Month: August 2018

Which ten restaurants would you most want to live next door to?

Seherli Tandir, in Baku, Azerbaijan is now on my list, but let me first explain the criteria.  This is not about the best restaurants, it is about the ones that give you the most consumer surplus.  For most of the “next door restaurants,” as I shall call them, you want them to be inexpensive, to offer some healthy options, to satisfy some of your cravings, to offer unique dishes, and not to take too long serving you.

It is not a mistake, if you are visiting Baku, to simply have each and every one of your meals at Seherli Tandir — the other restaurants in town are dominated assets.

The menu allows you to order three different types of cherry jam.  Get the one in the middle, the sour one (don’t let them tell you that you should not be ordering a jam, and don’t put it on anything, just eat it).

Have I had better yogurts and rices?  Order the little dumplings with sumac (gurza), asking for yogurt sauce on the side.  The qutabs — thin breads stuffed with either pumpkin or meat — are the surprise knock-outs.  The soups, the stews, the dolmeh.  Did I mention the pilaf with the chestnuts?  The “tandir” bread-baking oven in the middle of the restaurant?

The typical entree costs about $4-6.  And the staff is friendly and helpful.

The restaurant is located in the old city, on the “restaurant street,” near four or five other excellent but nonetheless inferior options (when in doubt in those order dishes with pomegranate seeds).  Go to the tower, and start walking up to the right, maybe 5-7 minutes.  No taxi can take you there, as it is in a pedestrian zone.  Simply ask when you get lost, as the restaurant is quite famous.  You can’t make a reservation and may need to wait out in the sun, thus another reason why it should be next to my home

In general, Azerbaijani food lies in the space between Persian and Georgian cuisines, a double yum.

Which other restaurants should be in the top ten you want right next to your home? And why aren’t those restaurants simply the best period?

p.s. watermelon jam tastes better than you think.

Saturday assorted links

1. A Bitcoin joke.

2. Are there hot streaks in individual careers?

3. Claims about populism (pdf, slides).

4. NPR: “The Story Behind the Numbers”: Full Episode: https://n.pr/2L2c13m, my segment: https://n.pr/2OJaeCx.

5. Are there people who are reading fifty books at once sort of?

6. Referral link for Pioneer, a VC program to find the next generation of “lost Einsteins.”  Here are the new terms of the offer.

Drifter

Studio Drift had a great exhibit at the Stedelijk Museum in Amsterdam featuring drifter, a monolithic block that levitates, rotates and moves around and in space.

Drifter personifies Arthur C. Clarke’s adage that “Any sufficiently advanced technology is indistinguishable from magic.” Seeing it is magical. I can tell you that it’s 3-dimensional not a projection. You can see under, above and around it. There are no strings. You can see a video here. Music plays as the block moves. I’m pretty sure that isn’t an accident. I can guess how it was done but really the point is that this was an art work that fulfilled it’s promise

Drifter calls on the viewer to reconsider our relationship with our living environment, which is often accepted as static and lifeless. It creates a sense of disbelief and displacement, creating tension between humanity versus nature and chaos versus order. Disconnected from our expectations, it floats between the possible and impossible.

Drifter will be at the Stedelijk until August 26. Look for it elsewhere.

More on statistical discrimination

A few of you have raised objections to my recent statistical discrimination hypothesis on the grounds that, if it were true, minority group members who “made it to the top” should be the super-achievers, since they had to pass through so many screens and implicit taxes.  I wrote back the following (edited) in an email:

Maybe, but I think you are assuming fixed quality of talent within each sector.

Let’s say there are two sectors. In the first, the CEO sector, women face statistical discrimination and there are multiple levels. In the second there is no statistical discrimination, let us call it women’s tennis but of course there are other examples too.

It could be that most of the talented women, those who can judge where they really will succeed best and most easily, flock to the latter sectors.  In which case the winners in the CEO sector need not be so special, including in the presence of discrimination.

That also means that employers and intermediaries have no special incentives to hunt for that talent: it has run away to other, less discriminatory sectors (and lowered wages in those sectors, I might add).

By the way, here was one good comment by Willitts on that post:

…if the signal of skill is “years of experience,” then the person filtered at the lower level will always look objectively worse at the higher level filters.

You’re assuming that the higher level decision makers have the opportunity (and desire) to consider walk-on candidates. You’re also assuming that those walk-ons will have adequate means to signal their superiority to those who passed through the filters.

