Nice maps

In this post by Megan.

Markets in Everything

Sorry, Tyler, but I can't see how I can call this anything else! This is the ancillary industry edition

I also use verification companies, which assist escorts in verification of clients. These companies do the verification of the client and put them in a database so that when the client wants to meet with a girl for the first time, he doesn’t have to go through the verification process again. For a fee, I can call in and they will tell me if the client has a history of giving the girls problems, where he works, and his full name.

From the Freakonomics blog.

I got to the above from a link on a piece by Sudhir Venkatesh on the same blog.

Postscript: Oh, this is just ridiculous

Lawyers have one common fantasy, according to high-end sex workers: they want their lady-friend to play the role of “opposing counsel,” by visiting them in the hotel room to strike a plea bargain. I’ll leave the rest to the imagination.

From a follow on post by Sudhir Venkatesh.

And I am sure this is true

If you want to stay in the game, you better keep a police man happy. You always give a freebie now and then, because most women get caught now and then, especially if you’re on the streets. And you always want to tell him he’s the biggest man you’ve ever seen. Men ain’t that hard to figure out.

On Revenge

From an article in the New York Times- gives you some idea of why it took so long for our species to civilize itself.

In Sicily there is an oral tradition describing various methods of revenge: tying a man’s feet to his neck so that when he moves, he strangles himself; handcuffing a victim to a bonfire of olive wood; throwing him into a sty with hungry pigs.

Some results from a study by Naci H. Mocan, looking at data on 89,000 people from 53 countries.

Mr. Mocan collected data compiled by a United Nations Interregional Crime and Justice Research Institute survey from the 1990s and 2000. People were asked what would be an appropriate sentence for a 20-year-old man found guilty of stealing a color television if it was his second offense. The punishments ranged from alternatives to prison through two to six months in jail, all the way to a life sentence. Mr. Mocan tried to take account of the different values of a television in different countries, the effectiveness of the legal system and the going rate, if you will, for other crimes.

The results

Within a given country, people who have been victims of the same kind of crime (here, a burglary) tend to be more vengeful, but not if they have been victims of a different crime, like mugging

and

vengeful feelings are stronger in countries with low levels of income and education, a weak rule of law and those who recently experienced a war or are ethnically or linguistically fragmented

and that

women turned out to be more vengeful than men. If a woman had been a victim of burglary, she was 10 percent more likely to impose a prison sentence; for men the figure was 5 percent.

Your masters command it

An AGM, as described by the Financial Times.

Sir Gerry Robinson, chairman of Allied Domecq, was awarded a knighthood at the end of 2003.

One month later, at the distiller's annual meeting, he resembled a nobleman petitioned by starving vassals.

Three times Sir Gerry was asked by shareholders why Allied only provided coffee and chocolate biscuits before and after the event.

To applause, the first petitioner demanded sandwiches. "We aren't asking for the world," pleaded the second, "we think you might reward us for coming here and listening to you."

A piece of cake would do, he added.

And

No. It turned into yet another rambling lunch question. "I'm not going to answer the lunch question again," Sir Gerry ruled.

But he did not say anything about carrier bags.

"How about a small carrier bag to take away containing a small sample of products?" demanded the next speaker, who, in keeping with his desire for miniature freebies, described himself as a "small, private shareholder".

Realising he was mired in a bog of triviality, Sir Gerry burst out laughing. Others might have wept.

Things could be worse- you could have the Riddler at your AGM:

In 1997, to quote just one example, the late Lord Hambro's final one as chairman of the merchant bank that bore his name was hijacked by a riddling, Latin-spouting octogenarian who demanded that the finance director stand up and click his heels. He obliged.

HT: The FT's management blog

Delegate

From the blog of the Futurepundit, Randall Parker: it appears that Nature does what engineers are taught to do- hide complexity.

Decisions flow from the properties of the materials our bodies are made of and their interactions with the environment. When we pick up an object, we are able to hold it not primarily because of what our brain says but because our soft hands mold themselves around the object automatically, increasing surface contact and therefore frictional adhesion. When a cockroach encounters an irregular surface, it does not appeal to its brain to tell it what to do next; instead, its musculoskeletal system is designed so that local impacts drive its legs to the right position to take the next step.

