I’ve noticed a lot of musings about behavioural economics over the past few months (to the point that Wendy’s currently taking a class on it at Columbia). A lot of it has been related Richard Thaler’s recent book Nudge, plus the fact that he frequently consults Austin Goolbee, one of Obama’s top economic advisers.
One of the other big players in this space is Daniel Ariely, who also has a book – Predictably Irrational. Both have recently-ish done book tour at Google. Here’s the video from Daniel’s visit; it’s a great intro to the topic (plus he’s an entertaining speaker):
If you only watch 3 minutes of this, skip ahead to 27:50 and watch as he recounts an offer The Economist had online (he took a screenshot). They offered the following subscription options:
Online-only access: $59
Print-only: $125
Print plus online access: $125
You’re probably thinking: “these people are idiots – why would anyone pay $125 for just print when they could get online for free?” And you’re right – Ariely asked 100 MIT students which offer they’d take and the split was 16/84 online vs. print + online. No one took the print-only offer.
Nothing exciting there, so he re-ran the experiment without the print-only option. Now it was a whole new world: 68 students wanted online-only access whereas only 32 wanted print plus online.
Now The Economist doesn’t look so stupid anymore. As Ariely describes it: “the middle option was useless in the sense that nobody wanted it, but it wasn’t useless in the sense that it helped people figure out what they wanted.”
Check out the video and read up on the topic. This is a nascent field tackling a lot of tough questions and it’ll be interesting to see if someone can come up with a comprehensive theory over the next few years.
Two recent articles I read have me thinking about path dependence. For those who don’t know, path dependence basically means that we (either individuals or institutions) are the sum of historical experiences – history matters. A corollary is that small events can build up over time to have large historical impacts (read the Wikipedia entry above for the story of VHS vs. Betamax).
The first article comes from the New Yorker and is about how we arrived at the current U.S. healthcare system (The author, Atul Gawande, is a pretty fascinating guy – read his recent NEJM paper on how simple checklists can significantly improve patient outcomes). The synopsis could be: nobody designed this system, rather many little decisions have now led us to what it is. This is classic path dependence (and his article calls it out). Anyone who wants to change the system is going to have to accommodate this and show that their solution is able to deal with all the challenges that got us here in the first place.
The same dialogue is going on right now in the world of finance. Check out Alan Blinder’s recent article in the New York Times. He outlines the six retrospectively obvious mistakes that we made to lead us into the current financial crisis we’re in. This again, is classic path dependence: a few independently made mistakes combines to create one massive mistake that was much great than the sum of its parts.
You might be thinking that path dependence is a bad thing, but that’s not true. In fact, it can lead to great outcomes. Before the Euro, one of the reasons that Germany consistently had a high standard of living was the Bundesbank’s focus on low inflation. They were adamant about keeping inflation low as the Bundesbank’s early governors had lived through the hyperinflation of the Weimar Republic and were obsessed with making sure that it never happened again.
One of my new year’s resolutions was to learn how to cook Thai food. Tonight I finally got around to making a meal – chicken with Thai basil and cashews.
