Category: Education

*A Life of Experimental Economics, volume I*, by Vernon Smith

I learned a great deal from this stimulating and highly unorthodox biography.  Here are a few points from the book:

1. It offers a brief but excellent early economic history of Wichita, where Vernon grew up.

2. Vernon, at the time, was very critical of the use of the atomic bombs on Japan, which he considered to be a disproportionate use of force.

3. In the 1940s he became active in CORE and its fight against racial discrimination.

4. In 1948 Vernon was an antiwar pacifist and a supporter of Norman Thomas.

5. At MIT, Paul Samuelson was a show-off lecturer, according to Vernon.

6. The book has plenty of sentences like: “Grandpa Smith and Uncle Norman were always a delight to have around — lots of jokes, wisecracks, and laughs.”

7. pp.163-164: “The details, as we came to know them, were not the least bit complicated…It was at first thought that she had considered using the knife on herself, but apparently the knife was there because she considered cutting a length from a nearby piece of rope.  Instead, she used a chain.  It was so like my mother — a clean job with no mess.  Everyone who knew her knew that she would never have used the butcher knife.  Even the hanging could never have occurred in the house.  No fuss, no mess; a clean job, with no room for error.”

8. On attention-switching: “I have always had what my mind has gradually come to recognize — by comparative observation of others — as a brain task-switching problem.  When I am thinking, writing, or composing, I pass into another world of experience, a world that is isolated from my surroundings…I experience many chaotic but loosely connected thought.  One, then another, rises and there emerges a hint of how they are to come together.”  He notes that interruptions are very costly to him, and he much prefers one-to-one conversations rather than group dialogues.  Furthermore, he argues that his capacity to “hyper-focus” is more valuable than his measured IQ of 130.

9. There are considerable and interesting discussions of autism, Asperger’s and ADHD.

10. The book offers an excellent account of why Purdue was an important economics department in the 1950s and 1960s.

11. In 1957, Vernon considered going to work for a private railroad and leaving Purdue for St. Louis.  He didn’t.

You can buy the book here, vol.II is good too.

The Cryptoeconomics Lab at Ivey

Ivey Business School at Western University (London Ontario, Canada) is looking for a Post doctoral Research Fellow to join our newly established CryptoEconomics Lab: http://cryptoeconomics-lab.com

The focus of the position is on conducting foundational research in the emerging discipline of cryptoeconomics, which examines the protocols and incentives that govern the production, distribution, and consumption of digital goods and services within decentralized online platforms.

The CryptoEconomics Lab at Ivey Business School is a cutting-edge initiative that is just getting started, and builds upon the school’s Scotiabank Digital Banking Lab and its interdisciplinary team of faculty members and graduate students.

The wild west era of blockchain is ending and the scams and flimflams are being revealed but the fundamental of the technology will be used to build socially useful mechanisms.

By the way, the CryptoEconomics Lab has a good bitcoin crash course ( I believe that should be read, bitcoin crash-course!).

Tom Lehrer, man ahead of his time

Ever since I was a young teenager I loved Tom Lehrer (thanks to Ken Regan, by the way), and I thought I would re-listen to some fresh.  I tried the Copenhagen concert, a good overview of his work and with good visuals.  I was struck by the following:

1. Lehrer represented the IDW of his day.  He said (sang) things others couldn’t, and his main enemy or target was political correctness.  It surprised me to hear how little many of the battle lines have changed.  Yet Lehrer, while warring against hypocritical political discourse, was in his day on the Left.  (Shades of Eric Weinstein!)  He worried about the “decline of the liberal consensus,” following the Kennedy era.  In 1982 he wrote that he considered feminism, abortion, and affirmative action “more complicated” than the older liberal causes, so perhaps he simply did not blend into the contemporary Left (the piece is interesting more generally).

2. Lehrer’s songs (repeatedly) indicate he saw nuclear weapons and nuclear proliferation as a major problem; in that regard his time probably was wiser than ours.

3. He is very interested in language and the question of how words are used in the public sphere, and how words are used to obfuscate.  Might that be the central theme in his thought?

