Results for “manipulation”
81 found

The demand for religious beliefs and the economics of faith

It seems Millennarian cults really mean it, at least in the experimental context:

We model religious faith as a “demand for beliefs,” following the logic of the Pascalian wager. We show how standard experimental interventions linking financial consequences to falsifiable religious statements can elicit and characterize beliefs. We implemented this approach with members of a group that expected the “End of the World” to occur on May 21, 2011 by varying monetary prizes payable before and after May 21st. To our knowledge, this is the first incentivized elicitation of religious beliefs ever conducted. The results suggest that the members held extreme, sincere beliefs that were unresponsive to experimental manipulations in price.

That is from Ned Augenblick, et.al., forthcoming in the Journal of Public Economics.  Here are ungated copies.

The original pointer was from Robin Hanson.

My Conversation with Cass Sunstein

There is audio, video, and transcript at the link.  I introduced Cass like this:

The Force is strong with this one. Cass is by far the most widely cited legal scholar of his generation. His older book, Nudge, and his new book on Star Wars are both best sellers, and he was head of OIRA [Office of Information and Regulatory Affairs] under President Obama from 2009 to 2013. Powerful, you have become.

So tonight I’d like to start with a survey of Cass’s thought. We’re going to look at legal theory and then go to Nudge and then consider Star Wars, how it all ties together, and then we’re going to talk about everything.

On every point Cass responded clearly and without evasion.  We talked about judicial minimalism, Bob Dylan’s best album, the metaphysics of nudging, Possession, the ideal size of the Supreme Court, the wisdom of Yoda, Hayek, why people should choose their own path, the merits of a banned products store, James Joyce, why the prequels are underrated, and which of the first six movies is the worst of the lot.  Here is one bit:

COWEN: Let’s take a concrete example from real life: Jedi mind tricks. Obi-Wan comes along and says, “These aren’t the droids you’re looking for.” And what does the stormtroooper do? He goes away. Now, is that a nudge?

SUNSTEIN: No, it’s a form of manipulation. So — .

[laughter]

COWEN: OK, but how do you draw the metaphysical categories? It seems like a nudge that just happens to work all the time.

SUNSTEIN: OK. I’ll give you a quick and dirty way of getting at that…

Here is another:

COWEN: If you were to pick one character from Star Wars who would nudge you — you get to elect them; you’re the only vote. Even Samantha doesn’t get a vote, just Cass — not your children — which character would you pick? Whom would you trust with that nudge? It’s a universe full of Jedi here, right?

SUNSTEIN: Yoda.

COWEN: Yoda?

SUNSTEIN: I trust that guy.

COWEN: But I worry about Yoda.

SUNSTEIN: I trust him.

Finally:

SUNSTEIN: Thank God for libertarian paternalism, that Luke has a choice. The Sith, by the way, like the Jedi, respect freedom of choice. In the crucial scene in Episode III where the question is whether Anakin is going to save the person who would be emperor, he says, “You must choose.” And so there’s full respect for freedom of choice. Nudgers have that. Good for them.

COWEN: Bad guys always tell you the deal, and then they say, “Choose evil.” It seems the good guys always mislead you.

There’s this funny tension. Star Wars makes me more nervous about nudge. I’m not like this huge anti-nudge guy, but when I look at Obi-Wan and Yoda lying to Luke — “Ben, Ben, Ben, why didn’t you tell me?” How many times have I heard that in these movies?

SUNSTEIN: It’s fair to ask whether Obi-Wan and Yoda had it right.

There is much, more more…self-recommending!

https://medium.com/conversations-with-tyler/cass-sunstein-star-wars-nudge-a7c874f3ce8c#.am5grz4nh

Does signaling also help you to do better?

That is the conclusion from a new paper by Rebecca Diamond and Peta Persson (pdf), on Swedish data, here is part of the abstract:

Despite the fact that test score manipulation [by teachers] does not, per se, raise human capital, it has far-reaching consequences for the beneficiaries, raising their grades in future classes, high school graduation rates, and college initiation rates; lowering teen birth rates; and raising earnings at age 23. The mechanism at play suggests important dynamic complementarities: Getting a higher grade on the test serves as an immediate signaling mechanism within the educational system, motivating students and potentially teachers; this, in turn, raises human capital; and the combination of higher effort and higher human capital ultimately generates substantial labor market gains. This highlights that a higher grade may not primarily have a signaling value in the labor market, but within the educational system itself.

Again, the result is that “encouragement effects,” or alternatively “writing off effects,” are stronger than many of us might think.  Tell people enough times that they are a certain way, and eventually they will start to believe you.  I would say this is evidence for my “beasts into men” theory of education, though other interpretations are not ruled out.

For the pointer I thank Ben Southwood.

