Devilish clever

From BPS Research Digest

Moments into the keynote talk, the teachers and I found ourselves blinded by darkness. As our eyes adjusted, we were told to cover one eye with our hands before the lights were raised again. A little wait for our open eyes to become light-adjusted and then the lights re-dimmed. What would happen to our vision this time? The answer depends on whether adaptation to light levels occurs centrally, in the brain, or locally in each eye. The audience tested this, looking through each eye one at a time and discovering the strange experience of having one eye adapted to the light and one to the dark, thus showing that light adaptation occurs locally. Both eyes open led to a strange, grey, grainy, effect.

but

A huge video of a waterfall filled the screen. After a minute staring at the cascading water, the video was stopped and the audience experienced the well-known illusion of the water appearing to flow upwards. But what if the flowing water was watched with just one eye (with the other covered), with the paused video then observed through the previously covered eye? The illusion was still experienced, thus showing that in this case, adaptation to motion had occurred centrally, in the brain.

And about expectations

Led Zeppelin's Stairway to Heaven began to fill the lecture room. Then a verse was played backwards (courtesy of Jeff Milner). Could we hear any words in the backward version? None. But then Stafford told us the hidden lyrics: “Oh here's to my Sweet Satan...”. The backward track was played again, and there the words were, bold, impossible to ignore.....Once the expectations for what to hear are in place, they can't be undone. You can't unhear the devilish lyrics once you know about them. This is a powerful demonstration of how our perceptual experiences are based not just on what is served up by our senses, but also on what our brains bring to the table.

A long way to go

Via growthology

Vilhelm Hammershøi

Last weekend, spent two hours at the Royal Academy, browsing their exhibition on Vilhelm Hammershøi. It made me as happy as their previous show of Art from Russia. I found his painting of his sister ("Portrait of a young woman") extremely moving, and I loved how you could tell that the light on the walls in "Sunbeams or Sunshine" is actually light which has been reflected from the floor. The image in "Street in London" is just how the road outside the British Museum looks today, but with loads of traffic and huge crowds added.

A very quiet, peaceful evening, and the tea and crumpets afterwards were lovely!

It too hot, lets ban thermometers

The title of this post paraphrases Russ Roberts. His post is about how Airlines are mailing their customers complaining about speculative activity in the oil market. The airlines seem to be arguing that the high cost of fuel today is due to speculation.

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known. Speculators buy up large amounts of oil and then sell it to each other again and again. A barrel of oil may trade 20-plus times before it is delivered and used; the price goes up with each trade and consumers pick up the final tab.Some market experts estimate that current prices reflect as much as $30 to $60 per barrel in unnecessary speculative costs

Exactly why speculators play this game of buying from one another, and why prices go up with each transaction is unclear. Why would speculator 1 sell to speculator 2 when he knows that speculator 2 can sell it on in a few days at a higher price? Why not hold on for a few days and pocket that profit himself?

The piece reminded me of this other article, also about how the Airlines industry seems to want the government to step in and regulate them. They are honest in some places

For passengers, Crandall's plan means fewer flights and higher fares. And for employees, it means less flexibility to fight for fair wages and benefits

and you can always read between lines such as these

Fares would undoubtedly go up, but they'd be more consistent. And regulation would provide the industry with some much-needed financial stability....Collectively, airlines have lost over $13 billion since deregulation, and that's even after you throw all the profitable years into the mix.

And this post by the Undercover Economist is about the impact of banning futures trading on the volatility of commodity prices.They quote a recent paper

The fundamental result of this paper is that futures markets are systematically associated with lower levels of commodity price volatility. The means for arriving at this result is a series of quasi-experiments with futures markets provided by history, namely their establishment as well as prohibition through time.

Alex Tabarrok at Marginal Revolution has a post on the same topic

Back in 1958, onion growers convinced themselves that futures traders (and not the new farms sprouting up in Wisconsin) were responsible for falling onion prices, so they lobbied an up-and-coming Michigan Congressman named Gerald Ford to push through a law banning all futures trading in onions. The law still stands.

