by Tyler Cowen
on December 20, 2013 at 11:54 am
in Uncategorized |
1. A robot walks into a bar…
2. Did David Walsh beat the odds?
3. Very good exam answers.
4. Live streaming your dinner: the culture that is South Korea.
5. A French view of the twenty best books of the year (in French). John Wilson has a very good best books list.
6. John Cochrane defends Williamson on interest rates and inflation.
#2 Great article for two reasons, weird stuff by the author such as “the extraordinary art that sits in its labyrinthine subsurface caverns, carved out of 250 million-year-old Triassic sandstone” (aren’t we all sitting on something that’s at least that old) and Walsh’s own ideas, particularly “When you trade derivatives or bet on horse racing, you have not actually made anything,” Walsh accepts. “The world is in no way a better place because you have extracted wealth from the market and lined your own pockets. In this case, I did at least one thing that might have made me feel a little bit better.”
#3. Very good exam answers.
Some of those test questions were so inane they richly deserved the answers they got!
Good test writing is hard, which is why most teachers suck at it.
#3. Problem 14 doesn’t even make sense as a math problem. I think a bunch of these are made up.
I agree they look made up.
But the question plausibly could be anticipating the answer (a+b)^n = (a+b)*(a+b)^(n-1) = a*(a+b)^(n-1) + b*(a+b)^(n-1)
I very curious to see if this renders correctly.
I _am_ very curious…
Frickin lack of edit…
It looks good to me.
Binomial Theorem? Looks good to me.
The answer for 7 is absolutely correct!
Yes, I’d have to give credit for that answer
I suspect that the geologist who wrote the extra credit question in #17 would answer their own question incorrectly – geologists rarely deal with the strong nuclear force.
Geology would seem rather pointless if you removed the weak nuclear and electromagnetic forces, as well.
#2 was interesting. An interesting character.
I thought it was funny that he his building a multi-million dollar status emblem filled with expensive artwork because he feels guilty for making money with a zero-sum, winner-take-all betting system.
It’s a shame that the zeitgeist, as it stands, allows intelligent people to announce that trading financial derivatives is a socially worthless enterprise, without losing some respect.
He didn’t say that it was “a socially worthless enterprise”. He said that it didn’t make the world a better place.
Socially worthless = Doesn’t make the world a better place, on net.
His statement is also demonstrably false. Derivatives improve the efficiency and informational quality of markets. That is, there are spillover benefits. One could argue that there are spillover costs and the net benefit must be considered. But since you can’t have the sweet without the bitter, there is little sense in looking at costs and benefits in isolation. His statement strikes me as more self-serving ego massage and survivor guilt. He needs a therapist.
Yes, very interesting. I find it revealing that a guy who can beat the system also says:
“The public odds are not just an important signal – they are a remarkably efficient signal.”
Sort of. He’s saying that the markets are MOSTLY efficient, and only a very few people like him have the capacity to profit from inefficiencies net of costs. He is obviously correct and since he plays with his own equity, he is more honest than most financial advisors.
With respect to the wisdom of crowds, he says he plugs the money odds (from wagers) into his formula for deriving the actual odds. This is little different than comparing pot odds with the odds of hitting your outs in poker.
The net expected value of this week’s Megamillions was likely positive. You’re almost a fool for not playing, except for the uncertainty of how many additional people will buy, raising the chances of splitting the win.
This part of the article on Walsh was interesting: “He cites the example of the former Russian chess grandmaster Boris Spassky, who played and lost to the Russian public in a game of chess. He describes the public’s ability to make accurate collective decisions as an “emergent strategy”, like birds flocking or democracies (which form not in the mind of one individual, but through the interactions of many).”
So how do you explain the fact that Kasparov, the chess grandmaster and former World Champion, won his match against the world? Perhaps because Spassky played before the age of PC chess playing software, while Kasparov’s PC was more tricked up and powerful than the rest of the world’s collective PC hardware?
Boy, do I have to agree with Rahul about #3. The single most important lesson there is how easy it is to write really bad questions…and that when you write really bad questions you get what you deserve.
But don’t expect to be graded that way. When a government teacher asks a question, you are expected to discern the government-approved answer, even if you have another answer that is also correct or even more correct. If it’s the latter, you have anarchist tendencies, and that’s going on your permanent record.
4) I used to go to a Korean restaurant in orange county, ca, which ran Korean food tv on an overhead tv. It was kinda funny, but rewarding, to eat good food while watching even more good food.
I used to watch a Korean cooking show (probably not the same one) which was full of interesting superstition and medical quackery. Things like this food is good for that medical condition, or you should only handle fresh raw vegetables with tools like big chopsticks rather than your hands because the life force would do something to the food (or your hands, I forget which). I got the impression that Korean culture is rife with superstitious beliefs about food.
#6 overstates Cochrane’s support for Williamson. The most controversial aspect of Williamson’s argument, to me at least, was the logic gap between describing a model of higher interest rates leading to inflation and a prescription of raising interest rates to induce inflation. It’s like Williamson forgot his own specifications and just assumed that a rise in the Fed Funds target equates to a rise in the yield curve.
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