And

The biologist who discovered this last fact, Joseph Spagna, currently at the University of Illinois, teamed up with engineers at the University of California at Berkeley to build a robot inspired by nature. The result, named RHex (for its six legs), is a robot that can traverse varied terrain without any central processing at all. At first it had a lot of trouble moving across wire mesh with large, gaping holes. Spagna’s team made some simple, biologically inspired changes to the legs of the robot. Without altering the control algorithms, they simply added some spines and changed the orientation of the robot’s feet, both of which increased physical contact between the robot and the mesh. That was all it took to generate the intelligence required for the device to move ahead. In a related project, Iida and his MIT group are now building legs that operate with as few controlled joints and motors as possible, an engineering technique they call underactuation.

I am impressed just that it can walk across such a mesh.

Another post from the same blogs describes how nature employs the "need to know" principle. The eye is fooled by optical illusions, but the Hand is not

Ben-Gurion University of the Negev Psychologist Tzvi Ganel and his colleagues presented research participants with the “Ponzo” illusion, an image common in psychological research that makes two objects that are similar in length appear drastically different. They then hooked participants’ index finger and thumb to computerized position tracking equipment and asked them to grasp the objects with their fingers.

Even thought the object appeared to be larger (or smaller) than it really was, the size of their grasp reflected the object’s real rather than apparent size. For good measure, the researchers arranged the illusion so that the object that appeared to be the smaller of the two was actually the larger of the two.

More evidence for the existence of the two visual pathways which I first read of in VS Ramachandran's book

According to this view, put forward more than a decade ago by Mel Goodale and David Milner, one system, -- vision-for-perception -- gives us our conscious visual experience of the world, allowing us to see objects in the rich context of the scenes in which they are embedded. It’s also the one that is fooled by optical illusions.

The other system, vision-for-action, provides the visual control we need to move about and interact with objects. This system does not have to be conscious, but does have to be quick, goal-directed, and accurate - and as a consequence, is much less likely to be fooled by illusions such as the one used by Ganel and his colleagues.

The Arrow of Economics

Google suggested that I would be interested in this blog, and I did find this interesting post on some questions which Kenneth Arrow finds difficult.

Family Guy

My mother


My grandmother


From my mother's blog

London

Dirigibles glide again through the skies over London.



Another view- this time, almost right outside my Office window, but the picture does not bring that out.



I saw this advertisement for the Tate in Holborn tube station. Again, the image is shot from an odd angle. Need to try again!

A new gameshow

Elberry proposes one I would watch.
HT: Harry Hutton of Chase Me Ladies

Elitist snob? Moi?

Its all done with mirrors

Randall Parker blogs on illusions. Its appears that illusions are not merely central to understanding how perception works- perception is an illusion, since the brain is constantly struggling to anticipate the world, not merely to see it as it is.

In an experiment originated by Dr. Nijhawan, people watch an object pass a flashbulb. The timing is exact: the bulb flashes precisely as the object passes. But people perceive that the object has moved past the bulb before it flashes. Scientists argue that the brain has evolved to see a split second into the future when it perceives motion. Because it takes the brain at least a tenth of a second to model visual information, it is working with old information. By modeling the future during movement, it is “seeing” the present.

And we also fool ourselves, except when we are depressed:

Individual subjects were placed in front of a panel with a green light, a yellow light and a spring loaded button, and were instructed to make the green light flash as often as possible. In one segment, they would win money every time the green light went on. In another, they would lose money when it didn't. A screen in the room showed their score. Afterward, subjects were asked how much control they had. … Among the "normal," non-depressed subjects, it depended on whether they were losing or making money. When they were winning money, they thought they had considerable control. … When they were losing money, they thought they had virtually no control. In other words, these subjects took credit for good scores and dished off blame when scores were poor. … The depressed subjects saw things differently. Whether they were winning or losing money, they tended to believe they had no control. And they were correct: the "game" was a fiction.

Dosas in Dupont Circle

Bravissimo!

This lecture by Tyler is just what the Internet is for!

A talk which ranges from the anguish caused by the arrival of McDonalds in India, the joy of eating Dosas in Washington, how the development of Reggae was catalyzed by the increasing range of American Radio Stations, why Paul Simon was being provincial when he championed South African music, and how Doo-wop music shaped the music of Madagascar.

The wonderful music! Listen for the delightful version- wonderful violin, drums, voice- of "Be my baby" from Madagascar, the references to James Bond and Oceans Eleven in a 1960's song by Desmond Decker, that Tuvan throat singing version of Led Zeppelin's "When the levee breaks", and the story of how Bob Marley gave up music for a while and became an illegal immigrant and worked on the General Motors assembly line.

