Recently in Miscellany Category

June 12, 2008

Michael Giberson

Will Wilkinson points to a post by Joshua Knobe discussing a philosophy experiment conducted by U. of Arizona philosophers Chris Freiman and Shaun Nichols. Here is how Knobe describes the experiment:

Subjects were randomly assigned either to receive [an] 'abstract' question or a 'concrete.'
Subjects who had been assigned to receive an abstract question were asked:

Suppose that some people make more money than others solely because they have genetic advantages.

Please tell us whether you agree with the following statement:
- It is fair that those genetically-advantaged people make more money than others.
Meanwhile, subjects who had been assigned to receive a concrete question were asked:
Suppose that Amy and Beth both want to be professional jazz singers. They both practice singing equally hard. Although jazz singing is the greatest natural talent of both Amy and Beth, Beth's vocal range and articulation is naturally better than Amy's because of differences in their genetics. Solely as a result of this genetic advantage, Beth's singing is much more impressive. As a result, Beth attracts bigger audiences and hence gets more money than Amy.
Please tell us whether you agree with the following statement:
- It is fair that Beth makes more money than Amy.

Freiman and Nichols found that, as Knobe put it, "subjects who were given the abstract question said that it was not fair, but subjects who were given the concrete question said that it actually was fair!"

Knobe suggests that it is a surprising result, and I guess it is surprising on some level. Logically, the cases are the same but for the additional details in the concrete example. The fact that we are talking about jazz singers, and not dockworkers or accountants, should not affect the fairness or lack of fairness of the case. Therefore, adding morally neutral information shouldn't change conclusions about fairness, but apparently does.

Knobe also tries to put a left-right political interpretation on the result, but doesn't actually report whether Frieman and Nichols collected any data relevant to a political angle. I can't find the paper online, so can't say what if anything the authors have to say about the politics. Wilkinson also joins in the political speculation, but again without any indication that there is data to support a political discussion.

My sense of the difference between the abstract and concrete cases is that the concept of fairness requires a consideration of the balance between, as it were, the inputs and outputs at issue. In the abstract case, the input is a random, unearned genetic advantage and the output is obtaining more money. Clearly, in my view, the concept of fairness cannot support a balancing between these unequal elements - a random input cannot merit a specific positive reward.

While the concrete case is formally identical in terms of structure, the details offered allow for a different mental processing of the fairness concept. In the concrete case, the subject is able to compare the more impressive performances against the the more money obtained and reach the conclusion that the better performances merit a better reward. It no longer matters, to the mind trying to answer the fairness question, that the better performances were themselves the result of a random genetic endowment. What matters is that a good performance can merit a good reward.

However, I'd wager that fairness conclusions for the concrete case would fall way off if Frieman and Nichols followed their concrete example with the same question posed to the subjects facing the abstract case, namely, asking them, "It is fair that those genetically-advantaged people make more money than others." The question posed this way cues up the random genetic input in the subject's mental processing again, and a random genetic input can not merit a positive reward.

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May 12, 2008

Michael Giberson

You don't want them picking up their ideas about oil on the streets:

And the education must begin early, he told a luncheon crowd of industry professionals at OTC.
"When we don't inform our children about petroleum facts," he said, "someone else is going to do the job for us."

"He" is Abe Palaz, director of educational and R&D Partnership at Halliburton, talking about the engineering talent pool for the oil and gas industry, to an audience at the Offshore Technology Conference. The OTC, apparently the place to see and be seen in the oil and gas business last week, recently concluded in Houston.

The Houston Chronicle has had coverage, supplemented by the Chronicle's own energy blogging at NewsWatch: Energy.

ADDED: A related story from the Houston Chronicle: Worker shortage looms large.

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April 7, 2008

Michael Giberson

Employment prospects must be looking up for economists with experience in electric power.

Three times in the last week I have received unsolicited notices - first, from out West came an email hoping I could recommend someone with expertise in state utility policies; then a day later, from a friend and former manager, a casual note asking if I know of any available electric power economists (or at least someone with good analytical and writing skills), and finally just now a Gmail alert returned an ad posted on Washington Post on-line, seeking an economist to analyze the competitive performance of electricity markets.

[Note to prospective job seekers: If I don't know you, or at least know someone who knows you, I can't offer a recommendation. But don't worry, despite all the headlines, my totally informal, spontaneous sample says things are just fine (at least if you have economics training and a electric power background).

Note to prospective employers: So far as I know, none of the other electric power economists I know are looking for new opportunities.

