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The terrifying new Psychoaster

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Good marketing for a new rollercoaster in England:
The £15million ride will be restricted to 16 to 55-year-olds only and visitors limited to one ride per day "due to concerns about emotional maturity and physical health", resort bosses said.

If you want to prove your new ride is scary, what better way to do so than to act concerned about the rider's health? Ultimately this will probably make people want to sue operators of roller coasters without waivers and the practice will spread to other amusement parks.

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The environmental movement as a signaling mechanism

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David Roberts writes:
The most puzzling behavioral phenomenon to understand when it comes to building efficiency is that Most People Won’t Do Sh*t (MPWDS). “Most people” includes people who could make money by doing sh*t, people who say they will do sh*t, even people who have promised to do sh*t. I’ve heard from people who write about energy efficiency for a living, know exactly what to do to make their homes more efficient, and still don’t do sh*t. It’s hard to disentangle the reasons why—some mix of status quo bias, hyperbolic discounting, and loss aversion to begin with—but it’s clear that public surveys and polls about this tend to be misleading. What people say they’re willing to do and what they demonstrate they’re willing to do are very different things. Attitudes don’t translate into actions.
We care much more about what others think than we do about the environment. Case in point: when homes in California were outfitted with special devices, showing a happy face if energy consumption was lower than the neighbors, or a red sad face if it was higher than the neighbors, overall energy consumption dropped 40%.

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Profiting from irrationality

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My friend Charlie Sprague wrote an article about “The Birther Madness,” about how a select group of Republicans refuses to believe that Barack Obama was born in Hawaii. A few birthers found the article and have let everyone know how they feel about the issue.

Finance theory says that whenever a large group of people has a significantly wrong valuation of something, in this case, a nonzero estimate of the probability that Barack Obama was born in Kenya, there’s an opportunity for arbitrage. If the birthers truly believe that Obama was born elsewhere, surely they’d be willing to put money on the line, and surely I would be able to rake in the dough. I would also be doing a public service, by making people more likely to hold beliefs that are true.

The problem is that we’re not betting on an event that will occur, but an event that already occurred, the truth of which has already been settled. For anyone to be willing to enter into a bet with me, we would have to be betting on some event that’s going to occur in the future, not some event which already happened and on the specifics of which we disagree. I would have to pick some future event that birthers would be willing to bet on (Barack Obama becomes President of Kenya? Reveals himself as the Antichrist before December 31, 2014?) It’s not enough to say, “Obama will be judged not a citizen, and removed from office,” because if you’re predisposed to believe Obama’s in Kenya, you probably also believe there’s a shadowy cabal behind Obama that’s preventing the truth from getting out.

People have far too little incentive to hold truthful political beliefs. If I can induce (and fleece) a few irrational voters I stand to gain a lot. If I challenge people to bet with me and they refuse, then that says a lot about their beliefs, too.

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Planning around the planning fallacy

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The planning fallacy is our inability to correctly estimate how long things take:
Buehler et. al. (1995) asked their students for estimates of when they (the students) thought they would complete their personal academic projects. Specifically, the researchers asked for estimated times by which the students thought it was 50%, 75%, and 99% probable their personal projects would be done. Would you care to guess how many students finished on or before their estimated 50%, 75%, and 99% probability levels? * 13% of subjects finished their project by the time they had assigned a 50% probability level; * 19% finished by the time assigned a 75% probability level; * and only 45% (less than half!) finished by the time of their 99% probability level.
We are extremely bad planners; even if we've turned in a hundred essays at the last minute, we still think we're going to turn in this one on time. Every night I plan on not hitting the snooze button, and then morning rolls around and I crave ten more minutes of sleep. These instances are trivial but the planning fallacy imposes real costs: think about all of the government projects that balloon way over budget and past schedule, because the contractors and government overseers failed to plan well. I've found two ways to get around the planning problem. #1: Move up the deadline. Usually this involves texting one of my friends and telling them, "If I don't finish this essay by 3pm, then I owe you $20." Very effective, and because I'm pretty competitive I usually avoid paying out, although I don't do it often enough. When you consider how much it costs to go to school, and how much good grades help you get a job, it's not too ridiculous to use $20 as an incentive to get things done. #2: Leave yourself no wiggle room: If an essay's due at 3pm, then schedule a whole bunch of other work from 9 to 12. Deliberately ignore thinking about the essay until then. Then, write your essay in three hours. That way, instead of spending six hours working on the essay (and procrastinating), you get it done in three hours, and you get three hours of work done in the morning as well. If you hit the snooze in the morning, work late, so you have no wiggle room for sleep (Generally, I have to get up by 9 to get to breakfast). These aren't great alternatives but they're better than mindless procrastination, and spending three hours surfing YouTube before getting down to business. If this doesn't sound appealing, you can always plan on becoming a person who finishes their work ahead of time.

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Links for today

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I've been using Aardvark. Not sure how they plan to make money, but it's pretty cool to ask a question and get an answer back nearly immediately. Loneliness can be transferred from person to person. I've also been dismayed by the reaction to David Obey's war surtax, a proposed income tax which would cover a small percentage of the cost of going to war in Afghanistan. It's one thing to oppose it because it would increase taxes during a recession and another to oppose it on ideological grounds. As long as we can push the costs of war further down the road, we'll be biased in favor of going to war. If we're not willing to spend one percent of our income on the war in Afghanistan, then maybe we shouldn't be there at all. Unfortunately, the cost of war is not salient for many Americans. Here is a moving speech by Diane Savino, on the eve of the gay marriage vote in the New York Senate.