4. He often sneaks China into the cultural references, for instance: “And I’m learning Chinese, says Werner von Braun.”  He seems to think it is a much more important country than Russia, although this concert was from 1967 and often was drawing on songs which were older yet.

5. He is much more interested in math and science than current comedians, for instance his “Elements” is a classic [22:54], and redone here with an Aristotle coda, mocking The Philosopher.  His audience seems to take this interest in stride.  This song is yet another example of inverting what should be said, or not.

6. Yes I know the tunes sound derivative, but most of them are original.  And as music…they’re a lot catchier than most of the other musical theatre of his time and I think of many of them as minor classics.  I still enjoy hearing them as music.  And other than Sondheim and Dylan, how many better American lyricists were there?

7. When he wants to get really gory, he doubles down on mock sadism (“Poisoning Pigeons in the Park”: “…we’ll murder them all with laughter and merriment…except for the few we take home to experiment…”).  He once said: “If, after hearing my songs, just one human being is inspired to say something nasty to a friend, or perhaps to strike a loved one, it will all have been worth the while.”

It would be hard to pull this off today.  Yet, when I listen to Lehrer, perhaps because I know the historical context, I am not offended.  Plus he is flat-out funny.  He cited losing his “nasty edge,” and starting to see things in shades of grey, as one reason for what appeared to be a quite premature retirement.

8. He wore a white shirt and his tie was tightly knotted.

9. He’s one of America’s great comics, and the material is idea-rich to a remarkable extent.  He hardly ever sung about social themes or person-to-person social interactions.

10. Many of the songs of his that you never hear are in fact commentaries on various folk song movements.  Circa 2018, few can understand their references, but they do showcase Lehrer’s extreme idealism.

11. He was at first a math prodigy and later in the mid-1950s, as a draftee, crunched numbers for the NSA.  He remains alive and turned 90 earlier this year.

 

Corporate science fiction markets in everything

…the business world has been increasingly aware of the genre’s potential. In 2017, PricewaterhouseCoopers, the professional services firm that advises 440 of the Fortune 500 companies, published a blueprint for using science fiction to explore business innovation. The same year, the Harvard Business Review argued that “business leaders need to read more science fiction” in order to stay ahead of the curve…

A number of companies, along with a loose constellation of designers, marketers, and consultants, have formed to expedite the messy creative visualization process that used to take decades. For a fee, they’ll prototype a possible future for a [corporate] client, replete with characters who live in it, at as deep a level as a company can afford. They aim to do what science fiction has always done — build rich speculative worlds, describe that world’s bounty and perils, and, finally, envision how that future might fall to pieces.

Alternatively referred to as sci-fi prototyping, futurecasting, or worldbuilding, the goal of these companies is generally the same: help clients create forward-looking fiction to generate ideas and IP for progress or profit. Each of the biggest practitioners believe they have their own formulas for helping clients negotiate the future. And corporations like Ford, Nike, Intel, and Hershey’s, it turns out, are willing to pay hefty sums for their own in-house Minority Reports.

That is from Brian Merchant on Medium.

Tamara Winter on how to generate compound returns

This is a concordance of responses she received on Twitter, I am not sure she endorses all of these ideas, the rest is her I won’t double indent:

Interpersonal and Mindfulness

  • Wake up early.
  • Spend time in prayer and/or meditation first thing in the morning. Or, if you can’t fit it in then, find time later in the day. I love using Headspace. If you’re Catholic, pray the Rosary daily.
  • Practice gratitude, and be specific when thanking someone.
  • Keep a personal calendar.
  • Write something, anything, everyday.
  • Study a foreign language for 5, 15, or 25 minutes a day. Here’s a list of 10 great options.
  • Eat meals with people you love.
  • Keep in touch with close friends.
  • Read to your children, and take pictures of them frequently.
  • Read for at least 15 minutes daily.
  • Read or watch something new daily. Ideally something you’re curious about.
  • Ask questions often.
  • Don’t slouch.
  • Learn to dance.
  • Call your parents and grandparents.
  • Go on lots of first dates. Law of large numbers.
  • Introduce yourself to new people.
  • Before dinner, write down tomorrow’s priority list.
  • Restrict your tv time. Or substitute tv time for your most potent distraction. For me that’s Twitter. Here are some practical ways to reduce screen time.
  • For young people, ask people you admire in your area for coffee once, twice, or a few times a month. Email is another option. The likelihood of a positive response in both scenarios is probably higher than you expect.

