Outage FUD

A gas pipeline running from Houston to New York had a break in Alabama over the weekend. My understanding is the owner has crews working to route around the problem. By the end of the week the flow should resume. Their second line for other fuels is apparently being used to help. The governor of my state declared a State Of Emergency in order to allow truck drivers to work beyond safe hours to ensure gas gets to places.

I hear of places running out of gas which I am sure fuels the panic. (Get it?) My guess is people scared of not being able to fuel up hit the gas stations over the weekend when the cars were at over half full. “Just in case.” In other words their panic caused a gas panic.

People’s fear of losing their money caused them to withdraw their cash out of banks caused banks to fail. People’s fear of not being able to get gas caused the fuel panics of the 70s. This is no where near that bad if the reports are correct. Just stay calm. Drive a little less. And get a hybrid.

Chaos of lists

I went to buy a book. There were a chaos of options in the used list at the same price. Because these were used, there were descriptions of quality headlined with:

  • Acceptable
  • Good
  • Very Good
  • Like New

All but new were represented at the cheapest price level. So naturally I looked through the very goods for the best described one. It felt more involved because I had to glance at dozens to find the 3 VGs. And re-check to make sure I had found them.

Being raised in libraries, it seemed to me like this needed an order tweak. It seemed like in addition to the existing order of lowest to highest, it should also order best quality to worst. So the first result is the cheapest price with best quality.

Then the behavior economist in me realized that the used book dealers would exploit that model. They would have a stronger incentive to inflate the quality of their book. Suddenly former library books they list as Good would find their way to Like New quality. Everyone wants the first spot because people are lazy and much more likely to buy the one there. If a seller wants to undercut competition by using a lower price, then that race to the bottom reflects supply and demand. When there are lots of books, buyers benefit by picking the cheapest.

Quality is a different animal. It is the area where buyers have to beware. Only the seller really knows the true quality of the item. The buyer only finds out upon receiving it. That kind of imbalance is where the free hand of the market tends to be tied behind its back. Sure, the buyer can complain and contest, but that really means buyers stop trusting this specific place and go elsewhere.

Easier is to take away the incentive to falsify the quality of books by putting the order random at the same price level. So my guess is that is why it is that way.

Sunk Cost Fallacy

In economics, a sunk cost is any past cost that has already been paid and cannot be recovered. For example, a business may have invested a million dollars into new hardware. This money is now gone and cannot be recovered, so it shouldn’t figure into the business’s decision making process.

… from How the Sunk Cost Fallacy Makes You Act Stupid.

The article goes on to describe common situations where we fall for it. The solution of making a pro and con list did not really impress me. Really, the solutions are:

  • Be willing to cut losses and run. The Cull and Surrender post is about being willing to cut out things not worth the time.
  • Actively expose mistakes to find. Embarrassment about being wrong or having made a mistake keeps us on the path of that bad place. On Being Wrong.
  • Act like the present is all there is. Past experience contributes to making a decision. But the present case should be handled as a new, independent situation and not a continuation.

Review: Flash Boys: A Wall Street Revolt

Flash Boys: A Wall Street Revolt
Flash Boys: A Wall Street Revolt by Michael Lewis
My rating: 5 of 5 stars

This book is really the story of why and how IEX was created. Humans made bad decisions. So, to protect people from other people, we moved the operation of the stock market to being run by computers. The natural consequence was for people to game the system with computer code. Rather than stay vigilant against new exploitations, we just redefined fair. The team behind IEX created it to eliminate these problems and establish a fair place for trading to occur.

About halfway through the book, I watched a commercial where an investment company touted their guaranteed one second trades. To the average person, this probably sounds amazing. The thing is that companies like this operate in milliseconds (1/1,000) and nanoseconds (1/1,000,000). Plus, they operate Dark Pools where the trade is obfuscated from independent review. Your trade could get executed where it benefits them and not you.

