pop-up ads, boon or bane?

Tim Harford on the use of Amazon's Mechanical Turk to quantify level of annoyance of pop-up ads

Usually researchers want to avoid people dropping out of their experiments. The wicked brilliance of this experimental design is that the dropout rate is precisely what the experimenters wanted to study.

Unsurprisingly, the experiment found that people will do more work when you pay them a better rate, and they will do less work when you show them annoying adverts. Comparing the two lets the researchers estimate the magnitude of the effect, which is striking: removing the annoying adverts entirely produced as much extra effort as paying an additional $1.15 per 1,000 emails categorised — and effectively $1.15 per 1,000 adverts viewed. But $1.15 per 1,000 views is actually a higher rate than many annoying advertisers will pay — the rate for a cheap advert may be as low as 25 cents per 1,000 views, says Goldstein.
 . . . 
Good adverts are much less destructive. They push workers to quit at an implicit rate of $0.38 per 1,000 views, for an advert that may pay $2 per 1,000 views to the publisher.

The rest here.

wie immer

Increasingly, restaurants are recording whether you are a regular, a first-timer, someone who lives close by or a friend of the owner or manager. They archive where you like to sit, when you will celebrate a special occasion and whether you prefer your butter soft or hard, Pepsi over Coca-Cola or sparkling over still water. In many cases, they can trace your past performance as a diner; how much you ordered, tipped and whether you were a “camper” who lingered at the table long after dessert. 

Susanne Craig at the NYT, the rest here.

The cafés and restaurants I go to aren't that hi-tech - but wherever I go, the staff say "Wie immer?" ("As always?") I don't have the same thing everywhere I go, but in each place I have a preference, and the staff remember it. The reason I go so often, too often, is precisely because people I barely know pay attention to my preferences - they WANT me to come back.  Whereas in every interaction with the biz I get people doing whatever they happen to want to do, whenever they happen to want to do it.

At the risk of stating the blindingly obvious, I care about my books a lot more than I care about my cappuccino & pain au chocolat, or my glass of rosé, or my green curry with tofu. In every single interaction on the path to getting a text out to readers (with, natürlich, the glorious exception of this blog), I have people blithely putting forward their OWN preferences for the text, and long-drawn-out arguments to reconcile said persons to sharing the (whisper who dares) author's preferences with the public. What would actually be so terrible about a publishing process where people were ANXIOUS to discover your preferences?

Be sane, be sane, be sane.

monkey biz

A while back I read a post by Sarah Manguso on the FSG blog: How to Have a Career: Advice to Young Writers.  There were points that could have been made which it seemed best not to make...

Today I came across this clip from a TED talk by Fans de Wall, Monkeys Reject Unequal Pay. HT MR, HT Greg Mankiw.

This does not really encapsulate the challenges that face you as a writer.  The problem is not that you get a cucumber while the other monkey gets a grape for the same work.  You write a book from scratch of 80,000+ words; you'll be lucky to get a cucumber.  Your agent/lawyer/accountant/other, meanwhile, is OUTRAGED if the book can't be crammed into a boilerplate - and lives on a lovely steady diet of grapes. If you are one of the lucky sods who got a cucumber, they will also be OUTRAGED if you fling that cucumber away and shake the walls of your cage.

MS Wha-

He had good reason to fret. Signs that Microsoft would be missing the boat in the next decade were already emerging. That very moment at Microsoft’s headquarters, in Redmond, Washington, a group of executives were developing a device that, in 10 years’ time, would transform a multi-billion-dollar industry: an electronic reader that allowed customers to download digital versions of any written material—books, magazines, newspapers, whatever. But, despite its multi-year head start, Microsoft would not be the one to introduce the game-changing innovation to the market. Instead, the big profits would eventually go to Amazon and Apple.

The spark of inspiration for the device had come from a 1979 work of science fiction, The Hitchhiker’s Guide to the Galaxy, by Douglas Adams. The novel put forth the idea that a single book could hold all knowledge in the galaxy. An e-book, the Microsoft developers believed, would bring Adams’s vision to life. By 1998 a prototype of the revolutionary tool was ready to go. Thrilled with its success and anticipating accolades, the technology group sent the device to Bill Gates—who promptly gave it a thumbs-down. The e-book wasn’t right for Microsoft, he declared.

“He didn’t like the user interface, because it didn’t look like Windows,” one programmer involved in the project recalled. But Windows would have been completely wrong for an e-book, team members agreed. The point was to have a book, and a book alone, appear on the full screen. Real books didn’t have images from Microsoft Windows floating around; putting them into an electronic version would do nothing but undermine the consumer experience.

