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The Surprising Historical Significance of Fortune-Telling | Cody Delistraty

The capitalist ethos of self-mastery is undermined by the possibility of luck leading to success without proportional labor. As a result, games of luck tend to be sidelined in capitalist societies, looked down upon as pastimes of the poor and lazy.

Even with a joke, anchoring moves an offer up 10%

As expected, participants did anchor on the first number presented during the salary negotiation — even when that number was intended as a joke. When the bidding started off with the mention of $100,000 the average offer was $35,385 compared to an offer of $32,463 for the control group. That is, the high salary joke actually paid off with an extra $3,000 a year.

Animals, like humans, place a higher value on what requires more effort.

We have examined the justification of effort effect in animals and found a pattern similar to the one in humans but we propose a simpler underlying mechanism: contrast between the greater effort and the resulting reward that follows. The contrast model predicts that any relatively aversive event will result in a preference for a reward (or for the signal of a reward) that follows. Much evidence supports this model: Signals for reward are preferred if they are preceded by having to make a greater number of responses, encountering a longer delay, or experiencing the absence of food (when food is presented on other trials). Contrast has also been found when the signals are associated with greater rather than less food restriction. We have also found a shift toward the preference of a food location that requires greater effort to obtain. Analogous effects have been found in humans (both children and adults) using similar procedures.

Salon's enduring losses

in the quarter ending Dec. 31, 2015 (the most recent quarter for which data is publicly available), Salon had $1.95 million in revenue and $2.19 million in expenses, for a net loss of about $250,000. That’s better than the year before — in the quarter ending Dec. 31, 2014, Salon had $1.47 million in revenue and $2.27 million in expenses, for a net loss of about $800,000 — but it’s still a net loss.

Take money away for failing to exercise

For a 13-week study, researchers randomly assigned 281 people to one of four groups. The goal for each person was to achieve 7,000 steps a day, recorded on a smartphone accelerometer. Those in the first group got $1.40 for each day they reached the goal. In the second group, the reward for success was entry into a lottery with a possible payoff of $100. Those in the third were given $42 the first day of every month, deposited in an online account, and had $1.40 automatically deducted each day they failed to achieve 7,000 steps. A control group received only daily feedback about their performance. The study is in Annals of Internal Medicine. The control group achieved their goal 30 percent of the time, and the lottery and paid-every-day groups performed statistically no better, at 35 percent. But the group paid upfront, risking a loss every day, succeeded 45 percent of the time.

A decade of media evolution in two paragraphs

Websites, Vox included, have been able to accumulate enormous audiences with incredible speed by harvesting referrals from social networks. These rapidly convened audiences felt contiguous because they ended up, eventually, on publishers’ websites; they felt […]real because advertising teams could sell web ads against them. Websites plausibly marketed these people as members of their audiences, rather than temporarily diverted members of a platform’s audience. […]The illusion of audience ownership is becoming harder to sustain, and the audiences are getting bigger and bigger. 2013 was the year every major site with a social strategy broke traffic records by a mile;[…]2015, when a single weird or clever native Facebook video can easily out-traffic a week of a site’s web content, is the year it’s becoming clear to everyone who these audiences really belong to, and what it means to borrow them. 2016 is the year we find out what the price of access will be.

Does gentrification lead to generification?

In the longer term, high commercial rents also damage what made neighborhoods like the West Village attractive and appealing to buyers and renters in the first place. One usually pays for distinction, and there is nothing distinct about a neighborhood where new businesses are national chains or safe, high-margin operations. The preservationist Jeremiah Moss, the author of the Vanishing New York blog, points out that Greenwich Village has been a bohemian center since the eighteen-fifties, but, since the rise in rents, it “no longer drives the culture,” and instead is becoming what James Howard Kunstler termed “a geography of nowhere.”

Journalists give, Twitter takes

In the last month, I've created nearly 2 million impressions for Twitter. Whether that is good for my Twitter persona and my pride is a qualitative question whose answer resides outside the bounds of an analytics dashboard. But it is quantitatively not a good deal for The Atlantic. Something I already suspected has now been made crystal clear: 99 percent of my work on Twitter belongs to Twitter.

Get Ready for $10 Oil

Instead, the chicken-out point is the marginal cost of production, or the additional costs after the wells are drilled and the pipes are laid. Another way to think of it: It's the price at which cash flow for an additional barrel falls to zero.  Last month, Wood Mackenzie, an energy research organization, found that of 2,222 oil fields surveyed worldwide, only 1.6 percent would have negative cash flow at $40 a barrel. That suggests there won't be a lot of chickening out at $40.  Keep in mind that the marginal cost for efficient U.S. shale-oil producers is about $10 to $20 a barrel in the Permian Basin in Texas and about the same for oil produced in the Persian Gulf.

What Putin giveth...

