Monthly Archives: August 2010

Dvorsky Matures

Futurist George Dvorsky:

A popular notion amongst futurists … is … that we can proactively engineer the kind of future we want to live in. … I myself have been seduced by this idea. … Trouble is, we’re mostly deluded about this. Now, I don’t deny that we should collectively work to build a desirable future … What I am concerned about, however, is the degree to which we can actually control our destiny. While I am not an outright technological determinist, I am pretty damn close. As our technologies increase in power and sophistication, and as unanticipated convergent effects emerge from their presence, we will increasingly find ourselves having to deal with the consequences. …

For example, consider the remedial ecology and geoengineering concepts. …. Breaking down toxic wastes and removing carbon from the atmosphere was not anything anybody would have desired a century ago. …

The Cold War … we have no reason to believe that a similar arrangement couldn’t happen again, especially when considering … nuclear proliferation and … nanoweapons and robotic armadas. … We are slaves to technological adaptationism. … In order to avoid our extinction, … we may be compelled to alter our social structures, values, technological areas of inquiry and even ourselves in order to adapt. As to whether or not such a future is desirable by today’s standards is an open question.

Bravo George. These are hard truths; not the sort that throngs of enthusiastic futurists will applaud in keynote speeches. I’d say it isn’t so much that “technologies increase in power and sophistication” as that coordination is hard.  Yes it can be hard to anticipate how changes, including new tech changes, will interact.  But even when we can anticipate changes we find it very hard to coordinate to act on such warnings.  Only the most extreme warnings will move us, and we have little interest in funding efforts to find warnings to consider.

So futurists would do well to follow economists’ usual analysis strategy: make your best guess about what things will be like if we do nothing to change them, and then try to sign the gains from moving parameters in particular directions away from that best guess. As I said in June:

When our ability to influence the future is quite limited, then our first priority must be to make a best guess of what the future will actually be like, if we exert no influence. This best guess should not be a wishful assertion of our far values, it should be a near-real description of how we would actually bet, if the asset at risk in the bet wer something we really cared about strongly. And yes, that description may well be “cynical.”  With such a cynical would-bet best guess, one should then spend most of one’s efforts asking which small variations on this scenario one would most prefer, and what kinds of actions could most usefully and reliably move the future toward these preferred scenarios. (Econ marginal analysis can help here.)  And then one should start doing such things.

Once you can guess which directions are “up”, you can work to push outcomes in such directions.  Even if you can’t push very far, you may still do the best you can, and perhaps make an important difference.

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Against Free Parking

Tyler’s latest NYT column describes the inefficiencies of “free” parking. I didn’t think I’d have much to say on it, because he’s just using standard microeconomics, and pretty obviously right. But then I saw two econobloggers disagree!

Mark Thoma:

[Sometimes] we choose to allocate goods by other means than the price system, [such as] lotteries, waiting time, random draws, that sort of thing. It generally occurs when we think … everyone should have a relatively equal shot at consuming a good or service. For example, suppose we believe that everyone should at least have a chance to swim in the ocean. … Willingness to circle for a period of time looking for a parking place so you can go to the beach … has desirable allocative properties — and we can eliminate the externalities Tyler is worried about through a tax on carbon and congestion at the pump. The supply of parking … could be determined by the carrying capacity of the beach, which is itself influenced by considerations such as habitat protection that private markets may not handle well in any case.

Arnold Kling:

I am not sure that the argument is correct. I worry that there is a lot of confusion between fixed costs and marginal costs. … If the price of parking went up, … maybe the total number of parking places would decline (it depends on elasticities), but … the number of unused parking places would go up. Is that necessarily welfare-improving? … Once I have decided to use land as a parking place (say, land in front of a store), then there is no reason for me to want to deter people from parking in empty spaces. That suggests charging a price of zero other than at peak times.

These seem to me to be weak status-quo-bias-driven attempts to evade simple microeconomic conclusions.

Re Mark Thoma, if we were concerned about overall equity of utility, we’d just give the poor more money and let them buy what beach trips they wanted. If we paternalistically thought poor folk irrationally buy too few beach trips (why?!), we might give them beach travel vouchers. But surely the vast majority of free parking is not well explained by our thinking the poor irrationally take too few car trips.

Re Arnold Kling, I didn’t see Tyler saying to force prices above marginal cost; he just opposed laws requiring excess supply. Why should we treat parking spots much different than thousands of other familiar products whose average costs are often above marginal costs? Should we require every mall to have enough movie theaters seats to handle the premier of a record blockbuster, all because since theatres are rarely full their marginal cost is near zero?  How about similarly requiring a vast supply of restaurant tables which would then rarely be full?

