but they’re remarkably common: None of the existing studies include all the gold-standard controls necessary to draw a firm conclusion about the benefits of gaming on cognition. When coupled with publication biases that exclude failures to replicate from the published literature, these flaws raise doubts about the mere existence of a benefit.
Decision Making/ Behavioral Economics/Psychology/ Risk/ Sciences:
Revisions and Regret: The Cost of Changing your Mind – via Wiley- Decision reversals often imply improved decisions. Yet, people show a strong resistance against changing their minds. These are well-established findings, which suggest that changed decisions carry a subjective cost, perhaps by being more strongly regretted. Three studies were conducted to explore participants’ regret when making reversible decisions and to test the hypothesis that changing one’s mind will increase post-outcome regret. The first two studies employed the Ultimatum game and the Trust game. The third study used a variant of the Monty Hall problem. All games were conducted by individual participants playing interactively against a computer. The outcomes were designed to capture a common characteristic of real-life decisions: they varied from rather negative to fairly positive, and for every outcome, it was possible to imagine both more and less profitable outcomes. In all experiments, those who changed their minds reported much stronger post-outcome regret than those who did not change, even if the final outcomes were equally good (Experiments 2 and 3) or better (Experiment 1).This finding was not because of individual differences with respect to gender, tendency to regret, or tendency to maximize. Previous studies have found that those who change from a correct to wrong option regret more than those who select a wrong option directly. This study indicates that this finding is a special case of a more general phenomenon: changing one’s mind seems to come with a cost, even when one ends up with favorable outcomes.
Time on the Brain: How You Are Always Living In the Past, and Other Quirks of Perception – via SciAm- I always knew we humans have a rather tenuous grip on the concept of time, but I never realized quite how tenuous it was until a couple of weeks ago, when I attended a conference on the nature of time organized by the Foundational Questions Institute. This meeting, even more than FQXi’s previous efforts, was a mashup of different disciplines: fundamental physics, philosophy, neuroscience, complexity theory. Crossing academic disciplines may be overrated, as physicist-blogger Sabine Hossenfelder has pointed out, but it sure is fun. Like Sabine, I spend my days thinking about planets, dark matter, black holes—they have become mundane to me. But brains—now there’s something exotic. So I sat rapt during the neuroscientists’ talks as they described how our minds perceive the past, present, and future. “Perceive” maybe isn’t strong enough a word: our minds construct the past, present, and future, and sometimes get it badly wrong.
The Psychology of Pleasure: Interview With Paul Bloom - via Why We Reason- I stole this example from Yale psychologist Paul Bloom, author of How Pleasure Works to reinforce a point I made a few posts ago: how you taste something strongly depends on what you believe you are tasting (this is the example I used: people enjoy wine more when it comes from a $90 bottle than a $10 bottle even when the wine is the same).
Is chance in the map or the territory? - via Rationally Speaking- My broader aim is therefore to argue that “chance” is always and everywhere subjective — a result of the limitations of minds — rather than objective in the sense of actually existing in the outside world.
15 Years of Cutting-Edge Thinking on Understanding the Mind – via Brain Pickings- For the past 15 years, literary-agent-turned-crusader-of-human-progress John Brockman has been a remarkable curator of curiosity, long before either “curator” or “curiosity” was a frivolously tossed around buzzword. His Edge.org has become an epicenter of bleeding-edge insight across science, technology and beyond, hosting conversations with some of our era’s greatest thinkers (and, once a year, asking them some big questions). Last month marked the release of The Mind, the first volume in The Best of Edge Series, presenting eighteen provocative, landmark pieces — essays, interviews, transcribed talks — from the Edge archive. The anthology reads like a who’s who of Brain Pickings favorites across psychology, evolutionary biology, social science, technology, and more. And, perhaps equally interestingly, the tome — most of the materials in which are available for free online — is an implicit manifesto for the enduring power of books as curatorial capsules of ideas. Brockman writes in the book’s introduction:
Videos of The Week:
Why We Should Hire The Hackers- TED.com – Despite multibillion-dollar investments in cybersecurity, one of its root problems has been largely ignored: who are the people who write malicious code? Underworld investigator Misha Glenny profiles several convicted coders from around the world and reaches a startling conclusion.
Richard Dawkins on his new book “The Magic of Reality” – via Value Investing World
Welcome to the genomic revolution – via Value Investing World- In this accessible talk from TEDxBoston, Richard Resnick shows how cheap and fast genome sequencing is about to turn health care (and insurance, and politics) upside down.
Let’s Face It, The British Tax System Is So complicated, Even the Taxman Can’t Cope - via The Independent Online- Up to now, however, it has been analysing the fiscal world as it is, rather than as it might be. That has changed with the new Mirrlees Review of the British taxation system, the most thorough look for a generation at how we raise tax revenues.
Insurers using computer modelling to identify ‘risky clients’ via social media – via Institute of Hazard Risk & Resilience- Terry McClure, who is studying for an MA in Risk, Health and Public Policy, explains how some insurance companies are using computer modelling and information about people’s lifestyle choices found on the internet to evaluate health-related risks. This could largely affect whether some people are able to receive life insurance coverage in the future. This form of ‘predictive modelling’ could also disproportionately affect poor people who may be perceived as a riskier clientele and denied coverage.