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The NFL oligarchy

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Every American sports league has a draft at the end of the season to allocate players graduating high school and college to teams. To ensure competitive balance, the teams with the worst records are allowed to pick first. This paper by Richard Thaler and Cade Massey suggests that despite having the top pick, those teams might be losing out:
A question of increasing interest to researchers in a variety of fields is whether the incentives and experience present in many ìreal worldî settings mitigate judgment and decision-making biases. To investigate this question, we analyze the decision making of National Football League teams during their annual player draft. This is a domain in which incentives are exceedingly high and the opportunities for learning rich. It is also a domain in which multiple psychological factors suggest teams may overvalue the "right to choose" in the draft; non-regressive predictions, overconfidence, the winner's curse and false consensus all suggest a bias in this direction. Using archival data on draft-day trades, player performance and compensation, we compare the market value of draft picks with the historical value of drafted players. We find that top draft picks are overvalued in a manner that is inconsistent with rational expectations and efficient markets and consistent with psychological research.
Unwittingly, when leagues allow the worst teams to pick first, they may induce those teams to overpay for a top player, and hurt their own cause going forward. I contrast that to the European system, where there's no draft, and the best teams systematically overvalue players. Liverpool, for example, paid 19 million pounds for Robbie Keane and then sold him back to the same team a year later for 12 million. Keane's not the only one: Liverpool overpaid for players like El Hadji Diouf, Djibril Cisse, and others. Which is better for competitive balance? Bad teams may have stingy owners, so inducing them to overpay for good players and open their wallets may lead them to become more competitive. However, the best teams overpay because they can; it costs more for them to improve their team at the margin, but even though they're overpaying, they're still improving their team. In either setup, draft or no-draft, as long as players are mis-valued, there are arbitrage opportunities - in the draft, trade away the first pick, or without a draft, develop an excellent farm system, and sell players to other teams for absurd amounts once they become good. This is another reason why we should scrap the draft.

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How can we make students write shit that’s worth reading?

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Responding to Steven Pressfield's blog writing lesson ("Rule #1: Nobody wants to read your shit") Ben Casnocha notes:
In school anything you write or do will be read and graded by a teacher paid to do so. In the real world nobody wants to read your shit, and you have to earn their attention every single day. Last year in a post titled You Have to Make People Give a Shit, I extolled blogging as a way to learn this value.
Teachers can't just give a 0 to someone because their writing is boring, even though in real life, that's what happens when you send in a crappy cover letter, and even though the goal of most educational writing is to prepare for real life writing. This means that students don't really have an incentive to be interesting. When we're told our writing needs a rewrite, often we just slap a few changes on the old piece, maybe Thesaurus a few words, and send it back in. It's tough to grasp the concept that no one wants to read your writing, especially when you know the teacher's going to read it, and you've spent the last ten hours writing it; it feels like your baby, even though your feelings about it are better than anyone else's. And it shows; former college admissions official Michelle Hernandez admitted that 90% of student essays that she read didn't make an impact. It's probably true that teachers give better grades to interesting papers, because after reading 20 boring ones, it must be nice to read a paper that reads smoothly. But this isn't an explicit part of the grading rubric. How can we make students' writing more interesting? Ben recommends blogging, as do I, except it's a lot of work for many students. The two things that will make anyone's writing better - read more and write more - require a large time investment. Here are simple changes to the class incentive structure that could work. Students are too accustomed to writing for an audience of one; get them to practice writing for a wider audience. Turn papers into competitions, where the winning piece gets published on the school's website, or read aloud to the class, or published in the local newspaper. This could be pretty easy; if you have kids write every day, just set up a class website and post "only interesting pieces" there. Unlike parents and most people in academia, I tend to regard competition as a good thing. One winner out of 20 is about right; think about how many applications employers get vs. how many applicants they end up hiring. Another alternative is to make a small part of every writing assignment - say, 5 points out of 100 - based on its interestingness. This is a simple exercise; the teacher simply flips through every paper and discards the ones that don't grab her right away. The ones in the discard pile get a 0 for interestingness. It's tough to peel away the layers of hackneyed phrases and tricks that accompany bad writing, to get to the interesting substance. Only recently have I started looking at whole paragraphs and pieces I've written and deciding that they need to be entirely rewritten. At the margin, if students spend more time writing (and more time writing interesting things) they will be better off, as will our society.

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How to mislead with graphs: Verizon edition

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You’ve probably seen the new Verizon commercials demonstrating that their 3G network is so much bigger than AT&T’s 3G network:

Nathan at FlowingData has a good post up about the differences. Obviously the Verizon 3G map covers more surface area, but that doesn’t translate to better coverage, because I spend most of my time in Claremont and the Bay Area, and little time in North Dakota. Here’s a map showing the population density in the USA:

I would guess that the AT&T map covers all of the major cities, where almost all of the people who use 3G live. Rural people aren’t going to have a very high demand for 3G coverage, so it doesn’t make much sense to cover them, or for 3G users to judge a company’s service based on how much rural area it covers. Verizon’s coverage probably is better than AT&T’s, but their ad campaign is not a good way to demonstrate that.

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Links for today

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Sign of the apocalypse: Test prep for 3 year olds. Website: Mystery Google, which returns the query that the person before you searched for. Some people are using it to send messages. Wonky: How accurate can NFL prediction algorithms get? Answer: As the distribution of wins and losses is indistinguishable from a schedule in which 52% of the games are determined by sheer luck, the best anyone can do is predict 76% of games correctly. Video: Deer finds water, gets very excited.

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