andrew_gelman_stats andrew_gelman_stats-2010 andrew_gelman_stats-2010-81 knowledge-graph by maker-knowledge-mining
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Introduction: Rajiv Sethi offers a fascinating discussion of the incentives involved in paying people zillions of dollars to lie, cheat, and steal. I’d been aware for a long time of the general problem of the system of one-way bets in which purported risk-takers can make huge fortunes with little personal risks, but Rajiv and his commenters go further by getting into the specifics of management at financial firms.
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1 Rajiv Sethi offers a fascinating discussion of the incentives involved in paying people zillions of dollars to lie, cheat, and steal. [sent-1, score-1.296]
2 I’d been aware for a long time of the general problem of the system of one-way bets in which purported risk-takers can make huge fortunes with little personal risks, but Rajiv and his commenters go further by getting into the specifics of management at financial firms. [sent-2, score-2.397]
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same-blog 1 0.99999988 81 andrew gelman stats-2010-06-12-Reputational Capital and Incentives in Organizations
Introduction: Rajiv Sethi offers a fascinating discussion of the incentives involved in paying people zillions of dollars to lie, cheat, and steal. I’d been aware for a long time of the general problem of the system of one-way bets in which purported risk-takers can make huge fortunes with little personal risks, but Rajiv and his commenters go further by getting into the specifics of management at financial firms.
2 0.14730845 1093 andrew gelman stats-2011-12-30-Strings Attached: Untangling the Ethics of Incentives
Introduction: Chris Paulse points me to this book by Ruth Grant: Incentives can be found everywhere–in schools, businesses, factories, and government–influencing people’s choices about almost everything, from financial decisions and tobacco use to exercise and child rearing. So long as people have a choice, incentives seem innocuous. But Strings Attached demonstrates that when incentives are viewed as a kind of power rather than as a form of exchange, many ethical questions arise: How do incentives affect character and institutional culture? Can incentives be manipulative or exploitative, even if people are free to refuse them? What are the responsibilities of the powerful in using incentives? Ruth Grant shows that, like all other forms of power, incentives can be subject to abuse, and she identifies their legitimate and illegitimate uses. Grant offers a history of the growth of incentives in early twentieth-century America, identifies standards for judging incentives, and examines incentives
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Introduction: Regarding the so-called Dutch Book argument for Bayesian inference (the idea that, if your inferences do not correspond to a Bayesian posterior distribution, you can be forced to make incoherent bets and ultimately become a money pump), I wrote: I have never found this argument appealing, because a bet is a game not a decision. A bet requires 2 players, and one player has to offer the bets. I do agree that in some bounded settings (for example, betting on win place show in a horse race), I’d want my bets to be coherent; if they are incoherent (e.g., if my bets correspond to P(A|B)*P(B) not being equal to P(A,B)), then I should be able to do better by examining the incoherence. But in an “open system” (to borrow some physics jargon), I don’t think coherence is possible. There is always new information coming in, and there is always additional prior information in reserve that hasn’t entered the model.
Introduction: Rajiv Sethi writes the above in a discussion of a misunderstanding of the economics of Keynes. The discussion is interesting. According to Sethi, Keynes wrote that, in a depression, nominal wages might be sticky but in any case a decline in wages would not do the trick to increase hiring. But many modern economics writers have missed this. For example, Gary Becker writes, “Keynes and many earlier economists emphasized that unemployment rises during recessions because nominal wage rates tend to be inflexible in the downward direction. . . . A fall in price stimulates demand and reduces supply until they are brought back to rough equality.” Whether Becker is empirically correct is another story, but in any case he is misinterpreting Keynes. But the actual reason I’m posting here is in reaction to Sethi’s remark quoted in the title above, in which he endorses a 1975 paper by James Tobin on wages and employment but remarks that Tobin’s paper did not include the individual-level de
5 0.098784618 539 andrew gelman stats-2011-01-26-Lies, Damn Lies…that’s pretty much it.
Introduction: This post is by Phil Price. We’re all used to distortions and misleading statements in political discourse — the use of these methods one thing on which politicians are fairly nonpartisan. But I think it’s rare to see an outright lie, especially about a really major issue. We had a doozy yesterday, when Congresswoman Michelle Bachmann presented a graphic that attributed the 2009 federal budget to the Obama administration. Oddly, most of the other facts and figures she presented were correct, although some of them seem calculatedly misleading. If you’re going to lie about something really big, why not just lie about everything?
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Introduction: Rajiv Sethi offers a fascinating discussion of the incentives involved in paying people zillions of dollars to lie, cheat, and steal. I’d been aware for a long time of the general problem of the system of one-way bets in which purported risk-takers can make huge fortunes with little personal risks, but Rajiv and his commenters go further by getting into the specifics of management at financial firms.
2 0.72049457 1378 andrew gelman stats-2012-06-13-Economists . . .