Note to my current employer: That doesn't mean you shouldn't offer a preemptive pay increase, just in case. Better safe, then sorry, I always say (if the implication is that I should be paid more).]

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March 31, 2008

Lynne Kiesling

As I have mentioned before, the KP Spouse and I have been renovating our house for the past 6.5 months (see, for example, this earlier post, and have been living in an apartment during the work. Today we move back in! I'm a little behind in my photographing, but here's a snapshot of the new bedroom:

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It'll be a busy day!

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March 26, 2008

Lynne Kiesling

It's spring break, and I'm escaping the course prep and house renovation load chez KP for a concert at the Savannah Music Festival.

Just got back from a run, and I've got to say, Savannah is picturesque! Just beautiful in that distinctively Southern way. The weather's gorgeous too. Now I'm off to prowl town and then to hear some great music!

I'm leaving Mike in charge ... just don't let those crazy friends of yours tear up all of the bushes out front, and clean all of the beer caps out of the hot tub drain before I get back ...

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March 18, 2008

Michael Giberson

From Scientific American online, "What Can Virtual-World Economists Tell Us about Real-World Economies?":

Eyjólfur Guðmundsson is the only economist on Earth who spends his days studying the fluctuating cost of warp-disruption batteries and T2 light drones. That's because he's the world's first virtual-world economist.
This past August, Guðmundsson took up residence in EVE Online, a massively multiplayer online game, to report on its economy, research its society and coordinate with academic institutions on their entrance into virtual worlds.
Think Alan Greenspan--only in Battlestar Galactica. In EVE Online players buy, sell, trade, earn, steal and otherwise work to accumulate interstellar kredits (ISKs)--a currency that, officially at least, is only valuable inside EVE.

The article includes quotes from George Mason University economist Tyler Cowen, who says he is "skeptical about using virtual worlds to do economics, at least as it is now." He says the simulations don't much resemble the controlled laboratory work that experimental economists do, so he doesn't quite see how economic analysis of virtual worlds will be useful. Cowen sums up, "Whatever result you get is interesting, but you don't know what to make of it. You're stuck." (Though I recall just a week or two ago, Cowen offered praise for one of Edward Castronova's books on virtual economies. Link here.)

I think Cowen is underestimating the creativity of young economists to apply their tools and training to new problems. Of course the economics profession -- naturally dominated by, shall we call them, a group of very experienced economists -- may be slow to recognize the value of work in virtual economies, so I wouldn't try to make tenure on a handle of Everquest and EVE Online papers, no matter how clever they are.

FORGING NEW LINKS: The SciAm article may be the first to both mention Battlestar Galactica and cite a paper by Vernon Smith (with colleagues Stephen Rassenti and Bart Wilson) on demand-side participation in electric power markets.

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March 2, 2008

Michael Giberson

In its annual ranking of business schools, Business Week takes a look at a few programs that distinguish themselves by offering an industry focus. At Florida State University for example, graduates from the Professional Golf Management program are in high demand. In Texas, universities naturally feature the state's energy industry, and Business Week singles out the University of Houston:

Houston is home to the U.S. headquarters of oil giants BP, ConocoPhillips, and Royal Dutch Shell, as well as hundreds of other smaller energy companies. But until 2001, when the University of Houston's Bauer College of Business launched the Global Energy Management Institute, there were no business school programs nearby that focused on the industry. "The energy industry is desperate for trained people," says Christine Resler, director of mergers, acquisitions, and new ventures at Smith International, and executive professor in the GEMI program. "They're fighting over each other for employees, so they are excited to have a program like this."
It's not only the oil companies competing for GEMI grads. Many students get jobs as commodities traders at investment banks such as Goldman Sachs (GS) and Morgan Stanley (MS) and garner salaries in the $50,000 to $60,000 range, considerably more than regular business students at Bauer, whose average starting salaries are about $43,000.

In an associated story, BusinessWeek.com noted that, "to keep up with changes in the business, the [GEMI program] is developing new electives focused on alternative energy. The first course, Carbon Trading, will be taught next spring."

Of course Houston isn't the only Texas university with an energy industry program. Texas A&M features the Reliant Energy Trading Center and the University of Texas in Austin has the Center for Energy Finance Education and Research.

Texas Tech University's Center for Energy Commerce, located in the midst of West Texas oil fields and wind farms, offers an undergraduate business degree in energy commerce. Like Houston's GEMI, Tech's program has expanded beyond oil and gas to include classes in alternative energy.

