There is a phenomenon in which someone gains great fame and wealth by holding a radical position; is empirically proved to have been completely wrong; and yet continues to enjoy fame and wealth for continuing to hold the same opinion that was proven to be wrong. George Gilder (”Trust the Internet now more than ever”), Paul Ehrlich (The Population Bomb: Hundreds of millions of people will die of starvation in the 1970s), and Hal Lindsey (The Late Great Planet Earth: Christ will return in the 1970s) come to mind.

If this website used a forum instead of a typepad format, there would be much more incentive to follow up to old topics like this.

Mark and Adirian, yes it is plausible that people who choose contrarian strategies have somewhat differing preferences, though it is hardly obvious what exactly those differences are. Nevertheless, they do care about some of the same things, and so it is important to consider whether they are sufficiently rewarded for the risks they take.

You are correct. In my post I was not drawing on
my own experience. But that would be difficult.
I do not play in your league — almost no one does,
after all — so there is no realistic way to
compare my experiences with yours.

So I tried to think of analogies. And the more
I think of them, the more I see different ways
to be a contrarian.

Perhaps by mentioning some of them in the same
comment I was only confusing the issue.

My apologies.

John

I may recall a better citation later, but I did a quick search for the discussion this reminded me of. Unsurprisingly, it has its roots in an Overcoming Bias post from Robin Hanson. A chain of links:

http://www.overcomingbias.com/2007/02/ads_advise_prof.html
http://www.economist.com/blogs/freeexchange/2007/02/trailing_the_truth.cfm
http://econlog.econlib.org/archives/2007/03/puzzled_by_brad.html
http://www.economist.com/blogs/freeexchange/2007/03/the_fighting_punditariat.cfm

Key quote (from the second link, unnamed Economist writer, Ms.McArdle?):

Overall, though, the influence seems to be very different from that in academia. Mr Hanson implies that career considerations make academics more conservatives, handing their peers and superiors things they expect to hear. In journalism, I suspect that the incentive is to take unlikely positions. It’s sort of like having a stock option. The problem with giving executives stock options is that there is no downside to them if the company does poorly; from the newly-endowed executive’s perspective, a company that muddles along doing exactly as well as expected is just as bad as a company where the stock has lost half its value, because his options only pay off if the company does better than expected, causing the stock price to rise. That gives him an incentive to take unnecessary risks.

Similarly, pundits are almost never punished for being wildly wrong about something. Nor are they rewarded for being right about something—along with 7,000 other pundits. For journalists, a prediction pays off only if it is both right, and unusual. This gives them an incentive to take unnecessary risks, making somewhat outlandish predictions on the off chance that they will be right.

It is far from being a scientist or academic, but I would think that there would be some carry-over. If nothing else, the contrarian should be able to catch this wave with a book and some self-promotion. If we have pundits cashing in on radical ideas, the same opportunity should apply to any idea marketable to the public. Maybe contrarians just need a bit more media savvy.

Heck, if someone can sell conventional academic ideas as “heterodox economics,” we should see Seth Roberts on TV every night under the heading, “Check out this wild idea, and buy his new book!”