Month: January 2014
Will your next car Google you?
Cecilia Kang and Michael Fletcher have a new article with a variety of interesting observations, here are some bits:
A tablet, running Google’s Android operating system, will pop out of the dashboard. The device can be passed around so passengers can find YouTube clips and order songs and audio books from the Google Play store for the car’s entertainment system.
Prefer Dunkin’ Donuts over Starbucks? Google may be able to decipher that by driving behavior and deliver the appropriate ads to an e-mail account or smartphone.
…The executives added that Google, not the automaker, would control any personal data generated by the car. And, they said, the information would be stored in servers, not the actual vehicles, to safeguard the data in case the car is stolen or sold.
…Much of the data that Web-connected cars generate may seem mundane — the route someone takes to work, where they are at a certain time, whether their car needs a tire alignment or more coolant — but they can be lucrative to companies in the business of closely targeted marketing.
“If you are a business that provides services to someone in that car, you have a captive audience for an hour a day,” Smith said. “Think about how much anybody would like to have a captive marketing audience for an hour a day. It is a gold mine.”
Much of the new discussion concerns new Audis, but of course such innovations may spread to other cars as well. Ads emanating from the car radio are old news, so what other mechanisms of ad delivery will be found? And will drivers be lured with free services (which?) for being willing to hear or view or smell such ads? I miss the old days of the open window and the eight-track tape.
*Capital in the 21st Century*
Many of you have been asking me about the forthcoming Thomas Piketty book. I am writing a 2500-word review of it for…elsewhere…so mum’s the word until then. For now I’ll just say it is a book to buy, read, and indeed study. Here is one good piece on the book from The Economist. It’s already a splendid year for the published word.
They should make a movie
The son of Indian immigrants, Mathew Martoma has led a pretty interesting life.
Part Two: An arrest can dog you for life but if you can avoid an arrest record, you can get away with a lot.
In 1999, Mr. Martoma was expelled from Harvard for creating a false transcript when he applied for a clerkship with a federal judge, court papers unsealed on Thursday showed. Mr. Martoma used a computer program to change several grades from B’s to A’s, including one in criminal law, and then sent the forged transcript to 23 judges as part of the application process.
Then, during a Harvard disciplinary hearing to determine whether he should be expelled, Mr. Martoma tried to cover his tracks by creating a fake paper trail that included fabricated emails and a counterfeit report from a computer forensics firm that Mr. Martoma had created to help conceal his activities.
After Harvard expelled him, Mr. Martoma, who at the time was known as Ajay Mathew Thomas, legally changed his name to Mathew Martoma.
Nearly a decade after he was kicked out of Harvard, federal prosecutors contend, Mr. Martoma carried out one of the largest insider trading schemes while working at Steven A. Cohen’s hedge fund.
From the NYTimes. But if you think that is the end of the story you would be wrong because the Times doesn’t even mention that Mortoma had an earlier career as, wait for it….a medical ethicist at the NIH! He even wrote a paper on medical ethics (bonus points if you can find it).
Part One, from USA Today, Academics praise insider trading suspect’s past:
Bruce Payne, a former Duke professor, stressed Martoma’s strong ethical code when he wrote a recommendation letter for his ex-pupil’s application to Stanford University Graduate School of Business. Martoma was in Payne’s ethics and policymaking class in 1994, before later becoming his chief teaching assistant for the class.
Payne…wrote that Martoma was “extraordinarily intelligent,” ”remarkably analytic” and “wonderfully fair-minded.”
and here is the piece de resistance:
“No one has contributed more to our class discussions of Sissela Bok’s Lying, nor was anyone in our class as acute on the issues of moral capacity raised by Camus’ The Plague,” Payne told Stanford.
Addendum: A reader points me to the paper. It’s on genetic testing and insurance. Unfortunately, they missed the key reference in this field.
Markets in everything: cafes that charge by the minute
Ever felt you’ve overstayed your welcome in a cafe, by reading, working or surfing the web while hugging the latte you bought two hours ago? Pay-per-minute cafes could be the answer. Ziferblat, the first UK branch of a Russian chain, has just opened in London (388 Old Street), where “everything is free inside except the time you spend there”. The fee: 3p a minute.
Ziferblat means clock face in Russian and German (Zifferblatt). The idea is guests take an alarm clock from the cupboard on arrival and note the time, then keep it with them, before, quite literally, clocking out at the end.
The link is here, hat tip goes to Tim Harford and also Ian Leslie.
DSGE has Failed the Market Test
Noahpinion makes a good point:
As far as I’m aware, private-sector firms don’t hire anyone to make DSGE models, implement DSGE models, or even scan the DSGE literature. There are a lot of firms that make macro bets in the finance industry – investment banks, macro hedge funds, bond funds. To my knowledge, none of these firms spends one thin dime on DSGE. I’ve called and emailed everyone I could think of who knows what financial-industry macroeconomists do, and they’re all unanimous – they’ve never heard of anyone in finance using a DSGE model.