Addendum: not too much analysis. Only two references to the role of market size on the success of various traditions of music, and the only discussion of cost structures, etc is a very interesting answer to a question. The lecture is a wonderful series of illustrations.

From the New Yorker

The more loving one

Tyler Cowen offers up a challenge to Auden.

Talk to the Invisible Hand

Greg Mankiw shows us why the Daily Show is still the best place for news. Awesome!

Natural foods

A letter to the Economist

Your article on the regulation of pesticides should have pointed out that slightly exceeding the “maximum residue levels” in some food, as occasionally happens, is a risk perhaps equivalent to the likelihood of being hit on the head by a meteorite (“A balance of risk”, July 5th). Of greater risk to humans is the exposure to thousands of pesticides made naturally by plants (to kill herbivorous insects) and found in all fruits and vegetables. The average daily diet contains a quarter teaspoon of natural nerve toxins, endocrine disrupters, carcinogens and chemicals that damage chromosomes, skin, blood and the thyroid.

Humans are not adapted to these natural chemicals, in which the margin of safety is about tenfold compared with traces in synthetic pesticides (some 10,000-fold higher). Yet unqualified environmental groups and European bureaucrats are obsessed with agricultural pesticide safety, basing their assumptions on unjustified fear and anxiety. Neither makes for good policy.

Anthony Trewavas
Professor of plant biochemistry
Institute of Molecular Plant Sciences
Edinburgh

Postscript: The above reminded me of this post on the impact of environmental impact of growing food locally.

Sweet

From the Economist's Free Exchange blog

investors are rioting and some are demanding the government freeze share prices to protect against future losses

This is a really surreal idea. What sort of market would this be? Is this so somebody can avoid booking paper losses?

Time and causality

From a New York Times interview with Dennis Overbye.

Causality is one of those topics that is going to get me in trouble if I pretend to know too much about it. It's an issue in physics because of quantum mechanics, which ascribes an irreducible randomness to nature on the smallest, subatomic scales. (See my first answer in this series.) If you don't know when an atom is going to decay or what direction a photon (the discrete carriers of light in quantum theory) is going to go when an atom loses energy, then you can't say "why" it went one way or another or one time or another. Some part of causality has been lost.

and

There is another issue with cause and effect, it seems naively to me, when you fold in time. The basic laws of physics are supposed to work equally well whether time is going forward or backward. You can't tell, watching a movie of a pair of billiard balls or a pair of electrons colliding, whether the film is running forward or backward. If the universe really works this way, then you can't have cause and effect uniquely defined. One time the red ball causes the blue one to go flying; the other (reversed) time the blue one causes the red one to fly off.

Economists on economizing

Which is very different from maximizing wealth. Alex Tabarrok tells us to spend more today

Over confidence and in particular the idea that we are special and will live a long life suggests the error is saving too much. Note that we also tend to think that our partner will be alive as well. My wife once asked me whether we were saving enough for "our" retirement. "Sure," I said, "don't forget one of us will probably die before the other and I'm not saving for your future husband." "Why," she replied with a sigh, "can't economists be more human?"


Availability bias probably also suggests we save too much - we see people who saved too little in the street but the ones who saved too much are dead and gone.

And

Kotlikoff's finding is that a large fraction of Americans, some 40%, are saving too much. Kotlikoff's program takes into account that we may need less wealth when we are old and retired (e.g. less transportation for work related reasons) but not that the marginal utility of wealth may be lower when we are old. (e.g. Money's not so valuable if you don't need it to or can't use it to attract a mate.) Thus over-saving may be even more common than Kotlikoff suggests.

A Hard World

Arnold Kling links to a nice piece by Summers on the Fannie Mae/Freddie Mac fiasco.

What went wrong? The illusion that the companies were doing virtuous work made it impossible to build a political case for serious regulation. When there were social failures the companies always blamed their need to perform for the shareholders. When there were business failures it was always the result of their social obligations. Government budget discipline was not appropriate because it was always emphasized that they were "private companies.” But market discipline was nearly nonexistent given the general perception -- now validated -- that their debt was government backed. Little wonder with gains privatized and losses socialized that the enterprises have gambled their way into financial catastrophe.

The bottomline is clear

It is hard in this world to do well. It is hard to do good. When I hear a claim that an institution is going to do both, I reach for my wallet. You should too.

Addendum: Tyler adds

He always had a talent for the bottom line...Larry Summers was my professor for Macro II and every lecture was a joy. "Lecture" isn't even the right word, it was more like turning on a faucet.

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.