Sometimes good economic analysis says that the world should be different than it is. Yes you should wonder if such an analysis is missing something important. But you shouldn’t strain too much just to justify the status quo. We require the creation of way too much parking, and we’d be better off to coordinate to stop it.

Added 5a: Arnold Kling responds, and Mark Thoma approves. Arnold again notes that when average costs are above marginal costs, free market prices may inefficiently deter usage.  Arnold doesn’t at all address my question: “Why should we treat parking spots much different than thousands of other familiar products whose average costs are often above marginal costs?”

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Rah Old Indian IVF Moms

Thursday the Post lamented the fact that India (population 1.2 billion) is growing twice as fast as China (population 1.3 billion), and may soon have by far world’s most in vitro fertilizations, perhaps 600,000 a year (~2% of India births), costing about $2500 each.

The Post reserved its strongest disapproval (between the lines, but still pretty clear) for the fact that many Indian IVF moms are 60 and 70 years old, and so are taking on bigger health risks. Supposedly regulation is needed to keep such women from succumbing to “cultural pressures.” Apparently, since Post reporters know no colleagues who would consider taking such an action, they conclude that elderly Indian IVF moms must be suffering from some horrible patriarchy. (No further evidence of illicit pressure is given.)

This seems to me cultural arrogance of the worst sort. Yes, new people induce some negative externalities, such as congestion. But overall economists’ best estimate is that new people give others a net benefit, especially via increased innovation. Thus creating (and raising) a new person is an incredibly altruistic act. The new person gets to have a life, and the rest of the world gains as well.

Yes, creating more people may reduce per-capita wealth in the short run, but if [most] everyone benefits, what’s wrong with that?  Yes, a high enough mom health risk could make this a net bad deal. But the Post quotes a 60% baby success rate, and I’ll bet mom mortality is below 6%, which means there’s at least a ten to one life gain ratio. And the gain ratio must be far larger in quality-adjusted life years.

These Indian women are not taking advantage of some overly-generous health insurance loophole – they are paying cash from their own pockets to give life to a new person. And they are not acting on some strange perverted desires – they are expressing an extremely basic, ancient, and revered desire, the desire to mother a child. Who are US elites to tell elderly Indians that their altruistic gift is not worth the cost? Shouldn’t we be subsidizing such altruism, instead of discouraging it?

This seems a lot like the phenomena of “Looking Too Good“:

Unselfish members (those who gave much toward the provision of the good but then used little of the good) were also targets for expulsion from the group. … Social comparison tends to induce feelings of inter-personal competition. People feel driven to outdo the group member who is setting the standard. … Removal of this person would eliminate that competitive standard.

If we praised poor elderly Indian IVF moms, that would implicitly criticize rich Western women who refuse to have even one kid even when young and healthy. Rather than raise our altruism standards, we’d rather exclude these women from the group of reasonable altruists. Quotes from that Post article: Continue reading "Rah Old Indian IVF Moms" »

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Disagreement Is Far

Key sources of disagreement among economic forecasters are identified by using data on … forecasters’ long- and short-run predictions of macroeconomic variables. Dispersion among forecasters is highest at long horizons where private information is of limited value and lower at short forecast horizons. Moreover, differences in views persist through time. Such differences in opinion cannot be explained by differences in information sets; our results indicate they stem from heterogeneity in priors or models. Differences in opinion move countercyclically, with heterogeneity being strongest during recessions where forecasters appear to place greater weight on their prior beliefs. (more)

These authors speak sloppily.  Their results suggest that disagreements on the state of the economy cannot be attributed much to differing “near” late-breaking info of the sort one usually feeds into models that predict the state of the economy.  But they could be due to differing “far” big-picture info of the sort that leads one to prefer some such models over others.  Disagreement is indeed far.