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February 24, 2008

Lynne Kiesling

And this time I mean it! Full Movable Type 4.1 upgrade, a wide range of social bookmarking options on the permalinks and archives of individual entries, a new look-and-feel, and hopefully the elimination of some wonky behaviors that the site had developed after five years of a half-assed recreational programmer (that would be me).

There are still a couple of bugs to work out in terms of commenter registration, so please be patient as I sort it out over the next couple of days.

I'll have more to say on this topic, but for now let it suffice to give credit where credit is due: Mihai at Pro IT Service did a fantastic, timely, and reasonably priced job of implementing all of these changes! I recommend him to anyone interested in doing a Movable Type upgrade. He's also written a bit about the project at the Pro IT Service blog.

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February 8, 2008

Lynne Kiesling

Still feeling quite under the weather ... but what's better for lifting a girl's spirits than having her alma mater's #1-ranked hockey team playing #2 Michigan, and having it televised tonight! Pizza and hockey on a cold Friday night, go Redskins (or Redhawks, whatever)!

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January 18, 2008

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January 4, 2008

Lynne Kiesling

Thoughts today on productivity instead of economics, energy, technology ... I am in the middle of a run of about 5 Project-Kill Days trying to get the albatross of a book manuscript off of the to-do list. Project-Kill Day is a great idea for me, as my biggest personal foible is my inability to focus on the single task at hand. Too easily distracted by cool Internet stuff, knitting, music, cycling, etc.

So today and the next few are devoted to focusing on the task at hand, with Gregorian chant in the background and no communication technologies allowed. Send me your positive brainwaves, please!

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January 2, 2008

Michael Giberson

The Economist observes that our present is not quite like some futurists of the past had projected, and provides advice to new futurists seeking to improve on the past. Among other things, they recommend "think small": "The best what-lies-ahead book of 1982 was Megatrends, by John Naisbitt, which prophesied the future of humanity. A quarter-century later, its counterpart for 2007 was Microtrends...."

Other advice includes: think short-term, admit uncertainty, and get embedded in a particular industry. The article ends with a plug for prediction markets and the "wisdom of crowds":

A fifth piece of advice: talk less, listen more. Thanks to the internet, every intelligent person can amass the sort of information that used to need travel, networking, research assistants, access to power. It is no coincidence that the old standard work on herd instinct, Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds, has been displaced by James Surowiecki’s The Wisdom of Crowds.

The most heeded futurists these days are not individuals, but prediction markets, where the informed guesswork of many is consolidated into hard probability. Will Osama bin Laden be caught in 2008? Only a 15% chance, said Newsfutures in mid-October 2007. Would Iran have nuclear weapons by January 1st 2008? Only a 6.6% chance, said Inkling Markets. Will George Bush pardon Lewis “Scooter” Libby? A better-than-40% chance, said Intrade. There may even be a prediction market somewhere taking bets on immortality. But beware: long- and short-sellers alike will find it hard to collect.

While I'm partial to the plug for prediction markets, the story from the past year that best fits the five pieces of advice (think small, short-term, uncertainty, embed in an industry, and listen) was not about the "wisdom of crowds." Rather, this profile by Michael Lewis of hedge fund/insurance risk modeler John Seo in the NYT Magazine seems to fit the bill.

[HT to Chris Masse at Midas Oracle for cite to The Economist story. Actually, come to think of it, another HT goes to Chris Masse at Midas Oracle for the cite to the story on John Seo that was published back in August.]

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January 1, 2008

Lynne Kiesling

Happy New Year from KPLandia!

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December 31, 2007

Lynne Kiesling

Here's a fun new find on my radar screen: Inkling Magazine (on the hunch that science rocks), and its associated blog Inky Circus. Great, amusing, witty, girly geek chic. In particular check out the entry on their She's Such A Geek Photo Contest.

See, it's cool to be a girly geek ...

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December 25, 2007

Lynne Kiesling

A delightful little holiday diversion: T.C. Boyle's short story I Dated Jane Austen is available to read at his website, complete with woodcut comic illustrations.

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December 18, 2007

Lynne Kiesling

I'm not going to go off on a Schroedinger's cat tangent or anything, but there's a really neat article in today's New York Times about the laws of physics. In a nutshell, here's the dilemma: how do we know that the laws of physics are true? Can we prove their truth in an overall, universal sense, in the sense that explains the order observed in the universe?