 ...

The death of the e-book effort was not simply the consequence of a desire for immediate profits, according to a former official in the Office division. The real problem for his colleagues was that a simple touch-screen device was seen as a laughable distraction from the tried-and-true ways of dealing with data. “Office is designed to inputting with a keyboard, not a stylus or a finger,” the official said. “There were all kinds of personal prejudices at work.”

Kurt Eichenwald on Microsoft's Lost Decade

go away

David Graeber: An anthropologist who studied people in central Nigeria showed us how we were completely clueless. She doesn’t really speak the language and she gets a house, and immediately women start showing up from the neighborhood and dropping off little baskets of stuff: somebody bringing some okra, somebody bringing some fish. And she doesn’t know what to do so she takes out her little notebook and eventually somebody takes pity on her and starts explaining how things work. The person says, “Well, you know, you give something back to these people. But the key is you have to figure out exactly what it’s worth, and then give them either something slightly more valuable, or slightly less valuable. So if it’s worth twelve shillings, you give them something worth eleven or thirteen, never give twelve. Because if you give twelve, that’s like saying, ‘go to hell, I don’t ever have to see you again.’” So everyone has to be a little bit beholden.

DG at Guernica,  the rest here

calculated risks

Fortunately, when you purchase a low-powered car from Young Marmalade, the free installation of a black box can cut your insurance premiums into half. By monitoring the driving behaviour such as acceleration, braking, what time of the day the car was driven and at what speed, Young Marmalade provides affordable telematic insurance premiums.

It’s simple. The black box data is used to calculate premiums, if the car was driven well, the lower the premiums will be and vice-versa.

HT Tyler Cowen of MR, the whole thing here.

ultimi Australi

3) Related: No tipping. Yes, some people expect and offer tips in Australia, but that's the exception rather than the degrading-to-all-parties rule. I realize that there is no chance that we'll actually switch to a similar system with a much higher minimum wage (> $15/hour in Australia) and consequently higher service-sector prices, but no expectation of the ongoing bazaar-and-bribery ritual that is the tipping culture. That's too bad, because the no-tip system is better.

on Australia, HT MR, James Fallows at Atlantic.com

The guiding principle of Graeber's sweeping global history is that debt must not remain the exclusive property of economic historians, and moreover, that anthropologists are better equipped to take on the issue. The foundational myth on which economics rests, and which Graeber relishes debunking, is the "touchingly utopian" idea that money emerged directly out of primitive barter systems and had only to do with interest-maximizing exchange. Arguing against this from an anthropological perspective, Graeber claims that debt is the basis of society, and as such is inherently ineliminable. He illustrates this point through the example of debt to one's parents: to seek to cancel that debt would be impossible. Graeber describes a system of gift-giving in traditional societies that takes place over time, and involves gifts of slightly more or less value than the ones that preceded them, thus ensuring that everyone is always slightly in debt or in credit to everyone else. This sort of debt, he says, is nothing less than the continual creation of society. It is not so much that we owe something to society, but that society "just is our debts."

Justin E H Smith on Debt, by David Graeber, at Bookforum, the rest here (courtesy Wood s Lot)

Trying to answer some questions, including one about cuts in review sections in print media. I check in on some blogs and find this on Rajiv Sethi:

The very first book on economics that I remember reading was Robert Heilbroner's majesterial history of thought The Worldly Philosophers. I'm sure that I'm not the only person who was drawn to the study of economics by that wonderfully lucid work. Heilbroner managed to convey the complexity of the subject matter, the depth of the great ideas, and the enormous social value that the discipline at its best is capable of generating.

I was reminded of Heilbroner's book by Robert Solow's review of Sylvia Nasar's Grand Pursuit: The Story of Economic Genius. Solow begins by arguing that the book does not quite deliver on the promise of its subtitle, and then goes on to fill the gap by providing his own encapsulated history of ideas. Like Heilbroner before him, he manages to convey with great lucidity the essence of some pathbreaking contributions. I was especially struck by the following passages on Keynes: [the rest here]

Which illustrates one of the points I wanted to make - in the blogosphere reviewers are not constrained by word count, or by an editor's sense of the level of specialization readers can cope with.  And reviews can be reviewed, or recommended.

I've only written two reviews for print media, and each time I was told to write something under 500 words. Getting my thoughts on the book down from 1000+ words to 500- took 50% of the time.

God is good

The years go by.  One goes on a daily basis to the supermarket.  One comes home with a one cent coin, a two cent coin; one rarely remembers to put these coins back into play on trips to the supermarket.  The coins accumulate in the home.