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Rah Firm Board Outsiders

The typical corporate board of directors has nine members, five of whom are “outsiders”, i.e., “who are not current or former employees, and who do not have dealings with the firm.” When such an outsider suddenly and unexpectedly dies, the stock price falls by about 5% on average, and falls even more if that outsider was not appointed by the current CEO. This 5% number is a (1% significant) estimate after controlling for director quality, by studying 30 directors who were outsiders on some boards, and insiders on other boards. This strongly suggests there are large gains to encouraging more independent firm directors. Details:

We investigate contributions of independent [= outsider] directors to shareholder value by examining stock price reactions to sudden deaths in the US from 1994 to 2007. We find, first, that following director death stock prices drop by 0.85% on average. Second, the degree of independence and board structure determine the marginal value of independent directors. …

We … run fixed effect estimations … [to] control for any director-invariant heterogeneity (e.g., ability, experience, and skills). … For comparative purposes, we run the regression on this subsample without director fixed effects … [and] find a -3.52% negative stock price reaction to sudden deaths of independent directors. … Column 3 confirms these results when we also control for director fixed effects. … The stock price drops on average by 5.01% following the death. … We add more control variables … [and find] the stock price drops on average by 4.85%. …

Stock prices react less negatively when the independent director has long tenure. Controlling for the effect of tenure, the stock price reacts less negatively when the director is appointed during the tenure of the current CEO. The marginal value of independence is higher when there are fewer outside directors or in cases in which the deceased independent director serves crucial board functions, such as chairmanship or audit committee membership. Independence is particularly valuable when the deceased director holds the swing vote that secures a majority of independent directors on the board.

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Humor As Norm Evasion

As a young engineering and physics student, I was suspicious of the “subtext” and hidden meanings humanities types went on about. Yeah sure some writers might use hidden meanings, but why analyze most texts this way?  And analyzing ordinary human conversation in such terms seemed over the top. I thought, “How convenient for English teachers that only they can explain a novel’s hidden meanings to us?”

But, I was wrong, wrong, wrong. Hidden meanings are everywhere. Maybe you can’t see them much when young, but if you keep at it eventually you will. The Homo Hypocritus (i.e., man the sly rule bender) hypothesis I’ve been exploring lately is that humans evolved to appear to follow norms, while covertly coordinating to violate norms when mutually advantageous. A dramatic example of this seems to be the sheer joy and release we feel when we together accept particular norm violations.  Apparently much “humor” is exactly this sort of joy:

The benign-violation [= humor] hypothesis suggests that three conditions are jointly necessary and sufficient for eliciting humor: A situation must be appraised as a [norm] violation, a situation must be appraised as benign, and these two appraisals must occur simultaneously. … People who see the behavior as both a violation and benign will be amused. Those who do not simultaneously see both interpretations will not be amused. …

In five experimental studies, … we found that benign moral violations tend to elicit laughter (Study 1), behavioral displays of amusement (Study 2), and mixed emotions of amusement and disgust (Studies 3–5). Moral violations are amusing when another norm suggests that the behavior is acceptable (Studies 2 and 3), when one is weakly committed to the violated norm (Study 4), or when one feels psychologically distant from the violation (Study 5). …

We investigated the benign-violation hypothesis in the domain of moral violations. The hypothesis, however, appears to explain humor across a range of domains, including tickling, teasing, slapstick, and puns. (more; HT)

Laughing at the same humor helps us coordinate with close associates on what norms we expect to violate together (and when and how). This may be why it is more important to us that close associates share our sense of humor, than our food or clothing tastes, and why humor tastes vary so much from group to group.

Added 14Aug: I don’t mean to claim that all humor is benign norm violations, nor that all such violations are humorous.  Rather, I’d say the pattern fits much better than chance, and seems insightful.  I suggested humor functions in part to help us coordinate with close associates on what norm violations to excuse. This suggests that humorous norm violations could be pretty harmful, but just not to those doing the coordinating. This seems to apply to Vlad’s example; I expect wives to laugh at his joke more than husbands.  This also suggests, as per Evan and Katja, that covertly lowering the status of outsiders, by indirectly “making fun of them” against egalitarian norms, should also be funny.  Perhaps the more general pattern is that covertly conspiring against others tends to be funny.

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Me On Future

Next Big Future’s Sander Olson interviewed me (short text here), and Ted Goertzel (Ben’s dad) had me give a guest lecture (1.5hr vid/slides here) for his Singularity Studies class at Rutgers.  I didn’t say anything new, but some may enjoy them.  Sander tried a bit too hard to quote me as forecasting big change soon; the vid gives a more accurate impression.

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Detail Is Near

A pilot tells me that we naturally tend to judge how far away things are by how much detail we can see on them. He says that this leads to a bias whereby pilots overestimate how far away is the ground at night, and when water is flat and calm.  Experienced pilots know to correct for this. More examples where this detail heuristic leads to bias:

  1. Women who see little detail in a man’s feelings often feel he is emotionally distant.  But often men’s feelings just don’t have that much detail.
  2. Liars add extra irrelevant detail to make their lies seem more believable.  Religions do the same.  Story tellers also add irrelevant (i.e., detached) vivid detail to make the overall features of plots and characters seem more realistic.