This is an interesting question. Think about it: you go about your daily activities assuming that gravity and surface tension and fluid dynamics and all of the other physical relationships that allow you not to dissolve into a puddle of bodily fluids are true. But what's interesting is that you can't prove deductively that they are true. Sure, you can falsify all sorts of alternatives, and the relationships that we call the laws of physics are the last ones standing.

Are they merely fancy bookkeeping, a way of organizing facts about the world? Do they govern nature or just describe it? And does it matter that we don’t know and that most scientists don’t seem to know or care where they come from?

Apparently it does matter, judging from the reaction to a recent article by Paul Davies, a cosmologist at Arizona State University and author of popular science books, on the Op-Ed page of The New York Times.

Dr. Davies asserted in the article that science, not unlike religion, rested on faith, not in God but in the idea of an orderly universe. Without that presumption a scientist could not function. His argument provoked an avalanche of blog commentary, articles on Edge.org and letters to The Times, pointing out that the order we perceive in nature has been explored and tested for more than 2,000 years by observation and experimentation. That order is precisely the hypothesis that the scientific enterprise is engaged in testing. ...

There is in fact a kind of chicken-and-egg problem with the universe and its laws. Which “came” first — the laws or the universe?

The article then goes on to discuss Plato's concepts of ideal forms and the laws of physics as an instantiation of those concepts. But we can't escape the fundamental problem that we are trying to analyze a large, complex system from within that system, and that because of that, we have to assume the orderliness of the system as a fixed point, if you will, in the argument in order to be able to make any progress in understanding the system to the extent that we can.

Fascinating. A very thought-provoking read.

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October 31, 2007

Lynne Kiesling

The RSS feeds seem to be ... sticky. I had a couple of them come through successfully late this morning, but the past couple of posts have not shown up, and it's been more than an hour. What gives?

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Lynne Kiesling

Over the past several years, some kind readers have inquired after the state of our home. Here's the backstory: three years ago we bought a neglected 1924 Craftsman home in Chicago. We did some preliminary work (air conditioning, plaster, refinished wood), but then spent three years living in the place and working with architects to decide how we wanted to renovate it.

Construction started in mid-September, and should end by mid-March. Here's what the back of the house looked like about a month ago:

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More below the fold ... and bonus points if you can name the song that inspired this post's title!

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Lynne Kiesling

I think that I've just updated the RSS 2.0 template to send full posts out on the RSS feed. Testing, testing ... I've also updated the RSS 1.0 template, and I've reset Feedburner so that it uses the RSS 2.0 feed. Anything you think I'm missing? Please let me know.

It's interesting; when I initially started this site 5 years ago (!!), RSS feeds were in their extreme infancy, and portable devices and readers were not widespread. So when I first set up RSS feeds I set it with titles and short excerpts only, because I didn't want to inconvenience readers who didn't have the hardware or software capability to take the full feeds. I think it's really interesting how quickly that has changed.

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October 29, 2007

Lynne Kiesling

Sitting in the Manchester, NH airport, coming home from a way cool conference on new frontiers in emergent order research ... the brain is too full to think of anything along those lines for a post! But courtesy of The Manolo,, I've found a new fashion read: The Thoughtful Dresser, by writer Linda Grant. I love one of her tag lines:

Because you can't have depths without surfaces.

Brilliant. Evocative. I can't wait to read more. She's got a post on how many pairs of shoes a man should own, in which she confirms my suspicion that men believe they only need three pair:

1 pair of newish hi-tech brand trainers

1 pair of normal black leather shoes

and 1 pair of knackered deck shoes that I may have no choice but to replace as summer is virtually upon us

I can imagine some variation in the composition of that set, but in general that's what most of the straight men of my acquaintance think. That is, until their women burrow into their subconscious and persuade them otherwise ... not counting athletic footwear (running shoes, bike shoes, etc.), the KP Spouse has about 5 pair of black or brown shoes of various degrees of formality, a pair of nice black boots, and a pair of nice brown boots. And the ubiquitous pair of Adidas Response trail runners that are the wear-around-always shoes. And the Teva sandals. I call that a respectable collection.

I've tried like the devil to get him in a sassy pair of retro-funky sneaker kicks, but nuthin' doin' ... as Linda says, though, that's OK, because it leaves more room in the closet for shoes for me ...

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October 26, 2007

Michael Giberson

From the Economist's Free Exchange blog, on blogging:

[W]e should expect those with strong resumés but lackluster ideas to abstain from extensive blogging, while those whose critical and analytical skills run ahead of the experience and education categories on their CVs should embrace blogging as a means to signal their exceptional fitness. We would expect those with most to gain from blogging to blog more.

