People often use simple cognitive shortcuts when processing information, which leads to systematic biases in their decision making. These biases can persist in and affect the functioning of markets that are highly competitive, even those involving high-stakes goods, sophisticated players, and elaborate decision processes. In Heuristic Thinking and Limited Attention in the Car Market (NBER Working Paper No. 17030), authors Nicola Lacetera, Devin Pope, and Justin Sydnor focus on the used car market and ask whether it is affected by consumers exhibiting a heuristic, or short cut, known as left-digit bias: the tendency to focus on the leftmost digit of a number while partially ignoring other digits.
Using data that come from wholesale auctions encompassing more than 22 million used car transactions, the authors document significant price drops at each 10,000-mile threshold from 10,000
to 100,000 miles, ranging from about $150 to $200. For example, cars with odometer values between 79,900 and 79,999 miles, on average, are sold for approximately $210 more than cars with odometer values between 80,000 and 80,100 miles, but for only $10 less than cars with odometer readings between 79,800 and 79,899. The authors also find price drops at 1,000-mile thresholds, but these changes are smaller.
This apparent left-digit bias not only influences wholesale prices but also affects supply decisions. ...
... But two things distinguished Sweden's welfare state from the very beginning. First, Sweden's progressives cleverly marketed their ideas as a way of realizing what they called a folkhemmet (people's home). The emphasis was upon realizing a once-overwhelmingly peasant society's traditional values in a context of industrialization. This helped the Social Democrat governments that ruled Sweden between 1932 and 1976 avoid being labeled as soft-Marxists in a country deeply wary of an expansionist Soviet Union.
The second distinguishing feature was Sweden's vision of state-provided social protection as a right. This led to successive governments insisting upon universal coverage and the costs being covered by general taxation.
It took several decades, but the relentless logic of these commitments eventually eroded the Swedish economy's competitiveness. The situation was worsened by the decision of governments in the 1970s to hasten Sweden's long march towards the Social Democratic nirvana. This included expanding welfare programs, nationalizing many industries, expanding and deepening regulation, and -- of course -- increasing taxation to punitive levels to pay for it all.
Over the next twenty years, the Swedish dream turned decidedly nightmarish. The Swedish parliamentarian Johnny Munkhammar points out that "In 1970, Sweden had the world's fourth-highest GDP per capita. By 1990, it had fallen 13 positions. In those 20 years, real wages in Sweden increased by only one percentage point." So much for helping "the workers."
Facing severe economic stagnation, Sweden began implementing several rather un-social democratic measures in the early 1990s. This included curtaining its public sector deficit and reducing marginal tax-rates and levels of state ownership. Another change involved allowing private retirement schemes, a development that was accompanied by the state contributing less to pensions.
These reforms, however, proved insufficient. In the early 2000s, according to James Bartholomew, author of the best-selling The Welfare State We're In (2006), more than one in five Swedes of working-age was receiving some type of benefit. Over 20 percent of the same demographic of Swedes was effectively working "off-the-books" or less than they preferred. Sweden's tax structure even made it financially advantageous for many to stay on the dole instead of getting a job.
But with a non-Social Democrat coalition government's election in 2006, Sweden's reform agenda resumed. On the revenue side, property taxes were scaled back. Income-tax credits allowing larger numbers of middle and lower-income people to keep more of their incomes were introduced.
To be fair, the path to tax reform was paved here by the Social Democrats. In 2005, they simply abolished -- yes, that's right, abolished -- inheritance taxes.
But liberalization wasn't limited to taxation. Sweden's new government accelerated privatizations of once-state owned businesses. It also permitted private providers to enter the healthcare market, thereby introducing competition into what had been one of the world's most socialized medical systems. Industries such as taxis and trains were deregulated. State education and electricity monopolies were ended by the introduction of private competition. Even Swedish agricultural prices are now determined by the market. Finally, unemployment benefits were reformed so that the longer most people stayed on benefits, the less they received.