What more examples of this bias can we find?

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Why Not Friend Match?

Bryan Caplan recently pointed out to a few of us that while many dating web sites offer to help you find matching romantic mates, there are far fewer friend finding helpers.  We tend to collect friends informally, by liking the people we meet for other reasons, and especially friends of friends. But for mating purposes we are more willing to choose folks based on a list of their interests, an intro paragraph, a picture, etc.  Why the difference?

The explanation that occurs to me is:  We need mates more for their simple surface features, while we need friends more to serve as social allies in our existing social network.  Since we need friends in substantial part to serve as allies in our social world, supporting us against opposing coalitions, it makes sense to draw our friends from our existing social world.  And since we need mates more for their personal quality, e.g., good genes, youth, wealth, smarts, mood, etc., it makes sense to pick them more via such features.

Now if the personal qualities we sought in mates were difficult to discern and describe, dating web sites wouldn’t be very useful; we’d more want to rely on personal experience and on folks who know us well recommending others who they thought would match us well.  And we do like to think that our mate (and friend) preferences are complex and subtle, not easily captured in a few match website entries. But in fact, I suspect, the truth is that we are more mating simpletons than we care to admit; we can actually find much of what we need to know about potential mates in a few simple items, especially the picture.

Added 1p: Many suggest the explanation is that friends are worth much less than mates because we can have many friends.  But I value top friends similarly to top mates – am I unusual?

Added 15Aug: Al Roth weighs in.

Added 12Nov 2013: Now there is at least one friend match site: bigfriendo

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More Diversity Or Less?

Nature reviews Biology’s First Law: The Tendency for Diversity and Complexity to Increase in Evolutionary Systems:

McShea and Brandon state that diversity and complexity tend to increase over time in biological systems. It is, the authors argue, a universal law, applicable to all taxa, at all hierarchical levels and at all times. They use the analogy of Newton’s law of inertia — just as it tells us that a body will move with a constant velocity if no forces act on it, this zero-force evolutionary law seeks to capture how a biological system will behave in the absence of other influences. Although the trend they describe may not manifest itself in cases when it is counteracted by constraints, it provides the background against which other evolutionary pressures should be understood.

The authors adopt a simplified measure of complexity that considers only the degree of differentiation among the parts of a biological system, not the various functions of those parts. … The authors argue persuasively that their simpler definition of complexity is more scientifically useful … because function is hard to quantify. … Diversity at one level of the hierarchy equates to complexity one level higher. Both diversity and complexity will increase over time through the accumulation of mutations, they suggest. …

The tendency for increasing diversity has been recognized previously in specific situations. … The authors aim to encompass these various findings in a single theory that covers all of the fields in which the principle has been seen. … They make a good case for their argument that a single principle is at work. …

Their theory suggests new research questions, such as whether the tendency for diversity to increase will usually be overcome by natural selection, and it advances our philosophical understanding of evolution. The law also makes testable predictions: for example, that diversity and complexity will increase fastest in ecological circumstances and taxa where selection is weak.

This is a deliciously vast topic, with huge long term implications. Overall, diversity has clearly increased within biology on average over time. Very recently, humans have displaced other biology diversity with human diversity. Within the human realm, many kinds of diversity have also increased, though some kinds have decreased as well. The big open question: will diversity continue to increase, or at least not greatly decrease, into the distant future?

One the one hand you might think that physics is the same everywhere, matter doesn’t vary that much, and there is only one very best way to arrange atoms for any particular purpose. So within a million years we’ll figure out the most competitive local designs and from then on everyone will use them.  Surely there is a lot of truth in this.

On the other hand, the very best design for any one thing may depend greatly on other choices made nearby, and ancient legacies, choices made long ago that are too expensive to change, may vary greatly from place to place. And there should be far far more places out there, only weakly connected to each other due to vast distances and light-speed limits.

On a third hand (oh someone will have them), the future might not be competitive, if a stable world government arises before our descendants radiate rapidly out into the cosmos, and if there are no aliens that matter out there. Such a stable central power might work to reduce diversity, to cement its hold on power. (More on world govt here, here, and here.) Or perhaps it will have stable preferences, unchallengeable power, and prefer to create diversity.

So, will diversity increase in the long run?

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