Signaling exceptional fitness. That's what I'm talkin' about, baby!

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October 24, 2007

Lynne Kiesling

My best wishes and good vibes to those in the fire zone in California. I hope the winds calm down soon.

The thing that really disgusts me is that three of the San Diego fires were set intentionally by an arsonist. What kind of sick person does that?

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September 27, 2007

Lynne Kiesling

I've not been the diligent writer here lately, for three primary reasons: I've been working on a book manuscript, we've started our house renovation and moved to a temporary apartment, and I've been spending a lot of time on a new course prep for a new job. But I'm slowly crawling out from under these things ... and will be doing things here like more writing and upgrading the guts of KP (including fixing that pesky Google RSS feed that stubbornly refuses to work).

A little more detail below the fold.

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August 24, 2007

Lynne Kiesling

Yesterday we had a terrible micro-burst in my neighborhood; it didn't go rotational so it really wasn't a tornado, but the winds were up to 78 m.p.h. at Wrigley Field. I was sitting in one of the second floor front bedrooms at the desk, writing, when the sky went greenish-black. A whistling wind came from the west, picked up the 4.5-foot-diameter tree just to the east of our house, and uprooted it easily.

By the time I got down to the basement for safety, it was all over.

My gorgeous little street has the dubious distinction of being the worst hit in this storm; of the beautiful 100-year-old trees that line our street, three-quarters of them are down:

Happily, I don't know of anyone being injured, although there's plenty of damage to garages and cars.

Yikes.

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August 8, 2007

Michael Giberson

The Washington Post Food section ran an article with Tyler Cowen, professor of economics at GMU, blogger at Marginal Revolution, and author of Discover Your Inner Economist.

An economist at George Mason University, Cowen has rather unusual criteria for restaurant selection. He doesn't first look at the menu, the ambiance or the reviews. Being an economist, he thinks about the rental market, property taxes, competition and clientele. "All of us already act like economists," he said, digging into a plate of Chengdu dumplings in a black vinegar sauce. "We just have to think about what we already know about the world and apply it to dining."

Here is Cowen blogging the article (of course!), which he said he liked. In the article the reporter meets Cowen at Hong Kong Palace. Here is Cowen's review of the place at Tyler Cowen's Ethnic Dining Guide.

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August 2, 2007

Michael Giberson

There's been a lot written about game-fixing in basketball lately, but not much about an obvious game fixing episode in World Cup Quidditch.

That is to say, not much written about quidditch match fixing until now. Phil Birnbaum fills the gap at the Sabermetric Research blog.

And then there was the suspicious episode in Harry Potter and the Chamber of Secrets during the big Gryffindor vs Slytherin match. As we only learn later, Dobby, the Malfoy's house elf, enchanted a bludger to chase after Harry and in trying to dodge the bludger Harry fell and broke an arm. I wouldn't be surprised if Lucius Malfoy himself had a little wager on the game.

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July 11, 2007

Lynne Kiesling

In anticipation of Movable Type 4.0 coming out of beta in the future, I have started thinking about feature, content, and design changes that might be desirable here. My short list:


  • I am considering going back to a two-column format, which will make the side column waaaaaay long, because I don't really want to cull any of the links lists.
  • Edge spacing in the comments files and archive files
  • Fixing the format of results in the search; I think it's just a matter of telling MT to put the search results in the middle column, but my agility with stylesheets is very limited
  • Fixing Technorati tags; for some reason we've not been able to do them for a couple of years
  • Fixing trackbacks; same thing
  • Fixing the Typepad trusted commenter login, which has never worked

So now I am asking you: what do you want to see here? Please share your feedback with respect to content, design, whatever. MT 4.0 is going to be a big innovation in functionality, so there's a big opportunity to get things right.

Also, if you are more comfortable with MT and stylesheets than I am and would like to offer some technical advice, please bring it on! Although this site is primarily a professional outreach venture for me, I do it voluntarily and for fun (as does Mike, whose contributions are enormously valuable), out of the love of the idea creation process. Thanks in advance for your input.

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June 21, 2007

Michael Giberson

Re: "The Electric Power Retail Access Hard Core"

Last week I quoted from an EnergyBiz Insider column, "Perfecting Retail Markets." Today, EnergyBiz Insider printed a letter-to-the-editor in response from Tom Casten, Chair of Recycled Energy Development LLC, a cogeneration outfit. Casten leads off with an important question:

How do entrepreneurs and markets work their magic in retail electricity without repealing all fifty state bans on private wires crossing public streets?

