Observers seem to focus on the target event and not its complement. Bagchi and Ince have a new paper on this question:
Consumers routinely rely on forecasters to make predictions about uncertain events (e.g., sporting contests, stock fluctuations). The authors demonstrate that when forecasts are higher versus lower (e.g., a 70% vs. 30% chance of team A winning a game) consumers infer that the forecaster is more confident in her prediction, has conducted more in-depth analyses, and is more trustworthy. The prediction is also judged as more accurate. This occurs because forecasts are evaluated based on how well they predict the target event occurring (team A winning). Higher forecasts indicate greater likelihood of the target event occurring, and signal a confident analyst, while lower forecasts indicate lower likelihood and lower confidence in the target event occurring. But because, with lower forecasts, consumers still focus on the target event (and not its complement), lower confidence in the target event occurring is erroneously interpreted as the forecaster being less confident in her overall prediction (instead of more confident in the complementary event occurring—team A losing). The authors identify boundary conditions, generalize to other prediction formats, and demonstrate consequences.
Of course this also has relevance for the evolutionary processes governing pundits.
Here is a related press release (pdf). For the pointer I thank Charles Klingman.
This Connie Chan article about mobile in China is difficult to summarize or excerpt, but it is one of the most important pieces of the year so far. Here are the opening bits:
This post is all about WeChat, but it’s also about more than just WeChat. While seemingly just a messaging app, WeChat is actually more of a portal, a platform, and even a mobile operating system depending on how you look at it.
Much has been written about WeChat in the context of messaging app trends, but few outside of China really understand how it works — and how it can pull off what for many companies (and countries) is still a far-off vision of a world managed entirely through our smartphones. Many of WeChat’s most interesting features — such as access to city services — are not even visible to users outside of China.
So why should people outside of China even care about WeChat? The first and most obvious reason is that it points to where Facebook and other messaging apps could head. Second, WeChat indicates where the future of mobile commerce may lie. Third, WeChat shows what it’s like to be both a platform and a mobile portal (what Yahoo could have been).
Ultimately, however, WeChat should matter to all of us because it shows what’s possible when an entire country — which currently has a smartphone penetration of 62% (that’s almost 1/3 of its population) — “leapfrogs” over the PC era directly to mobile. WeChat was not a product that started as a website and then was adapted for mobile, it was (to paraphrase a certain movie) born into it, molded by it.
Do read the whole thing, this is also one of China’s first major innovations in the classic sense of that term.
The subtitle for this one suffices for a review:
A Soccernomics Guide: Why Chievo Verona, Unterhaching, and Scunthorpe United Will Never Win the Champions League, Why Manchester City, Roma, and Paris Saint-Germain can, and why Real Madrid, Bayern Munich, and Manchester United Cannot Be Stopped
I haven’t even read the full subtitle yet (I used Control C), much less the book. But the author is the highly regarded Stefan Szymanski, and John Foot gave it a very positive review in the 24 July 2015 TLS.
Here is a Schneier on Security post in toto, I won’t indent it once again:
New research paper: “New methods for examining expertise in burglars in natural and simulated environments: “preliminary findings“:
Expertise literature in mainstream cognitive psychology is rarely applied to criminal behaviour. Yet, if closely scrutinised, examples of the characteristics of expertise can be identified in many studies examining the cognitive processes of offenders, especially regarding residential burglary. We evaluated two new methodologies that might improve our understanding of cognitive processing in offenders through empirically observing offending behaviour and decision-making in a free-responding environment. We tested hypotheses regarding expertise in burglars in a small, exploratory study observing the behaviour of ‘expert’ offenders (ex-burglars) and novices (students) in a real and in a simulated environment. Both samples undertook a mock burglary in a real house and in a simulated house on a computer. Both environments elicited notably different behaviours between the experts and the novices with experts demonstrating superior skill. This was seen in: more time spent in high value areas; fewer and more valuable items stolen; and more systematic routes taken around the environments. The findings are encouraging and provide support for the development of these observational methods to examine offender cognitive processing and behaviour.
The lead researcher calls this “dysfunctional expertise,” but I disagree. It’s expertise.