And yet even with no traders to blame, the volatility in onion prices makes the swings in oil and corn look tame, reinforcing academics' belief that futures trading diminishes extreme price swings.

Let us praise city people!

On the 4th of July, an interesting article by Ed Glaeser on the relationship between cities and democracy.

As we celebrate our freedom at spacious suburban barbecues, we should remember that the road to freedom started on far more crowded city streets...

In the fight for freedom between dictatorship and democracy, dictatorship starts with a big edge.

Dictatorships have a small number of insiders who have strong incentives to fight for their regime. Because the benefits of democracy are so widely shared, no one has particularly strong incentives to fight to create or preserve representative government.

Democracies have a massive free-rider problem where all of us have a natural tendency to let someone else die for our liberty. Solving this free rider problem requires coordination and this is what urban density has done for millennia. Urban density connects citizens and enables them to meet and plan and talk. With enough talking, groups like the Sons of Liberty may even convince themselves that it is worth dying for a common cause. Monarchies flourished in our agricultural past, because effective democratic opposition was far more difficult to organize in a dispersed rural setting.

And some history I did not know

the true birthplace of modern democracy was the wool-trading towns of the Low Countries. In Bruges's market square, there is a statue of a butcher and a weaver, who are far more important in the history of freedom than their contemporary, the rural warlord William Wallace. In 1302, more than 450 years before our Tea Party, these two urban artisans coordinated their fellow guild members' surreptitious destruction of the French king's army occupying their town. Two months later, they led the urban militias from Bruges and Ghent that destroyed the elegantly armored French cavalry in the Battle of the Golden Spurs.

The Bruges revolt of 1302 was only one of a string of urban uprisings that bedeviled the autocratic overlords who tried to control the wealthy but troublesome cities of the Low Countries. In 1566, a great revolt began 40 miles from Bruges. For 80 years, urban rebels fought against their Hapsburg overlords, and eventually turned Europe's most urbanized area into the independent republic of the Netherlands. In 1581, the Dutch enacted an Act of Abjuration declaring that the King of Spain was unfit to lead them. It is the most direct ancestor of our own Declaration of Independence.

First, boot up your black hole

Don't ask me why, but I just remembered this article about the work of Leonard Susskind. Decided to blog it in case I wish to locate it again.
The last line is pretty zany:

So the idea of a black hole computer remains controversial

but the rest of the article is simply fascinating.

Stephen Hawking of the University of Cambridge showed theoretically that black holes are not truly black, but emit radiation. In fact they evaporate very slowly, disappearing over many billions of years. This "Hawking radiation" comes from quantum phenomena taking place just outside the event horizon, the gravitational point of no return. But, Hawking asked, if a black hole eventually disappears, what happens to all the stuff inside? It can either leak back into the universe along with the radiation, which would seem to require travelling faster than light to escape the black hole's gravitational death grip, or it can simply blink out of existence.

Trouble is, the laws of physics don't allow either possibility. "We've been forced into a profound paradox that comes from the fact that every conceivable outcome we can imagine from black hole evaporation contradicts some important aspect of physics," says Steve Giddings, a theorist at the University of California, Santa Barbara.

Researchers call this the black hole information paradox. It comes about because losing information about the quantum state of an object falling into a black hole is prohibited, yet any scenario that allows information to escape also seems in violation. Physicists often talk about information rather than matter because information is thought to be more fundamental.

In quantum mechanics, the information that describes the state of a particle can't slip through the cracks of the equations. If it could, it would be a mathematical nightmare. The Schrödinger equation, which describes the evolution of a quantum system in time, would be meaningless because any semblance of continuity from past to future would be shattered and predictions rendered absurd. "All of physics as we know it is conditioned on the fact that information is conserved, even if it's badly scrambled," Susskind says.

Something about the power of abstract mathematical models

In 1997, Maldacena developed a type of string theory in a universe with five large dimensions of space and a contorted space-time geometry. He showed that this theory, which includes gravity, is equivalent to an ordinary quantum field theory, without gravity, living on the four-dimensional boundary of that universe. Everything happening on the boundary is equivalent to everything happening inside: ordinary particles interacting on the surface correspond precisely to strings interacting on the interior.

