Results for “prizes”
224 found

FuturePundit on Space Tourism

The ever-intelligent Randall Parker – and never so intelligent as when he is agreeing with me! – weighs in on the space tourism debate.  Randall makes two key points in his post:

1938 was 35 years after the first aircraft flight of Orville and
Wilbur Wright on December 17, 1903 at Kitty Hawk North Carolina. Manned
space travel began on April 12, 1961 when a Soviet air force pilot,
Major Yuri A. Gagarin, made an orbit of the Earth. So manned space
travel is over 40 years old. Space travel into Earth’s orbit is orders
of magnitude more dangerous after 40 years than aircraft travel was
when it was only 35 years old….

Newer rockets have been designed in recent years and have unexpectedly
blown up on launch. Rutan’s accomplishment is not as radical as some
media reports present it for a number of reasons. First of all, whether
he has designed a safer spaceship is will not be proven unless and
until it has flown hundreds and even thousands of times without mishap.
Also, and very importantly, SpaceShipOne does not do that much. It can not achieve orbital velocity or decelerate from orbital velocity.
In my view the Scaled Composites SpaceShipOne flight was important
because it demonstrated the potential for prizes to spur innovation. It
also opens up the possibility that that dangerous orbital spacecraft
can be designed and built for much lower costs than NASA and big
aerospace companies typically spend.

Addendum: Randall’s programming work is already in outer-space!

Charity Angels

Should we give people prizes for helping the poor?  Robin Hanson thinks so:

Organized charities (especially government ones) spend a large fraction of their income on administration and still suffer relatively poor information regarding who is worthy of what charity. The most effective charity is often one on one, one charitable person helping one person in need they have met through some ordinary social context. Such personal charity is more likely to offer the kind and amount of aid needed, and to satisfy the emotional needs of both parties. The problem is, charity money often comes concentrated from taxes or a few rich donors.

My solution idea comes from the Bible, which tries to convince its readers that they should be kind to strangers in need, because they might be angels in disguise come to test their charity. (Paul said "be ye not fearful to entertain strangers, for some have entertained angels unawares".) What if concentrated charities funded "angels" to go around acting like they are in need of help, noting who helped them the most, and then giving those people large publicized rewards later, say in a couple of years? The help offered could range from giving directions to offering a job.

Those rewards, and the publicity that goes with them, might induce people to try to help folks they meet more often, so that they might win this "charity lottery". The percentage of administrative costs might be lowered by offering large rewards relative to the wages of the angel.

Prizes tend to induce the appropriate effort when the desired result is well-specified in advance; this condition appears to be satisfied in this case.  But if I was poor, would I rather just receive the funds directly, in lieu of seeing a prize for helping me?  (If you think that Robin deserves the prize of tenure, as I do, we should be giving prizes to people for thinking of prizes for those aiding the poor..and perhaps I should get a prize for voting for him…)

The prize competition is better for the poor if you can get people to compete very intensely for the prizes, perhaps in negative-sum fashion.  Good samaritans might treat the game as a fun lottery, thereby spending more resources than the government has pledged in the first place.  Alternatively, the prize system may mobilize decentralized information better than a simple government cash drop.

The bottom line:

We don’t spend nearly enough time trying to figure out how to help the poor.  Here is Robin’s full argument.

Brian Leiter attacks economics (and me)

A philosopher has levied another attack on economics:

…a lot of the credibility of economics depends precisely on its claim to be a science, in the precise sense of generating successful predictions. (Predictive power may be neither a necessary nor sufficient condition for science, but economists generally view it as what makes their discipline “scientific.”) Indeed, many economists and lawyer/economists have emphasized the putatively “scientific” character of economic theory. Friedman’s classic paper on “The Methodology of Positive Economics” is predicated on the idea that economics is “a positive science [whose] generalizations about economic phenomena. . .can be used to predict the consequences of changes in circumstances.”

All of these scientistic sentiments about economics co-exist, of course, with a very different picture of the discipline as essentially a pseudo-science. It is better, perhaps, than astrology, but not much more predictively successful than common-sense psychology. It parlays a set of implausible and utterly unrealistic assumptions into tidy, mathematically-expressible theories that have little or no connection to reality. A recent article in The New Yorker captures this sentiment well. “[A] good deal of modern economic theory,” says the author, “even the kind that wins Nobel Prizes, simply doesn’t matter much.” (“The Decline of Economics,” Dec. 2, 1996, p. 50)

The attack goes on at length.

The simplest defense of economics (or philosophy, I might add) is biographical rather than methodological. Just spend some time talking to a person who knows little economics (philosophy) and you will be impressed at how much understanding the discipline brings.

