Category: Web/Tech

Simple advice for watching and understanding on-line chess

Yes, the computer evaluations are extremely useful.  But they are measuring the quality of the position when two computers are playing.  Yet most of the games you care about tend to be two humans playing each other.  And those humans do not play like computers.  The computer might say the game is even, and maybe it is with perfect play, but one side can be much harder (easier) to play than the other.  So I suggest this trick.  Go to, which covers top games (only).  Scan down the vertical list of all possible moves and consider the distribution of outcomes.  If the top move is great for White, but all the others are not, robustness is low, especially if the top move for White is not super-obvious (such as recapturing a Queen, etc.).  If all the sequences look very good for White (Black), you will know that for humans the position probably is somewhat better for White than the single computer evaluation number will indicate.  Robustness against human error will be present.

For the Carlsen match, here is a good Twitch stream, currently with Caruana as commentator.

Model this Apple pricing decision

Apple has one new product that’s already so back-ordered it won’t arrive in time for Christmas. It’s a polishing cloth. Priced at $19.

Unveiled in October after Apple showed off its new line of gadgets, the soft, light gray square is made of “nonabrasive material” and embossed with Apple’s logo. During tests, the rag worked like other microfiber cloths that list for less than half that price. So…why $19?

As it happens, Apple’s pricing strategy rarely allows accessories to fall below that threshold. The 6.3-inch swatch of fabric sits beside 17 other Apple-branded items on the company’s website—a mélange of charging cables, dongles and adapters—each priced at $19. Some, such as the wired earbuds and charging adapter, were once included with new iPhones.

Those $19 Apple items—together with the Apple Watch, AirPods and other small gadgets—are part of the company’s growing Wearables, Home and Accessories category, which had more than $8 billion in revenue in the quarter that ended in October.

Almost every Apple price ends in the number “9.”  Would it matter if we all carried around $30 bills?  There is further discussion in this Galvin Brown WSJ piece.

Via the excellent Samir Varma.

Monetary theory and crypto

No, I don’t mean money/macro, such as debates over ngdp targeting or transitory inflation.  I mean old-fashioned monetary theory.  Try all these pieces.  Obviously, many of those particular authors are now deceased or retired.  But take the field in general — has it had anything interesting to say about crypto developments?  I don’t expect it to have predicted crypto, or its price, any more than I expect macroeconomists to have predicted recessions (see Scott Sumner on that one).  But surely monetary theory should be able to help us better understand crypto?  And its price.

How much has it succeeded in that endeavor?  (I have read and on MR cited a number of NBER and other academic working papers on crypto, over the years.)  Or are you better off reading “amateur” pieces on Medium and other sources cited on Twitter?

What should we infer from your answer to these questions?

Surely any failings here are restricted to monetary theory alone.

My Conversation with David Rubinstein

Here is the audio, video, and transcript — David has a studio in his home!  Here is part of the CWT summary:

He joined Tyler to discuss what makes someone good at private equity, why 20 percent performance fees have withstood the test of time, why he passed on a young Mark Zuckerberg, why SPACs probably won’t transform the IPO process, gambling on cryptocurrency, whether the Brooklyn Nets are overrated, what Wall Street and Washington get wrong about each other, why he wasn’t a good lawyer, why the rise of China is the greatest threat to American prosperity, how he would invest in Baltimore, his advice to aging philanthropists, the four standards he uses to evaluate requests for money, why we still need art museums, the unusual habit he and Tyler share, why even now he wants more money, why he’s not worried about an imbalance of ideologies on college campuses, how he prepares to interview someone, what appealed to him about owning the Magna Carta, the change he’d make to the US Constitution, why you shouldn’t obsess about finding a mentor, and more.

Here is an excerpt from the dialogue:


And please note that David has a new book out, The American Experiment: Dialogues on a Dream.

How the crypto skeptics changed their minds

That is a Walter Frick feature story at Quartz, the other answers are interesting throughout, here is my contribution:

What was your original reaction to cryptocurrencies and blockchain?

