Saturday, February 22, 2014

Why Rational People Can't Succeed as Economic Forecasters - Justin Fox - Harvard Business Review

Harvard Business Review takes a look at economic forecasting.  One comment,

"Is there a risk that you get overconfident because of that? One of the things that happened in the ‘20s is that things kept going so well, and the forecasters who predicted a continued boom were right again and again. If you get very confident that government knows what it’s doing and can manage the economy well, does that increase risk at all?"

This is consistent with the ideas that trends can generate positive feedback that encourages overshooting and complacency.  This make it all the more likely that a bubble will ensure.  The difficulty is that it starts with something real and becomes over-extended.  Where do the two meet?:

Tuesday, February 18, 2014

Barclays’ bonuses give the City a say on banking values - makes the Rooney analogy:

"It is the Wayne Rooney answer. Weekend reports say that the Manchester United football star is negotiating an extended, improved contract even though the team is enduring the worst season for years. His employers could respond to poor results by cutting wages but would then lose their star players, have to pay nearly as much for replacements who are not nearly so good and risk falling into a downward spiral. So it is in investment banking, where the worst of all possible worlds is to have an A-grade cost base and B-grade revenue potential. Thus, while Barclays sticks to its big league investment banking strategy, it has little choice but to pay up."

Tuesday, February 11, 2014

David Graeber: Play at the heart of everything

What’s the Point If We Can’t Have Fun? | David Graeber | The Baffler:

 "It’s hardly surprising, then, that this aspect of Kropotkin’s argument was ignored by the neo-Darwinists. Unlike “the problem of altruism,” cooperation for pleasure, as an end in itself, simply could not be recuperated for ideological purposes. "

It is a lot more interesting than that quote.

Monday, February 10, 2014

James Surowiecki: The End of Brand Loyalty : The New Yorker

James Surowiecki: The End of Brand Loyalty : The New Yorker:

The internet, the free flow of information and the decline of brands.  If  brand delivers the same product each time, that can be valuable.  However, when experience becomes more valuable and the cost and availability of information plummets, brands lose value.

'via Blog this'

Tuesday, February 04, 2014

Viral math | Felix Salmon

Felix Salmon on the math of going viral on Facebook.

As a result, the important formula isn’t S·F·C; rather it’s S·F·FBT·C, where FBT is the probability that the article you’re sharing is going to actually appear in your friends’ feeds. In recent months, Facebook has been taking its foot off the throttle quite dramatically — but no one knows how long that’s going to last.

I am not sure what Facebook does to Facebook does to affect this process.  However, the model is one of chaos where changes in the initial condition (S, F, C etc) can have dramatic effects and can be adapted to other situations.