It turned out well: very aromatic, light and incredibly fresh. Here’s a shot (tastes much better than it looks); recipe follows:
Ingredients:
1.5 pounds skinless, boneless chicken breasts
2 lemongrass stalks, white part only, finely chopped
3 small fresh red chiles, seeded and finely chopped. Note: we used green chiles as that’s all they had at the store and it still tasted great
4 cloves garlic, crushed
1 tablespoon finely chopped fresh ginger
2 fresh cilantro roots, finely chopped. Note: it’s almost impossible to get cilantro root as it’s cut off the cilantro in most stores. Just chop up the stalk and it’ll work fine
2 tablespoons vegetable oil. Note: we used olive oil and it still tasted great
2/3 cup cashews
1.5 tablespoons lime juice. Note: that’s about 2 limes, squeezed
2 tablespoons fish sauce
1.5 tablespoons light brown sugar
2 cups lightly packed fresh Thai basil. Note: if you can’t get Thai basil, normal basil will work
2 teaspoons cornstarch mixed with 1 tablespoon water
Directions:
Place the chicken in a large bowl with the lemongrass, chilies, garlic, ginger and cilantro root. Mix together well
Heat a wok over medium heat, add 1 teaspoon of the oil, and swirl to coat the surface of the wok. Add the cashews and cook for 1 minute or until lightly brown (note: you better stir ‘em as they burn quickly). Remove and drain on paper towels
Heat the remaining oil in the wok, add the chicken in batches, and stir-fry over medium heat for 4-5 minutes or until browned. Return the chicken to the wok
Stir in the lime juice, fish sauce, brown sugar, and basil, and cook for 30-60 seconds or until the basil just begins to wilt. Add the cornstarch mixture and stir fry until the mixture thickens slightly. Stir in the cashews and serve with steamed rice
I was in a meeting that was not going in the greatest direction and I updated my Facebook status to read:
Lindsay is not getting that warm and fuzzy feeling
Debate what you will the merits of using Facebook at work, but you weren’t in this meeting (iPhone + Facebook = no more boring meetings). Anyways, this was around 2:30 or so, not too long after Obama’s inauguration. This led to the following comment:
listen here you canadian cynic! let the amerikanis have their moment. they’ve put up with bush for the last eight years, you too would be warm and fuzzy.
My workers were definitely feeling warm and fuzzy today – I was genuinely impressed when they clapped for their President after his swearing in. (I couldn’t feel that warm and fuzzy as his first sentence was “my fellow citizens…” and I am, alas, not a citizen – but I still liked the speech and wish the new Pres nothing but success).
Just down the street from us is Madison Square Park. It’s a lovely little park that is surrounded by heritage buildings (Flatiron, Met Life, New York Life) and is home to the Shake Shack. It’s also notable as one of the few sites in the city that promote public art. In 2007, they featured sculptures by Roxy Paine. I quite liked this one (Conjoined):
Right now they’re featuring the work “Untitled (Tree House)” by Tadashi Kawamata. Here’s a shot:
Since I’ve recently been writing about apophenia (our tendency to see patterns everywhere), I thought I’d explore our tendency to see conspiracy theories everywhere. This art consists of tree house by an artist who likes to wrap things in pieces of wood (check out the link above). But why tree houses? And what if they weren’t really tree houses, but meant to be duck blinds? After all, this is a park and it’s got pigeons and they’re the rats of the sky and nobody likes them…
So now we’ve got a park full of duck blinds. But who’s going to go hunting? Well, the timing of this installation just happens to overlap the inauguration of Barack Obama – and the end of the Dick Cheney era. And everyone knows that Dick Cheney is a great hunter, so maybe the park is celebrating that Cheney’s out of office by creating this installation. So now the trust running this park hates all Republicans and is a tool of the Democratic party.
Now of course all of this is crap. It’s just a piece of work by an artist in the park. But I’d like to think that this is how conspiracy theories begin…
It is the deliriously lazy Sunday of a long weekend today; one of those days where the slightest task feels as though it is an Odyssey-like challenge. Wen and I have enjoyed a day of doing nothing, with the result that this blog post is about almost nothing.
One of our lazy Sunday traditions is brunch. A favourite local spot of ours is the Empire Diner. Here’s a shot of it from this morning (or, perhaps, this afternoon as it was 1pm…).
This afternoon was completely surreal. Adam and I went to Chelsea Market for coffees plus a change of scenery to come up with some ideas for new projects. As we were leaving, the TV in the entranceway showed a plane floating in water along with a message that everyone had gotten out alive. I thought to myself, that’s great, what are the odds?
As we walked outside, the traffic was nuts and there was a traffic cop at the corner of 15th and 9th, not letting anyone turn to the West Side Highway. I noticed this and couldn’t help but think that the traffic must have been hell in order for them to have someone standing on the corner.