I might be able to be the best CEO who ever lived, but my lack of management experience would never get me in the door for an interview. If (mild) discrimination at several rungs of the ladder kept me from rising to the penultimate rung, I’d have ZERO chance of attaining the top rung, not merely a small chance

And David:

Most elite performers are impressive throughout their lives. But they can stay constantly motivated, by rising through the ranks quickly. A stat-discriminated person might not have that advantage either.

And Jwilli7122:

Well, with the first gatekeeper there’s really no motivation to gamble on the marginalized, because a) there’s not yet a big gap and b) doing so would give up the profit of stereotyping (see the Bayesian analysis referenced in #3 of Dan’s post).

And as you get to the subsequent gatekeepers, a larger actual ability gap starts to form because the discrimination of prior gatekeepers prevented the marginalized group from gaining valuable experience.

I will continue to ponder this problem.

Crowdfunding science, from other scientists

…all qualified scientists would get some guaranteed funding — no grants required. But there should be one added step: everyone must anonymously allocate a fraction of their funds to other researchers of their own choosing.

The goal of this system would be to let scientists devote more of their time to research…

In SOFA [Self-Organizing Funding Allocation], every participant starts with the same allocation of funding every year but must allot a portion to other scientists. Reasons to select someone could range from, ‘That was a great paper’ to ‘I think they will release useful data.’ Those who get the most give the most, because scientists give a percentage of everything received under SOFA. To avoid currying favour, this process will be anonymous…

We can limit collusions and kickback schemes — the financial equivalent of citation cartels — by mandating a minimum number of recipients and restricting people from designating frequent collaborators, or colleagues at the same institution. Counteracting gender, age and prestige biases that plague conventional peer review might even be easier in SOFA because they are measurable.

Here is the Johan Bollen piece in Nature.

If codetermination boosts output, will start-ups use it?

Think of codetermination as requiring that say 40% of the board seats be given to workers and broad-based worker representatives (not just founders!), as in the new Elizabeth Warren bill.

Sometimes it is claimed that codetermination would limit capital returns, but boost the firm’s investment in labor, and thus possibly boost productivity.  Let’s say a firm with codetermination would produce 10, and the same venture without codetermination would produce only 8.

If you are initiating a start-up, it seems the codetermined firm is more competitive, plus you still could bargain for some share of the extra 2 in output, albeit a smaller share of the initial 8.

A priori, this could work out as either board form proving more profitable for capital.  Still, if you think of most start-ups as being quite desperate to make it at all, I would think the productivity boost would militate in favor of the codetermination form in at least some cases.  After all, your higher productivity means you will be able to capture the market with lower prices, right?

If you don’t see much voluntary codetermination, one logical conclusion is that codetermination will decrease output.  Will anyone tell me by how much?

Addendum: Here is Ryan Decker: “Interesting thing about the Warren idea is that it mainly applies to large firms. The Vox write-up did not mention the voluminous literature on size-dependent distortions. Also did not mention the literature on the large firm wage premium.”

And Adam Ozimek: “Giving workers board seats may reduce more “fissured economy” stuff at existing big companies, but will probably lead to more of at it tomorrow’s big companies.”

My musical self-education

Musick-er requests:

I’ve noticed that you tend to have pretty wide ranging tastes in music, and your recommendation on introduction to classical music was pretty spot-on. I’m wondering what training/expertise you have in music theory/aural skills?…As someone who is obviously very intelligent but not a musician (that I know of), I wonder how you interact with Bach or other master composers – what criteria do you listen for? What makes great works stand out from the merely good?

My history is this:

1. I learned how to play the guitar when I was twelve or so, and also figured out how a piano works.

2. I spent about six years studying jazz chords, American popular song, some classic rock, early acoustic blues and ragtime, Fahey/Kottke, and Bach.  I also learned how to listen with a score, at least for guitar and piano pieces.

3. Later in life, I focused on trying to make sense of early to mid 20th century classical music and Indian classical music, both excellent entry points for many of the other difficult musical genres and styles.  I tried to learn at least something about micro-tonal musics and ragas.

4. Starting in my thirties, I tried to develop a basic familiarity with world musics, not so much the European folkie stuff as those based on different conceptual principles, such as some of the Arab musics, Chinese music, and African musics including the Pygmies.

