Author Archives: Robin Hanson

Parable of the Multiplier Hole

By Robin Hanson · March 12, 2010 11:00 am · Comments (37)

Imagine that we discovered a “hole in space”, through which we could see an alternate Earth, filled with people recognizably like us, though different in many ways.  Those people could also see us.

While no objects could move from their side of the hole to ours, small items (but not humans) could move from our side to theirs.  Furthermore, the hole had the amazing property of multiplying everything we sent through by a factor F of a million!  That is, if you tossed a gold coin through the hole, a million identical coins would come out the hole on the other side.

How tempted would you be to toss useful items, like food, through the hole?   Remember, the cost to you, relative to the benefit to them, is 1/F, only one part in a million.  When considering the following variations, and their various combinations, consider not only F = a million, but also ponder what fraction F would make you indifferent to tossing or not:

  1. Your gift goes to a random person on the other side.
  2. Your gift goes to a government on the other side, which controls the hole.
  3. You can specify to whom your gift will go, using some simple descriptors like “poor”, “smart” etc.
  4. We could also do other things to help them, such as by studying a problem of theirs and sending them a report with suggested solutions.  But these other actions don’t get multiplied by F; a million copies of the report doesn’t help more than one copy.
  5. The hole isn’t very reliable, and only one time in a thousand does what you toss through the hole actually get to the people on the other side.  But when the hole does work 1000*F items come out the other side.
  6. You have very good theoretical reasons to think that most likely there are people much like us on the other side of the hole, but you can’t actually see through the hole (though they can see us).

The point of this parable is that interest rates would also greatly leverage any gift you gave the distant future folks.  For example, in 1785 a French author wrote a satire about Ben Franlkin, the most famous American to Europeans.  While Franlkin was famous for his Poor Richard’s Almanac, the satire mocked American optimism by having “Fortunate Richard” leave money in his will to be invested for 500 years before being given to charity.

Franklin responded by leaving £1000 each to Philadelphia and Boston in his will to be invested for 200 years.   He died in 1790,  and by 1990 the funds had grown to 2.3, 5M$, giving factors of  35, 76 inflation-adjusted gains, for annual returns of 1.8, 2.2%.  Why has Franklin’s example inspired no copy-cats?  Does no one care to help distant future folks through the multiplier hole of compound interest?

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Hard Facts: Incentives

By Robin Hanson · March 12, 2010 1:00 am · Comments (11)

More wisdom from Hard Facts:

We … [did] research to discover if courteous clerks fueled sales.  … We ultimately found little if any evidence that courtesy increased store sales. …The main finding … was that clerks in stores with more sales were actually less courteous.  Apparently, the crowding and long lines in busy stores make clerks and customers grouchy. (p.39)

A survey of more than 200 human resource professionals from companies employing more than 2500 people … found that even though more than half of the companies used forced rankings, the respondents reported that forced ranking resulted in lower productivity, inequity and skepticism, negative effects on employee engagement, reduced collaboration, and damage to morale and mistrust in leadership. (p.107)

Individuals believe that others are motivated by money, even as they know that they are much less so. … A survey … of almost 500 prospective lawyers … revealed that 64 percent … said they were pursuing a legal career because it was intellectually appealing or because they were interested in the law, but only 12 percent thought their peers were similarly motivated.  Instead 62 percent thought that others were pursuing a legal career for the financial rewards. (p.115)

A survey of 205 executives from diverse industries found that 68 percent reported their companies had executive bonus plans because senior management believed tthat such plans would motivate executives.  These same executives reported, however, that they did not make daily business decisions based on how such decisions would affect either their bonus or those of other people. (p.116)

Students who are in school or who have chosen a major for instrumental reasons – in order to get a better job or to make more money – are much more likely to cheat than students who have chosen a course of study because of their interest in in the subject matter.  (p.124)

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Why Wash?

By Robin Hanson · March 11, 2010 1:45 pm · Comments (16)

In 2005, Boston-based doctors published the very first clinical trial of alcohol-based hand sanitizers in homes and enrolled about 300 families with young children in day care. For five months, half the families got free hand sanitizer and a “vigorous hand-hygiene” curriculum. But the spread of respiratory infections in homes didn’t budge, a result that “somewhat surprised” the researchers. A Columbia University study also found no reduction in common infections among inner-city families given free antibacterial hand soap, detergent, and cleaning supplies. The same year, University of Michigan epidemiologist Allison Aiello summarized data on hand hygiene for the FDA and pointed out that three out of four studies showed that alcohol-based hand sanitizers didn’t prevent respiratory infections. Then, in 2008, the Boston group repeated the study—this time in elementary schools—and threw in free Clorox disinfecting wipes for classrooms. Again, the rate of respiratory infections remained unchanged, though the rate of gastrointestinal infections, which are less common than respiratory infections, did fall slightly. Finally, last October, a report ordered by the Public Health Agency of Canada concluded that there is no good evidence that vigorous hand hygiene practices prevent flu transmission. …

In hospitals, outside of these clinical trials, just half of doctors and nurses regularly clean their hands before patient care, despite widespread publicity. More worrisome: In hospitals where massive educational efforts have increased hand-washing rates from 40 percent up to 70 percent, there has been no overall reduction in infection rates. Even in highly regulated places like hospitals, the promising benefits of hand-washing remain largely unrealized.