Anti-GMO Research Under Fire

Nature reports that some of the research most-cited by opponents of genetically modifying crops appears to have been manipulated. In particular, images appear to have been altered and images from one paper appear in another paper describing different experiments with different captions.

Papers that describe harmful effects to animals fed genetically modified (GM) crops are under scrutiny for alleged data manipulation. The leaked findings of an ongoing investigation at the University of Naples in Italy suggest that images in the papers may have been intentionally altered. The leader of the lab that carried out the work there says that there is no substance to this claim.

The papers’ findings run counter to those of numerous safety tests carried out by food and drug agencies around the world, which indicate that there are no dangers associated with eating GM food. But the work has been widely cited on anti-GM websites — and results of the experiments that the papers describe were referenced in an Italian Senate hearing last July on whether the country should allow cultivation of safety-approved GM crops.

Friday assorted links

1. William Nordhaus tells us “…the Singularity is not near.

2. Joel Mokyr wins the Balzan Prize.  And is the smart money on East African economic growth?

3. Which colleges and universities have produced the greatest advances in science?

4. Data manipulation is a bigger problem than data theft.

5. Felix Salmon on effective altruism, and also finance.

6. Syrians in Erfurt.  Not just anyone is allowed to teach them German.

*Phishing for Phools*

The authors are Nobel Laureates George A. Akerlof and Robert J. Shiller and the subtitle is The Economics of Manipulation and Deception.  It’s a popular take on how markets trap you and your preferences in places you don’t want to be.  Self-recommending of course.

There are chapters on advertising, tobacco, alcohol, junk bonds, credit cards, pharmaceuticals (some), and yes government.  My main complaint about the book is that its chooses easy targets and doesn’t puncture enough sacred cows.  For instance the chapter on government criticizes spending money on lobbying, whereas I would have preferred an attempt to show that an apparently beneficial and popular institution is in fact bad and appealing to the weaker elements in our preferences.  I wonder to what extent what the authors call “The Resistance and its Heroes” is in fact another example of…phishing for phools.  In other words, I wish this book were more Hansonian.

By the way, I have never eaten too much ice cream.

The first genetically modified potato

In the modern sense that is, of course potatoes have been genetically modified for a long time:

The Agriculture Department on Friday approved the first genetically modified potato for commercial planting in the United States, a move likely to draw the ire of groups opposed to artificial manipulation of foods.

The Innate potato, developed by the J.R. Simplot Co., is engineered to contain less of a suspected human carcinogen that occurs when a conventional potato is fried, and is also less prone to bruising during transport.

Boise, Idaho-based Simplot is a major supplier of frozen french fries to fast-food giant McDonald’s.

The story is here, and you will note that on Tuesday the mandatory GMO-labeling initiatives failed in Oregon and Colorado, the second failure in Oregon and that means failures in four states overall.  Less positively, voters in Maui County, Hawaii chose to restrict GMO cultivation altogether.  And now McDonald’s is under pressure not to use these new potatoes for its french fries.  But of course you can understand the marketing dilemma of McDonald’s here — they can’t just come out and say “these french fries won’t give you cancer.”

Are siblings obsessed with moral hazard?

In most Darwinian models there is competition across siblings for resources and parental attention, from the womb but also stretching into adulthood.  Siblings who do well therefore will be hyper-aware of the strategies employed by their brothers and sisters.  They will need to counter those strategies on a very regular basis and furthermore they will on average be deploying similar strategies themselves.

At the same time, siblings probably won’t see each other as so evil by nature.  They will be realistic about motives — some would say cynical — while at the same time recognizing that the siblings are probably, on average, no worse than themselves.  Plus there is a natural genetic and also family affinity.

How about mothers?  Genetically speaking, mothers often adopt the interests of the sibling as “their own.”  For instance a lot of mothers died in childbirth before modern medicine, when alternative biological arrangements would have given the mothers greater protection.  So the children can commandeer the loyalty of the mother (and sometimes the father) more readily than they can commandeer the loyalties of their siblings.

Mothers are therefore often deceived about or simply tolerant of the manipulations employed by their children on them.  In other words, mothers worry less about moral hazard problems with respect to their children.  The siblings will in some respects understand these strategies better than the mother will.

The other children may feel that a mother should punish (or possibly but less likely reward) the other siblings more.  And “Johnny is being a stinker” will be a more frequent complaint than “Johnny is possessed with Original Sin.”

In turn, mothers may worry more about problems of type.  If a mother is hyper-aware of the faults of her children, she may do a better job of protecting them or teaching them how to overcome those limitations.

A world where fewer people have siblings may be a world where recognizing moral hazard problems may be for many people less intuitive.  Is it also possible that men may on average be more aware of moral hazard problems than are women?  And women more aware of problems of type?

Should we care that Facebook is manipulating us?