The overarching theme is that complexity and obfuscation created an environment where bad things can happen. As a technologist in education, I fight against this every day. We desire simplicity. Yet every change and especially those we execute without a good understanding of the business case creates complexity which will result in a failure. When no one fully understands how all the components work together, it exists to fail. Funnily enough, my team, the database administrators (really application administrators) sit at the intersection of the analysts, vendors, operating system admins, storage admins, network admins, and others. So this is familiar territory.

Zoran Perkov and Sergey Aleynikov are unsung heroes I am sure about whom I will spend more time reading.

View all my reviews

2012 Reading List

I had three reading goals:

Complete unfinished novel series.

  1. A Song of Ice and Fire
    1. DONE — A Game of Thrones (A Song of Ice and Fire, #1) — George R.R. Martin
    2. DONE — A Clash of Kings (A Song of Ice and Fire, #2) — George R.R. Martin
    3. DONE — A Storm of Swords (A Song of Ice and Fire, #3) — George R.R. Martin
    4. DONE — A Feast for Crows (A Song of Ice and Fire, #4) — George R.R. Martin
    5. DONE — A Dance With Dragons (A Song of Ice and Fire, #5) — George R.R. Martin
  2. Wicked Years
    1. DONE — Wicked: The Life and Times of the Wicked Witch of the West (Wicked Years, #1) — Gregory Maguire
    2. DONE — Son of a Witch (Wicked Years, #2) — Gregory Maguire
    3. NOT DONE — A Lion Among Men (Wicked Years, #3) — Gregory Maguire
  3. The Malazan Book of the Fallen
    1. DONE — Deadhouse Gates (The Malazan Book of the Fallen, #2) — Steven Erikson
    2. DONE — Memories of Ice (Malazan Book of the Fallen, #3) — Steven Erikson
    3. DONE — House of Chains (Malazan Book of the Fallen, #4) — Steven Erikson
    4. DONE — Midnight Tides (Malazan Book of the Fallen, #5) — Steven Erikson
    5. DONE — The Bonehunters (Malazan Book of the Fallen, #6) — Steven Erikson
    6. NOT DONE — Reaper’s Gale (Malazan Book of the Fallen, #7) — Steven Erikson
    7. NOT DONE — Toll the Hounds (Malazan Book of the Fallen, #8) — Steven Erikson
    8. NOT DONE — Dust of Dreams (The Malazan Book Of The Fallen #9) — Steven Erikson
    9. NOT DONE — The Crippled God (Malazan Book of the Fallen, #10) — Steven Erikson
  4. Barsoom
    1. DONE — A Princess of Mars — Edgar Rice Burroughs
    2. DONE — The Gods of Mars (Barsoom, #2) — Edgar Rice Burroughs
    3. DONE — The Warlord of Mars (Barsoom, #3) — Edgar Rice Burroughs
    4. DONE — Thuvia, Maid of Mars (Barsoom, #4) — Edgar Rice Burroughs
    5. DONE — The Chessmen of Mars (Barsoom, #5) — Edgar Rice Burroughs
    6. DONE — The Master Mind of Mars (Barsoom, #6) — Edgar Rice Burroughs
    7. DONE — A Fighting Man of Mars (Barsoom, #7) — Edgar Rice Burroughs
    8. DONE — Swords of Mars (Barsoom, #8) — Edgar Rice Burroughs
    9. DONE — Synthetic Men of Mars (Barsoom #9) — Edgar Rice Burroughs
  5. Millennium
    1. DONE — The Girl Who Played With Fire (Millennium, #2) — Stieg Larsson
    2. DONE — The Girl Who Kicked the Hornet’s Nest (Millennium, #3) — Stieg Larsson
Total: 28. Done: 23. Failed.

American History and Decision Making

  1. DONE — Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist — Tyler Cowen
  2. DONE — The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business — Clayton M. Christensen
  3. DONE — The Innovator’s Solution: Creating and Sustaining Successful Growth — Clayton M. Christensen
  4. DONE — Our Endangered Values: America’s Moral Crisis — Jimmy Carter
  5. DONE — The Federalist Papers — Alexander HamiltonJames MadisonJohn Jay
  6. DONE — 1776 — David McCullough
  7. DONE — All the Devils are Here: The Hidden History of the Financial Crisis — Bethany McLeanJoe Nocera
  8. DONE — Common Wealth: Economics for a Crowded Planet — Jeffrey D. Sachs
  9. DONE — American Lion: Andrew Jackson in the White House — Jon Meacham
  10. DONE — At the Center of the Storm: My Years at the CIA — George Tenet
Total: 10. Done: 10. Completed.