Claire Nee, a researcher at the University of Portsmouth in the U.K., has been studying burglary and other crime for over 20 years. Nee says that the low clearance rate means that burglars often remain active, and some will even gain expertise in the crime. As with any job, practice results in skills. “By interviewing burglars over a number of years we’ve discovered that their thought processes become like experts in any field, that is they learn to automatically pick up cues in the environment that signify a successful burglary without even being aware of it. We call it ‘dysfunctional expertise,'” explains Nee.
See also this paper.”
The pointer is from the estimable Chug.
The newspaper header is:
Panos Kammenos, Greece’s defence minister, threatens to open country’s borders to refugees – including potential members of Islamic State of Iraq and the Levant (Isil) – unless Athens receives debt crisis support
The story is here, via Andrea Castillo. Whether it jives with your mood affiliation or not, it’s time to admit “these people simply don’t know what they are doing.” Fortunately, it does seem the Greek government has been walking back on this talk.
It’s in an economics journal, so it must be true. Agne Suziedelyte reports, from Economic Inquiry:
According to the literature, video game playing can improve such cognitive skills as problem solving, abstract reasoning, and spatial logic. I test this hypothesis using the data from the Child Development Supplement to the Panel Study of Income Dynamics. The endogeneity of video game playing is addressed by using panel data methods and controlling for an extensive list of child and family characteristics. To address the measurement error in video game playing, I instrument children’s weekday time use with their weekend time use. After taking into account the endogeneity and measurement error, video game playing is found to positively affect children’s problem solving ability. The effect of video game playing on problem solving ability is comparable to the effect of educational activities. (JEL I2, J13, J24)
I wonder how much endogeneity can be overcome in such settings, but if nothing else there is positive selection into video games and perhaps you should not be upset if your child is playing them.
Do any of you see an ungated copy? The pointer here is from Kevin Lewis.
Those questions are considered by Jeffrey Ely, Alexander Frankel, and Emir Kamenica in their new JPE paper “Suspense and Surprise.” Here is one to the point excerpt:
In the context of a mystery novel, these dynamics imply the following familiar plot structure. At each point in the book, the readers thinks that the weight of evidence suggests that the protagonist accused of murder is either guilty or innocent. But in any given chapter, there is a chance of a plot twist that reverses the reader’s beliefs. As the book continues along, plot twists become less likely but more dramatic.
In the context of sports, our results imply that most existing rules cannot be suspense-optimal. In soccer, for example, the probability that the leading team will win depends not only on the period of the game but also on whether it is a tight game or a blowout…
Optimal dynamics could be induced by the following set of rules. We declare the winner to be the last team to score. Moreover, scoring becomes more difficult as the game progresses (e.g., the goal shrinks over time). The former ensures that uncertainty declines over time while the latter generates a decreasing arrival rate of plot twists. (In this context, plot twists are lead changes.)
There are ungated versions of the paper here. Note that at the very end of the paper…well, I’ll just let you read it for yourselves.
So says my Twitter feed.
For the last few weeks there have been three models in the running:
1. The Greek government is calling the Germans Nazis because they figure Grexit is coming no matter what and they want to get the populace riled up as a distraction from the disasters, or
2. The Greek government will cave so cravenly on the substance that they want to have it on the record books that they supplied some expressive goods for a few weeks’ time, namely insulting the Germans and claiming that the Troika is dead and buried, or
3. The Greek government is simply full of out-of-control, ideological maniacs.
Right now it is looking like #2 — however unlikely it may sound as a model of retrospective voting and intertemporal substitution — is closest to reality. What the relevant legislatures will go along with, however, still remains to be seen. Arguably the insults and posturing have narrowed the possible bargaining space by hurting feelings all around.
Monopoly games filled with real money, in this case euros, from France:
In honor of the game’s 80th anniversary this year, its French manufacturers have replaced its traditional fake bills with real money in 80 boxes now on sale.
As if Monopoly needed higher stakes.
Agence France-Presse reported that 69 of the prize sets will include five 10-euro notes and five 20-euro notes, while another 10 will include five real 20-euro notes, two 50-euro notes and one 100-euro note.