This is remarkable because the two worlds look so different, yet their information content is identical. The higher-dimensional strings can be thought of as a "holographic" projection of the quantum particles on the surface, similar to the way a laser creates a 3D hologram from the information contained on a 2D surface. Even though Maldacena's universe was very different from ours, the elegance of the theory suggested that our universe might be something of a grand illusion - an enormous cosmic hologram....

The holographic idea had been proposed previously by Susskind, one of the inventors of string theory, and by Gerard't Hooft of the University of Utrecht in the Netherlands. Each had used the fact that the entropy of a black hole, a measure of its information content, was proportional to its surface area rather than its volume. But Maldacena showed explicitly how a holographic universe could work and, crucially, why information could not be lost in a black hole.

According to his theory, a black hole, like everything else, has an alter ego living on the boundary of the universe. Black hole evaporation, it turns out, corresponds to quantum particles interacting on this boundary. Since no information loss can occur in a swarm of ordinary quantum particles, there can be no mysterious information loss in a black hole either. "The boundary theory respects the rules of quantum mechanics," says Maldacena. "It keeps track of all the information."

And what this means to a mahout and elephant who happen to fall into a black hole

Let's say Alice is watching a black hole from a safe distance, and she sees an elephant foolishly headed straight into gravity's grip. As she continues to watch, she will see it get closer and closer to the event horizon, slowing down because of the time-stretching effects of gravity in general relativity. However, she will never see it cross the horizon. Instead she sees it stop just short, where sadly Dumbo is thermalised by Hawking radiation and reduced to a pile of ashes streaming back out. From Alice's point of view, the elephant's information is contained in those ashes...

There is a twist to the story. Little did Alice realise that her friend Bob was riding on the elephant's back as it plunged toward the black hole. When Bob crosses the event horizon, though, he doesn't even notice, thanks to relativity. The horizon is not a brick wall in space. It is simply the point beyond which an observer outside the black hole can't see light escaping. To Bob, who is in free fall, it looks like any other place in the universe; even the pull of gravity won't be noticeable for perhaps millions of years. Eventually as he nears the singularity, where the curvature of space-time runs amok, gravity will overpower Bob, and he and his elephant will be torn apart. Until then, he too sees information conserved.

Susskind argues that both stories are right, which takes relativity to a new level

The elephant is both inside and outside the black hole; the answer depends on who you ask. "What we've discovered is that you cannot speak of what is behind the horizon and what is in front of the horizon," Susskind says. "Quantum mechanics always involves replacing 'and' with 'or'. Light is waves or light is particles, depending on the experiment you do. An electron has a position or it has a momentum, depending on what you measure. The same is happening with black holes. Either we describe the stuff that fell into the horizon in terms of things behind the horizon, or we describe it in terms of the Hawking radiation that comes out."

Wait a minute, you might think. Maybe there are two copies of the information. Maybe when the elephant hits the horizon, a copy is made, and one version comes out as radiation while the other travels into the black hole. However, a fundamental law called the no-cloning theorem precludes that possibility. If you could duplicate information, you could circumvent the uncertainty principle, something nature forbids. As Susskind puts it, "There cannot be a quantum Xerox machine." So the same elephant must be in two places at once: alive inside the horizon and dead in a heap of radiating ashes outside.

What's more, this new type of "non-locality" is not just for black holes. It occurs anywhere a boundary separates regions of the universe that can't communicate with each other. Such horizons are more common than you might think. Anything that accelerates - the Earth, the solar system, the Milky Way - creates a horizon. Even if you're out running, there are regions of space-time from which light would never reach you if you kept speeding up. Those inaccessible regions are beyond your horizon.

A Neat Idea

At least some people are thinking for themselves. If the purpose of public toilets is to help keep a city clean, why not pay people to use them?

Win-Win

Enjoy, and build up a nice stock of memories.

The government we deserve

Bryan Caplan recently published a book "The myth of the rational voter", arguing that bad policies are less often the result of vested interests than of politicians responding to the irrational biases and ignorance of voters politicians pandering to the biases of stupid and ignorant voters- biases which the politicians often share.

