November 2010 Archives

Predictably Irrational

Much of my personal study since working at Mercury Markets has centered on the way human reasoning fails; driven on by the blatant manifestations of confirmation bias and the narrative bias I saw on display there. 

The latest in a long line of books that I have investigated in Predictably Irrational by Dan Areily. While I am only into the second chapter, there is an example in there of pure irrational behavior that resonates with me and I think is likely to resonate with everyone else who reads this. We will try to justify it in our heads, but from a purely economic perspective the behavior is inexplicable. This is not his example exactly.

Imagine you are at a store; you are buying a blender (or some other moderately priced item) and the price tag is $50. Now suppose you are at the register when someone tells you that the same item is available at another branch of the same store for $25 and that they have the item in stock. Traveling to the other branch will take about a half hour. Would you run to the other store? While most of us would agree that the circumstances would to some extent dictate their likelihood to pop cross town, I think most would admit that they would be tempted.

Now lets assume you are buying a new leather sofa. It's going to cost you $3000. As you prepare to pay, the clerk tells you that another branch of the same store has the same sofa, in stock, for $2975. Traveling to the other branch will take about a half hour. Would you run to the other store? Here I believe most people would admit that they are less tempted to make the trip, I know I would be unlikely to bother. 

So whats going on here? It would seem that our time doesn't have a fixed value. In one scenario we would be sorely tempted to blow a half-hour to save $25 and in the other it doesn't seem worth the effort. While the tradeoff is precisely the same we seem to be driven to look at the problem to some extent as proportional. In one case we are saving fifty percent and in the other we are saving about eight tenths of a percent; one feels worth it and the other does not. I am of the opinion that Homo economicus is no more than a branch of Eoanthropus dawsoni; hacked together to serve an agenda.

Harry Harrison Short Stories

The nook, the train, and free short-stories in ePub format go together like a house on fire. Following up on two Harry Harrison books I burned through a collection of his short stories.
  • Arm of the Law: A new robotic deputy brings law and order to a backwoods town on a backwoods world.
  • Navy Day: What happens when the army develops a new technology they claim makes the navy obsolete?
  • The K-Factor: What can you do with a operable model of social movements?
  • The Missplaced Battleship: A very early appearance of stainless steel rat single-handedly stalking a rogue warship.
  • The Repairman: A universe fairing repair man has to fix a device the planets natives have adopted into their religion.
  • The Velvet Glove: A waterproof robot, trying to make his way in a bigoted world, finds himself in over his head.

Deathworld by Harry Harrison

Exploring very similar themes to Planet of the Damned in a very similar universe, this book tells the story of a small population of people constantly under siege by a planet that wants the dead so badly that the flora and fauna rapidly evolve newer and deadlier forms. This story foreshadows Avatar.

Planet of the Damned

Every now and again I go through a sci-fi reading phase. Discovering the availability of a bunch of old Harry Harrison books and stories on feedbooks seems to have kickstarted another one of them. This first of my glut is set in the type of classic space opera universe popular in the mid-20th century. Mankind is scattered across the universe, many on planets which have forced evolution of people to match an inhospitable environment. Here, people who have adapted to a desert planet and devolved socially, find them selves at odds with a neighboring world who is reluctantly preparing to destroy the planet to avoid their own destruction. Only the new member of shadowy organization bent on ensuring mankind's apotheoses has a chance of averting the war.

The Failure of Risk Management

This is a followup book to How to Measure Anything, which details what the author sees as the standard errors and failures in the way businesses manage risk. I agree strongly with the thesis. The sequencing of the two books is interesting; where the first book provides techniques, the second provides a stronger argument justifying those techniques. The two books are strong companions and will reward reading by anyone with a need to manage risk.

Heart of Darkness by Joseph Conrad

The basis for Apocalypse Now; this is the story of an English steamboat captain going up a river in Africa in the service of a Belgian trading company to the ivory outpost controlled by a man named Kurtz. The contrast of various types of insanity is the core theme of the story comparing the "civilized" mistreatment of the natives at the hands of the company with the "uncivilized" mistreatment by Mr Kurtz.
I am one of those people fascinated by language.  I own several dictionaries, etymologies, and usage guides; my favorite being the Oxford English Dictionary. I picked The Meaning of Everything up on a whim at Bookman's corner about a month ago. Written by the same author as The Professor and the Madman, this latter book is also about the genesis of the OED, but is more a history of the dictionary's development, and less of a human story. I would recommend anyone with a serious interest in the OED to read it, those not so philologically inclined may be better sticking with the authors earlier work.