Mr. Yevtushenkov has now joined a list that includes not only Putin critics like the exiled former oil executive Mikhail B. Khodorkovsky, who spent 10 years in prison before being freed by Mr. Putin, and Aleksei A. Navalny, […]They also include others who, like Mr. Yevtushenkov, once expected that outward loyalty and close ties to the Kremlin afforded them a measure of protection.A prominent businessman who knows Mr. Yevtushenkov said that Mr. Putin had eroded the very notion of property rights in Russia, even for those who displayed fealty. He said that Mr. Putin himself had described private ownership of strategic industries with the Russian word to roost. “A chicken can exercise ownership of eggs, and it can get fed while it’s sitting on the egg,” he said, “but it’s not really their egg.”

Risk takers are scarce (in theory)

It is not enough to think of an idea, or even to pursue it desultorily; the entrepreneur’s profit goes to the person who is willing to commit his time and energy to projects that may not succeed. Workers are guaranteed their salaries, lenders are guaranteed their interest, but the entrepreneur has no guarantee: he just collects all the money that is left over. That could be a fortune or it could be less than nothing at all. Most of us don’t want to take this risk. Part of the reason entrepreneurs are well rewarded is because they are scarce.

Rent seeking ennabled by innovation OR knowledge

Schumpeter is correct in asserting that entrepreneurs are fundamentally rent-seeking creatures. But Schumpeter was romantic in thinking that only innovation (i.e., finding new ways of doing things that lower costs or increase quality or create a new good or market) is the source of rent. Much more common is what his fellow Austrian Friedrich Hayek called the “particularized knowledge of time and place.” An entrepreneur makes his living from that knowledge, from a profound local understanding of demand, suppliers, and price.

What's entrepreneurship?

By creating a new product, finding a new market, or discovering a more efficient method of production, Schumpeter claims that an entrepreneur can, for a time, make exceptional profits. These excess profits, Schumpeter agrees with the neoclassicals, won’t last forever. As soon as others copy the entrepreneur’s techniques, supply will increase and so prices will decline until profits equal the wages of a hired worker doing the same job. Schumpeter’s florid prose does make entrepreneurs sound like Nietzschean supermen rather than our more commonplace vision of middle-aged men in suits talking enthusiastically into phones, worried about selling enough widgets every month to cover their nuts. Schumpeter would claim that our widget wholesaler is just a “businessman,” the “entrepreneur” a more distinguished subset of the group, the innovator with new techniques or new technologies that allow him to make supernormal profits. Of course, in common conversation, the businessman and the entrepreneur are synonyms: that is to say, the individual directs a business enterprise, and unlike employees does not earn a regular wage, and unlike lenders does not receive regular interest payments. The entrepreneur or businessman then is the person who collects the residual profits of the business after wages, interest, and other expenses are paid.

Digital giants get bigger at the expense of the small blog sites

So the result of the 2014 new-money surge is that the world of online publishing has become bifurcated. Either you aspire to become a “platform”, or you simply join up with somebody else’s. (Take your choice: WordPress, Tumblr, Medium, YouTube or, of course, Facebook.) The small but self-sustaining bloggy site is a thing of the past: if you’re not getting 20-30 million unique visitors every month, and don’t aspire to such heights, then you’re basically an economic irrelevance. Advertisers won’t touch you, you won’t make any money, and your remaining visitors will inexorably leach away as they move from their desktops to their phones.

Biggest data

In a collective farm, a pig gave birth to three piglets. The Party committee was convened and decided that to report about only three piglets would make a bad impression in the district Party committee. So, they reported that five piglets were born in the farm. The district Party committee reported to the Region Party committee that seven piglets were born in the collective farm. In their report to the Ministry of Agriculture, the Region Party committee advised that the socialist obligation to increase the number of pigs by twelve, has been successfully fulfilled. To please comrade Brezhnev, the Ministry reported that twenty piglets were born, ahead of the planned date. "Very good," comrade Brezhnev said. "Three piglets you'll give to the workers of Leningrad. Three you'll give to the heroic city of Moscow. Five you'll put aside for exports. Five you'll send to the starving African children. The rest you store as a strategic food reserve. Nobody shall touch it!"

Writing about the null state

Two brothers, John, and Bob, who lived in America and were members of the communist party, decided to emigrate to the USSR. Even though they didn't believe the American media's negative reports on the conditions in the USSR, they decided to exercise caution. First, only John would go to Russia to test the waters. If, contrary to the media reports, the living conditions would be found good, and the reports about persecutions by the KGB false, than John would write a letter to Bob using black ink whose color would signify that the letter is to be taken at face value. If, though, the situation in the USSR happened to be bad, and John would be afraid of writing the truth, he would use red ink thus indicating that whatever he says in the letter must not be believed. In three months John sent his first report. It was in black ink and read, "Dear brother Bob! I'm so happy here! It's a beautiful country, I enjoy complete freedom, and high standard of living. All the capitalist press wrote was lies. Everything is readily available! There is only one small thing of which there's shortage, namely red ink."

The economics behind 432 Park Avenue

Keep in mind that these are pied-a-terres that begin at $7 million each and include several full-floor parcels in the $75 million range. More than anything else, this speaks to the insatiable appetite of the world’s greatly expanded billionaire class. Middle Eastern oil magnates, Chinese billionaires, Russian oligarchs, and the Latin American aristocracy all have one thing in common: More money than they know what to do with and a desperation to get as much of it out of their home countries as possible. New York real estate works very well as both a facilitator of this as well as a store of value.