If you know someone who does, please reply in the comments. I’m sure there’s someone out there. But even if there is, they haven’t soared to fame and fortune on the back of their DSGE model.
…In other words, DSGE models (not just “Freshwater” models, I mean the whole kit & caboodle) have failed a key test of usefulness. Their main selling point – satisfying the Lucas critique – should make them very valuable to industry. But industry shuns them.
Can public libraries offer high school degrees? (hi future)
The Los Angeles Public Library announced Thursday that it is teaming up with a private online learning company to debut the program for high school dropouts, believed to be the first of its kind in the nation.
It’s the latest step in the transformation of public libraries in the digital age as they move to establish themselves beyond just being a repository of books to a full educational institution, said the library’s director, John Szabo.
Since taking over the helm in 2012, Szabo has pledged to reconnect the library system to the community and has introduced a number of new initiatives to that end, including offering 850 online courses for continuing education and running a program that helps immigrants complete the requirements for U.S. citizenship.
The library hopes to grant high school diplomas to 150 adults in the first year at a cost to the library of $150,000, Szabo said. Many public libraries offer programs to prepare students and in some cases administer the General Educational Development test, which for decades was the brand name for the high school equivalency exam.
But Szabo believes this is the first time a public library will be offering an accredited high school diploma to adult students, who will take courses online but will meet at the library for assistance and to interact with fellow adult learners.
The article is here, and for the pointer I thank Robert Tagorda.
Assorted links
1. If you can trademark a cheese, why not a God (the God?) too?
2. Does Medicaid influence migration across states?
3. Dale Mortensen has passed away, and more here.
4. A short essay on Peter Temin.
5. Robot farmers.
6. Mysterious portraits of a young woman. There is a bit more here.
Should women brag more?
Here is the latest:
Women’s Bragging Rights: Overcoming Modesty Norms to Facilitate Women’s Self-Promotion
Jessi Smith & Meghan Huntoon
Psychology of Women Quarterly, forthcomingAbstract:
Within American gender norms is the expectation that women should be modest. We argue that violating this “modesty norm” by boasting about one’s accomplishments causes women to experience uncomfortable situational arousal that leads to lower motivation for and performance on a self-promotion task. We hypothesized that such negative effects could be offset when an external source for their situational arousal was made available. To test hypotheses, 78 women students from a U.S. Northwestern university wrote a scholarship application essay to promote the merits of either the self (modesty norm violated) or another person as a letter of reference (modesty norm not violated). Half were randomly assigned to hear information about a (fake) subliminal noise generator in the room that might cause “discomfort” (misattribution available) and half were told nothing about the generator (normal condition: misattribution not available). Participants rated the task and 44 new naive participants judged how much scholarship money to award each essay. Results confirmed predictions: under normal conditions, violating the modesty norm led to decreased motivation and performance. However, those who violated the modesty norm with a misattribution source reported increased interest, adopted fewer performance-avoidance goals, perceived their own work to be of higher quality, and produced higher quality work. Results suggest that when a situation helps women to escape the discomfort of defying the modesty norm, self-promotion motivation and performance improve. Further implications for enhancing women’s academic and workplace experiences are discussed.
That is via Kevin Lewis.
Books Average Previous Decade of Economic Misery
That is the new paper by Bentley, Acerbi, Ormerod, and Lampos, and here is the abstract:
For the 20th century since the Depression, we find a strong correlation between a ‘literary misery index’ derived from English language books and a moving average of the previous decade of the annual U.S. economic misery index, which is the sum of inflation and unemployment rates. We find a peak in the goodness of fit at 11 years for the moving average. The fit between the two misery indices holds when using different techniques to measure the literary misery index, and this fit is significantly better than other possible correlations with different emotion indices. To check the robustness of the results, we also analysed books written in German language and obtained very similar correlations with the German economic misery index. The results suggest that millions of books published every year average the authors’ shared economic experiences over the past decade.
Here is NYT coverage of that paper. Here are some related papers by Bentley and co-authors, note that American English is diverging from British English by its greater use of emotional words.
For the pointer I thank Mark Thorson.
Assorted links
1. MIE: weird Japanese toothpastes. And here is a Swiss nihilist toothpaste.
2. French driverless vehicle available in the USA for 250k.
4. Where have all the Cantonese restaurants gone?
5. The economics of IBM’s Watson. There is further information here about the new business group behind Watson, more here.
6. Polar vortex map (the link uses obscenity, repeatedly).
Robert Laszewski (and Ezra Klein) on where Obamacare stands right now
This is a very good interview, read the whole thing, here is one bit from Laszewski:
There’s a big misconception that this is about young people. That’s baloney. It’s about healthy people. A healthy 20-year-old might only pay a $100 premium. You want healthy 40 and 50-year-olds. The big problem right now is really total enrollment. We only have about 10 percent of the uninsured in here. Insurers think you need more like 70 percent of a pool of people to sign up.