The Bulletproof Palestinian Stock Exchange - via Business Week- The Palestine Exchange, known as the PEX, had rented a hotel nearby for employees who live outside the city. Hijaz, who oversees relationships with companies listed on the exchange, would go the week without seeing his wife or children, returning to his home only on weekends. Commuting every day through the multiple Israeli military checkpoints would have been impossible. “We were challenging the occupation at that time for national reasons and to work. At the end, you have to work. For your family, you have to earn money,” Hijaz says over coffee in the bright, glass-enclosed conference room of the bourse’s headquarters in Nablus.
How Fast Can China Go? - via LongForm- On the railways of China and a trip aboard its latest spectacle, a $32 billion line carrying passengers between Shanghai and Beijing at 170 MPH.
Satyajit Das: ‘Financial TV is pornography’ – via Globe & Mail- Financial TV is pornography—sleazy, intrusive, seeking to titillate, and shock. During a crisis, these programs can be compulsive. Once, pornographic scripts had a passing interest in improbable plot and implausible dialogue. In the Coen brothers’ film The Big Lebowski, Jackie Treehorn bemoans falling standards in adult entertainment. Competition from cheap amateur pornographic films means that professionals can no longer afford the extra investment in story, production value, and feeling. Financial TV never bothered with plot, dialogue, or production values, focusing only on the action.
The Silicon Valley: Bubble Boys – via LongForm- In Silicon Valley, up all night coding in the dorms with the aspiring Mark Zuckerbergs of tomorrow.
How home prices helped kill the first tech boom – via Reuters - The reason, you’ve no doubt already guessed, was housing costs. From 1997 to 2000, average earnings in the Silicon Valley area increased by nearly 40%. But from 1997 through the end of 2000, home prices in San Francisco nearly doubled, according to the Case-Shiller index of home prices. As fast as compensation was rising, it wasn’t keeping up with housing costs. And so even as the demand for skilled workers in Silicon Valley soared, residents trickled away to other locations. That made for a too-tight labor market, and that, in turn, squeezed out entrepreneurs. And what did that mean for the American economy? The workers that moved elsewhere didn’t give up working. They found employment in other metropolitan areas, many of which developed thriving tech sectors. Those sectors weren’t fallow fields for new firm creation; entrepreneurship rates, remember, were higher nationally than in the Bay Area. But what the economics of metropolitan geography tell us is that many small collections of firms will often be less productive and less innovative than fewer, larger firm clusters. The forces that repelled workers from Silicon Valley, which was the intellectual heart of the country’s tech industry, reduced the potential economic impact of the tech boom. And in a not unimportant side effect, it reduced national productivity and total compensation in the economy.
The Eclectic Mix:
Take a Nap! Change Your Life – via KK Stream- Napping is a evolutionarily habit that still works wonders today. I can get by with several hours less sleep per night by adding a 20-minute nap in the afternoon. But I work at home where napping is easily done. The point of this book is to persuade you that the benefits of napping, scientifically derived, are so great you should do everything you can to make napping a habit whatever your schedule. As this concise guide makes clear the benefits to nappers are significant: smarter, more productive, healthier. For those who have tried napping without success, this book offers several different methods to try. It is hard to imagine the siesta returning in full force in the workplace, but it should be resurrected in some fashion. Start here. This is the best practical book on naps yet.
What the mob can teach your business – via Economist - Mafia-mastermind-turned-author Louis Ferrante used his time in prison to turn his life around. He now applies his knowledge of Mafia organization skills to business. Ferrante spoke on Thursday at The Economist’s Human Potential summit in New York City. Austin Kleon captures his message here.
The power of small batches – via Lessons Learned- Toyota discovered that small batches made their factories more efficient. In contrast, in the Lean Startup the goal is not to produce more stuff efficiently. It is to— as quickly as possible— learn how to build a sustainable business. Think back to the example of envelope stuffing. What if it turns out that the customer doesn’t want the product we’re building? Although this is never good news for an entrepreneur, finding out sooner is much better than finding out later. Working in small batches ensures that a startup can minimize the expenditure of time, money, and effort that ultimately turns out to have been wasted.
Freedom to Riot: On the Evolution of Collective Violence - via SciAM- From London to the Middle East riots have shaken political stability. Are the answers to be found in human nature?
Studying True Grit - via Information Processing- The next project with my colleague Jim Schombert is to see whether student personality inventories increase our ability to predict college GPA. In previous work we found a .4 or so correlation between SAT score and upper division in-major GPA. (Other studies, which focus on freshman GPA, typically find lower correlations but this is partly because academically stronger freshmen usually take harder courses. At the upper division level, majors typically have to take certain core courses, so there is more uniformity.) The correlation is somewhat higher (.5 to .6) if we use a z score derived from high school GPA and SAT. We think GPA is a proxy for conscientiousness, or what is referred to below as grit. But there is too much grade inflation in high school these days, and GPA depends both on work ethic and cognitive ability. So we’d like to see how well personality variables work. Optimistically, I think we can do better than correlations of .6, which is pretty impressive for social science.
Megalist of US Social Indicators – via Global Sociology