Finances

  • Negotiate your salary.
  • Practice making money online. For a fun place to start, try PredictIt.
  • Contribute early and often to your IRA/401(k).
  • Invest as you’re able to. (Would welcome reading suggestions in the comments).
  • Save a predetermined percentage from each paycheck.
  • Pay off your credit cards monthly.

Health

  • Sleep 8 hours or more each night. Limiting your blue light exposure after sunset can also improve your sleep quality.
  • Try not to use your cell phone in bed. You can also go even further, and put away your phone 30 minutes, an hour, or even two hours before bedtime.
  • Increase your water consumption, and whenever possible, drink it to the exclusion of everything else.
  • Reduce your sugar, carb, and processed food intake.
  • One way you can do this is by bringing your lunch from home to work rather than ordering take out. Added bonus: saving money.
  • When you do eat out, choose the healthier options.
  • When grocery shopping, check the ingredients of what you’re buying. Try to avoid processed foods with numerous and complicated ingredients.
  • Take the stairs if and when you can. If you live in a fairly walkable area, walk everywhere within a mile.
  • Don’t overeat — stop just before you’re full.
  • If you can, try intermittent fasting at least once a week.
  • Exercise daily. Try exercises that you enjoy, otherwise it’s unlikely that you’ll stick with them.
  • Incorporate resistance weight-training into your routine.
  • Floss!

TC again: Here is the full Medium essay.

My Conversation with Paul Romer

Here is the audio and transcript, Paul was in top form and open throughout.  Yes economic growth, blah blah blah, but we covered many related topics too:

COWEN: And you also think we should simplify the English language. Right?

ROMER: [laughs] Well, there’s two parts to that. One is, in writing and communication, there should be a very high priority on clarity. It’s hard to know what’s the mechanism that enforces that. There are variants on English, like the English used to write the manuals people use to service airplanes, where there’s a very restricted vocabulary. The words are chosen so that you can’t have any ambiguity because you don’t want somebody servicing a plane to get confused. So there are some things you could do on writing, word choice, vocabulary, exposition.

There’s a separate issue, which is that amongst the modern languages, English has the worst orthography, the worst mapping between spelling and sounds of any of the existing languages. And it’s a tragedy because English is becoming the universal second language.

The incidence of people who don’t learn to read is substantially higher in English than in other languages. People have known for a long time, it takes longer to learn to read in English because of the bad orthography. But what hasn’t gotten enough attention is that there’s an effect on the variance as well. There are more people who never get over this hurdle to actually learning to read.

If there were a way to do in English what they’ve done in other languages, which is to clean up the orthography, that could make a huge difference in the variation associated with whether or not people can learn to read English.

And:

COWEN: Can a charter city work if we import good laws from the outside world but not the appropriate matching culture?

ROMER: You’ve zeroed right in on the connection. The real motivation that I had for charter cities was exactly this one that you can see in the US versus New Zealand. You can think of a charter city exercise . . .

This is actually the story of Maryland: We’re going to create laws, and we’re going to guarantee freedom of religion in Maryland, and it’s in the laws; it’s in the institution somehow. That didn’t turn out very well. Maryland had a Catholic elite but then large numbers of Protestant indentured servants or workers. And this kind of commitment to freedom of religion was not stable in Maryland at all.

The case that’s worth trying to copy is Pennsylvania, where William Penn recruited large numbers of people who actually believed in freedom of religion. The word charter comes from the charter that Penn wrote for Pennsylvania, but it wasn’t the document that mattered. What mattered was that there were a bunch of people in the founding population who were committed to this idea of a separation of church and state and religious freedom. And that’s what made it durable in Pennsylvania in a way it wasn’t in Maryland.