When I got back into the office there was a voicemail for me with some urgent issue that had to be resolved by 5pm or the world would end. Paul came over so we could work on it and mentioned that his wife had told him that a plane had crashed into the Hudson. We looked around and noticed that half the office was standing looking out the window. We ran over and you could see a flotilla of ferries and emergency boats being pulled downstream while a helicopter flew overhead.
…except from the opposite perspective. I work in the giant red brick building in the background. What made it extra surreal was that it lasted about five minutes, and then the current had pushed the flotilla/wreckage out of our field of view.
On a different note, this crash will almost certainly be talked about for the quality of ‘citizen journalism’. One of the first pictures came from Twitter and Flickr has photos that outdo any television. Check out this one and this one.
Update (01/19/2008): The videos are up and the first rescue boat arrived around three and a half minutes after touchdown.
So today Richard and I took coffee lessons (Espresso Fundamentals) at Joe. It was a quick class on how to pull the perfect espresso shot. I’m hoping my morning lattes will now get a lot better.
In addition to learning how to make a great shot, I learned a fair bit about espresso. For instance, there’s no such thing as an ‘espresso bean’: espresso is a blend of many different types of beans. Joe uses a blend from the Barrington Coffee Roasting Company – who won’t way what’s in the blend, but the Joe baristas suspect a mix of Ethiopian and Guatemalan. FYI, this should also tip you off that when you buy a cafe’s ‘coffee’, you’re really just buying repackaged stuff from a roaster.
But I digress. We also learned that you could use single origin coffee in an espresso machine, but you wouldn’t want to as the taste would be weird. It would be either too sour or too bitter – and a good espresso shot should start sour and end bitter.
Before I tell you how to do that, here’s a shot (pun intended) of the machine we worked on:
So how do you create that shot? Do the following:
Adjust the grinder to the fineness you desire
Grind the beans into the filter. The amount should be heaping and overflowing the filter. Note that the depth of your filter will determine whether it is a single/double/triple shot
Tap the filter against the fork of the grinder (where you were resting it as you were grinding) two or three times in order to make it settle
Run your finger across the top of the filter to flatten the coffee: to the left, to the right, then down, then up. This ensures that there’s a consistency to the coffee and that water will not ‘channel’ through it. If the water channels you will end up with some coffee in your shot; some plain water -all bad
Tamp the coffee down into a puck. Do it once with 10 pounds of force and once with 30 pounds of force. This is a critical step. If you do too much the espresso will ‘fall’ too fast; too much and it will take too long for the water to get through your coffee puck and the flavour will be too bitter
Run the steam/water without yet putting in the filter. This clears out any particulate
Add the filter and then turn the steam half on for two seconds. This causes a thin film of water to form on top of the coffee and will ensure that when the steam is added it is all at the same temperature, thereby ensuring consistency in the coffee
Turn on the water. After six seconds espresso should start to come through; after 22-26 seconds it should halt and you should turn off the water. If it drops earlier or later your coffee will not taste good. Adjust the grain of the grind in step 1 and repeat and you’ll eventually work it out
There you go. How to pull the perfect shot. Here’s a photo of Richard’s as it was coming out:
This shot was on it’s way to being pretty much perfect. By the time it was finished he had almost exactly an ounce and a half of coffee/crema. Notice how the shot’s pouring smoothly out the bottom of the filter (they call them naked filters as you can see the bottom) – that’s a sign that there’s no ‘channeling’ going on.
Damn fine coffee. Stop on by some time and you can see if I learned anything.
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…except from the opposite perspective. I work in the giant red brick building in the background. What made it extra surreal was that it lasted about five minutes, and then the current had pushed the flotilla/wreckage out of our field of view.
This shot was on it’s way to being pretty much perfect. By the time it was finished he had almost exactly an ounce and a half of coffee/crema. Notice how the shot’s pouring smoothly out the bottom of the filter (they call them naked filters as you can see the bottom) – that’s a sign that there’s no ‘channeling’ going on.
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