Advanced metering and the rate structures to go with it will be an important piece of the near-future retail landscape, but if you want revolutionary consumer-centric retail restructuring, then you need to ask and answer questions like Casten's.

Re: "PJM Market Monitor Reports Interference from Management"

In April I noted that the head of PJM's market monitoring unit had reported to FERC that PJM's management was interfering with the performance of market monitoring functions. Joe Bowring, the head of PJM's market monitoring unit has filed a detailed statement with FERC, and PJM management have filed a similarly detailed statement as well. The Energy Legal Blog provides an update with links to the filings: Market Monitor Continues Lobbing Shells at Defensive PJM Management.

Re: "Not in Iceland, Yet..."

Haven't heard from Lynne since yesterday morning's "Not in Iceland" posting, which means either she is happily enjoying herself among ISNIE colleagues in Iceland or has retreated to Chicago, fuming and biting her tongue. I'm hoping it is the former case.

I'm also hitting the road, soon to be on my way to the beach for a few days, so it may be quiet around here. Your comments are held for moderation, so if you post one, be patient and we will catch up with you when we can.

As always, thank you for reading.

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June 11, 2007

Michael Giberson

I have a post up at Midas Oracle about some research into the effects of picking an outcome on the enjoyment a person gets from watching a contest. Here's the first part:

“When people make these predictions, they have this little sliver of doubt – ‘What if I’m wrong?,’” [Stephen] Nowlis says. … The researchers dubbed this emotion “anticipated regret.”

A pair Arizona State University professors, Stephen Nowlis and Naomi Mandel, have research forthcoming in the Journal of Consumer Research in which they claim that predicting an outcome takes the fun out of watching the event.

My personal experience is pretty much the opposite. So while I find the research interesting, I don’t believe they have fully understood the phenomena. Of course, they’ve done the research and I am just reporting introspection and anecdote, so weigh my commentary appropriately.

You can read the rest of the post at Midas Oracle, and I've also cross-posted the rest of it here in the continuation.

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June 9, 2007

Michael Giberson

Prediction markets (a category which includes gambling on event outcomes) work well in some cases and less well in others. Justin Wolfers and Andrew Leigh have an overview of prediction markets appearing in The Melborne Review, which states the pertinent point: "attempts to set up markets on topics where there are insiders with substantial information advantages have typically failed" because the cadre of highly informed insiders will tend to drive out the partly-informed public.

But if that is the case, then why all the gambling/prediction market interest in the fates of two fictional characters - Harry Potter and Tony Soprano - and their equally fictional associates?

These fictional worlds do not produce widely dispersed bits of information that can be usefully aggregated by a market. Careful study of, say, the first six Harry Potter books and reading interviews with J.K. Rowling may produce some sense of what will happen, but ultimately whether "Harry Potter must die!" (as Marginal Revolution suggested) or "Harry Potter will NOT die!" (as Chris. F. Masse at Midas Oracle interprets prediction market prices to suggest) will depend on what Rowling wants to say through the book and how she decides to do it.

I don't think there is sufficient information available to form a good probability estimate. So the betting is all based on emotion, some bettors will be lucky and others not. An informed insider can enter the market and clean up.

A lot of people enjoy betting on entertainment events (a category broad enough to include everything from the Super Bowl winner to week-end movie box office totals to the survivor/winner in the TV show "Hell's Kitchen), and far be it from me to want to squash people's fun. Fun is good, and good for business if you are a prediction market maker.

But if you are an investor trying to maximize long term returns and have no inside information, this is a case where Kelly's criterion for betting comes into play. Kelly's criterion for setting bet size can be described as "edge over odds," which implies, as Wikipedia explains: "If the gambler has no edge, ... then the gambler should bet nothing."

NOTES: The Wolfers and Leigh piece provides a good general background on prediction markets. HT to Midas Oracle for the heads up on the Wolfers and Leigh article. Also at Marginal Revolution: Tony Soprano must live, citing a Washington Post story among others.

[A lightly edited version of this post is also up at the prediction market group blog Midas Oracle under the title Harry Potter will NOT die? Don’t Bet on It.]

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June 7, 2007

Lynne Kiesling

Through my various wanderings in the past week I have come across two fun little shopping-oriented sites that I like: Little Splurge, which highlights little (and no-so-little) finds for fashion, home, travel, work, etc; and Paperclippy, focusing on office-friendly fashion finds.