One, well, I try from time to time to spend them.  I collect, as it might be, one euro in 2-cent pieces, go to the newsagent, and am told off.  He won't take them; his bank will charge for depositing them; I must take them to the bank myself.

I go to a bank and am told they will not accept these coins unless I am a customer of the bank.  Do I have an account with another bank?  Yes, the Postbank.  Well, I must go to the Postbank.

Weeks go by.  I have 6 euros in small change: 3.70 in 2-cent pieces, 2.15 in 1-cent pieces, 15 cents to make up an even 6 in 5-cent pieces.

I go to the nearest Deutsche Post and ask if they can give me the paper rolls.  The woman at the counter says gaily (in German, but I give you the gist):

Oh, you don't need to do that, we have a machine! You can just bring it all in and fill out this paying-in form!

Great!

I'm not sure whether I can put everything in one container, or whether the coins need to be separated by denomination; to be on the safe side I separate the ones and twos.  I label the bags. I fill out the form. I return to this helpful branch of the Deutsche Post.

Where a different woman explains that the machine is kaputt.  And HAS been kaputt for four weeks. I need to roll up the coins. 

OK, I say, can you give me the Rollen?  (Not sure if this is the technical term.) 

She brings out a sheaf of papers, or rather two sheaves (is this really English usage?), one for 1 cent coins, one for 2.  These are not rolls into which coins can be dropped, these are small romboidal sheets of paper into which the coins must be rolled. 

I try to roll a couple. I am not adept.

I have a brilliant idea!

I can take the coins to a different branch, one where the machine is not kaputt!

I go to the branch where I have my PO box and am told they don't have the machine, the coins need to be rolled.

I go to the big branch in Haupstraße and am told THEY don't have the machine, the coins need to be rolled.

I am tired.  I am very very very very tired.

It IS petty.  Ezra Klein is not bogged down in these petty details.  The US just narrowly raised the debt ceiling; S&P has downgraded its rating, generating much of interest on the difference between S&P and Moody's.  The troubled Eurozone (Greece! But it's not so much Greece, what if Portugal, Italy, Spain?????) has markets in turmoil. (Or possibly not turmoil, maybe they're just worryingly going down, but meanwhile we at paperpools have 6 euros in small change which nobody wants.)

I go to Restaurant Toronto, just up the street, in my old neighborhood, Crellekiez.

Not without qualms.  Last time I came to the Toronto the waitress said the Stalker kept coming by and asking for me.  But I like the Toronto, so sod it.

(Does Ezra Klein have a stalker? Punk rock musician from Moscow? I'm guessing not.)

SO.

I'm sitting at an outside table at the Toronto.  My laptop is out, I'm online, I have a glass of Riesling.

A guy comes by selling a street magazine, and he also says, as they do, Kleine Spende?

Meaning, even if you don't want to buy the paper, maybe you could spare some small change.

I first dig out a coin, 50 cents.  Then I have an idea.

I say, Er, Moment.  Moment.  Ich weiß nicht (I don't know), ich bin nicht begabt (I don't have the knack), vielleicht sind Sie begabt (maybe you have the knack).

I root around in my three bags (handbag, laptop bag, gym bag) and haul out these bags of 1- and 2-cent coins, WITH the rolling papers provided by Deutsche Post.  I explain haltingly that I have tried many times to hand them in, without success; perhaps HE will know what to do, but if not I perfectly understand.

There is a moment of confusion; he is not sure what is on offer, whether he is being asked to roll up the coins for me.  A man at the adjacent table explains, no, he is not being asked to give them back, if he wants he can take them away.

We then exchange thanks many times.  He is happy to take away these bags of coins, I am happy that 215 1-cent coins and 185 2-cent coins are now HIS.  (Yes. He did not get the full Monty. The 3 5-cent coins are at the bottom of one of the bags.)

There is some sort of moral, if you want a moral.  Most of the things I need done for me as a writer are little 1-cent 2-cent jobs. If I have to do them all myself there is never a clear block of time for writing.
But I can't pay someone 6 euros to do 215 1-cent jobs, 185 2-cent jobs, and 3 5-cent jobs. Not only can I not pay 6 euros for this service, there is NO amount of money I can pay to get 403 microjobs taken care of.

Which is too bad, but somebody asked for small change and got 6.35 (5.85 in 1- and 2-cent coints, 50 cents before I had the brilliant idea of ridding myself of the copper).