Facebook manipulated the emotions of hundreds of thousands of its users, and found that they would pass on happy or sad emotions, it has said. The experiment, for which researchers did not gain specific consent, has provoked criticism from users with privacy and ethical concerns.

For one week in 2012, Facebook skewed nearly 700,000 users’ news feeds to either be happier or sadder than normal. The experiment found that after the experiment was over users’ tended to post positive or negative comments according to the skew that was given to their newsfeed.

The research has provoked distress because of the manipulation involved.

Clearly plenty of ads try to manipulative us with positive emotions, and without telling us.  There are also plenty of sad songs, or for that matter sad movies and sad advertisements, again running an agenda for their own manipulative purposes.  Is the problem with Facebook its market power?  Or is the the sheer and unavoidable transparency of the notion that Facebook is inducing us to pass along similar emotions to our network of contacts, thus making us manipulators too, and in a way which is hard to us to avoid thinking about?  What would Robin Hanson say?

Note by the way that “The effect the study documents is very small, as little as one-tenth of a percent of an observed change.”  How much that eventually dwindles, explodes, or dampens out in the longer run I would say is still not known to us.  My intuition however is that we see a lot of longer-run dampening and also intertemporal substitution of emotions, meaning this is pretty close to a non-event.

The initial link is here.  The underlying study is here.  Other readings on the topic are here.

I hope you’re not too sad about this post [smiley face]!

Can you trust Chinese government statistics?

Political scientist Jeremy Wallace has a recent paper on this topic:

Economic statistics dominate policy analyses, political discussions, and the study of political economy. Such statistics inform citizens on general conditions while central leaders also use them to evaluate local officials. Are economic data systematically manipulated? After establishing discrepancies in economic data series across regime types cross-nationally, I dive into sub-national growth data in China. This paper leverages variation in the likelihood of manipulation over two dimensions, arguing that politically sensitive data are more likely to be manipulated at politically sensitive times. GDP releases generate headlines, while highly correlated electricity production and consumption data are less closely watched. At the sub-national level in China, the difference between GDP and electricity growth increases in years with leadership turnover, consistent with juking the stats for political reasons. The analysis points to the political role of information and the limits of non-electoral accountability mechanisms in authoritarian regimes as well as suggesting caution in the use of politically sensitive official economic statistics.

All good points.  I would stress, however, that Chinese statistics have many problems in them and so they are not simple overestimates of how the economy is doing, at least not over the last thirty years as a whole.  In some ways Chinese growth statistics have been, until 2008-2009, probably underestimating the actual progress on the ground.  In general, growth figures underestimate progress when changes are large, and overestimate progress when changes are small.  (One reason for this is that extreme progress brings a lot of new goods to the market and their marginal value is underestimated by their price ex post, since it is hard to adjust for the fact that the price ex ante was infinite or very high.)  In Western history for instance, our most significant period of growth was probably the late 19th through early 20th century, when the foundations for the modern world were laid, yet estimated growth rates for this period are not astonishingly high.  We’re missing out on the values of the new goods, for one thing.

For the pointer I thank Henry Farrell.

Most Popular MR Posts of 2013

Here is my annual round-up of the most popular MR posts of 2013 as measured, somewhat eclectically, using the number of links, tweets, shares, comments and so forth. Sadly, the post that was most linked to this year was by neither Tyler nor myself but by… Tyrone.

Look people, I have explained this before. Tyrone is a bad man. Do Not Encourage Tyrone. Fortunately for us Tyrone doesn’t like it when people like him. 

Second most highly linked was my post No One Is Innocent. I was also pleased that a related post, Did Obama Spy on Mitt Romney?, was also highly linked although I think that the question raised in this post about the potential for NSA tools to be abused for political purposes hasn’t been truly addressed in the main stream media. Conor Friedersdorf at The Atlantic in The Surveillance State Puts U.S. Elections at Risk of Manipulation was one of the few people to pick up on this important question.

Also highly linked were my post The Great Canadian Sperm Shortage and a few less substantive items drawn mostly from elsewhere such as Equal Population US States and What is the Most Intellectual Joke You Know.

If you followed Tyler’s timely advice in another highly linked post, China, and the soaring price of Bitcoin, you would have saved yourself from a big loss (albeit you would have made an even bigger profit by ignoring Tyler’s earlier advice).

The most shared post was Tyler’s Stereotyping in Europe with over seven thousand shares, followed by Nobody dislikes inflation more than strippers. I was pleased that a bunch of my substantive posts were highly shared including:

Another highly shared and commented upon post was Our DNA, Our Selves on the FDA and 23andMe. Mark my words, when this or similar case goes to court the FDA will eventually lose on free speech grounds.

