What I’ve been reading

by  Tyler Cowen in

1. Identity Economics: How Our Identities Shape our Work, Wages, and Well-Being, by George Akerlof and Rachel Kranton.  There's a general question of how satisfying largely non-empirical treatments of this topic can be, but still the original papers behind this popular book are seminal.

2. Paul Collier, The Plundered Planet: Why We Must — and How We Can — Manage Nature for Global Prosperity.  The book is not due out until May, yet I have a review copy.  I admired Collier's essay on the ethical dimension of global warming, and I loved his The Bottom Billion, but I struggled to find a meaty part of this book.

3. Joan Schenkar, The Talented Miss Highsmith: The Secret Life and Serious Art of Patricia Highsmith.  I can't recall having read a more sprawling, messy, obsessive, and personal biography than this one.  Here's a typical bit: "Still, this fan, who knew all about cats, was allowed to select a seal-point Siamese kitten for Pat, and he and his aunt sometimes looked after Pat's cats on her trips away.  One night — the circumstances were complicated and involved a fight with current lover, Jacqui — Pat ended up sleeping in the aunt's bed, where, for once, Pat herself was on the receiving end of an unwelcome sexual advance." 

I don't think I can read it through to the end, but still I wish to issue a yelp of approval.  By the way, she kept 300 snails as pets.  Read the first Amazon review.  This biography did cause me to order more of her work, namely the first novel, with the lesbian love story.  Here is an NYT review of the book, which is in any case unique and revelatory.

I've been reading, and putting down, lots of other books.  I've also been reading the complete letters of van Gogh, for a longer review.  They are splendid.

How to avoid being fooled by a menu

by  Tyler Cowen in

This one is not so easily excerptable, but it's one of the best pieces-with-graphics I've seen all year.  It's about all the "nudge" tricks which go into designing menus, and how to avoid being fooled by them.

You really do need the image with it (best is to buy the New York issue), but if you insist on an excerpt, here's one:

5. Columns Are Killers
According to Brandon O’Dell, one of the consultants Poundstone quotes in Priceless, it’s a big mistake to list prices in a straight column. “Customers will go down and choose from the cheapest items,” he says. At least the Balthazar menu doesn’t use leader dots to connect the dish to the price; that draws the diner’s gaze right to the numbers. Consultant Gregg Rapp tells clients to “omit dollar signs, decimal points, and cents†‰…†‰It’s not that customers can’t check prices, but most will follow whatever subtle cues are provided.”

The best paragraph I read today

by  Tyler Cowen in

The believe-it-or-not superlatives are so extreme and Tom Swiftian they make you smile. The L.H.C. is not merely the world’s largest particle accelerator but the largest machine ever built. At the center of just one of the four main experimental stations installed around its circumference, and not even the biggest of the four, is a magnet that generates a magnetic field 100,000 times as strong as Earth’s. And because the super-conducting, super-colliding guts of the collider must be cooled by 120 tons of liquid helium, inside the machine it’s one degree colder than outer space, thus making the L.H.C. the coldest place in the universe.

The article is here, via Yves Smith and Jim Crozier.

Austrian business cycle theory returns to Harvard

by  Tyler Cowen in

Way back when, before 1936, Alvin Hansen carried the torch.  These days, don't listen to what they say, watch what they do:

Harvard announced Thursday that it would indefinitely suspend construction on a high-tech science complex in the Allston neighborhood of Boston because of money problems.

This was to have been the showcase of the previous regime.  A lot of the work has been done, but it doesn't look like they'll ever complete the project in anything resembling finished form.  The scientists will never move there.  The associated spaces for retail outlets won't be much populated.  Etc.  The full story is here.

Weeping

by  Tyler Cowen in

In February, a music professor at Stanford, Jonathan Berger, revealed that he has found evidence that younger listeners have come to prefer lo-fi versions of rock songs to hi-fi ones. For six years, Berger played different versions of the same rock songs to his students and asked them to say which ones they liked best. Each year, more students said that they liked what they heard from MP3s better than what came from CDs. To a new generation of iPod listeners, rock music is supposed to sound lo-fi.

Here is more.  The whole series — notable new ideas picked out by the NYT — starts here and as usual it is worth perusing the entire list.