Here is another:
I have an interesting answer for that. I think the mandate is almost worthless because the word is getting around that they can’t really collect it. And by year three, it’s really a lot of money. I think there’ll be real pressure to just get rid of it. I don’t think you can force people to buy this insurance. If they don’t want it there’ll be a political groundswell to get rid of it. So in my mind the individual mandate is kind of irrelevant to this.
And another:
…I do have a concern that people are looking at these plans and not finding value. Some people are looking at paying 10 percent of their income for plans with huge deductibles, and then you have politics of Obamacare and the bad press of the launch and if you put all those things in a bag and mix them up, I am really concerned that the uninsured who are healthy are not finding Obamacare the value they hoped it will be. That’s the real risk for Obamacare.
Read the whole thing, for Ezra’s responses too.
“Elastic Multi-User Stochastic Equilibrium Toll Design with Direct Search Meta-Heuristics”
Here is the abstract of a sadly under-cited piece (pdf), by Dimitriou and Tsekeris, which is only now receiving some trial implementation attempts:
This study describes the use of a Direct Search (DS) meta-heuristic algorithm for solving the toll design problem, in terms of finding the optimum toll level, in private roads. The problem is formulated as a nonconvex, bilevel nonlinear mathematical program which seeks to maximize toll revenues while taking into account the travel responses of network users, through a multi-class stochastic user equilibrium traffic assignment model with elastic demand. The algorithm is implemented onto a real-life urban sub-network which includes a private highway. The results show the ability of the DS algorithm to relatively quickly find an optimal solution and signify its potential to provide a competitive alternative to the currently used genetic algorithm (GA) approach for solving such types of nonconvex bilevel programs in the sector of road transport services.
Bitcoin-like innovation without cryptocurrency
Eli Dourado reports:
Bitcoin also has applications that are not purely payments. As a distributed ledger, it can function as a notary service, providing proof that a given document existed at a particular time and date. Another innovative idea is to use Bitcoin as a bonded identity service. The proposal is to create a system of “Passports,” secure identities verified by the blockchain, backed by “fidelity bonds.” Essentially, you would create a unique identity in the system and then verifiably give a non-trivial sum of bitcoins away to whichever miner randomly processes your transaction. By making it costly to create an identity, this system could be used to ensure that dozens of new accounts are not simply created to engage in fraud, spam, or sock-puppetry. Passports could be portable across different online services, creating a persistent identity that is both pseudonymous and reputable. Reputation rating services could develop to ensure that Passport-holders who misbehave on one service are shunned on other services.
There is more here.
Introductory Korean drama
To an economist like me, this fondness for hospitals is surprising, because hospitals are expensive in Korea and much of the bill is not covered by Korea’s National Health Insurance system. Price-elasticity of demand does not seem to work in Korean drama.
That is from Princeton economist Uwe E. Reinhardt, from a document from his “class” on Korean Drama (pdf). He introduces the “class” with this explanation:
After the near-collapse of the world’s financial system has shown that we economists really do not know how the world works, I am much too embarrassed to teach economics anymore, which I have done for many years. I will teach Modern Korean Drama instead.
Although I have never been to Korea, I have watched Korean drama on a daily basis for over six years now. Therefore I can justly consider myself an expert in that subject.
By the way, I have been watching Boys Over Flowers lately, a Korean drama (it’s also on Hulu). Think of it as a mix of Heathers, Mean Girls, and Clueless, but set in a posh Korean high school, with lots of “Average is Over” value. There is definitely income-elasticity of demand in Korean drama, even if there is not much price-elasticity. There is also plenty on matching models, moral hazard, status competition, and repeated games, and not always with cooperative solutions.
For the pointer I thank Oriol Andres.
If they designed a hotel to please me (hotels for infovores)
I am enjoying the “new David Brooks” and his last column prompted me to consider what I actually look for in a hotel. It is pretty quirky and it involves:
1. Very flat pillows so the head can lie almost flat.
2. No fawning from service people.
3. Numerous ready to access electrical outlets, including a laptop outlet right next to the bed so I can lean up against the pillow while blogging.
4. A non-ventilated bathroom which allows you to steam clothes into submission, and clothes hangars which support the same.
6. NBA-relevant channels on the TV and an easy to operate remote control system which does not trap said user in irrelevant menus.
7. Good breakfast choices which do not have an excess of carbohydrates.
I am putting aside location and obvious matters such as “they don’t torture me with unscheduled wake-up calls at 4 a.m.” In any case, it is easy for an expensive hotel — boutique or not — to fail on most of those grounds.