For the final box, the entire “bank” has been replaced with real bills, making the game — which costs about 26 euros before shipping and handling — worth 20,580 euros, or about $23,000.
The notes were replaced during a covert operation last month in the small forest town of Creutzwald in northeastern France.
The monopoly boxes are selling for the normal price, although of course without notice as to which boxes have the real money inside. Hasbro’s U.S. wing, by the way, is planning a ““vintage style board” to complement the 27 other variations currently available.”
The article is here, hat tip goes to NinjaEconomics.
As part of a publicity stunt, author James Patterson is giving away 1,000 self-destructing digital advance copies of his latest novel, Private Vegas. If you score one, you have 24 hours to finish the entire book before the text vanishes forever. And if that’s just not risky enough, Patterson is selling a real self-destructing copy (for a whopping $294,038) that includes a dedicated bomb squad, among other creature comforts. There are likely much better ways to spend six digits in record time, but it’ll probably be the most exciting reading experience you ever have — no matter how good the story might be.
There is more here, via Kurt Busboom. Much better than my advice, it would seem.
From the letters page of the FT:
Sir, Whether the European Central Bank chooses to embark on a programme of sovereign QE (or quantitative easing, as it used to be known) is of little day-to-day interest to most citizens of the EU. Whether the compilers of dictionaries accept that QE is now a word in its own right — as opposed to an abbreviation — is of far more relevance to us scrabble players. Using a Q without needing a free U it would rapidly be up there with Qi (the Chinese word for life force) as one of the most useful words in the lexicon.
Surbiton, Surrey, UK
I would think that for the foreseeable future QE would be ruled an abbreviation, not a word, although enough years of macroeconomic misery eventually could flip this the other way.
“Some abbreviations, however, are acceptable Scrabble words because they have entered common parlance.”
Here are other “Q without U” words which are eligible for use in Scrabble.
Here is the latest:
It was not what Derek Nash expected to find in his 5-year-old’s school bag: A bill demanding a “no-show fee” for another child’s birthday party.
Nash said the bill from another parent sought 15.95 pounds ($24.00) because his son Alex had not attended the party at a ski center in Plymouth, southwest England.
Nash told the BBC on Monday he had initially accepted the party invitation, but later realized Alex was supposed to visit his grandparents that day. He said he did not have contact details to let the other family know.
The birthday boy’s mother, Julie Lawrence, told the BBC that her contact details were on the party invitation.
Nash says Lawrence has threatened him with small claims court but he has no plans so far to pay.
The link is here. And here is yet another account. I thank Drew for the pointer.
A new computer algorithm can play one of the most popular variants of poker essentially perfectly. Its creators say that it is virtually “incapable of losing against any opponent in a fair game”.
…That means that this particular variant of poker, called heads-up limit hold’em (HULHE), can be considered solved. The algorithm is described in a paper in Science1.
The strategy the authors have computed is so close to perfect “as to render pointless further work on this game”, says Eric Jackson, a computer-poker researcher based in Menlo Park, California.
“I think that it will come as a surprise to experts that a game this big has been solved this soon,” Jackson adds.
…Bowling and colleagues designed their algorithm so that it would learn from experience, getting to its champion-level skills required playing more than 1,500 games. At the beginning, it made its decisions randomly, but then it updated itself by attaching a ‘regret’ value to each decision, depending on how poorly it fared.
This procedure, known as counterfactual regret minimization, has been widely adopted in the Annual Computer Poker Competition, which has run since 2006. But Bowling and colleagues have improved it by allowing the algorithm to re-evaluate decisions considered to be poor in earlier training rounds.
The other crucial innovation was the handling of the vast amounts of information that need to be stored to develop and use the strategy, which is of the order of 262 terabytes. This volume of data demands disk storage, which is slow to access. The researchers figured out a data-compression method that reduces the volume to a more manageable 11 terabytes and which adds only 5% to the computation time from the use of disk storage.
“I think the counterfactual regret algorithm is the major advance,” says computer scientist Jonathan Shapiro at the University of Manchester, UK. “But they have done several other very clever things to make this problem computationally feasible.”
The computer does engage in a certain amount of bluffing, full story here, via Vaughan Bell.