Science

  1. DONE — The Genius in All of Us: Why Everything You’ve Been Told About Genetics, Talent and IQ is Wrong — David Shenk
  2. DONE — The Best American Science and Nature Writing 2010 — Freeman DysonTim Folger
  3. DONE — The Theory of Everything: The Origin and Fate of the Universe — Stephen Hawking
  4. DONE — The Nature of Technology: What It Is and How It Evolves — W. Brian Arthur
  5. DONE — The Demise of Guys: Why Boys Are Struggling and What We Can Do About It  — Philip ZimbardoNikita Duncan
  6. DONE — Mind Wide Open: Your Brain and the Neuroscience of Everyday Life — Steven Johnson
  7. DONE — NurtureShock: New Thinking About Children — Po BronsonAshley Merryman
  8. DONE — The Botany of Desire: A Plant’s-Eye View of the World — Michael Pollan
  9. DONE — The Social Animal: The Hidden Sources of Love, Character, and Achievement — David Brooks
  10. DONE — What We Believe But Cannot Prove: Today’s Leading Thinkers on Science in the Age of Certainty — John Brockman
  11. DONE — The Cosmic Landscape: String Theory and the Illusion of Intelligent Design — Leonard Susskind
  12. DONE — A Different Universe: Reinventing Physics from the Bottom Down — Robert B. Laughlin
  13. DONE — Being Logical: A Guide to Good Thinking — D.Q. McInerny
Total: 13. Done: 13. Completed.

Not Your Oprah’s Book Club (FacebookGoodreads) selections:
(Facebook page for Athens book club)

  1. DONE — The House of Mirth — Edith Wharton
  2. DONE — Love is a Mix Tape — Rob Sheffield

Re-read to watch the movie:

  1. DONE — The Hobbit — 
  2. DONE   — 

Offlist:

  1. DONE — The Picture of Dorian Gray — Oscar Wilde
  2. DONE — Ubik — 
  3. DONE  Free Will — Sam Harris
  4. DONE  Free Will: A Response to Sam Harris  Kurt Keefner
  5. DONE — The Three Musketeers — Alexandre Dumas

TED Talk: The riddle of experience vs. memory

We tend to think of memory the same as an audio-visual recording of the events in our life. Unfortunately, it is not. Memory captures snapshots which influence what we recall later. So a relatively good experience with a particularly bad ending can bias memory to recall the whole as bad.

If the below video does not display, then try Daniel Kahneman: The riddle of experience vs. memory.

TED Talk: David Brooks: The social animal

Some quotes I liked from this talk.

“Emotions are not separate from reason. They are the foundation of reason as they show us what to value.”

“The first gift or talent is Mindsight: the ability to enter into other people’s minds and learn what they have to offer…. Babies are born to interpenetrate into Mom’s mind and download what they find.”

“We are overconfidence machines [1]. Ninety-five percent of our professors say they are above average teachers. Ninety-six percent of college students say they have above average social skills. Time magazine asked Americans if they are in the top 1% of earners. Nineteen percent of Americans [say they] are in the top 1% of earners.”

Other abilities are Medis, picking out patterns to arrive gists, and Sympathy, work within groups, and Blending, synthesizing concepts, and Limerence, drive or motivation for moments of transcendence.

[1] In Why We Make Mistakes is a confidence test. The idea of the test is to give answers in a range where you are 90% confident the answer will be. The less certain, the wider the range. With ten questions, one can only get one wrong to pass. Managers given this test in their field got most

Tapping into the findings of his latest book, NYTimes columnist David Brooks unpacks new insights into human nature from the cognitive sciences — insights with massive implications for economics and politics as well as our own self-knowledge. In a talk full of humor, he shows how you can’t hope to understand humans as separate individuals making choices based on their conscious awareness.