5. I cultivated “music mentors” to help me understand these musics.  Overall this is not a very book-intensive endeavor, though you will enjoy reading accompanying biographies.

I am not saying that is the right path for everyone, but I found it very rewarding, including for my broader understanding of history.

To address one of the specific questions, I think of Bach-Stravinsky, classic rock, and Indian classical music (live only) as covering some of mankind’s greatest cultural achievements, with only cinema in the running for possible parity.  Most of all just listen plenty, noting that the canonical opinions about what is best are actually pretty much on the mark.

The economics of density: evidence from the Berlin Wall

From Ahfeldt, Redding, Sturm,and Wolf:

The Berlin Wall provides a unique natural experiment for identifying the key sources of urban development. This research, for which its authors have recently been awarded the prestigious Frisch Medal, shows how property prices and economic activity in the east side of West Berlin, close to the historic central business district in East Berlin, began to fall when the city was divided; then, during the 1990s, after reunification, the same area began to redevelop. Theory and empirical evidence confirm the positive relationship between urban density and productivity in a virtuous circle of ‘cumulative causation’.

Via the excellent Samir Varma.

What should I ask Bruno Maçães?

I will be doing a Conversation with him.  Bruno is the author of Dawn of Eurasia: On the Trail of the New World Order, published earlier in the United Kingdom but just now in the United States.  It is one of the essential reads of the last few years and was last year a tied favorite for my “Book of the Year.”

On the book:

Well, it turns out there is a book explaining all the recent, strange events in China, Russia, Turkey and the European Union

Here is his excellent recent piece on what the West is becoming, and why.  I also have read he is currently writing a book on China’s “One Belt, One Road.”

On Bruno, here is one bit from Wikipedia:

Bruno Maçães is a Portuguese politician, political scientist, business strategist, and author. He studied at the University of Lisbon and Harvard University, where he wrote his doctoral dissertation under Harvey Mansfield. He is currently a Nonresident Senior Fellow at Hudson Institute in Washington.

My Conversation with Bruno is in fact one reason why I took my August trip to Kiev and Baku — what better and indeed necessary way to prepare for a discussion of Eurasia?

So what should I ask him?

Why statistical discrimination is higher than is either socially optimal or Bayesian rational

Let’s say there is only a mild amount of statistical discrimination in a system.  Not prejudice, just a social judgment that some groups are more likely to succeed at some tasks than others.  Most people, for instance, do not expect women to reach the NBA, but I would not from that conclude they are prejudiced.

But now introduce a further assumption.  There are multiple layers of evaluation, and at each layer people, and institutions, wish to be seen as successful talent spotters, mentors, and coaches.  High schools wish to promote students who will get into good colleges.  Colleges wish to invest in students who will get into best grad schools, or get the best jobs.  Firms wish to hire workers who will rise to CEO, even if elsewhere.  And so on.  Let’s say there are ten levels to this “game.”

Each level will apply its own “statistical discrimination” tax, whether intentionally or not.  Say for instance there is (mild) statistical discrimination against women at the CEO level.  Firms that wish to hire and promote future CEOs will be less likely to seek out women to hire, including at lower levels.  This may or may not be conscious bias; for instance the firms may decide to look for certain personality traits that, for whatever reason, are harder to find in women.  They’ll simply be making decisions that give them plaudits as good talent spotters.

Colleges will then consider similar factors in their decisions.  And so will high schools.  And so on.  In equilibrium, all ten levels of the game will levy a partial “statistical discrimination tax,” with or without conscious bias in thee discriminatory direction.

Does this sound familiar?  It is a bit like the double/multiple marginalization dilemma in microeconomics.  The number of discrimination taxes multiplies, at each level.  Just like the medieval barons put too many tolls on the river.  All of a sudden the initially mild statistical discrimination isn’t so mild any more, due to it being applied at so many veto-relevant levels.  (As you will recall from the double marginalization problem, each supplier does not take into account the effect of his/her mark-up or tax on the gains from trade elsewhere in the system.)

So say the “Bayesian rational” level of statistical discrimination is a five percent discount.  You can get far more than that as the actual effective tax on the disadvantaged group, with everyone in the system behaving in a self-interested manner.

And of course these taxes will discourage effort from the disadvantaged groups, to the detriment of efficiency and also justice.

I am indebted to Anecdotal for a useful query related to this discussion.