Just for a bit of background, I wrote a series of papers on monetary economics, and then a book (Explorations in the New Monetary Economics, with Randall Kroszner) which argued that technological changes were going to fundamentally revolutionize monetary institutions and finance over the next few decades. Those papers start in the mid-1980s and the book comes in the early 90s. So I was primed to see this coming, but in fact utterly failed.

I just wasn’t expecting crypto!

When bitcoin first came out, someone sent me the link and I put it on my blog Marginal Revolution —we were one of the first places to report on it.

But after that, the thing seemed to sour. It looked like a bubble. I didn’t see the use cases for bitcoin. So I became pretty crypto negative. Perhaps I was also turned off by the dogmatism shown by many crypto advocates.

What changed your perspective on blockchain’s potential?

A few things. First, in decentralized finance (DeFi) I began to see viable and important use cases. Superior returns for depositors might now drive broader crypto adoption

Second, after a market price crash, prices came back. That suggested to me this was not just a bubble. Crypto had its chance to go away and never come back, but it didn’t. Third, I have seen incredible energy and vitality in the crypto community. Many of the best discussions are held there, it attracts amazing talent, and the conversations are overwhelmingly positive. All big pluses and signs of a movement that is going somewhere. I am still broadly agnostic, but now see the positive scenarios as more likely than the negative scenarios.

What projects or trends in crypto are you most excited about right now?

DeFi, or Decentralized Finance.

NFTs, not only for the art world but also as a new system of property rights for the metaverse, and as a new method of fundraising.

Use of crypto to lower the costs of sending remittances abroad to poorer countries.

What would you recommend our readers watch / listen to / read / follow to better understand crypto’s potential?

I am learning the most through conversations, meetings, and WhatsApp chatter—I am not sure how that easily can be replicated!

Books and most articles on this topic are simply too out of date, even if they are factually accurate, which is not always the case. The fact that the field is moving so fast is another reason for optimism.

The symposium is a good way to catch up quickly on many different views.

Is the growing geographic concentration of innovation flattening out?

U.S. invention has become increasingly concentrated around major tech centers since the 1970s, with implications for how much cities across the country share in concomitant local benefits. Is invention becoming a winner-takes-all race? We explore the rising spatial concentration of patents and identify an underlying stability in their distribution. Software patents have exploded to account for about half of patents today, and these patents are highly concentrated in tech centers. Tech centers also account for a growing share of non-software patents, but the reallocation, by contrast, is entirely from the five largest population centers in 1980. Non-software patenting is stable for most cities, with anchor tenants like universities playing important roles, suggesting the growing concentration of invention may be nearing its end. Immigrant inventors and new businesses aided in the spatial transformation.

That is new research by Brad Chattergoon and William R. Kerr.

Explaining NFTs

Writing at the Harvard Business Review, Steve Kaczynski and Scott Duke Kominers have en excellent explanation of how NFTs create value–the best I have read.

NFTs don’t just provide a kind of digital “deed.” Because blockchains are programmable, it’s possible to endow NFTs with features that enable them to expand their purpose over time, or even to provide direct utility to their holders. In other words, NFTs can do things — or let their owners do things — in both digital spaces and the physical world.

In this sense, NFTs can function like membership cards or tickets, providing access to events, exclusive merchandise, and special discounts — as well as serving as digital keys to online spaces where holders can engage with each other. Moreover, because the blockchain is public, it’s even possible to send additional products directly to anyone who owns a given token. All of this gives NFT holders value over and above simple ownership — and provides creators with a vector to build a highly engaged community around their brands.

It’s not uncommon to see creators organize in-person meetups for their NFT holders, as many did at the recent NFT NYC conference. In other cases, having a specific NFT in your online wallet might be necessary in order to gain access to an online game, chat room, or merchandise store. And creator teams sometimes grant additional tokens to their NFT holders in ways that expand the product ecosystem: owners of a particular goat NFT, for example, were recently able to claim a free baby goat NFT that gives benefits beyond the original token; holders of a particular bear NFT, meanwhile, just received honey.