And this:

ROMER: …Moses was of this generation that was too enamored of the car, and this is where I think Jacobs had a better intuition. But the challenge, the dichotomy I would pose would be Jane Jacobs versus Gouverneur Morris.

Morris was the guy who drew the grid that laid out the rectangular street map for Manhattan.

We also discussed music, including Hot Tuna, Clarence White, and Paul’s favorite novel, dyslexia, what Paul has learned about management, and much more.  Self-recommending, if there ever was such a thing.

Mostly returned books

I have thought about this question for at least twenty years, Elisa Gabbert spells it out (NYT):

My favorite spot in my local library — the central branch in Denver — is not the nook for new releases; not the holds room, where one or two titles are usually waiting for me; not the little used-book shop, full of cheap classics for sale; and not the fiction stacks on the second floor, though I visit all those areas frequently. It’s a shelf near the Borrower Services desk bearing a laminated sign that reads RECENTLY RETURNED.

This shelf houses a smallish selection of maybe 40 to 60 books — about the number you might see on a table in the front of a bookstore, where the titles have earned a position of prominence by way of being new or important or best sellers or staff favorites. The books on the recently returned shelf, though, haven’t been recommended by anyone at all. They simply limit my choices by presenting a near-random cross section of all circulating parts of the library: art books and manga and knitting manuals next to self-help and philosophy and thrillers, the very popular mixed up with the very obscure. Looking at them is the readerly equivalent of gazing into the fridge, hungry but not sure what you’re hungry for.

Is it better to spend time, at the margin, pawing through the “recently returned” cart, or the “New Arrivals” section or for that matter just the regular shelves?  How about the books simply left on tables and abandoned?

The big advantage of the books on the carts is that they usually are not bestsellers.  For bestsellers there is a waiting list, and they are held for another patron, never making their way to the cart.  I say go for the carts.

52 things Tom Whitwell learned in 2018

Here is one of them:

35% of Rwanda’s national blood supply outside the capital city is now delivered by drone. [Techmoran]

Here is another:

Advertisers place a single brown pixel on a bright background in a mobile ad. It looks like dust, so users try to wipe it off. That registers as a click, and the user is taken to the homepage. [Lauren Johnson]

And:

Those weirdly expensive books on Amazon could be part of a money laundering scheme. [Brian Krebs]

And:

Expensive placebos work better than cheap placebos. [Derek Lowe]

And if you ever doubted it:

There is a small but thriving startup scene in Mogadishu, Somalia. [Abdi Latif Dahir]

Here is the whole list, definitely recommended.  Via Anecdotal.

If you love prediction markets you should love the art world

Think of art markets, and art collecting, as an ongoing debate over what is beautiful and also what is culturally important.  But unlike most debates, you have a very direct chance to “put your money where your mouth is,” namely by buying art (it is very difficult to sell art short, however).  In this regard, debates over artistic value may be among the most efficient debates in the world.  At least if you are persuaded by the basic virtues of prediction markets.  The prices of various art works really do aggregate information about their perceived values.

I have, however, noted a correlation, how necessary or contingent I am not sure.  The “white male nerd types” who are enamored of prediction markets tend to be especially skeptical of the market judgments of particular art works, most of all for conceptual and contemporary art.

In my view, discussions about the value of art, as they occur in the off-the-record, proprietary sphere, are indeed of high value and they deserve to be studied more closely.  Imagine a bunch of people competing to make “objects that are interesting but not interesting for reasons related to their practical value.”  And then we debate who has succeeded, or not.  And those debates reflect many broader social, political, and economic issues.  And it is all done with very real money on the line.  The money concerns not just the value of individual art works, but also the prestige and social capital value that arises from having assembled a prestigious and insightful collection.