Gun posts get lots of comments including The Culture of Guns, The Culture of AlcoholGuns, Suicide and Natural ExperimentsFirearms and Suicides and How Japan Does Gun Control.

Question posts such as Who is the Worst Philosopher? and Who is the most influential public intellectual of the last twenty-five years? get lots of comments as did Who is Juan Galt?

There is overlap between most linked, shared, and commented so some of the above would fit in several categories but it’s surprisingly weak. Posts with a lot of comments, for example, often do not draw lots of links.

What were your favorite posts of 2013? And what requests do you have for 2014?

The literature on Iranian negotiation techniques

I found this 2004 piece (pdf) by Shmuel Bar.  It has numerous interesting and detailed points, though I do not think it can be considered objective.  Here is one excerpt:

Iranian negotiators are methodical and have demonstrated a high level of preparations and a detailed and legalistic attitude. On the other hand, their communication tends to be extremely high-context; ambiguous, allusive and indirect not only in the choice of words utilized, but in the dependence of the interpretation of the message on the context in which it is transmitted: non-verbal clues, staging and setting of the act of communication, and the choice of the bearer of the message. Procrastination is another key characteristic of Iranian negotiation techniques. This stands in sharp contrast to American style communication (Get to the point/Where’s the beef?/ time is money!) which places a high value on using lowest common denominator language in order to ensure maximum and effective mutual understanding of the respective intents of both sides. This tendency has been explained by an aversion to an assumption that the longer the negotiations last, the greater a chance that things can change in his favor and an intrinsic Shiite belief in the virtue of patience.

Dissimulation, high-level disinformation and manipulation are widely acceptable.

…one may paraphrase Marshall McLuhan in saying that in Iran frequently “the messenger is the message.”

…One of the characteristic traits of Iranian negotiation techniques is that the haggling goes on even after an agreement is struck.

I suppose we’ll see how it goes.

Wise Crowds Tell No Lies

One of the benefits of tapping the wisdom of the crowds is that the market doesn’t lie*.  Not even white lies, as Lars Christensen found to his chagrin when he recently gave a talk to investment advisors in the Danske Bank group:

As I was about to start my presentation somebody said “The audience have been kind of quiet today”. I thought that was a challenge so I immediately jumped on top of a table. That woke up the crowd.

I ask the audience to guess my weight. They all wrote their guesses on a piece of paper. All the guesses was collected and an average guess – the “consensus forecast” – was calculated, while I continued my presentation.

I started my presentation and I naturally started telling why all of my forecasts would be useless – or at least that they should not expect that I would be able to beat the market. I of course wanted to demonstrate exactly that with my little stunt. It was a matter of demonstrating the wisdom of the crowds – or a simple party-version of the Efficient Market Hypothesis.

I am certainly not weighing myself on a daily basis so I was“guestimating” my own weight then I told the audience that my weight is 81 kilograms (fully dressed). I usually think of my own weight as being just below 80 kg, but I was trying to correct it for the fact I was fully dressed – and I added a bit extra because my wife has been teasing me that I gained weight recently.

As always I was completely confident that the “survey” result would come in close to the “right” number. So I was bit surprised when the  ”consensus forecast” for my weight came in at 84.6 kg

It was close enough for me to claim that the “market” – or the crowd – was good at “forecasting”, but I must say that I thought the “verdict” was wrong – nearly 85 kg. That is fat. I am not fat…or am I?

So once I came back home I immediately jumped on the scale – for once I hoped to show that the Efficient Market Hypothesis was wrong. But the verdict was even more cruel. 84 kg!

So the “consensus forecast” was only half a kilo wrong and way better than my own guestimate. So not only am I fat, but I was also beaten by the “market” in guessing my own weight.

* The market doesn’t lie doesn’t mean the market is always correct. A lie is an intentional falsehood. Market manipulation would be analogous to an intentional lie so it’s not impossible for markets to lie only difficult much of the time.

Is a Ph.D. important for succeeding in finance?

There is a new paper by Ranadeb Chaudhuri, Zoran Ivkovich, Joshua Matthew Pollet, and Charles Trzcinka, the abstact is this:

Several hundred individuals who hold a Ph.D. in economics, finance, or others fields work for institutional money management companies. The gross performance of domestic equity investment products managed by individuals with a Ph.D. (Ph.D. products) is superior to the performance of non-Ph.D. products matched by objective, size, and past performance for one-year returns, Sharpe Ratios, alphas, information ratios, and the manipulation-proof measure MPPM. Fees for Ph.D. products are lower than those for non-Ph.D. products. Investment flows to Ph.D. products substantially exceed the flows to the matched non-Ph.D. products. Ph.D.s’ publications in leading economics and finance journals further enhance the performance gap.

For the pointer I thank Samir Varma, whose teenage daughter has a new book on iTunes here.