Noam Lupu and Jonas Pontussen (PDF) have a piece on the relationship between inequality and distribution in the new American Political Science Review. There is a lot of debate about whether the level of economic inequality in society leads to greater or lesser distribution – what Lupu and Pontussen suggest is that the structure of inequality (that is – the more particular relationships between different segments in the income distribution, rather than some summary index) is more important. More particularly they argue that if one tries to hold racial and ethnic cleavages constant, the key factor determining redistribution is the income gap between middle income voters and lower income voters. Where this gap is low, middle class people feel some degree of solidarity with the poor and exhibit what Lupu and Pontussen describe as “parochial altruism.” That is, they are more likely to support income redistribution because they feel that the poor are in some sense, ‘like them.’ When the gap is high, middle class people will have a much weaker sense of solidarity with the poor, and hence be less supportive of redistribution. Lupu and Pontussen suggest that the US is an outlier, with weaker solidarity than the structure of US inequality would suggest. They argue that the explanation for this is straightforward – “it is clearly attributable to the high-concentration of racial-ethnic minorities in the bottom of the income distribution.” More bluntly put – middle class Americans feel less solidarity with the very poor because the very poor are more likely to be black.

hat tip Marginal Revolution

that clinking clanking sound

Ownership of your Egg Card account
4627XXXXXXXX3061 has been transferred to Barclays Bank PLC.

Dear Dr Dewitt

As you may be aware, on 1 March 2011 we announced Egg credit cards were to be sold to Barclays Bank PLC. As a result of this, the ownership of your Egg Card account transferred to Barclays on 29 April 2011. The sale involves the assignment of all Egg Banking PLC's rights as the lender to Barclays Bank PLC, who have agreed to perform the obligations of Egg Banking PLC under the terms and conditions of your Egg Card Agreement. Barclays will manage your account through their credit card operation, Barclaycard. From 29 April 2011, references to 'we', 'us', 'our' and 'Egg' in your Egg Card conditions became references to Barclays Bank PLC and references to 'Group' will mean Barclays and each Barclays Affiliate including but not limited to Barclays Bank PLC and Barclaycard.

If you have any other products with Egg, such as Egg Savings, Egg Insurance, Egg Mortgages or Egg Loans, they are not affected by this announcement and will continue to be provided by Egg Banking PLC.

How you use and service your credit card account will not change immediately. You'll continue to be able to service your account online at www.egg.com in the usual way and use your Egg Card as normal. Any Direct Debits you may have set up with Egg will be collected as usual, so there's no need for you to change anything.

You can still make the most of all the benefits your Egg Card has to offer.



Um.

Why do I find this terrifying?

black swans

Andrew Gelman revisits his review of Taleb's The Black Swan.

And then there are parts of the review that make me really uncomfortable. As noted in the above quote, I was using the much-derided "picking pennies in front of a steamroller" investment strategy myself--and I knew it! Here's some more, again from 2007:

I'm only a statistician from 9 to 5

I try (and mostly succeed, I think) to have some unity in my professional life, developing theory that is relevant to my applied work. I have to admit, however, that after hours I'm like every other citizen. I trust my doctor and dentist completely, and I'll invest my money wherever the conventional wisdom tells me to (just like the people whom Taleb disparages on page 290 of his book).

Not long after, there was a stock market crash and I lost half my money. OK, maybe it was only 40%. Still, what was I thinking--I read Taleb's book and still didn't get the point!

Actually, there was a day in 2007 or 2008 when I had the plan to shift my money to a safer place. I recall going on the computer to access my investment account but I couldn't remember the password, was too busy to call and get it, and then forgot about it. A few weeks later the market crashed.

If only I'd followed through that day. Oooohhh, I'd be so smug right now. I'd be going around saying, yeah, I'm a statistician, I read Taleb's book and I thought it through, blah blah blah. All in all, it was probably better for me to just lose the money and maintain a healthy humility about my investment expertise.

Andrew was kind enough to have me to dinner (along with Jenny Davidson) while I was in New York; Andrew is probably one of the few who are more charismatic in person than in avatar (possibly because backed up by the exceptionally charismatic Caroline, Jakey and Zach). This in itself would be sufficient justification for blogging (at a purely personal level); the thing that is of real significance, though, is the fact that AG was able to write a review with self-determined word-count -- and then revisit it in light of events. Show me the paper publication that lets reviewers write a review of the review years later, at a word count dictated by developments in the world rather than by paper constraints-- I don't think so.