Greg Mankiw called it the best book he has read lately.

I came across the story of Sergei Mavrody while browsing Blanchard's Marcoeconomics- it could have been used as a case study in that book.

From Blanchard (emphasis added):

In 1994 a Russian "financier," Sergei Mavrody, created a company called MMM and proceeded to sell shares, promising shareholders a rate of return of at least 3000% per year.

The company was a huge success, its share price increasing from 1600 rubles in February t0 105,000 rubles in July.

The trouble was that the company was not involved in any kind of production and held no assets, except for its 140 offices in Russia. The shares were intrinsically worthless. The company's initial success was based on a standard pyramid scheme..Despite repeated warnings by Government officials, including Boris Yeltsin, that MMM was a scam and that the increase in the price of shares was a bubble, the promised reurns were just too attractive to any Russian people, especially in the midst of a deep economic recession.

The pyramid collapsed by the end of July 1994 and the company closed but

Mavrody tried to blackmail the government into paying the shareholders, clamining that not doing so would trigger revolution or civil war. The government refused, leading many shareholders to be angry at the government rather than Mavrody. Later that year, Mavrody actually ran for Parliament, as a self-appointed defender of shareholders who had lost their savings. He won!

Warms the cockles.

Postscript: I was reminded of this post in Free Exchange, which quotes Anthony de Jasay

There is a subconscious belief in France that the state does not pay Paul by taking the money from Peter. It just gives it to Paul, and Peter is not made worse off. This is so because the money sits in an imaginary reservoir and the state can "unblock" it (debloquer is the French word used to describe this happy event). . .

Is this true? I don't know. Does it seem plausible? Sure does.

The Economist as Science Fiction writer

Tom Schelling repeatedly surprises you.

From his essay Self-command in Practice, in Policy, and in a Theory of Rational Choice

A second experiment: some anesthetics block transmission of the nervous impulses that constitute pain; others have the characteristic that the patient responds to the pain as if feeling it fully but has utterly no recollection afterwards. One of these is sodium pentothal. In my imaginary experiment, we wish to distinguish the effects of the drug from the effects of the unremembered pain, and we want a healthy control subject in parallel with some painful operations that will be performed with the help of this drug. For a handsome fee you will be knocked out for an hour or two, allowed to sleep it off, then tested before you go home. You do this regularly, and one afternoon you walk into the lab early and find the experimenters viewing some videotape. On the screen is an experimental subject writhing, and though the audio is turned down the shrieks are unmistakably those of a person in pain. When the pain stops the victim pleads, "Don't ever do that again. Please."
The person is you.
Do you care?
Do you walk into your booth, lie on the couch, and hold out your arm for today's injection?
Should I let you?

Worthy of Philip K. Dick.

Where are those huddled masses?

George Borjas asks why anyone still lives in Puerto Rico

Ever since I was first exposed to the music from West Side Story as a teenager, some of Stephen Sondheim's lyrics stuck with me. They appear in the song America. In the movie version, Bernardo and Rita are arguing over the costs and benefits of migrating from Puerto Rico to New York.

BERNARDO: I think I'll go back to San Juan
ANITA: I know a boat you can get on
BERNARDO: Everyone there will give big cheer
ANITA: Everyone there will have moved here

because

There are no legal restrictions whatsoever that hamper the mobility of Puerto Ricans to the mainland--they are American citizens by birth--and transportation costs are low. Yet here we are, 60 years on (to use an Elton John song title) from the onset of Puerto Rican migration after World War II, and there are still quite a few people left in Puerto Rico. Why hasn't Puerto Rico emptied out?

Between 30 to 40 percent of the Puerto Rican population chose to move out. But that means that about two-thirds did not. Why?

If people are not leaving Puerto Rico even though wages are so much lower there, is capital flowing in the other direction, anxious to exploit these poor, dumb people? Appears not.