The lipstick index, as reported by NYTimes

After Estée Lauder chairman Leonard Lauder revived the truism that the cosmetics industry is recession-proof and actually suggested that the “lipstick index” could indicate economic fluctuations in 2001, writers in the business section and the magazine, including pop economist Adam Davidson, simply repeated it and attributed it vaguely to economists. (So did Maureen Dowd, but in pure Dowd fashion.) Only in the Styles section did reporters ask economists about it and look at some numbers, much less correctly attribute the concept’s revival to Lauder. Also, they noted that it had “been largely discredited.”

The future has taken a looong time to reach the US Treasury market

The face of automation on Wall Street is a computer hooked up to nine blinking screens that goes by the name Quantitative Market Maker, or Q.M.M. Until last year, the work that Q.M.M. performs was handled by human traders at JPMorgan Chase, who would shout prices into a phone and yell “Done!” when the trade was executed. Now, Q.M.M., which sits on the same floor as those traders in a Midtown Manhattan skyscraper, can come up with the same prices in a fraction of a second. When it completes a trade, it emits a jingling cash register sound, making the trading floor sound like an arcade. […]These trading desks have long been the noisy, competitive heart of Wall Street, and JPMorgan’s operation has been the biggest in the world in recent years, bringing in $15.5 billion in revenue last year.

Experiences vanish, make us happier

Experiential purchases are also more associated with identity, connection, and social behavior. Looking back on purchases made, experiences make people happier than do possessions. It's kind of counter to the logic that if you pay for an experience, like a vacation, it will be over and gone; but if you buy a tangible thing, a couch, at least you'll have it for a long time. Actually most of us have a pretty intense capacity for tolerance, or hedonic adaptation, where we stop appreciating things to which we're constantly exposed. […]It's the fleetingness of experiential purchases that endears us to them. […]Even a bad experience becomes a good story.

Uncertain reward more motivating than sure thing, study finds | The University of Chicago Booth School of Business

The researchers ran several experiments that established this motivation. For example, in one study they asked college students to drink a large amount of water in two minutes. Some were told they would receive $2 for completing the task, while others were told they would receive either $1 or $2. They found that more people finished the water to receive the uncertain amount of money. The team calls this phenomenon the motivating-uncertainty effect. Fishbach, Hsee and Shen explain this effect by positing that making the unknown known — i.e., figuring out what is in a wrapped package or finding out which reward one has earned — is a positive experience. Because people are excited to find out what they can actually get, working for an uncertain reward makes the whole situation more like a game and less like work. They then ran two more experiments that confirmed this explanation.

Edward Baptist’s New Book Follows the Money on Slavery - NYTimes.com

“The idea that the commodification and suffering and forced labor of African-Americans is what made the United States powerful and rich is not an idea that people necessarily are happy to hear. Yet it is the truth.”

A Cost-Benefit Analysis of Being Jewish - The Atlantic

Orthodox Judaism generally requires the most hours of an adherent's time, while Reform Judaism generally requires quite a lot less of an adherent's time. Therefore, based on income alone (which makes a person's time more or less valuable), “we would expect the members of Orthodox congregations to have the lowest wage rates and the members of Reform congregations to have the highest wage rates,” with Conservative Jews somewhere in the middle. And since education correlates well to income, we’d expect college and advanced degrees to be similarly-sorted throughout the denominations. Sure enough, Chiswick writes, “This pattern was clearly apparent by the mid-20th century.”
Visible Prices is the tool that I wished for to help students grasp the economic content of literature, and to provide researchers with a means of studying how authors used prices in their texts. In Charlotte Bronte’s Jane Eyre, Jane’s salary as governess to Mr. Rochester’s ward is £30 per annum. This database makes price back into a visible part of the reading experience by allowing students to discover what £30 meant in purchasing power, or to see how the salary that Bronte chose compared with those being offered at the time of composition and publication. Economic historians have, in the past, gathered price listings for staple goods and raw materials, such as wool and wheat. These records of the changing prices of a specific commodity have been formatted as excel spreadsheets, or as .txt files. They are readable, but not manipulatable, and are able only to track specifically focused inquiries, i.e. “What was the price of wheat recorded in France from 1825-1913?”. As printed documents have migrated onto the web, researchers have gained greater access to economic data, though the challenges of making it easy to combine and manipulate remain.
"The only way in which inequalities between short- and long-lived can be attenuated is by having everyone spend a little more and work a little less early in life," said Fleurbaey. "That way, for those who are unlucky and die prematurely, their life is not as bad economically as it would be if they had planned to enjoy more consumption and leisure later."
The professors said the news release on their research identified the funding source. As for the op-eds, Hakim said at first that the newspapers must have chosen not to include it. But he and Blackstone later said they weren't sure they had provided the information. "We believe we did," Hakim said. "It's not that important."