So what were the effects of all these changes? The story is to be found in the numbers. Unemployment levels fell dramatically from the 10 percent figure of the mid-1990s. Budget-wise, Sweden started running surpluses instead of deficits. The country's gross public debt declined from a 1994 figure of 78 percent to 35 percent in 2010. Sweden also weathered the Great Recession far better than most other EU states. Sweden's 2010 growth-rate was 5.5 percent. By comparison, America's was 2.7 percent. ...
Universities pay millions of dollars a year for academic journal subscriptions. People without subscriptions, which can cost up to $25,000 a year for some journals or hundreds of dollars for a single issue, are often prevented from reading taxpayer funded research. Individual articles are also commonly locked behind pay walls.
At a September 19 meeting, Princeton’s Faculty Advisory Committee on Policy adopted a new open access policy that gives the university the “nonexclusive right to make available copies of scholarly articles written by its faculty, unless a professor specifically requests a waiver for particular articles.”
“The University authorizes professors to post copies of their articles on their own web sites or on University web sites, or in other not-for-a-fee venues,” the policy said.
“The main effect of this new policy is to prevent them from giving away all their rights when they publish in a journal.” ...
Despite bursts of innovation and pockets of vitality, the first decade of the twenty-first century witnessed a slow, overall erosion of the strength of America’s congregations, according to the Faith Community Today series of national surveys of American congregations.
Conducted in 2000, 2005, 2008 and 2010, the FACT series shows that the decade brought:
A continued increase in innovative, adaptive worship
A surprisingly rapid adoption of electronic technologies
A dramatic increase in racial/ethnic congregations, many for immigrant groups A general increase in the breadth of both member-oriented and mission-oriented programs
It also gave witness to:
An increase in connection across faith traditions
A twist in the historical pattern of religious involvement in support of the electoral process
Jason and Candy Fields’ backyard in the Lykins neighborhood — one of the most blighted areas in Kansas City — is a patchwork quilt of urban farming ventures.
There are a vegetable garden fertilized with nutrient-rich fish waste and a lush swath of bamboo stalks waiting to be dried and used to stake tomato plants or to build a tree house or a lightweight bicycle.
Towering sunflowers wear paper grocery sacks draped over their heads, an effort to keep the birds away so the mature seeds can be roasted, then eaten as a snack. There’s a playhouse-turned-chicken coop for heritage breed hens.
On the driveway, tilapia swim in an aquaponics system fashioned from recycled, food-grade plastic drums that takes up as much space as an average living room. Fragrant basil grows in rock beds above the drums, cleaning the water for the fish while the nutrient-rich fish waste fertilizes the basil, all without the use of soil.
Nearby, duckweed grows in kiddie wading pools. The inexpensive, high-protein, easy-to-grow food for fish resembles green pond scum. A biodigester constructed from more plastic drums converts 800 pounds of restaurant and household food scraps into methane that could heat a greenhouse.
Word of these innovative, low-tech farming experiments has traveled rapidly through local food circles. One steamy weekend in late June, almost 300 people milled around the “Myrtle Plot” at the corner of 12th and Myrtle streets. The plot was a featured stop on the Urban Farms and Garden Tour sponsored by Cultivate Kansas City, a nonprofit that helps people learn how to grow food in urban settings.
Much of that grassroots popularity is a result of social media. Using his iPhone, Jason Fields routinely posts cleverly produced how-to or slice-of-life videos to www.theurbanfarmingguys.com. More than 8,000 people “like” the website and Facebook page, and their “Farmin’ in the Hood” video has gotten 47,000 views on YouTube since its debut last spring.
The idealistic newlyweds decided to ditch their comfortable suburban lifestyle, if not their sense of humor, in 2008. Only half-joking, they recall how they worried that the drug-dealing squatter came with the foreclosed property they bought for $21,000. ...
... These urban homesteaders are mostly white 20- to 40-somethings. Most also are members of the Rock, a nondenominational Christian church founded in 1999 with loosely affiliated networks of house churches in Kansas, Missouri, Montana, Wyoming, Texas, Ohio, Michigan and North Carolina.
The Rock’s mission is to “plant” house churches throughout the inner city so members can live in and work with the communities they are trying to serve. On the face of it, their tactics for revitalizing a racially mixed, economically depressed neighborhood are simple: walk the neighborhood streets, make eye contact and open your heart.