There are also no restrictions that hamper the flow of capital between the two places. Yet despite all these unrestricted labor and capital flows, there is still a sizable income differential between the United States and Puerto Rico. By 2003, price-adjusted per-capita GDP in Puerto Rico was still only two-thirds that of the United States (according to the Penn World Table). Whatever happened to the factor price equalization theorem? If 60 years is not the "long run," maybe Keynes was right after all.

Its not just Puerto Rico and the United States.

In London, I was struck by the number of East Europeans around- rather like Hispanics in New York City. New Economist writes that that was an illusion.

Meanwhile, the Daily Star announced: "An army of 600,000 Romanian and Bulgarian immigrants will start entering Britain on Monday - and they won't even have to show a passport."

None of this actually happened. Officially, only 8,000 Romanian and Bulgarian migrants came to work in Britain in the first three months of this year and it is clear now that there will be no "tidal wave".

Of course, they are writing about the migrants who were expected to arrive after Romania and Bulgaria acceeded to the EU this year- not the ones who 800,000 young Bulgarians who left in the 18 years since the Berlin wall fell. I guess those are the ones I met.

I totally understand this fellow

Besides all that, the UK is not the most preferred destination for Bulgarian workers with low qualifications - Greece, Spain and Italy are. The United States also provides opportunities for immigration. I remember a friend who told me that he would always prefer the United States. One of the main reasons was that when you say "I am from Bulgaria" in the United States, the next question usually is: "Where is that?" When you say "Europe", most Americans think "Ah, Europe - Paris", great. And no further questions asked.

Quite right.

Its good to have tenure

Arnold Kling blogs (emphasis mine)

Economic conferences rarely produce great papers. Entrepreneurship, Innovation, and the Growth Mechanism of the Free-Enterprise Economies, a conference dedicated to the work of William Baumol, is typically pedestrian, with particularly forgettable contributions from Kenneth Arrow and Robert Solow.

Anyway, he quotes Barry Weingast on what constitutions do (to paraphrase: they restrict the power of the government and put in mechanisms to enforce those restrictions. This lowers "the stakes of politics"), on how they do this (to paraphrase, they make all elites sufficiently better off so that they have an incentive to protect the new arrangement), and on how the U.S. constitution almost collapsed

many Federalists sought to expand the powers of the federal government beyond those enumerated...Alexander Hamilton sought...to expand national power...the Federalists sought to deal with growing opposition through the Alien and Sedition Acts (1798), allowing them among other things to jail opposition newspaper editors. The situation was sufficiently desperate that both Madison and Jefferson thought the Constitution had failed...

Yet the Constitution did not fail, in part because a sufficient number of Federalist voters agreed with Jefferson that the Federalists' use of powers was illegitimate, switching allegiance and booting out President John Adams in the election of 1800...With Jefferson taking power in 1801, the Jeffersonians (including many former Anti-Federalists who opposed the Constitution) joined the remaining Federalists in supporting the Constitution.

How does one map this to the situation in India in 1947? Which were the relevant elites? What kept them in line?

In particular, why did the Army (so far as we know) never intervene in politics?

Merde!

From Citizens by Simon Schama

Controller-General Silhouette, for example, in 1759, had proposed a tax on luxury items like gold and silver plate, jewelry, carriages- as well as on celibacy- and was drummed out of office for his temerity, amidst a chorus of execration.

And on tax avoidance

At the level of the urban bourgeois it meant accumulating enough money to buy one of the many thousands of petty municipal offices that would confer tax exemption. So that in every major town and especially in Paris, there were wardens of the oyster sellers' guild and gaugers of cheese and curds and inspectors of tripe who gloried in their small dignities and enjoyed their exemptions

Whats New?

In the new economy, many of the old classical rules of economics no longer apply; over the years the U.S. has made and learned new rules all its own

From Time magazine's issue of December 31, 1958.

As quoted in Capital Ideas, byt Peter Bernstein

Keynes, Investment Advisor

Keynes was a great economist and a very successful investment manager, but I think this statement of his is glib and ill-considered.

I am in favour of having as large a unit as market conditions will allow...To suppose that safety-first consists in having a small gamble in a large number of different [companies] where I have no information to reach a good judgement, as compared with a substantial stake in a company where one's information is adequate, strikes me as a travesty of investment policy

As quoted by Peter Bernstein in "Capital Ideas".