More here; HT Tyler.

Added 12Mar: Yvian lists may pro-washing studies here.

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Great Depression

By Robin Hanson · March 11, 2010 1:15 pm · Comments (10)

Conventional wisdom tends to treat President Hoover as a clueless advocate of laissez faire who refused to stimulate the economy in the dramatic downturn. Franklin Roosevelt, on the other hand, was the heroic leader who both saved the day and transformed the American economy through his promotion of the New Deal. …

There is little corroboration in the historical record for this simplistic storyline. … Most of what both Presidents did in fiscal policy had little impact on the Depression one way or another. … The consensus view is that FDR’s [main] policy success was the abandonment of the gold standard in 1933.

Though there is still a lively popular debate about the “true” cause of the Great Depression, there is nonetheless a strong expert consensus … The Fed’s focus on curbing speculation in the stock market by restricting lending—as well as its unwillingness to extend liquidity and expand the money supply in the face of a collapsing economy and a wave of bank panics in the early 1930s—deeply aggravated the severity and extent of the downturn.

That is John Nye.  Read and learn.

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Hard Facts: Innovation

By Robin Hanson · March 11, 2010 1:00 am · Comments (19)

More wisdom from Hard Facts:

Harvard Business Review has published at least three articles on incentive pay and organizational performance in the past decade.  … Each makes a similar point: compensating people for only individual performance creates more problems than it solves, so rewards should emphasize organizational, not just individual, performance. … Not one of these articles refers to the prior article, because HBR precludes footnotes and … discourages references to prior work. (pp.43,44)

James March … put it “Most claims of originality are testimony to ignorance, and most claims of magic are testimony to hubris.” … Knowledge isn’t generated by lone geniuses who magically produce brilliant new ideas in their gigantic brains.  This is a dangerous fiction. … Hackman was troubled because he could only find published success stories about companies that had redesigned work to be more motivating and meaningful.  Yet in his experience most redesign efforts were failing. … a study found no significant performance differences between Peters and Waterman’s “excellent” companies and a representative sample of Fortune 1000 companies.  (pp.46-48)

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Hard Facts: Med

By Robin Hanson · March 10, 2010 1:00 am · Comments (6)

Yet more wisdom from Hard Facts:

Bloodletting was used routinely until 1836 when French physician Pierre Louis conducted one of the first clinical trials in medicine.  Louis compared pneumonia patients whom he treated with aggressive bloodletting and those he treated without it.  Louis found that bloodletting was linked to far more deaths. … George Washington, the first president of the United States, … died two days after a doctor treated his sore throat by draining almost five pints of blood.  … A remarkably high percentage of medical decisions still reflect the often-obsolete practices that a doctor learned in medical school, the ingrained traditions of a hospital or region. (p.13) …

What she thought was a straightforward study of how leader and coworker relationships influence errors in eight nursing units. … [She was] flabbergasted when nurse questionnaires showed that the units with the best leadership and best coworker relationships reported making 10 times more errors than the worst. … Better units reported more errors because people felt psychologically safe to do so. …

Nurses whom doctors and administrators saw as most talented unwittingly caused the same mistakes to happen over and over.  These “ideal” nurses quietly adjust to inadequate materials without complaint, silently correct others’ mistakes without confronting error-makers, create the impression that they never fail, and find waits to quietly do the job without questioning flawed practices.  These nurses get sterling evaluations, but their silence and ability disguise and work around problems undermine orgainzational learning.  (pp105,106)

Clearly most med errors are not reported, and docs reward nurses more for covering doc asses than for improving patient outcomes.

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Hard Facts: Teaching

By Robin Hanson · March 9, 2010 10:00 am · Comments (46)

More wisdom from Hard Facts:

Merit pay for teachers is an idea that is almost 100 years old ahd has been subject to much research.  In one study conducted in 1918, “48 percent of U.S. school districts sampled used compensation systerms that they called merit pay.” … The evidence shows that merit-pay plans seldom last longer than five years and that merit pay consistently failes to improve student performance.  … [Researchers] also showed that cheating [by teachers] was quite sensitive to the size of the incentives provided for enhancing student scores.  … The same problems emerged when merit-pay systems were implemented in the 1980s. … “It is like policy makers suffer from amnesia.” (pp.22-24) …

The evidence strongly suggests that students learn better when they are not graded and certainly not when they are graded on a curve.  … When drill instructors were tricked into believing that certain randomly selected soldiers would achieve superior performance, those soldiers subsequently performacned far better on tasks like firing weapons and reading maps.  (p.38)