Economics in particular does two things. First, it provides “existence theorems” as to what can possibly happen, and how. This may not sound very ambitious, but in fact many of the mechanisms (e.g., time consistency or principal-agent problems) are rich in their implications and applications. Second, economics gives you a good idea of the conditions under which various results can come about.

Milton Friedman overemphasized prediction as a justification for economic science. That being said, plenty of propositions are abandoned because would-be proponents cannot cite convincing evidence on their behalf. How many people today still wish to target monetary aggregates?

I might add that Leiter is the first person ever to attack me for being a Popperian falsificationist. Oddly he mentions my name and then characterizes my views by quoting someone else; by that time he is off and running and never looks back.

An additional mistake of philosophers is to believe that economics rests on the idea of “instrumental rationality,” I have written on this elsewhere.

Why isn’t cryonics more popular?

In discussing prizes, Alex wonders why cryonics isn’t more popular?

Who better to ask than Robin Hanson? Read his very short paper on the topic.

Individuals may pay for medicine mostly to convince groups of their loyalty, and groups may pay to convince individuals similarly. This can explain many puzzles, including the low health value of medicine, and the lack of interest in private info about quality of medicine. Together with a few simple auxiliary assumptions, it can also explain many other health puzzles.

This theory also suggests why people might be particularly uninterested in cryonics. At present cryonics is something individuals buy for themselves, which if it works will transport them to an alien social world where they can do little to aid their current social allies. That alien world seems unattractive and downright scary to most current allies, and spending all that money on going there reduces one’s ability to aid current allies. Buying cryonics can then naturally be interpreted as symbolizing betrayal and abandonment. And with medicine mostly being a symbolic purchase, people aren’t in the habit of looking any deeper than that.

This suggests that cryonics is mainly going to be popular among people who think of the distant future not as a scary alien place, but as their home and social world, and especially among tight-knit groups of people who expect to move there together. It suggests that perceptions of social fragmentation (such as when many split off from Alcor) are especially damaging, and that evidence of the effectiveness of cryonics technology is only marginally important.

Have you noticed that women in particular are hostile to the idea of their men surviving them and coming back for another life?

Alas, I am a cryonics pessimist and I have yet to sign up for the extant services. (It is an interesting exercise to sit down and calculate how much resurrection would be worth to you, your implicit probability expectation, and your value for the modest yearly fee; many people have to fudge the numbers to justify their absolute dismissal of the idea.) But I also am pretty sure that most people, including prospective donors, reject the idea for the wrong reasons.

Going up?

The X-Prize is close to being won and has been a success in motivating the research and development of private spacecraft. Ultimately, however, putting people into space by sitting them atop powder kegs or similar devices just seems too crude. As I wrote earlier, a space elevator would dramatically lower the costs of developing space. Elevator 2010 is sponsoring several new prizes for space elevator related technology.

Science is Not War

For fifty years the United States dominated the rest of the world with its scientific advances, Nobel prizes and life-saving drugs. We were the king! We ruled!

But now, Tom Daschle sees “disturbing” signs. “America’s dominant position in the scientific world is being shaken,” he says.

Quake! Hold on!

We are in decline and “it’s frightening,” intones Dr. Armbrecht from the Industrial Research Institute.

“They’re catching up to us,” warns Jennifer Bond.

Run, run for your lives!

Funniest statement is from the aforementioned Jennifer who is a vice-President at something called the Council on Competitiveness, an organization in Washington that seeks “to promote industrial vigor.”

We must not lose our precious bodily fluids.

All of this is from a hysterical and hysterically funny article in the NYTimes, U.S. Is Losing Its Dominance in the Sciences by William Broad. One of the brief nods to sanity in the entire piece is this sentence:

Even analysts worried by the trend concede that an expansion of the world’s brain trust, with new approaches, could invigorate the fight against disease, develop new sources of energy and wrestle with knotty environmental problems.

Of course, the next sentence begins with the word “But…”

Now, the U.S. system has its share of problems. The university system is not a market and as a result price signals don’t allocate labor very well so we have too many English and history majors and not enough natural science and engineering undergraduates. (See Paul Romer for the academic argument and the Invisible Adjunct for the life lesson.)

The basic point, however, is that science is not war. So let us turn away from the mediocrities like Tom Daschle and the New York Times and turn instead to Thomas Jefferson who wrote nearly 200 hundred years ago:

He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation.

Union-busting as cultural policy?

Once again the French are at strike:

Protesting French actors and technicians, who prompted the cancellation of most summer arts festivals last year and forced the resignation of the French culture minister this spring, are now threatening to disrupt the Cannes film festival next month. They want to pressure the government to bow to their demands on unemployment benefits.

On Monday the protesters muscled their way into a Paris theater where the annual Molière theater prizes were being awarded. Amid raucous scenes, that ceremony was held without lights or microphones. Across town they also forced “Il Trovatore” to be given in concert version at the Bastille Opera.