“The biggest problem in this neighborhood is fear,” Jason Fields says. “There’s a spirit of hope and community when you decide not to hide from this and own it. … Something happens when you’re in something together. You meet people you wouldn’t have met otherwise, and it turns into really deep friendships.” ...
Great written works from authors such as Shakespeare and Jane Austen that you'll never have a chance to read.
1. Homer’s Margites
Before the Iliad and the Odyssey, there was the Margites. Little is known about the plot of the comedic epic poem—Homer’s first work—written around 700 B.C. But a few surviving lines, woven into other works, describe the poem’s foolish hero, Margites.
“He knew many things, but all badly” (from Plato’s Alcibiades). “The gods taught him neither to dig nor to plough, nor any other skill; he failed in every craft” (from Aristotle’s Nicomachean Ethics).
It is unfortunate that no copy of Margites exists because Aristotle held it in high acclaim. In his On the Art of Poetry, he wrote, “[Homer] was the first to indicate the forms that comedy was to assume, for his Margites bears the same relationship to comedies as his Iliad and Odyssey bear to our tragedies.”
2. Lost Books of the Bible
There are 24 books in the Hebrew Bible, or Tanakh—and depending upon the denomination, between 66 and 84 more books in Christian Bibles, divided between the Old and New Testaments.
Missing from these pages of scripture are what have become known as the “lost books” of the Bible. Sometimes the term is used to describe ancient Jewish and Christian writings that were tossed out of the biblical canon. But other books are lost in the true sense of the word. We only know that they existed because they are referenced by name in other books of the Bible. ...
Frontiers in Systems of Neuroscience: Topological isomorphisms of human brain and financial market networks
[Emphasis mine]
Although metaphorical and conceptual connections between the human brain and the financial markets have often been drawn, rigorous physical or mathematical underpinnings of this analogy remain largely unexplored. Here, we apply a statistical and graph theoretic approach to the study of two datasets – the time series of 90 stocks from the New York stock exchange over a 3-year period, and the fMRI-derived time series acquired from 90 brain regions over the course of a 10-min-long functional MRI scan of resting brain function in healthy volunteers. Despite the many obvious substantive differences between these two datasets, graphical analysis demonstrated striking commonalities in terms of global network topological properties. Both the human brain and the market networks were non-random, small-world, modular, hierarchical systems with fat-tailed degree distributions indicating the presence of highly connected hubs. These properties could not be trivially explained by the univariate time series statistics of stock price returns. This degree of topological isomorphism suggests that brains and markets can be regarded broadly as members of the same family of networks. The two systems, however, were not topologically identical. The financial market was more efficient and more modular – more highly optimized for information processing – than the brain networks; but also less robust to systemic disintegration as a result of hub deletion. We conclude that the conceptual connections between brains and markets are not merely metaphorical; rather these two information processing systems can be rigorously compared in the same mathematical language and turn out often to share important topological properties in common to some degree. There will be interesting scientific arbitrage opportunities in further work at the graph-theoretically mediated interface between systems neuroscience and the statistical physics of financial markets.
"... Yes, I know that the Bible does teach us to care for the poor, and I accept that, in principle, just as my colleagues accept fidelity and (to some extent) chastity – in principle. But if we begin to ask the same questions about caring for the poor that my colleagues have asked about sexuality, the Bible’s teaching becomes not so clear or imperative.
The Old Testament clearly teaches care for the poor. For me, that’s good enough. But that’s not good enough for those who wish to play the home version of the game “Marcion.” If we can dismiss the Old Testament’s teachings on marriage and sexuality as outdated and non-binding, the same can be said with equal force about its teachings on the poor, or any of its other teachings. And if we say that Jesus assumed and reaffirmed the Old Testament’s teaching on the poor, the same can be said for his stance toward its teachings on sexuality. As Jesus proves in his teaching on divorce, if Jesus had disagreed with the Judaism of his day on any subject, he would have undoubtedly corrected our misunderstanding. ...