Ending social promotion harms students and schools, and the strongest negative effects are found in the best, most rigorous studies.  At least 55 studies show that when flunked students are compared to socially promoted students, flunked students perform worse and drop out of school at higher rates.  One of the most careful studies found that, after controlling for numberous alternative explanations indlucing race, gender, family income, and school characteristics, students held back one grade were 70 percent more likely to drop out of high school.  (p.51)

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Hard Facts: Mergers

By Robin Hanson · March 8, 2010 8:00 pm · Comments (4)

Back in December Nancy Lebovitz commented here that the book Hard Facts, Dangerous Half-Truths And Total Nonsense: Profiting From Evidence-Based Management “may be may be of interest to any contrarian”  She is quite right.  So much so that I will do a series of posts quoting from it. Here is Hard Facts on mergers:

Study after study shows that most mergers – some estimates are 70 percent or more – fail to deliver their intended benefits and destroy economic value in the process.  A recent analysis of 93 studies covering more than 200,000 mergers published in peer-reviewed journals showed that, on average, the negative effects of a merger on shareholder value become evident less than a month after a merger is announced and persist thereafter. …

More thoughtful leaders might do what Cisco Systems has done – figure out the factors associated with successful and unsuccessful mergers and then actually use those insights to guide behavior.  … A Fortune article on bad mergers noted that “infrastructure giant Cisco has digested 57 companies without heartburn.” … Cisco figured out that mergers between similar sized companies rarely work, as there are frequently struggles about which team will control the combined entity.  … Cisco’s leaders also determined that mergers work best when companies are geographically proximate, making integration and collaboration much easier. … and they also uncovered the importance of organizational cultural compatibility for merger success.  …

You might think that companies would learn from all this experience … you would be wrong.  Business decisions … are frequently based on hope or fear, what others seem to be doing, what senior leaders have done and believe has worked in the past, and their dearly held ideologies – in short on lots of things other than the facts. (pp. 4,5)

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Motivated Legal Bias

By Robin Hanson · March 7, 2010 5:00 pm · Comments (20)

The probability of being sentenced to death is much greater if a defendant kills a white or Hispanic victim who is married with a clean criminal record and a college degree, as opposed to a black or Asian victim who is single with a prior criminal record and no college degree. …

“Irrelevant social facts also shape the ultimate state sanction” Phillips says. “In the capital of capital punishment, death is more apt to be sought and imposed on behalf of high status victims. Some victims matter more than others.”

Phillips research is based on 504 death penalty cases that occurred in Harris County, Texas between 1992 and 1999.  Drawing on the same data, Phillips’s previous research demonstrated that black defendants were more likely to be sentenced to death than white defendants in Houston. The racial disparities revealed in the prior paper become even more acute after accounting for victim social status – black defendants were more apt to be sentenced to death despite being less apt to kill high status victims.

More here (HT naz). I expect such patterns to be found in most legal jurisdictions, not just Harris County Texas.  You will find it hard to find any lawyer, judge, or law professor who will go on the record saying these are officially accepted as legitimate considerations in legal sentencing.  Most will say the law “tries” to ignore such considerations.  And yet such patterns have long existed, have long been widely known to exist.

These are motivated biases, not just random accidents of a system trying to be fair but failing to because of limited human mental capacity.  These errors are far more likely to persist than the opposite error.  If the opposite errors were suddenly to become common, enormous concern would be expressed, great resources would be spent, and we’d be willing to consider large institutional changes to eliminate them.

The place such errors enter is of course via “judgment.”  We recoil in horror at the thought of a simple legal system where judges or juries could make any decision they wanted in each case they considered.  But we also recoil at the thought of a legal system with explicit rules which had to be followed exactly in each case.  We instead prefer a legal system with lots of specific rules, where in the end “reasonable” people are allowed to exercise “judgment” about how to “interpret” the rules.   It sure looks like what we want is the appearance of constraining ourselves to follow rules, combined with the practice of arbitrary choice.

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Managing Our Cut

By Robin Hanson · March 6, 2010 8:40 pm · Comments (39)

Our income tax system gives each of us a stake in the work of others – the more money others make, the more we each get via taxes.  In principle we could use this fact to justify a great deal of intervention in everyone’s work lives.  For example, one might argue: why should we let folks choose fulfilling but poorly paid jobs like social worker, veterinarian, or forestry agent, if they are capable of becoming an lawyer, doctor, or engineer?  Or why should we let folks work part time to focus on a music or acting hobby, or choose to live anywhere but the city where their skills are worth the most?

To most folks such regulations seem intolerably intrusive.  But when people are asked to justify our common and extensive regulations and subsidies of medicine and education, they often mention exactly this issue – that such interventions make sense because we all have a stake in the work of others via the income taxes those folks pay.  Why the asymmetry?  Why do folks think these arguments make sense regarding medicine and education, but not regarding choice of career or location?

My guess: humans inherited intuitions that the community should have more say in and contribute more to medicine and education.  This is the way our distant ancestors did things in their small nomadic forager bands, and we intuit we should act similarly today.  The stuff about managing our cut of others’ income is just a rationalization.

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