"Commercially Lethargic"

Ayres warns as companies use super crunching to get better and better at determining the maximum price an individual customer is willing to pay, some customers will lose out. He says individuals must do research and calculations more exhaustively on their own, to learn of their maximum price point is higher than others, to avoid being ripped off. On the flip side, Ayres believes when companies use super crunching to improve product quality, then consumers win all around.

Consumers are going to have to engage in a kind of number crunching of their own, creating and comparing datasets of (quality-adjusted_ competitive prices. This is a daunting prospect for people like me who are commercially lethargic by nature. Yet the same digitalization revolution that has catalyzed seller crunching has also been a boon to buy-side analysis. Firms like Farecast.com, E-loan, Priceline, and Realrate.com allow customers to comparison shop more easily . . . For consumers worried about the impace of Super Crunching on price, it is both the best of times and the worst of times (pp 173-174).

Immediately, his "commercially lethargic" phrase resonated with me. It's frustrating to feel like giving up on a transaction because it's "too hard" to complete. Part of it may be perfectionism paralysis. There may also be psychological reasons personal finance is a major procrastination center for me. I hope to alleviate this by:

• being clear on personal objectives for the task
• recognizing when perfectionism appears
  
• giving "permission to be human" when the commercial lethargy sets in and not beating myself up over it or considering myself a bad person because I have those thoughts.

Well, although Ayres describes himself as "commerically lethargic," his books seem to be a commercial success! Also, he did randomized testing to select the more successful title for his work, using Google AdWords, so that seems pretty commercially savvy!

Disappointing Olympics Media Coverage

I was a bit unhappy with the media's Olympic coverage. In past Olympics, I've always wished for more coverage of the lesser athletes. In the qualification for one of the track events, everything was on Tyson Gay, while we learned nothing of Walter Dix, even though he was American too! Well, Walter Dix ended up qualifying for the final, and Tyson Gay didn't qualify--how annoying not to learn anything about Walter!

Not to mention all the competitors from other countries . . . So, we hear about the other nations' athletes if they are big competition for us, and of course that makes for an excited media, with all the China anxiety we have right now.

What really started upsetting me was the tone the media was taking with this ruckus over underage Chinese girl gymnasts. It's difficult to place my finger on it exactly, but it was getting to me for sure. People were making such a big deal about computer graphics assisted fireworks for American television audiences, and how the singing girl was replaced by the prettier one in the opening ceremonies. Well, duh! It was a show and it was meant to impress. Don't you usually try to iron your shirt or do your makeup nicely when you go on a date and want to impress someone? It's the same thing!

Luckily, I randomly caught some Anderson Cooper 360 coverage of the topic, and they interviewed a former gymnast, Amanda Brown. Amanda basically said that if the American girls were drastically better than the Chinese girls and weren't so closely matched in talent, then the underage ruckus would be a non-issue. This sounded spot-on to me! The only record I can find confirming Amanda's sentiments is on a blog dedicated to covering all of the Anderson Cooper 360 shows. Here is the entry
the day Amanda was interviewed. Here's an excerpt from that blog entry:

Of note is former Olympic gymnast Amanda Borden bringing up the fact that probably no one would be talking about this if the US won. It does sort of make it seem like sour grapes, doesn't it? Because the Americans had a fair number of falls and step outs. Then again, I heard of this controversy before last night, so there's that.

I also learned that the age requirement for Olympic competition has not always been the same. It has increased from previously. When Dominique Moceanu competed in the 1996 Atlanta games, she was not 16, because she was born in 1981. The wikipedia article on Age falsification in gymnastics has a history of the age requirements and their changes over the years.

Googling for Dominique, I found quite an extensive page of her thoughts, and some surprising criticism of Marta and Bela Karolyi. When we see Marta as hen mother to the American team in Beijing, and ever enthusiastic Bela sitting next to Bob Costas, we don't imagine they could possibly have darker sides to them. Here is what Dominique has to say on Dominique Moceanu's website. Dominique explains some of her former colleagues disagree with her claims, but here is one thing Dominique says she experienced personally:

In another case, Bela put me on the scale in front of the entire team at the 1995 World Championships. He berated me and belittled me in front of everyone. That kind of treatment is unnecessary. I was 70 pounds!