... Perhaps I sound like W. C. Fields reading the Bible “looking for loopholes.” Such is also what it looks like when I see those who reject the historic understanding of the Bible on sex. Let me make it clear, I do believe that the Bible does command us to care tangibly for the poor. I struggle to obey, and I try not to make excuses to avoid doing so. I have no intention of scrupling that command. I would prefer that we accept both the Bible’s teachings about sex and about poverty as equally authoritative. ..."
Interesting provactive piece. Hobson is right in one important respect. Each ideological camp tends to be able focus, with laser precision on, the nuanced contextual readings of Scripture that show that the text does not mean what their opponents think it means (for example, debunking six-day creationism or traditional sexual standards) while simultaneously proof-texting favored agendas (for example, anti-markets or more open boarders.) I think most of us overreach for biblical justification for our political agendas. Instead of saying, "Here is my reasoned perspective," we want our views to carry the authority of Scripture and deny that authority to our opponents.
These topics keep bringing to mind Mark Noll's The Civil War as a Theological Crisis. Noll makes the case that the Southern conservatives were the ones being faithful to the traditional interpretation of Scripture. Many leading abolitionists didn't care what a careful study of Scripture revealed. They were committed to abolition and they were willing to use Scripture to suit their ends, but they were not truly concerned about Scripture's authority in cultural matters. There was yet a third, much smaller, group that held to Scripture's authority but also understood the critical importance of context. The first two groups dominated that conflict and their parallel parties prevail to this day in theological reflection on social issues.
I came to Kenya partly to help make a PBS documentary about empowering women as a way to lift families and communities — men included — out of poverty. And I promptly met a prostitute-turned-businesswoman who epitomizes that theme. ...
... In Jamii Bora, Jane was pushed to save for the future, to lean forward. There is growing evidence that the most powerful element of microfinance is not microlending, but microsavings, and that’s how Jamii Bora starts: it encourages members to save small amounts, perhaps just 50 cents a week. Then members are coached to use those savings, coupled with loans and training, to start tiny businesses. ...
While traditional retail is facing serious and sometimes deserved challenges (Bland chains! E-commerce! Environmental impact! The financial crisis! Demographics! Anti-consumerism!), most people do, and will continue to, enjoy going shopping in the real world. From Oxford Street to Nanjing Road. In fact, rather than witnessing RETAIL RUIN, a RETAIL RENAISSANCE is in the making:
RETAIL RENAISSANCE | Smart retailers are defying doom and gloom scenarios, as they realize that shopping in the real world will forever satisfy consumers’ deep rooted needs for human contact, for instant gratification, for the promise of (shared) experiences, for telling stories. Hence the flurry of new formats, technologies, capabilities, and products that now are delighting retail customers around the world.
Here are just four drivers behind RETAIL RENAISSANCE (there are many more, but we think you’ll get the point):
OFF=ON: How the benefits of shopping online can now be had offline by consumers too.
RETAIL SAFARI: How experiences still rule.
INSTANT STATUS FIX: How shopping in the real world delivers instant status gratification in a way that online (still) can’t.
CITYSUMERS: The future of consumerism is urban, and urban culture is retail culture. On a global level.
Way back in 2008, we published a Trend Briefing on OFF=ON, highlighting the new ways in which the offline world was adjusting to, if not mirroring the increasingly dominant online world. We stated: “where OFF=ON gets most interesting [is that] a whole new set of business practices and processes, not to mention client involvement and marketing techniques, have emerged online, with consumers relishing these developments, and thus the offline world has to adapt.”
Since then it’s actually been more about total immersion than adaptation: the online world is now completely accessible even when ‘offline’ (that is, away from any kind of online device that is too clunky to be used on the go). For consumers, this is a cause for celebration: because while they want (if not crave) to be online 24/7 (ONLINE OXYGEN), they still prefer to live in the world of warm bodies rather than cyberspace (please re-read MASS MINGLING).
For retailers, this means a world where not only have consumer expectations been set by a decade of shopping online, but one where consumers can access all the things they love about e-commerce – convenience, the ability to hear other consumers’ experiences, total price transparency, and virtually endless choice – out in the ‘real world’ too.
Just check out this recent anecdote, about a shopper in Sears, who when faced with an in-store price $3 higher than Sears’ online store, simply pulled out his smartphone, bought online, selected in-store pickup and walked over to collect his purchase (via The Consumerist). Extreme? Perhaps, but consider this selection of stats.