Ben Casnocha’s rules of thumb wiki

by  Tyler Cowen in

You'll find it here.  In theory they are for business but what is business but another form of human action?  Here are a few from the list:

Email is a communications medium, not a collaboration medium. When confused as a collaboration tool, efficiency plummets. – Ben Casnocha

A bad reference is as hard to find as a good employee. – Robert Half

Rather than telling an associate, "You look good in that suit," tell the person, "That suit looks good on you." – Dale Carneigie

The new html edition of Tyler Cowen’s Ethnic Dining Guide

by  Tyler Cowen in

You'll find it here, namely on my home page (you may need to scroll down).  This version of the guide has more revisions than any other new edition, mostly because there has been a lot of quality turnover.  More than half of the "Top 20" list has changed in the course of a year.  Currently my two favorite places are Sichuan Pavilion and Abay Market (you now can and indeed have to order vegetables in advance), with Thai X-ing a perennial.  Komi is the "finest" dining and Bourbon Steak is the place most likely to be better than you think.

I should note that if you've been following the blog version of my dining guide, the html version is simply a print-it-all-out-at-once compendium, rather than a source of new information.

99 10 Red Balloons

by  Alex Tabarrok in

Earlier this week DARPA, the Defense Advanced Research Projects Agency, moored ten, 8 ft red, weather balloons in undisclosed locations across the United States.Balloon7

The DARPA Network Challenge offered a prize of $40,000 to the person or group who first identified all the locations.

The MIT Group which won the challenge used a clever pyramid  incentive scheme.  Each balloon was worth $4000.  The person to identify the location earned $2000.  The person who invited that person to join the MIT group got $1000, the person who invited the person who invited the person who located the balloon got $500 and so forth (any money not distributed in this way was given to charity.)

The incentive scheme meant that contestants not only had an incentive to find balloons they had an incentive to find someone who could find balloons (or find someone who could find someone who could find balloons and so forth).

Incredibly, the MIT team located all ten balloons in just under 9 hours!  The challenge may seem frivolous but in fact is a great example
of how prizes and network technologies can combine to collect and use
highly dispersed information–a problem of very general interest and relevance.

Markets in everything: randomized pizza prices

by  Tyler Cowen in

Sébastian Turben writes to me:

It's about a restaurant where at the end of your meal, you roll 3 dice, and if you get the combination 4-3-1 you don't have to pay…I guess what makes it work is that people will tend to eat more/more expensive that what they usually do, thinking that the proba[bility] of not paying is not that small…

The link, in French, is here.  I take this as evidence against the view that people systematically miscalculate expected utility in repeated, real market settings.  If they did, you would expect to see commercial lures like this much more often.  Maybe in mortgage markets, or credit card markets, people are overoptimistic about the bad (too many floating rate mortgages or too many people accepting the risk of high default fees), but I don't think in pizza markets they are overoptimistic about the good.  A restaurant which makes this kind of offer, of course, has to charge systematically higher prices, the greater the customer's chance of winning the lottery,

Addendum: Jeff Ely considers a related example.

Are the naughties the best decade ever?

by  Tyler Cowen in

Some people are saying they're the worst decade ever, but that's more true for the global relations of the United States than for the level of human well-being in the world as a whole.  Even in the U.S., a lot of social indicators improved.  Elsewhere Chinese growth continued, Indian growth moved into the big time (in the gross reckoning we're already at well over two billion people), a lot of Eastern Europe was successfully absorbed into the EU,  Indonesia made slow but steady progress.  Brazil may have turned a corner, and Africa had a better-than-lately decade in terms of economic growth.  Communism didn't really come back.  Admittedly the Middle East is a tougher call.  Canada did strikingly well, as did Australia.  There was lots of progress on public health, including in the war against AIDS.  The internet truly blossomed and human creativity continued.

For a lot of you it feels bad, but it's not obvious that the naughties have been such a terrible decade overall.  By the way, that home prices fell was overall a good thing; the roofs on those homes still keep out the rain.

I thank Bryan Caplan for a discussion related to this post.

The endgame?

by  Tyler Cowen in

…the exchanges will get much bigger over time. Part of what’s going on in the United States is that the employer-based health insurance system is slowly unraveling. Both the House and Senate versions of reform consist not only of using exchanges to cover the currently uninsured, but also using exchanges to construct a kind of safety net so that as employer-based insurance continues to unravel, people will land softly in exchangeland rather than crashing into the rough ground of the current individual insurance market. The Senate bill will slightly accelerate the decline of employer-based insurance by slowly phasing out the tax subsidy for such insurance.

That is Matt Yglesias, here is more.  Of course if this is true — and it may well be — the composition and nature of the exchanges means everything.