You would not be pleased with the performance of a share which generated a return of 2% when the market returned 4%. Hence, to say that you have adequate information about a company which you intend to invest in means that you know not only how well its will perform, but how well the other shares in the market (and even assets such as real estate, bonds, and gold) will perform. This means that we need adequate information not merely about the company which we are considering investing in, but also in every other company we might choose to park our funds in.

Even if we merely concerned about the absolute performance of one particular firm's shares, that depends on how its products (not its shares) will do in the marketplace vis-as-vis the products of its competitors. Again, we need information about more than that particular business.

All arguments for diversification, and passive investment

Yay!

At the New York Times, John Tierney follows up on his article about the sources of laughter. This quote from Schopenhauer is some of the most turgid prose I have ever had waylay me.

“The origin of the ludicrous is always the paradoxical, and thus unexpected, subsumption of an object under a concept that is in other respects heterogeneous to it. Accordingly, the phenomenon of laughter always signifies the sudden apprehension of an incongruity between such a concept and the real object thought through it, and hence between what is abstract and what is perceptive.”

Translation: laughter requires surprise. Simply stated, and quite false. Why do we laugh at jokes we have heard before, and at Monty Python episodes which we have already seen?

Ignore the rest of the article- the best part is this joke

A blind man enters a department store, picks up his dog by its tail and begins swinging it over his head. A clerk hurries over and says, “Can I help you, sir?”
“No, thanks,” the man replies, “I’m just looking around.”

John Tierney is a strange man. He did not find the Muffin joke funny, and he does not find this one funny either.

Nothing to see here- Move on

On the day that I leave New York to return to Mumbai, this article by Tim Harford strikes a chord. One reason I so prefer Mumbai to Bangalore is that the latter is so one-dimensional. The local economy stands on one leg- Information Technology. This is not merely boring, but a dangerous strategy for a community.

Even big cities can struggle if they overspecialise. Liverpool and Manchester are examples. Birmingham, on the other hand, has always been a city bustling away making everything and nothing in particular. As the late author Jane Jacobs once pointed out, Birmingham was thought highly inefficient compared with the specialised mills of Manchester, but when the downturn came Manchester was devastated and Birmingham kept on chugging along.

Both Mumbai and New York benefit from having diverse economies- finance, tourism, movies, fashion, television.

When communities are in visible decline, why do people stay on? There are the obvious reasons- emotional attachments to familiar places and beloved people. This would be a perfectly reasonable choice- paying for those emotional benefits in the form of lower wages. Tim argues, however, that the desire to own one's home- rather than rent it- is another major cause of economic stagnation.

The British are a nation of home owners, apparently happy to pay far more for the privilege of owning their own house than they would ever pay to rent one. Other nations, happier to rent, see unemployment reduced as a result.

The economist Andrew Oswald has shown that across European countries, and across US states, high levels of home ownership are correlated with high levels of unemployment. More conventional factors such as generous welfare benefits or high levels of trade unionisation don’t explain unemployment nearly as well as the tendency to own houses.

I am having some trouble reconciling the above with the very next passage in the article.

Recent research in the Economic Journal by Jakob Munch and colleagues suggests that people who own their own homes do find jobs as quickly as those who are free to move, but do so partly by being less picky about which job to take, and by commuting further..

I would expect this to result in lower incomes- not necessarily higher unemployment. Can it be that a third factor- conservatism- explains both the economic decline and the high rates of home ownership in these regions? As the local economy declines, the more venturesome residents leave the area for greener pastures. Those who stay on tend to be more conservative and, as they consider themselves more rooted in the area, they are also more likely to purchase homes. This becomes easier to do because house prices decline along with the local economy. The last paragraph seems to suggest some such process may be in play

Even if we did all this, the US economists Ed Glaeser and Joe Gyourko argue that one serious barrier remains: houses do not walk. No matter how bad things get in Detroit or Treorchy, the houses will still be there, and if they are cheap enough people will want to live in them. The likely result is a gloomy sort of segregation: those who feel that they can find a good job in the big cities will move there and pay the higher rents. Those who are less confident of that would rather have no job in a cheap house than no job in an expensive house. Detroit will have residents for a long time to come.