8 out of 10 consumers research purchases online. While 42% research online and then buy online, 51% research online and then buy in-store (Source: Google & IPSOS OTX, September 2010).
Multi-channel consumers who receive information from more than one source (store, online, mobile, or catalogue) prior to purchase, spend 82% more per transaction than a customer who only shops in store (Source: Deloitte, December 2010).
E-commerce conversion rates have been hovering around 2-3.5% while brick-and-mortar conversion rates for fashion retailers have been around 20-25% (Source: Verdict Research, May 2010).
Of the 40% of US consumers who own smartphones, 70% use their smartphones while shopping in-store (Source: Google & IPSOS OTX, April 2011).
74% of smartphone shoppers made a purchase as a result of using their smartphone. Of these 76% have purchased in-store, 59% online while only 35% have made a purchase via their smartphone (Source: Google & IPSOS OTX, April 2011).
Mobile barcode scanning (including traditional UPC barcodes and QR codes) increased 1,600% globally during 2010 (Source: Scanlife, December 2010).
But OFF=ON is a cause for celebration for retailers too: ...
A lengthy report but a fascinating analysis of how ther e-commerce, the virtual world, and bricks and mortar stores are being resahped. I wonder what the trends mean for the church?
This post is to let you know that blogging will be light this week and next. The Kronicler has left the country. I arrived in Beirut yesterday. I will be in Lebanon until the weekend and in Cairo next week. I’m here with Amgad Beblawi from the PCUSA, Office for the Middle East, Europe, and Central Asia. Tomorrow Charles Wiley and Roger Dermody will be joining us. We are meeting with our partner denominations, the Synod of Syria and Lebanon, and the Synod of the Nile.
Amgad and I arrived late in the afternoon and had a chance to walk by the waterfront in Beruit …
… before having some dinner at this restaurant on the Mediterranean.
This morning we joined a group from the Outreach Foundation and visited the National Evangelical Institute for Boys and Girls, an institute started by Presbyterians that now has 2,100 students.
In the afternoon we drove through Sidon and went to Tyre. There we visited the ancient ruins where the Kronicler had his picture taken at the Hippodrome.
I hope to post more in coming days but we will see what time and internet connections to permit.
Hunger and poverty is increasing, people are working longer hours, crime is getting worse, and violence around the world is on the rise. In short, the world is going to hell in a hand basket. So goes the common wisdom. But the common wisdom is wrong. Long-time readers of the Kruse Kronicle who have read my series on American Social Indicators and World Social Indicators know that most social indicators show an improving world … in some facets, the improvements are nothing short of astonishing.
Now comes an excellent book by sociologist Brad Wright, Upside: Surprising GOOD NEWS About the State of Our World. Wright covers most of the issues I’ve raised at my blog plus many more. It is full of wonderful stats and charts but the narrative is in Wright’s characteristically engaging witty style.
Wright is not saying that everything in the world is getting better (think things like obesity and environmental challenges) but it is hardly a planet on the verge disaster. In fact, there are reasons for considerable optimism. Following Matt Ridley’s lead, he sees the coming to fruition of specialization and exchange as a key to the recent rise in human welfare. One area where I would like to have heard more, is why pessimism is so pervasive. He offers some insights. For one, our modern society is highly adaptive due to the rise of specialization and exchange. But it is incomprehensibly complex. Because of our inability to grasp complexity, we are prone to simply extrapolate present trends … particularly negative ones … indefinitely into the future. There is a radical underestimation of our adaptive ability. Furthermore, we seem programmed not to see incremental improvements in life. Once an improvement arrives it quickly becomes the new normal. But we easily fixate on negative news and trends that we experience as threats. And, of course, news sources are aware of the fixation and they highlight such news to attract readers. That is how we create a society where are large majority think there life is good or getting better but also think other people’s lives are going downhill.
The book is a gem. His data is documented in endnotes, most of it available through websites or readily available sources. I will be keeping this book on my reference shelf and you will know doubt see it referenced in future Kronicle posts. Pick up a copy today.
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