Here is more background:

The protesters want to revoke an agreement, reached in June by three unions and the national employers’ association in France, that reduces unemployment benefits for about 100,000 self-employed artists and technicians. The employers said that an earlier agreement was being widely abused and cost them $1 billion a year. Two leftist unions, which refused to sign the deal, have been leading the protests. Before the June agreement, if employees worked 507 hours during a 12-month period they were guaranteed 12 months of unemployment benefits. Now they must work 507 hours in 11 months to earn 8 months of unemployment benefits.

In theory the unemployment fund for cultural workers is managed exclusively by employers and representatives of artists and technicians. But inevitably the government has been drawn into the fray, with the wrath of protesters frequently directed at Jean-Jacques Aillagon, who was the culture minister until March 31. His successor, Renaud Donnedieu de Vabres, is caught between the employers’ refusal to cede and the countdown to Cannes.

Instead of all those subsidies and quotas, why don’t they just bring the unions in line? Here is the full story. Here is a post on how well the French can run a strike. To be continued…

The economics of carnival culture

Have you ever been to Trinidad? The steel bands (“pans”) start practicing sometime before Christmas, and the pan competitions peak at the time of Carnival, which we call Mardi Gras. Serious pan music is otherwise hard to find on the island, although we do see many smaller performances for tourists throughout the year.

We find a similar pattern in Brazil. The production of samba culture has an especially pronounced seasonal business cycle, again centered around carnival.

Carnival culture appears to have started for religious and cultural reasons, yet it persists more in some places rather than others. Why bunch your cultural production so tightly into one part of the year?

Carnival culture may prove efficient when a large number of the customers are tourists, who journey from other countries, or other regions, to an urban center. A high fixed cost of the journey implies it is better to bunch cultural production at one time of the year, to lower transport costs.

The significant presence of amateurs in production also encourages carnival culture. It is widely understood in Trinidad that many workers will take off extra time to practice the pans. The relevant time of year is an accepted social convention, plus everyone takes off at the same time, so the pan orchestras can practice together. After carnival, everyone is expected to go back to work at the regular pace.

The use of national competitions to market performers also increases the efficiency of carnival culture. When everyone competes at the same time, on a set of common stages, it is easier to declare a “winner,” and indeed carnival cultures usually emphasize such competitions and hand out national or regional prizes. The prospect of being a winner is then used to drum up local corporate support. If a company backs a carnival winner, it receives significant favorable publicity.

So enjoy your Mardi Gras today!

By the way, classical music has survived as a truly popular music only in Trinidad and Tobago, largely because it is played on the steel pans at Carnival competitions.

Markets in everything, part II

You can now buy a personalized romance novel, featuring you and your sweetheart:

To get their names in print, customers decide on a book – most companies offer several stories to choose from – then fill out a questionnaire with details such as their love’s hair color and nickname. The information is inserted into the context of pre-fab story and presto, a personalized romance.

Don Fox of Port Saint Lucie, Fla., bought the novel “Treasure Seekers” for his wife last Valentine’s Day and included details such as the type of car he drives and his wife Josephine’s favorite radio station in the text.

“It’s something my wife and I will have forever. It’s unique,” said Fox, 43. “If you get a box of chocolates, it looks just like the box you got before that one. Then you eat it and it’s gone.”

The novels come in “mild” and “wild” versions and the plots take place in various standard romance novel locales such as a dude ranch and the white sand beaches of Tahiti (search). While their text won’t win any Pulitzer Prizes, they offer a quick read and, at $55.95, the books won’t break the bank.

Some people actually like this idea:

“It was an addictive read because it makes you the star,” said Pete Hart, 34, who received a pre-fan novel called “Vampire Kisses” from his girlfriend. “I was referred to as Pedro in the book, which is my nickname. I found that quite charming.”

Another fellow noted:

“It read more like a novel or novelette and less like a typical romance novel,” he said. “I enjoyed reading it. Besides, I was in it.”

So what is next? How about DVD movies with your face superimposed upon that of Tom Cruise?

But our world is not always taking steps forward. Ebay has been moving to take down sales of imaginary girlfriends.

If you are curious, here is part one of “Markets in everything.”

Markets in prediction, revisited

You can now bet on future developments in the tech sector. The questions include the following:

1. When will Google have an IPO?

2. Will SCO be awarded damages? [in its lawsuit against IBM at the District Court in Utah]

3. When will there be a commercially available electronic device using ultrawideband technology?

4. Will Oracle acquire PeopleSoft Inc?…before March 31st, 2004.

Here is the website. There are no cash prizes, but it is not just for pure play either. The top ten winners receive prizes from Circuit City. If you are wrong about everything, you lose nothing.