Keep moving.

Futility

Move him into the sun-
Gently its touch awoke him once,
At home, whispering of fields unsown.
Always it awoke him, even in France,
Until this morning and this snow.
If anything might rouse him now
The kind old sun will know.

Think how it wakes the seeds--
Woke, once, the clays of a cold star.
Are limbs so dear-achieved, are sides
Full-nerved,--still warm,--too hard to stir?
Was it for this the clay grew tall?
--O what made fatuous sunbeams toil
To break earth's sleep at all?

Wilfred Owen

Just Jokin'

I, for one, found this very funny.

So there are these two muffins baking in an oven. One of them yells, “Wow, it’s hot in here!”
And the other muffin replies: “Holy cow! A talking muffin!”

Yesterday's New York Times had a nice article on humor. It was well worth reading, even with little gems like this

“Primal laughter evolved as a signaling device to highlight readiness for friendly interaction,” Professor Panksepp says. “Sophisticated social animals such as mammals need an emotionally positive mechanism to help create social brains and to weave organisms effectively into the social fabric.”

I happened to wonder about the purpose of laughter a couple of weeks back. I was just about to open the door to the stairwell at work here when someone opened it from the other side, and we almost collided. We instinctively laughed, and I wondered at that.

There was nothing funny about what happened- someone could have got hurt- so why did we laugh? My best guess was that it had something to do with signalling that we both meant no harm- I had not been lurking in wait to pounce on that poor guy. From the article

“Laughter is an honest social signal because it’s hard to fake,” Professor Provine says. “We’re dealing with something powerful, ancient and crude. It’s a kind of behavioral fossil showing the roots that all human beings, maybe all mammals, have in common.”

If I had been lurking in wait to beat that poor man up, I would have found it very hard to laugh convincingly.

And of course, your boss' jokes are always funny.

Which brings us back to the muffin joke. It was inflicted by social psychologists at Florida State University on undergraduate women last year, during interviews for what was ostensibly a study of their spending habits. Some of the women were told the interviewer would be awarding a substantial cash prize to a few of the participants, like a boss deciding which underling deserved a bonus.

The women put in the underling position were a lot more likely to laugh at the muffin joke (and others almost as lame) than were women in the control group. But it wasn’t just because these underlings were trying to manipulate the boss, as was demonstrated in a follow-up experiment.

This time each of the women watched the muffin joke being told on videotape by a person who was ostensibly going to be working with her on a task. There was supposed to be a cash reward afterward to be allocated by a designated boss. In some cases the woman watching was designated the boss; in other cases she was the underling or a co-worker of the person on the videotape.

When the woman watching was the boss, she didn’t laugh much at the muffin joke. But when she was the underling or a co-worker, she laughed much more, even though the joke-teller wasn’t in the room to see her. When you’re low in the status hierarchy, you need all the allies you can find, so apparently you’re primed to chuckle at anything even if it doesn’t do you any immediate good.

Again, it could be that to "get" a joke, you need to be able to empathize with the other person, and we know that being in a position of power diminishes empathy.

HT: Brad DeLong

The neighbours are watching

From the essay "Against backsliding", in the book "Strategies of commitment and other essays" by Thomas Schelling:

S.L.A. Marsall in Men against Fire (Magnolia, Mass.: Peter Smith, rpt. 1985) discussed the phenomenon that in all armies in World War II most individual soldiers never fired their rifles- no matter how long a battle lasted, how brave they were, or what targets presented themselves- while weapons that required joint action by two or three soldiers, like feeding a belt of ammunition intop a machine gun or loading and aiming an artillery piece, were regularly fired as intended.

P.S. I later came across this- "What economists should learn from sociology"- and this seemed apt

Sociologists have a deep appreciation of imitation and conformity as a basic feature of human behavior. Economists rarely model this explicitly. If it is so important, as sociologists have shown, then economists are really missing the boat.