Meet the Pioneers

Here are the winners from the first Pioneers tournament, summarized here:

In the short 3 months since its launch, Pioneer has garnered a global reach. Our first tournament featured applicants from 100 countries, ranging from 12 to 87 years old. Almost half of our players hailed from countries like India, UK, Canada, Nigeria, Germany, South Africa, Singapore, France, Turkey, and Kenya. Projects were spread across almost every industry — AI research, physics, chemistry, cryptocurrency and more.

They are a remarkably impressive group, here is one example:

Clark Urzo (23, Philippines)

Clark is making a programming language for physics. The idea is to enable anyone who can code to contribute to serious physics research (for example, simulations of gravitating systems). This opens up the field to the wondrous forces of open source and promotes open and accountable science along the way.

Noteworthy: Clark has an insanely impressive trajectory. He learned to code when he was 12. By 16, he was doing Laplace transforms, tinkering with Arduinos, reading Marx and Nietzsche, and taught himself conversational German. He co-founded a VR company by 19.

Or:

Harshu Musunuri (18, USA)

Harshu is creating synthetic materials to improve the diagnosis, treatment, and prevention of sepsis, a leading cause of death in hospitals around the world. Unlike other approaches, these materials don’t require refrigeration and enable low-cost toxin capture in resource-poor settings.

Noteworthy: Harshu comes from a humble background: she was born to an electrical engineer and an elementary school math teacher in a small village in South India. But her work is anything but humble. In her short career, she’s done research with NASA’s JPL, built a seizure detection app for epileptic patients and is now working on a project with the potential to save thousands of lives. She’s also a hacker at heart: when she lacked the formal lab tools to braze at high temperature, she used the exhaust vent of a ceramic kiln.

The overall lesson is that there is a great deal of undiscovered talent out there, and also that some people are out there discovering it!  And if you wish to apply to round two, just follow the instructions at the top link.

Insurance markets in everything

The University of Illinois at Urbana-Champaign has paid $424,000 to insure itself against a significant drop in tuition revenue from Chinese students.

In what is thought to be a world first, the colleges of business and engineering at the university signed a three-year contract with an insurance broker to pay the annual six-figure sum, which provides coverage of up to $60 million.

The university came up with the idea in 2015 and implemented it last year but received permission from the broker to discuss it in public only earlier this month.

Here is the story.

Fading Legacies: Human Capital in the Aftermath of the Partitions of Poland

This paper studies the longevity of historical legacies in human capital. The Partitions of Poland (1772-1918) represent a natural experiment that instilled Poland with three different legacies of education, resulting in sharp differences in human capital among the Polish population. I construct a large, unique dataset that reflects the state of schooling and human capital in the partition territories from 1911 to 1961. Using a spatial regression discontinuity design, I find that primary school enrollment differs by as much as 80 percentage points between the partitions before WWI. However, this legacy disappears within the following two decades of Polish independence, as all former partitions achieve universal enrollment. Differences in educational infrastructure and gender access to schooling simultaneously disappear after WWI. The level of literacy converges likewise across the former partitions, driven by a high intergenerational mobility in education. After WWII, the former partitions are not distinguishable from each other anymore.

That is from Andreas Backhaus, a job market candidate from University of Munich.

Open questions from Gwern

This is all Gwern, I won’t add another layer of indentation:

Open Questions

Some questions which are not necessarily important, but do puzzle me or where I find standard answers to be unsatisfying (along the lines of Patrick Collison’s list & Alex Guzey; see also my list of project ideas):