Moceanu is unhappy with Marta and Bela's selection process for the Olympic teams, believing the process is not transparent enough, and that certain worthy gymnasts were left out:

I think the men's selection is very similar now to the women's. David Sender -- the 2008 National Champion -- was overlooked; Sean Golden -- with amazing performances -- was overlooked; Raj Bhavsar is devastated right now because he was kept off the team again. How do you justify keeping Raj off the team when you say you've crunched the numbers? Can you show us how you crunched the numbers? What kind of hidden system is being used? What has to be so secretive here?

Dominique believes the Karolyi's are worshipped a bit too much, and that many other coaches have pitched in quite a bit to the success of US gymnastics:

I think that we forget that this is the individual coaches like Valeri Liukin and Liang Chow, Peter Zhao and Mihai Brestyan… that they're the principle reason for the success of team USA, not the Karolyi system.

Also, it is important to note that Bela is on the record as believing the age requirement should be abolished, since anyone talented enough to qualify for an Olympic team should be allowed to go. His interview expressing his belief that the Chinese girls were underage, and that there should be no age requirement, was covered by outfits like The Washington Post and Yahoo Sports.

Ok, so mainly I was happy to see Amanda Borden on tv in that interview. She was spot on, and helped me think through figuring out what bothered me about the underage coverage. It also got me on google learning a bit more about Dominique Moceanu, and brought back memories of watching the Atlanta games, which were the last games I really watched before Beijing, as I didn't watch any of the Sydney or Athens games.

I found one other perspective on this Olympics stuff that vibed with me, and here is the video of Jon Stewart's Daily Show on the comedy central website:

Six Thinking Mistakes

Kida's Six Basic Thinking Mistakes:

1. Prefer stories to statistics.
2. Seek to confirm, not to question, our ideas.
3. Rarely appreciate the role of chance and coincidence in shaping events.
4. Sometimes misperceive the world around us.
5. Tend to oversimplify our thinking.
6. Have faulty memories.
   

"Don't Believe Everything You Think" Chapters

1. Weird Beliefs and Pseudoscientific Thinking
2. A Gremlin on My Shoulder
3. Thinking Like a Scientist
4. The Role of Chance and Coincidence
5. Seeing Things That Aren't There
6. Seeing Associations That Aren't There
7. Predicting the Unpredictable
8. Seeking to Confirm
9. How We Simplify
10. Framing and Other Decision Snags
11. Faulty Memories
12. The Influence of Others
    

Seeking Disconfirming Evidence

I need to do this more and this was an eye-opener for me!

Kida's main point was:

"Whatever your belief, find disconfirming evidence, and take that into consideration, because we really on confirming evidence far too much because it is easier for our brains to process"

I've had this belief that gay people for whatever reason end up institutionalized in state hospitals because they cannot manage to make it in this world. My confirming evidences are various people I know that have gone into these places for long term periods. However, perhaps there are successful case as well that don't come to mind because of my bias. David Geffen is a successful example. Am I focusing too much on the outliers?

Pages 164-5 in Chapter 8 "Seeking to Confirm" is where Kida deals with these issues most "Don't Believe Everything You Think."

Reliability of Evidence from Others

Here are some thoughts and questions I have about Kida's last three paragraphs in his "Reliability of Evidence Received from Others" section in Chapter 12 "The Influence of Others"

It's increasingly difficult to make appropriate decisions when we're exposed to a barrage of faulty information. The risk of AIDS for heterosexuals in the United States is a good example. What's your risk of contracting AIDS if you are a non-IV-drug-using heterosexual? In the 1980s we were told by the media: "Research studies now project that one in five heterosexuals could be dead from AIDS at the end of the next three years. That's by 1990. One in five. It is no longer just a gay disease"; "By 1991 one in ten babies may be AIDS victims"; and "The AIDS epidemic is the greatest threat to society, as we know it, ever faced by civilization--more serious than the plagues of past centuries." If we believed these sensational accounts we'd stop having sex altogether (pp 225-6).