These two cute sites are great examples of Internet filtering; there's so much great stuff out there, and I wouldn't know about most of it if it weren't for filters and seekers like these!

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May 27, 2007

Michael Giberson

Today I did something new. Something I’ve never tried before. I walked into the local Barnes and Noble bookstore and bought a diet book.

I’ve never really though of myself as overweight. For most of my life I haven’t been overweight. For the last few years, however, I have thought of myself as needing to lose a few pounds -- unlike Lynne, I am no triathlete -- and over the past few years I have added pounds rather than losing a few.

I got naked earlier today and stepped on a scale: 198.4 pounds. A quick BMI calculation online produced a 27.3. The number puts me smack in the middle of the “Overweight” category.

Lots of people try lots of diets. Over the last few years I have heard people talk about their low fat, South Beach, low carb, Atkins, high fiber, unprocessed foods, more veggies, weight watchers, and how to take it off and how to keep it off diets.

Two things I’ve noticed about people on diets: they can’t seem not to talk about their diets; and, except for the people in TV commercials, none of them seemed to be having fun. And while I get that not everything in life has to be fun, the general tenor of the discussions tended to put me off the idea. Plus, many didn’t seem to work.

My feeling about the matter was, I’m happy for lots of people to try lots of different diets, and if something actually works, word will get out, and then I’ll give it a go. I’m a big fan of experiments, especially when other people are paying the costs and I can sit around and wait. I guess I’m ready to join the lab rats.

Wandering through the bookstore, I came across Seth Robert’s paperback edition of The Shangri-La Diet. (Previously mentioned on KP here and here.) I’ve been thinking about the “SLD” half-seriously since David Tufte’s one-year anniversary post at voluntaryXchange. Picked the book up, scanned through, read the Stephen Dubner quote on the back cover (and front cover, and again inside – apparently they really liked the Dubner quote.)

The second quote at the beginning of Chapter 4 caught my eye: “It appealed to my essential laziness.” (The quote was by-lined “A Blogger’s Reason for Trying the Shangri-La Diet.” Now you know that I stole my title.) I think for me the “laziness” aspect is part of the appeal for me – it looks astoundingly easy to do. But in addition to my essential laziness, the book also appeals to my essential curiosity. It is a little quirky. Roberts is interesting. I’d like to give it a shot.

So I’ve bought the book. I’ll probably start in a few days. If I’m lucky, I will drop 25 pounds or so and never have to buy another diet book again in my life.

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May 17, 2007

Michael Giberson

The folks that do technology site CNET have launched an online business magazine at www.BNET.com.

Among the items of interest (at least to me) now on BNET:

A discussion with the CEO of Erickson Retirement Communities which covers, among other things, practical applications of prediction market Inkling.

A podcast that includes New Yorker writer/Wisdom of Crowds author James Surorwiecki.

A brief posting on grocer Safeway's energy strategy (citing a MarketWatch story. Did you know that the retail grocery chain has a FERC-approved license to engage in wholesale energy marketing? Find out why.)

(HT to Midas Oracle and the Inkling Blog.)

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May 13, 2007

Michael Giberson

Bastiat, were he alive today, would be econoblogging.

Much econoblogging deploys the rhetorical form of gossip: observation and comment. Only instead of the target being someone’s ex-spouse’s new partner, or a celebrity headed to jail, it is GDP or government subsidies or tax policy. We’re a fun bunch don’t you know.

Grant McCracken said, “good blogs inhale data before they exhale comment.” But Grant writes from the intersection of economics and anthropology, and observation is data if you’re an anthropologist, right? Observe and comment. OMG so EZ!!!

Econoblogging succeeds as a form, as, for example, compared to philosophy- or anthropology-blogging, partly in the same way that gossip succeeds as a form. The basic theoretical principles are familiar and readily deployed. Logically the structure is: (a) If X, then Y, (b) X, and (c) Therefore, Y.

Except the fundamentals and logical forms are commonplace so the gossiper can skip (a) and (c), jumping straight from observation to the post-(c) evaluative commentary: Isn’t that awful!

By the way, if you don’t share fundamentals with your gossiper, you aren’t likely actually part of the community of interest anyway and the gossiper won’t tell you the story. At least not the good stuff. Econoblogging is a little different here, since the selectivity is on the receiver’s end of the communication rather than the sender’s end, but it works out much the same: if you don’t share fundamentals with your econoblogger, you aren’t likely to stick around. No one said you had to like it.