Tabarrok on Arrow

Arrow showed that when a group chooses, there are no underlying preferences to uncover--not even in theory. In one sense, the theorem is trivial. We know or should always have known that a group doesn't have preferences anymore than a group smiles. What Arrow showed, however, is that without invoking special cases we can't even rationalize group choices as if leviathan had preferences. Put differently, the only leviathan that rationalizes group choice has the preferences of a madman.

the whole glorious thing here

Buffettgate

Already a cult text among gold enthusiasts and inflation phobes (old copies of the original hardback were until recently trading at up to £1,800 each on the web), it received a further boost when it was revealed in a Sunday newspaper at the time of the relaunch that the book was admired by the US investor, Warren Buffett, and recommended by him to others. It seemed to confirm Fergusson as the sage to whom the Sage of Omaha himself turned.

The claim guaranteed the book a lot of attention and Fergusson found himself being summoned to give his views about the economic situation on the BBC’s Today programme and the television news. This did not abate even after Buffett told CNN that he had not actually read the book. When Money Dies continues to be well-­reviewed and the sales pile on.

Fergusson is embarrassed and amused by the Buffett story which, it should be said, has never been repeated by him or his publisher to market the book. “My daughters call it Buffettgate, which I like very much,” he says. The claim, he tells me, came from a Dutch hedge fund manager who attended the launch party, having purchased 200 copies, which he said he would give to every member of the Dutch parliament and some top-flight bankers.

“He told me that it was a cult among high-powered financiers,” says Fergusson, who remains mystified how the story found its way into the paper. “Buffett does now have the book and has thanked my publisher for sending it to him,” he adds. “He may now have read it; we can only guess.”

Adam Fergusson, author of When Money Dies, has lunch with the FT.

Granger causality is a standard statistical technique for determining whether one time series is useful in forecasting another. It is important to bear in mind that the term causality is used in a statistical sense, and not in a philosophical one of structural causation. More precisely a variable A is said to Granger cause B if knowing the time paths of B and A together improve the forecast of B based on its own time path, thus providing a measure of incremental predictability. In our case the time series of interest are market measures of returns, implied volatility, and realized volatility, or variable B. . . . Simply put, Granger's test asks the question: Can past values of trader positions be used to predict either market returns or volatility?

A report on Granger causality, discussed by Andrew Gelman at Statistical Modeling...

AG:

I have nothing to say on the particulars, as I have no particular expertise in this area. But in general, I'd prefer if researchers in this sort of problem were to try to estimate the effects of interest (for example, the amount of additional information present in some forecast) rather than setting up a series of hypothesis tests. The trouble with tests is that when they reject, it often tells us nothing more than that the sample size is large. And when they fail to reject, if often tells us nothing more than that the sample size is small. In neither case is the test anything like a direct response to the substantive question of interest.

There is much more of interest here. I would describe this as a major, still uninternalized lesson of the recent crisis, with its roller coaster-rapid dips. In a highly specialized modern economy, it is much easier to prevent jobs from being destroyed than to create them again, at least assuming those are "good" jobs in the first place. (Yes, people thought they knew this but it's an even stronger difference than had been believed.) The U.S. auto bailout, for instance, worked better than did most of the stimulus program.

Tyler Cowen on Nicholas Kulish at the NYT, on recent German economic success and expansion of a program to keep workers employed, rather than dealing with them once they'd lost their jobs

Courtesy MR, Keith Hennessey on The Roles of the President's White House economic advisors. Tyler Cowen is right to say: to excerpt would be to diminish the impact. Read the whole thing.

In 1994 Ginsberg sold his archives to Stanford University for a million dollars, but after all the deductions for the auction house, his agent, and taxes he only had enough money left to buy his New York loft and was back to square one. His photos brought him some income in his last years, though he insisted that most of the profits were plowed back into his work, for hiring an assistant and maintaining a lab.

NYRB blog, Beats & art market

The most daunting real-world problem Roth has solved so far: New York City's high school match, which he tackled in 2003. While many American kids simply attend their neighborhood high school, eighth graders in big cities like New York face a staggering number of choices. In theory, at least, each of the city's 80,000 eighth graders has the option of going to any one of 700 high school programs. The right match can be especially meaningful for kids who live in impoverished neighborhoods with lousy schools.

Before Roth got involved, the matching system was so screwed up that a third of the city's eighth graders didn't even participate. "It was like a crowded, crazy bazaar somewhere in the Middle East," recalls Neil Dorosin, a former New York Department of Education official.

Roth, aided by a Harvard graduate student and a young economist at Columbia, redesigned the system using a version of what's known as a deferred-acceptance algorithm. Roth has used modified forms of this same algorithm to design matching systems for Boston's public school system and for placing medical school graduates with residency programs.

Susan Adams, Forbes (ht MR)