Here is Kida's note explaining the media 1980s media quotations:

The quotes are by Oprah Winfrey, USA Today, and a member of the president's AIDS commission, respectively, in M. Fumento, The Myth of Heterosexual AIDS (New York: Basic Books, 1990), pp. 3, 249, 324. Also see Gilovic, How We Know What Isn't So, p. 107.

I definitely want to check these sources out, but isn't it a bit strange Kida's using a secondary source when one could use the Fumento notes to track down the original article from Oprah and USA Today? It's possible Fumento might have imperfect thinking also.

Moving onto Kida's next paragraph:

What happened? News sources played up the accounts of heterosexual transmission, emphasizing that it's a heterosexual disease in Africa and Haiti. They typically failed to note that most heterosexual transmissions involve one partner from a high-risk troup (e.g., gay, bisexual, intravenous drug user, hemophiliacs), and that public health practices in Africa and Haiti are so different from in the United States that they don't tell us much about the risk in the United States. But sensational stories get the ratings (p 226).

I've always wondered how so many girls could get HIV from "straight" guys. If it's statistically more dangerous to be the receptive partner, then how could so many straight guys be passing on the virus if they're only penetrating? Are that many of them sharing needles? I've always suspected more of these guys might be getting penetrated themselves than the governments, studies, and media let on. So my interest was really piqued when I zoned in on Kida's claim "they typically failed to note that most heterosexual transmissions involve one partner from a high-risk troup (e.g., gay, bisexual, intravenous drug user, hemophiliacs) . . ." However, what study or statistics are being used for this claim??? Kida has no note for this line!

Ok, here is the final paragraph of "The reliability of evidence received from others" section in "The Influence of Others" chapter:
So how can we know whether to trust someone's information? Here are some hints. Consider the source. With the AIDS issue, we have to look for the views of epidemiologists who try to understand and predict the spread of infectious diseases--not the views of sex therapists, actors, or talk show hosts. And, keep in mind that reporters can distort the views of the experts. Place more emphasis on past statistics instead of future projections. Even the experts have a hard time predicting future events, as we've seen. Be wary of anecdotal information. News magazines are notorious for reporting the problems of a single person, and since we are storytellers, we pay particular attention to that information. But as noted, personal accounts just don't provide good evidence to base our beliefs upon (p 226).

Again, this seems imprecise. Kida went on at length earlier in the book to explain how predictions are so often wrong, and frequently not much better than chance probability, or even worse, so why does he say we should look toward epidemiologists--what if it is an epidemiologist that falls into the same thinking errors Kida warns against? Admittedly, he also warns against predicting future events in the same paragraph. Plus, there are still stones unturned:

• For the guys who are spreading it to the girls, how can we learn how they got the virus first? Penetrating an infected girl, penetrating an infected guy (well, that doesn't sound very straight to me . . .), sharing needles, getting a blood transfusion, or getting penetrated by an infected guy (well, that's really not straight). What are the statistcs?
  
• If being bisexual or gay is high-risk, what is the statistical risk for being bisexual or gay if they use condoms every time they penetrate or get penetrated? How many people use these condoms all the time?
• If the medical care is so different in these countries, as Kida claims, then how many hemophiliacs or other people needing blood are actually fortunately enough to get a blood transfusion in the first place?
  

Overconfidence in the "Framing and Other Decision Snags" chapter

I'm wrestling with this paragraph, but can't figure out what's bothering me about it.