Related: Seth Roberts and Tyler Cowen exchange thoughts on the antecedents to blogging. Seth suggests that blogs are "non-fiction with emotion." Is this not also an accurate description of gossip?

[Actually, since he wrote in French, Bastiat would be writing econo-bloc-notes.]

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April 4, 2007

Michael Giberson

In a post a year ago, I had this to say about Inkling Markets:

The crowd has wisdom (maybe). You want it (certainly). Inkling wants to give you a shot at capturing it.

With a recent redesign of their homepage, Inkling has added a few user quotes, including the above words of wisdom (maybe) by yours truly.

In the same post I said:

I've been playing in their markets for a few weeks, and I have a few quibbles with how they do things, but in taking this step they are trying to make it to their own "next level." It might be fun, it will be messy, and Inkling stands to learn a ton about how to make their system better. What better way for them to discover how to do it?

My impression, after a year or so of off and on playing in Inklings 'play money' prediction markets, is that Inkling has in fact learned a ton about how to make their system better.

And while I'm drawing attention to myself here in an immodest fashion, I'll mention that what it says about me in the blurb caption remains true: I'm the "#1 Trader All Time" (at least as of the time of this posting). Sometime in the next week or two I'll reveal some of the secrets of my success. Just promise you won't tell the #2 trader on the list, who seems to be catching up to me rapidly.

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March 14, 2007

Michael Giberson

Via Discovery News:

The adage "like a kid at heart" may be truer than we think, since new research is showing that grown-ups are more immature than ever.

Specifically, it seems a growing number of people are retaining the behaviors and attitudes associated with youth.

As a consequence, many older people simply never achieve mental adulthood, according to a leading expert [Bruce Charlton]....

Among scientists, the phenomenon is called psychological neoteny.

Personally, I think "psychological neoteny" is a big wad of hooey, and anyone who believes in it is a stinky, polka-dotted dunderhead.

And trust me, I probably spent more years in graduate school than you did, so I should know.

Fortunately:

A “child-like flexibility of attitudes, behaviors and knowledge” is probably adaptive to the increased instability of the modern world, Charlton believes. Formal education now extends well past physical maturity, leaving students with minds that are, he said, “unfinished."

[...] "People such as academics, teachers, scientists and many other professionals are often strikingly immature outside of their strictly specialist competence in the sense of being unpredictable, unbalanced in priorities, and tending to overreact.”

Charlton added that since modern cultures now favor cognitive flexibility, “immature” people tend to thrive and succeed, and have set the tone not only for contemporary life, but also for the future....

Wait, so now he's saying more and more people are "strikingly immature", unfinished, unpredictable, unbalanced, and tending to overreact, and we're supposed to take it as a compliment?

All that I have to say to Charlton is this: "I know you are, but what am I?"

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March 12, 2007

Michael Giberson

A few items from yesterday and today's Washington Post caught my eye and relate to topics on our mind here.

Yesterday the Post profiled Mojo Nixon, the eighties camp rocker ("Elvis is Everywhere"), who has landed a gig deejaying for Sirius Radio. In my view among the biggest of the short-run losses from the proposed merger would be a cooling of the competitive drive to find and fill these kind of musical niches. Still not convinced that consumers will be worse off in the long run if the deal goes through.

Arriving in time to revive the flames of my energy-independence rant from last week, today the Post highlights the grand scheme of the Mayor of Warrentown, Virginia to make the town of 8,000 energy independent. If the projected cost of $30,000,000 comes from private investors, I say "go for it."

A local issue, though U.S. tax dollars are involved, concerns dueling plans for an extention of the Washington D.C. area's Metro Rail from Falls Church out to Dulles Airport. The duel is over whether to underground the portion of the route planned through the Tyson's Corner area or to have a raised rail through the densely developed commercial area. Interesting, as the article points out, that the McLean, Virginia chamber of commerce is favoring the more expensive underground plan while the Reston-area chamber of commerce supports the cheaper above ground option. I didn't know until I read the article, but the Reston-area is in a special tax district that will help pay the costs of the project, but the McLean area is not. Perhaps the McLean chamber of commerce would like to join up?

And finally, appropos of nothing in particular that we've discussed around here lately, but also in this morning's Post was a review of the Taj Mahal and Los Lobos concert of last Friday night. As the Post say's: a spectacular show.

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March 5, 2007

Lynne Kiesling

I am traveling this week, may have some things to say later in the week, but the next couple of days are hectic. In the meantime, I commend WSJ's Energy Roundup to your attention, particularly their commentary on oil price volatility in this period of financial market turbulence.

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