Thus owning an NFT effectively makes you an investor, a member of a club, a brand shareholder, and a participant in a loyalty program all at once. At the same time, NFTs’ programmability supports new business and profit models — for example, NFTs have enabled a new type of royalty contract, whereby each time a work is resold, a share of the transaction goes back to the original creator.

This all means that NFT-based markets can emerge and gain traction quickly, especially relative to other crypto products. This is both because the NFTs themselves have standalone value — you might buy an art NFT simply because you like it — and because NFTs just need to establish value among a community of potential owners (which can be relatively small), whereas cryptocurrencies need wide acceptance in order to become useful as a store of value and/or medium of exchange.

Read the whole thing. Kaczynski and Kominers also offer good advice to firms and organizations interested in creating NFTs. It remains true, of course, that there is a lot of foolish and wasted spending in the space–that’s typical of most new asset classes where the rush to get into the space throws up a lot of noise making the signal more difficult to detect.

Addendum: Don’t forget you can buy the Marginal Revolution NFT! You will be purchasing from the new owner (we sold it) but I believe we get a royalty which also illustrates an advantage of the NFT model.

Image: SupDucks6484.

The gender gap in preferences

This is taken from new work by Ángel Cuevas, Rubén Cuevas, Klaus Desmet, and Ignacio Ortuño-Ortín.  Here is the abstract:

This paper uses information on the frequency of 45,397 Facebook interests to study how the difference in preferences between men and women changes with a country’s degree of gender equality. For preference dimensions that are systematically biased toward the same gender across the globe, differences between men and women are larger in more gender-equal countries. In contrast, for preference dimensions with a gender bias that varies across countries, the opposite holds. This finding takes an important step toward reconciling evolutionary psychology and social role theory as they relate to gender.

Here is a bit more:

Our premise is that innately gender-specific interests should mostly conform to evolutionary psychology theory, whereas other interests should mostly conform to social role theory. We find strong evidence consistent with this premise.

And some detail on the categories:

We say that an interest is gender-related if it displays a systematic bias toward the same gender across the globe. More specifically, if in more than 90% of countries an interest is more prevalent among the same gender, then we refer to it as gender-related. For example, “cosmetics” and “motherhood” are universally more common among women, whereas “motorcycles” and “Lionel Messi” are universally more common among men. Conversely, we say that an interest is non-gender-related if its gender bias varies across countries. More specifically, if an interest is more common among men in at least 30% of countries and more common among women in at least another 30% of countries, then we refer to it as nongender-related. For example, “world heritage site” and “physical fitness” do not display a systematic gender bias across the globe.

And indeed everything works out as one ought to expect.  In the more gender-equal countries, men have “more male” interests, and the women have “more female” interests.  But for the less gender-specific interests, greater equality ends up resulting.  As for magnitude:

the standardized β is 30% when taking 9 dimensions, meaning that a one standard deviation increase in gender equality increases the difference in preferences between men and women by 30% of its standard deviation. The corresponding standardized β when taking 68 dimensions is 19%. Overall, the evidence points to a positive relation between gender equality and the difference in interests between men and women.

Hope you all are interested in this one!

Mobile internet and political polarization

So far this paper is my favorite of the job market papers I have seen this year, and it is by Nikita Melnikov of Princeton.  Please do read each and every sentence of the abstract carefully, as each and every sentence offers interesting and substantive content:

How has mobile internet affected political polarization in the United States? Using Gallup Daily Poll data covering 1,765,114 individuals in 31,499 ZIP codes between 2008 and 2017, I show that, after gaining access to 3G internet, Democratic voters became more liberal in their political views and increased their support for Democratic congressional candidates and policy priorities, while Republican voters shifted in the opposite direction. This increase in polarization largely did not take place among social media users. Instead, following the arrival of 3G, active internet and social media users from both parties became more pro-Democratic, whereas
less-active users became more pro-Republican. This divergence is partly driven by differences in news consumption between the two groups: after the arrival of 3G, active internet users decreased their consumption of Fox News, increased their consumption of CNN, and increased their political knowledge. Polarization also increased due to a political realignment of voters: wealthy, well-educated people became more liberal; poor, uneducated people—more conservative.

