Measuring the dependency of different variables

What’s wrong with people? The movie is just awful.

I hadn’t expected an excellent film, but it’s just boring.

As someone in my party commented they spent so much money on the visuals that they couldn’t afford creativity, a plot, or characters that weren’t paper thin.

Since Greece does not control its currency (which is controlled by a country [Germany], which is interested in keeping it strong), is it fair to say that it is on a sort of Gold Standard?

If so, what do its current budget troubles say about the ability of a gold standard to push governments towards balanced budgets?

For extra credit: Is California on a Gold Standard?

I read about this book in Less Wrong and immediately added it to my queue (a mental queue at this point).

The book is really good and its flaws are of the I wish he would tell me more type.

Most of the book is a recollection of experiments performed by the author or his associates, where people were asked to perform as if they were dictators of a small country/village/city/factory/… or simply having to set a thermostat in a room (many failed at this task!).

Some of the examples are eerie in their resemblance to real events, like the player who introduced worker’s ownership and later, when the factory wasn’t producing enough, proposed to shoot any worker who wasn’t producing his quota. In fact, this is one of those examples that seems to fit almost too perfectly. Other examples show the intellectual knots that people get themselves into:

In one of our planning games, people were asked to shape a country’s [policies]. [...] One participant found himself threatened on the foreign-policy front while at the same time he needed to cope with vast unemployment at home. The solution he hit on to deal with both these problems was to introduce universal military service. [...] However, he recalled that only a few hours earlier he had announced decisively that the government should do nothing to strengthen the military and should certainly not introduce any forced measures to that end. [...] What did he do? He introduced *voluntary conscription*, commenting as he did so, “Everybody will surely understand the need for this.”

Brilliant. As is the fact that many people seem to start distrusting the experiment when their hare-brained ideas cause problems.

Also interesting is the discussion on how teaching people some introduction into the problem field will make them feel much more confident while still performing poorly, while actual experience in the field helps much more (which should temper the hubris of the educated fool).

Many little examples such as this abound in the book. They are held together by the common themes of human folly so that it is not simply another management book of anecdotes. Also, unlike anecdote books, this one comes with numbers that show that not everyone does poorly and that there are significant differences between how those that do poorly and those that do smartly behave.

On the negative side, there is a tendency to spell out tables of numbers that is sort of annoying. I suppose someone told the author that (non-technical) people are too stupid to understand a table of numbers so the author sometimes seems to spell them out: “30% of users of type 1, fell into category 1, 40% into category 2, …” in a way that is tedious. Also, many of the references are just given in German, which makes them a bit harder to look for.

Predictioneer’s Game

Rating: 3/5

It’s a nice introduction to de Mesquita’s modeling approach to predicting the output of protracted human negotiations (be it negotiating with North Korea on nuclear weapons or in Congress about health-care reform or in the boardroom to prevent your rival from getting the CEO spot). de Mesquita claims to have a very high (90% is often mentioned) success rate.

It’s important to note that de Mesquita’s approach is immune to the Taleb critique of statistical model. Nassim Taleb’s argument works against phenomenological approaches which relate multiple variables statistically (such as if in the past, inflation has been correlated with low unemployment, then in the future it will be so or some similar rule, see also Goodhart’s Law). De Mesquita’s approach is mechanistics, it is based on the mechanics of the situation. If human nature were to change, then the model will be invalidated, but there is more permanence to the pursuit of self-interest, which is the basis of de Mesquita’s models, than to the statistical flukes that form the basis of the models that Taleb tears down. I have been looking for a good critique of de Mesquita, but am actually yet to find one which understands that saying Taleb doesn’t cut it. (For the record, I really like Nassim Taleb’s ideas. They just seem inapplicable to de Mesquita.) An attack on de Mesquita would have to go to his weak points: can his models really capture the essence of the problem? where are his high accuracy statements coming from? how often is the model completely side-tracked by an outside event (one of the major players dying or, in an example from the book, getting arrested on corruption charges)? This might be one of those cases where the weakness of the existing critique has taken away some of the skepticism I had after first reading the book.

It’s pop-science, so it doesn’t bring in the models, or the math, or the details, or the critique. It does make it want to go back and read the original papers though.

A couple of little details from the book: on and around page 40, you get a very informative discussion of why Herman van Rompuy is President of the European Council (the discussion is phrased as if it was about getting a guy named Curly nominated CEO). The interpretation of the Catholic prohibition of charging interest as a way to keep economic growth down was new to me (even if am I taking it as an interesting hypothesis until I have independent confirmation that it is a reading supported by the facts).

On the down-side, the prose is sometimes patronising. He doesn’t really need to repeat his arguments 3 times: once as if it was a intro undergraduate class, one as if it was a high-school class, and a third as if he was trying to explain it to his 4-year old daughter. The graphs out of Excel could have used some work too (even Excel does better graphs nowadays).

I have been thinking for months that Barack Obama will be a debt President (particularly if he gets a second term). By a debt president, I mean a president whose term is dominated by discussion of how to deal with the debt and interest payments. Not Iraq, not Afghanistan, not banks, not green energy, not health care, but debt (i.e., how to pay for Iraq, Afghanistan, the bailing out of every bank and its cousin, health care—green energy will never be a big item).

Maybe the fact that the NY Times put the topic on the front page is a sign that this discussion is moving to the fore. I predict it will becoming dominant in a couple of years.

In Norway, tax returns have been made public.

Alex Tabarrok asks:

Perhaps most interesting–does conspicuous consumption fall and efficiency increase in a society in which income is conspicuous?

An interesting variation on this is: Can we find evidence for people declaring more than what they truly earn so that the neighbours comment on it (reverse tax fraud).

He drives a really old car, but, in fact, he makes a ton on family income alone. I guess he just doesn’t want us to know. You know, old money doesn’t show off.

Probably this effect would be higher in the lower tax-brackets!

(I don’t know how to test for this based on that data, however.)

You know an idea is a crackpot idea when it tries to wrap itself in the veneer of respectability by borrowing the name of Economics.

On econtalk the person who headed the gmail team reveals that it was developed by all of a dozen people.

Again, no one of importance won the “Literature” Nobel. Good.

I am always surprised by the excitement that the Nobel Prize for “Literature” generates in some people considering how unrelated to literature it is (and has always been).

The List of winners reads not as a Who’s who of 20th century literature, but rather as a Who’s He?. As far as I know, this is not true of any of the other Nobel Prizes (even the by-nature highly political Peace Prize is awarded to people who an informed audience has at least heard of). Also, as far as I know, no other Nobel Prize has ever been awarded to the members of the Jury who was deciding the Nobel Prize.