  • What is personal productivity and why does it vary from day to day so strikingly, and yet not correlate with environmental variables like weather or sleep quality nor appear as the usual kind of latent variable in my factor analyses? Is it something much weirder than the usual kind of latent variable, like a set of zero-sum measurements drawing on a generic pool of energy or mana?
  • Does listening to music while working serve as a distraction, or motivation?
  • What, algorithmicly, are mathematicians doing when they do math which explains how their proofs can usually be wrong but their results usually right?Is it equivalent to a kind of tree search like MCTS or something else? They wouldn’t seem to be doing a literal tree search because then there would almost never be mistakes in the proof (as the built-up tree of theorems only explores valid inferential steps), but if they’re not, then how are they handling logical uncertainty? Are they doing something like MCTS’s random playouts where lemmas are not proven but simply heuristically given a truth value to shortcut exploration and the heuristic is accurate enough to usually guess correctly and this is why the proofs are wrong but the results are right?
  • Why did Jean Calment live so many more years than other centenarians, breaking all records and setting a life expectancy record which decades later has not just not been broken, but not even approached? Which is extraordinary considering that she smoked, medicine has continuously advanced, the global population has increased, life expectancy in general has increased, and the Gompertz curve implies that, with mortality rates approaching 50%, centenarians should die like flies and ever closer in age to each other and not have occasional enormous permanent 3 year gaps between the record setter (Calment) and everyone since then.
  • Why do humans, pets, and even lab animals of many species kept in controlled lab conditions on standardized diets appear to be increasingly obese over the 20th century? What could possibly explain all of them simultaneously becoming obese?
  • What happened to the famous genome sequencing cost curve after late 2012, which stopped price decreases, damaged genetics, and delayed the advent of whole-genome sequencing by perhaps a decade? Was it really just the Illuminati’s fault?
  • Why do humans have such a large mutation load on common genetic variants? Common SNPs make up a large fraction of variance, even for traits which must be fitness-affecting. Culture or technology slow evolution doesn’t wash when human fitness differentials are so large and so many people died young or as infants, and how did the many deleterious variants get pushed up to such high frequencies in the first place?
  • Why does the immune system so often surface as a genetic correlation or tissue enrichment in GWASes for many things not generally believed to be infectious? Are we missing an enormous range of infections directly causing bad things (or indirectly through autoimmune mechanisms), or the immune system just sort of like intelligence in being a general health trait?
  • Why does catnip response vary so much across countries in domestic cats, and also across feline species, with no apparent phylogenetic or environmental pattern? It is so heritable in domestic cats that a genetic reason is plausible, but if it’s adaptive, what is it doing when catnip doesn’t exist in the ranges of most tested cats, and if it’s neutral why can so many closely-different different animals respond to it in different ways?

TC again: There is much more at the link.  If you don’t know Gwern, you should know Gwern.

Why do so many academics dislike the market?

It seems Nozick was right after all, here is Raul Magni-Berton and Diego Rios:

In this article, the authors explore why academics tend to oppose the market. To this intent the article uses normative political theory as an explanatory mechanism, starting with a conjecture originally suggested by Robert Nozick. Academics are over-represented amongst the best students of their cohort. School achievement engenders high expectations about future economic prospects. Yet markets are only contingently sensitive to school achievement. This misalignment between schools and markets is perceived by academics – and arguably by intellectuals in general – as morally unacceptable. To test this explanation, the article uses an online questionnaire with close to 1500 French academic respondents. The data resulting from this investigation lend support to Nozick’s hypothesis.

Via Rolf Degen.

The best results on assortative mating and inequality I have seen

This paper studies the evolution of assortative mating in the permanent wage (the individual-specific component of wage) in the U.S., its role in the increase in family wage inequality, and the factors behind this evolution. I first document a substantial trend in assortative mating, as measured by the permanent wage correlation of couples, from 0.3 for families formed in the late 1960s to 0.52 for families formed in the late 1980s. I show that this trend accounts for more than one-third of the increase in family wage inequality across these cohorts of families. I then argue that the increase in marriage age across these cohorts contributed to the assortative mating and thus to the rising inequality. Individuals face a large degree of uncertainty about their permanent wages early in their careers. If they marry early, as most individuals in the late 1960s did, this uncertainty leads to weak marital sorting along permanent wage. But when marriage is delayed, as in the late 1980s, the sorting becomes stronger due to the quick resolution of this uncertainty with work experience. After providing reduced-form evidence on the impact of marriage age, I build and estimate a marriage model with wage uncertainty and show that the increase in marriage age can explain almost 80% of the increase in assortative mating.

That is from the job market paper of Alparslan Tuncay, from the University of Chicago.