My read of these results (not the author’s to be clear!) is that the mobile internet polarized the Left, but not so much the Right.  What polarized the Right was…the polarization of the Left, and not the mobile internet.

And please do note this sentence: “This increase in polarization largely did not take place among social media users.”  It seems that on-line versions of older school media did a lot of the work.

Here are further papers by Melnikov.

The teleshock

That is the topic of my latest Bloomberg column, here is one part:

If you have had a relatively comfortable job during the pandemic, it might now be time to worry.

The more culturally specific your knowledge and skills, however, the more protected you will be. Doing math and writing code are universal skills. But if you are a wedding consultant, even an online wedding consultant, you’re probably not going to lose business to a competitor from Zimbabwe, no matter how sharp. On the whole, more people will end up in jobs that feel very “American,” for lack of a better word. Legally protected sectors — law, medicine and other professions requiring occupational licenses — will also get more crowded.

Among the winners will be American managers, shareholders and consumers. Managers will be able to hire the world’s best talent, at least from the English-speaking world, while productivity gains will translate into more profitable companies and better and cheaper products.

Big business will likely benefit more than small business. The larger companies have the networks and the brand names to attract the best overseas talent. And if a worker overseas cannot perform all the functions of a particular job, a larger company can more easily fill in the gaps with other talent.

It will also be very good for American U.S. soft power. The U.S. has a lot of successful, well-known multinational corporations. Think of all the many people around the world who might like to work for Apple, for example. American culture also seems to produce highly talented managers, and U.S. business is used to working with people from many different cultures. (This is in contrast to, say, Japan, which will not benefit as much as the U.S. from the teleshock, while Anglophone-friendly countries such as Sweden and the Netherlands may do well.)

The teleshock is likely to continue for a considerable period of time, perhaps longer than the China shock. It is conventional wisdom that “software is eating the world.” As software and tech become larger and more important, more of their jobs can be outsourced. The process will have no natural end. Furthermore, more people in the world will learn English, including in low-wage countries, so the potential competitive supply of affordable workers will not be exhausted anytime soon.


Tyrone on crypto assets

Egads, what a fool this man is!  Nonetheless he has grown wealthier as of late, so I thought I would give him the indulgence of another MR post.  Little did I know what arrant nonsense he would come up with.  Here is what he started with, the transcription from the Pig Latin being mine:

“Tyler, let’s play the envelope game.  I give you an envelope with $100, and I tell you it is going to either double or half in value.  (Think of it like a floating exchange rate that either will go to 2-1  or 1-2, with equal probability.)  So you will end up with either $200 or $50, the expected value therefore being $125.  That is a good deal for you!  You started with $100, and you can expect now $125.

You would love to keep on playing this envelope game of course, except no one will play that envelope game with you even once.  Until now.

In essence, by “tolerating” cryptocurrency, big-time fiat money holders have agreed to keep on playing this game.  And so, if this continues, over time crypto will absorb more and more of the wealth in an economy.  Just by playing the envelope game!

After all, the indirect utility function is convex in prices and the rest of the world is creating a floating exchange rate game for us for free!  That is why so many different crypto assets keep proliferating!

The only joke about dogecoin is that it isn’t doing even better than it is.

What is philanthropy going to look like in five years’ time?  All life extension technologies?

The envelopes game, of course, doesn’t boost the quantity of real resources, so eventually the purchasing power of non-crypto holders will shrink, shrink, shrink.  That is why we will need a UBI, not because of AI.

Of course you might think that the fiat holders won’t tolerate the crypto game forever.  And maybe not.  But as long as there is any chance whatsoever that crypo assets turn out to have real value, at least some of those fiat money sows will be lining up at the trough to trade at some exchange rate…the envelopes game thus will continue!

At this point I had to push Tyrone down the stairs.  Such fallacies!  Such absurdities!  I even offered him an envelope of his very own if he would shut up, but to no avail.  I demanded that he write down the transversality condition for this fool game he had postulated, but all he could was recite the envelope theorem, another sign of his deep and utter confusion.