One reason we're overconfident is we remember the hits and forget the misses--we often remember the times we're successful, and forget the times we fail. It's a bit more complicated, however, because sometimes our failures are our most vivid memories. It turns out that even when we remember our failure, we interpret them in a way that still bolsters our belief. Eileen Langer, a Harvard psychologist, calls it the "Heads I win, tails its chance" phenomenon. As we saw with gamblers' behavior, if we're successful, we think the positive outcome was caused by our knowledge and ability. If we're unsuccessful, we think the negative outcome was caused by something we had no control over. As a result, we reinterpret our failures to be consistent with an overall positive belief in our abilities (p 194)

The line that resonates with me most was "It's a bit more complicated, however, because sometimes our failures are our most vivid memories," but Kida doesn't cite any studies about that aspect.

I understand the phenomenon of attributing success to personal skill, and failure to an outside source. However, aren't there some individuals who consistently believe they will fail and consider all their past to be a completely failure? Does this have something to do with perpetual optimists and pessimists? Just as those overconfident shouldn't believe everything they think, neither should the underconfident or those with low self-esteem do the same. Maybe this paragraph is ok, because it's in the "Overconfidence" section of the "Framing and Other Decision Snags" chapter. Perhaps a corresponding section on "Underconfidence" would be a beneficial addition.

The Langer study Kida refers to is "Heads I Win, Tails It's Chance: The Illusion of Control as a Function of the Sequence of Outcomes in a Purely Chance Task," Journal of Personality and Social Psychology 32 (1975): 951.

Narita Airport in the 1970s

Discovered this lovely vintage looking photograph in a book called "Introducing Japan," which has many other nice photos also. Was struck by the realization I've been here, and the space is recognizable, but all the interior furnishings have changed.

I think it was called "New Tokyo International Airport" back then. Look at the awesome clear flight information monitor base, and the awesome standing lamps! Can you imagine a monitor that small fitting all the necessary info these days? It looks really uncongested too, with hardly any folks sitting in those chairs. The element I wish they'd kept most is the soothing striped carpet.

Photo by Goro Iwaoka in:
Introducing Japan by Donald Richie. Tokyo: Kodansha International. 1978. p 10.

ISBN 0-87011-833-1

20/20 Hindsight

In Thomas Kida's "20/20 Hindsight" portion of the Framing and Other Decision Snags chapter in his book, Don't Believe Everything You Think, this paragraph struck me for several reasons. The Paul Gallico revelation was stunning, and "the oppressed ethnic group of that time" reminded me of some conversations I'd had with a friend.

At one time, Jews dominated the game. Basketball was primarily an east-coast, inner-city game from the 1920s to the 1940s, and it was played, for the most part, by the oppressed ethnic group of that time--the Jews. Investigative journalist Jon Entine noted that when Jews dominated basketball, sports writers developed many reasons for their superior play. As he states, "Writers opined that Jews were genetically and culturally built to stand up under the strain and stamina of the hoop game. It was suggested that they had an advantage because short men have better balance and more foot speed. They were also thought to have sharper eyes . . . and it was said they were clever" (Entine Taboo: Why Black Athletes Dominate Sports and Why We Are Afraid to Talk About ItNew York: Public Affairs, 2000 pp 202-203). Paul Gallico, one of the premier sports writers of the 1930s, said the reason basketball appealed to Jews was that "the game places a premium on an alert, scheming mind, flashy trickiness, artful dodging and general amart aleckness" (Shermer,"Blood Sweat and Fears," Skeptic8, no. 1 p 47). Notwithstanding the insulting stereotype, I'm amazed how we think we know the cause for something after the fact--even if that presumed cause is quite absurd.

I discovered Paul Gallico's Mrs. 'Arris Goes to Paris in one of my used bookstore jaunts cutting high school and really enjoyed it. Later on, I picked up Mrs. 'Arris' New York adventures as well. Since I so thoroughly enjoyed these novels, I was caught off guard to learn about his sports writing on Jewish basketball players.

In the discussion with my friend, we were wondering about the stereotype of gay flight attendants. We thought of the long distance pullman trains in earlier america with black porters. There is an exhibit about them--the discrimination, their camaraderie, etc. in Boston's Back Bay Station. At the time, when there was so much discrimination, being a pullman porter was one of the "allowed" jobs for black men, and they gained prestige in their own communities because they could travel and earned a relatively high income with tips etc. Do gay flight attendants have prestige in the gay world as well? I know this might now be the same as Kida's basketball discussion but this is what came to mind.