My take: I’ve long been intrigued by the idea futures concept. One central question is whether they can perform some function that current asset markets do not already satisfy. I’ll say no for this version of the idea. For instance some of the other predictions involve the future value of the NASDAQ index. Many of the others can be satisfied, albeit with noise, by betting on the relevant companies. Note also that Circuit City wins publicity for sponsoring the contest, which points to another truth about idea futures. In financial terms they are a zero-sum game for the investors, so a sponsor may need an external incentive, such as publicity value, to market the idea. If idea futures have a breakthrough use, it may well be within companies, such as to evaluate competing R&D proposals.

Thanks to Daniel Akst for the pointer to the link.

We should spend More on Health Care

Tyler appears to be growing more skeptical of the value of health care spending (see his posts here and here). A simple model explains most of what is going on and why he and another of my very smart colleagues Robin Hanson, are wrong. In the graph below spending on health care is on the X axis, health outcomes are on the Y axis. Spending shows diminishing returns. We are currently at point Q on the graph labeled T1 – note that at this point marginal increases in spending have little effect on output (Tyler asks, What margin has low value? Answer: The marginal dollar). Even fairly large increases or decreases in spending will not change outcomes very much given that we are currently at point Q.

Why are we spending so much as to push us into the flat portion of the production function? One reason is that out-of-pocket expenses for medical care are much lower than true costs – we typically are spending someone else’s money. A second reason is that the marginal utility of wealth is low if you are dead so spending on health care near the end of life has unusually low opportunity cost. A third reason may be that various psychological factors make the desire to avoid regret particulary strong for health care, as Tyler speculated earlier.

Although the marginal dollar has low return the value of improvements in medical technology is enormous. These gains are illustrated by the shift from T1 to T2. It has been estimated, for example, that increases in life expectancy from reductions in mortality due to cardiovascular disease over 1970-1990 has been worth over $30 trillion dollars – yes, 30 trillion dollars (for this research see: book, papers, summary). A conservative estimate is that 1/3rd of these improvements in life expectancy were due to better medical technology. One third of the annual benefits is $500 billion – this is much more than total government spending on medical research (the budget of the entire NIH is around 25 billion).

The low value of medical spending at a particular point in time and the high value of medical research over time suggest that we would be much better off if we cut back on medical care spending and devoted the funds to medical research. We should spend less on Medicaid, Medicare, Prescription drug plans etc. and use the savings to better fund the NIH (or other methods of increasing medical research such as prizes etc.)

HealthModel.JPG

Hypotheses about envy

1. We envy those close to us, who get paid just a bit more, not Bill Gates.

2. Men find it hardest to forgive other men for their success with women.

3. Men do not much envy women because they view women as “one of life’s prizes”.

4. The philosophers who wrote most insightfully about envy were all bachelors (Kant, Kierkegaard, Schopenhauer, Nietzsche).

I found these claims in Joseph Epstein’s recent, and entertaining, book Envy. Here is an interview with Epstein. Here is an essay by Epstein on envy. Here is a whole host of Epstein-related links.

My take: I envy how well he writes, but was comforted to read that tenured academics typically earn more than he does.

Chess and mixed strategies

Many laboratory experiments fail to find evidence for the game-theoretic concept of “mixed strategies.” But Doru Cojoc, a graduate student at Clemson University, looks at data taken from the world of chess, where high prizes are on the line and we find repeated games between the same players (there is no copy of the paper on the web).

A player might prefer one opening move over another (e.g., “1. e4” vs. “1. d4”), but if a player always uses his favorite, the opponent will find it easier to prepare a defense. So players tend to vary their opening moves in an effectively random manner, as confirmed by Cojoc’s data from championship matches. The returns to differing opening moves end up being the same, in expected value terms, even though players have their favorites. Note: For purposes of contrast, I would like to see if chess champions do any better with their favorite moves in non-repeated settings, Cojoc says he is working on this.

Doru tells me he is also preparing work on whether chess players ever reason using backwards induction strategies. And click here for a lead on the Chiappori, Steve Leavitt, and Tim Groseclose paper on mixed strategies in soccer.

By the way, did you know that for world championship games since 1951, the player with white is more than twice as likely to win as the player with black (26% white wins, 12% black wins, 61% draw)?

Thanks to Bob Tollison for the pointer on this work.

Why executives should be paid more than they deserve

If workers are paid their marginal product its difficult to understand why some CEOs are paid such high wages. But think of the CEO’s wage as a prize. Valuable prizes make everyone else work hard in order to become the CEO. With this model, the tournament model (JSTOR) of Lazear and Rosen, it may even make sense that CEO wages go up as profits go down. After all, shouldn’t prizes be set highest when motivation is most required? No doubt, some will see this argument as more proof that economists are just shills for the capitalist class.