As he was falling down the stairs, he kept on insisting that Satoshi really was Satan, that all of the world’s wealth would fall into the hands of The Whales, that we all needed to reread Melville, and Johan Jensen, and ponder the Leviathan from Psalms, Jonah, and Job, and our sins, and that everyone trading with crypto holders was caught in a massive prisoner’s dilemma — collectively handing them volatile exchange rates and thus envelope games for free — and yes this was a long and deep stairwell…

Dear reader, I hope you never have to suffer under such sophistries and indignities again.

I return you now to your regularly scheduled programming, for however long it may last…at the very least writing this blog does not require much money.  Yes, my cherished reader, it is my UBI…and so crypto will be allowed to proceed…

Will stablecoins have fluctuating prices?

That is the topic of my latest Bloomberg column, here is one excerpt:

Even if all goes well, why should those different brands of stablecoins remain priced at $1 apiece? In most well-functioning markets, suppliers compete on innovation, quality and price. That diversity is the natural outcome of trying to figure out which coin systems — fully stable or not — are best.

If market prices do not communicate this information, how can you discover it? In my vision, higher prices will signify a coin’s quality and attract more business; the coins with strictly fixed prices will fill a niche; and the coins with lower prices will lose business, or otherwise serve as discount issues for those of lower means.


On a more positive note, if you think stablecoins serve so many new and marvelous functions, you would expect many of those assets to sell for more than a dollar.


For another look at why prices won’t stay fixed, consider the incentives of a stablecoin issuer. Let’s say your issue is currently one-to-one with the U.S. dollar and you are holding 100% reserves of very safe assets. Might you then be tempted to go down to 98% reserves? 95%? If the price of your coin stays at $1, fine, you come out ahead. If the price declines in proportion to the new and higher risk, you as an issuer still have broken even. So it seems that coin issuers will have an incentive to test the one-to-one exchange rates by diluting their backing.


Markets in everything

In the latest phase of the quest to turn everything into an NFT, crypto traders are now bidding to digitally own a 1,784-lb. cube of tungsten in Willowbrook, Illinois. According to the terms of the sale, which will have the receipt posted to the blockchain for posterity, the “owner” can have one supervised visit to the cube per year to touch or photograph it.

Over the past two weeks, a joke fired off by Coin Center’s Neeraj Agrawal about a nonexistent tungsten shortage thanks to crypto traders buying cubes of tungsten due to a meme actually caused one for Midwest Tungsten Service. The Illinois manufacturer actually creates small cubes of tungsten, and the tweet caused a 300 percent increase in sales that depleted the company’s stock on Amazon, Coindesk reported.

Last week, The Block reported that the company entered a partnership with crypto payment processor OpenNode to accept Bitcoin payments. One explanation as to why this is happening, which doesn’t really explain why this is happening, was offered to The Block by CMS Holdings’ Dan Matuszewski, who said “crypto just has a propensity for the density.” Tungsten is a very dense metal, comparable to uranium or gold, and its surprising weight is, apparently, pleasurable.

Midwest Tungsten told Coindesk that it primarily makes these cubes for industrial firms, and Sean Murray, the company’s director of e-commerce, suggested to Coindesk there would be a 14-inch cube next. The company offers cubes ranging from an 18-gram, 1-centimeter cube that costs $19.99 to a 41-pound, 4-inch cube that costs $2,999.99.

Well, the 14-inch cube is finally here. It weighs 1,784 poinds and is now listed on OpenSea as an NFT. Seemingly, it’s the biggest cube that Midwest Tungsten can create.

“Since we began selling the cube we have constantly asked ourselves, ‘What is the right size?’, and ‘Would anyone buy a bigger cube?’ Only recently has anyone asked us, or have we asked ourselves, ‘What is the biggest cube we can make?’

Here is the full story, via the excellent Samir Varma.  You know, circa 2010 I thought MR was about to run out of startling “Markets in Everything” examples — how wrong I was!