Beliefs are like posessions

The last paragraph of Thomas Kida's chapter 5 entitled Seeing Things That Aren't there concludes:

As psychologist Robert Abelson has said, our beliefs are like posessions. We buy our possessions because they have some use to us. So it is with our beliefs. We often hold beliefs not because of the evidence for those beliefs, but because they make us feel good. How can we overcome perceptual biases that lead to faulty beliefs? It's difficult, but a good place to start is by asking three questions:

• (1) Do you want this belief to be true?
  
• (2) Do you expect this event to occur? and
  
• (3) Do you think you would perceive things differently without these wants and expectations?
  

If the answer is yes to these questions, you should be very careful in how you interpret your perceptions of the world. (Kida p 117)

This reminds me of my"Once Burned" blog post where Victor Niederhoffer recalls the no longer useful beliefs of some of his family members. The relative held onto the belief, because it protected him from another loss which he'd previously experienced during the depression.

Kida, Thomas Edward. Don't Believe Everything You Think: The 6 Basic Mistakes We Make in Thinking. Amherst, NY: Prometheus Books. 2006

Kida cites these two items in his concluding paragraph:

R. Abelson, "Beliefs Are Like Possessions," Journal for the Theory of Social Behaviour 16 (1986): 222.

Plous, Scott. The Psychology of Judgment and Decision Making. McGraw Hill: 1993. (p 21)

Awesome Exit Interview!

Glenn Mitchell's Shear Genius amazing exit interview is the best exit interview I've seen on Bravo since Emmett's on Project Runway Season 3. It starts at the 2:37 countdown mark on Blogging Shear Genius' site.

The one thing that I miss the most is the feeling you get after you know what the challenge is, but before you get started with the challenge. It's just very exciting -- it seems like the world is yours to conquer at that moment. And it's something that really makes you feel alive. That's what I'm gonna miss the most. (Part 2 of Glenn Mitchell's exit interview on Shear Genius Season Two)

You can also watch Part 2 of Glenn's exit interview directly on Bravo's Shear Genius site, but it's not as nice as watching it on the Blogging Shear Genius site link above.

I admire Glenn and her thoughts expressed in this exit interview. Best Wishes Glenn!

Pseudoscience, Skepticism, and Predicting Markets

The "Delphic Oracles and Science" section of Victor Niederhoffer's The Education of a Speculatory offers some good connections between the work of Martin Gardner, Irving Langmuir, and John Wheeler and market forecasters.

Irving Langmuir's Symptoms of Pseudoscience

1) The maximum effect that is observed is produced by a causative agent of barely detectable intensity, and the magnitude of the effect is substantially independent of the intensity of the cause.
2) The effect of a magnitude that remains close to the limit of detectability; or, many measurements are necessary because of the very low statistical significance of the results.
3) [There are] claims of great accuracy.
4) Fantastic theories contrary to experience.
5) Criticisms are met by ad hoc excuses thought up on the spur of the moment (p 77).

Victor Niederhoffer's Symptoms of Pseudoscience in Market Analysis

1) Appeal to authority.
2) An absence of counting.
3) A framing of predictions in a form that cannot be tested.
4) A tautological prediction guaranteed to be true under almost all conceivable circumstances.
5) No allowance for chance variations; any randomly formed groups exposed to varying conditions will show differences in means and variability. But the differences can be due to sampling variation rather than the true effects of the conditions. That's what statistical analysis is about.
6) A paranoid mien.
7) Disregard of alternative explanations.
8) Self-evaluation of accuracy.
9) Retrofitted systems (p 8).

Niederhoffer recommends

Martin Gardner and Christopher Scott in the Oxford Companion to the Mind
Fads and Fallacies in the Name of Science, by Martin Gardner.
Paranormal Phenomena: The Problem of Pro, by