Introduction: Catherine Rampell writes : On Monday the Nobel Foundation, which bestows the world’s most prestigious academic, literary and humanitarian prizes, said it was reducing the cash awarded with Nobel Prizes by about 20 percent. . . . Peter A. Diamond, a professor emeritus at the Massachusetts Institute of Technology who also received the Nobel in economic science in 2010, observed that over the long run, cutting the cash award could dilute the prize’s prestige. But he added that Monday’s news overstates the financial blow to future laureates. “One of the things that comes with the prize, besides the prestige and the money,” he said, “is the opportunities to make more money.” I wouldn’t think these guys need the money, but I suppose it’s part of their professional code that they have to say that? (Recall our earlier discussion of the economist who said he’d stop working once his marginal tax rate reached the anticipated value of 93%.)
3 0.72029513 92 andrew gelman stats-2010-06-17-Drug testing for recipents of NSF and NIH grants?
Introduction: People seeking unemployment benefits or welfare would have to first pass a drug test under a proposal Sen. Orrin Hatch will try to add to legislation extending the social safety net during this time of economic turmoil. Hatch … said his idea would help battle drug addiction and could reduce the nation’s debt. He will try to get the Senate to include his amendment to a $140 billion bill extending tax breaks and social programs this week. “This amendment is a way to help people get off of drugs to become productive and healthy members of society, while ensuring that valuable taxpayer dollars aren’t wasted,” he said after announcing his amendment. “Too many Americans are locked into a life of a dangerous dependency not only on drugs, but the federal assistance that serves to enable their addiction.” I have a horrible vision of NSF and NIH dollars used to support the amphetamine dependencies of students pulling all-nighters in their bio labs. Something’s gotta be done about this
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Introduction: Four recent news stories about crime and punishment made me realize, yet again, how little I understand all this. 1. “HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering” : State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system. Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities. . . . I don’t understand this idea of punishing the institution. I have the same problem when the NCAA punishes a college football program. These are individual people breaking the law (or the rules), right? So why not punish them directly? Giving 40 lashes to a bunch of HSBC executives and garnisheeing their salaries for life, say, that wouldn’t destabilize the global financial system would it? From the article: “A money-laundering indictment, or a guilt
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Introduction: Chris Paulse points me to this book by Ruth Grant: Incentives can be found everywhere–in schools, businesses, factories, and government–influencing people’s choices about almost everything, from financial decisions and tobacco use to exercise and child rearing. So long as people have a choice, incentives seem innocuous. But Strings Attached demonstrates that when incentives are viewed as a kind of power rather than as a form of exchange, many ethical questions arise: How do incentives affect character and institutional culture? Can incentives be manipulative or exploitative, even if people are free to refuse them? What are the responsibilities of the powerful in using incentives? Ruth Grant shows that, like all other forms of power, incentives can be subject to abuse, and she identifies their legitimate and illegitimate uses. Grant offers a history of the growth of incentives in early twentieth-century America, identifies standards for judging incentives, and examines incentives
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Introduction: Rajiv Sethi offers a fascinating discussion of the incentives involved in paying people zillions of dollars to lie, cheat, and steal. I’d been aware for a long time of the general problem of the system of one-way bets in which purported risk-takers can make huge fortunes with little personal risks, but Rajiv and his commenters go further by getting into the specifics of management at financial firms.
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Introduction: Abby points us to a spare but cool visualization . I don’t like the curvy connect-the-dots line, but my main suggested improvement would be a closer link to the map . Showing median income on census tracts along subway lines is cool, but ultimately it’s a clever gimmick that pulls me in and makes me curious about what the map looks like. (And, thanks to google, the map was easy to find.)
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Introduction: I Paid a Bribe by Janaagraha, a Bangalore based not-for-profit, harnesses the collective energy of citizens and asks them to report on the nature, number, pattern, types, location, frequency and values of corruption activities. These reports would be used to argue for improving governance systems and procedures, tightening law enforcement and regulation and thereby reduce the scope for corruption. Here’s a presentation of data from the application: Transparency International could make something like this much more widely available around the world . While awareness is good, follow-up is even better. For example, it’s known that New York’s subway signal inspections were being falsified . Signal inspections are pretty serious stuff, as failures lead to disasters , such as the one in Washington. Nothing much happened after: the person responsible (making $163k a year) was merely reassigned .
Introduction: Rajiv Sethi writes the above in a discussion of a misunderstanding of the economics of Keynes. The discussion is interesting. According to Sethi, Keynes wrote that, in a depression, nominal wages might be sticky but in any case a decline in wages would not do the trick to increase hiring. But many modern economics writers have missed this. For example, Gary Becker writes, “Keynes and many earlier economists emphasized that unemployment rises during recessions because nominal wage rates tend to be inflexible in the downward direction. . . . A fall in price stimulates demand and reduces supply until they are brought back to rough equality.” Whether Becker is empirically correct is another story, but in any case he is misinterpreting Keynes. But the actual reason I’m posting here is in reaction to Sethi’s remark quoted in the title above, in which he endorses a 1975 paper by James Tobin on wages and employment but remarks that Tobin’s paper did not include the individual-level de
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Introduction: In high school and college I would write long assignments using a series of outlines. I’d start with a single sheet where I’d write down the key phrases, connect them with lines, and then write more and more phrases until the page was filled up. Then I’d write a series of outlines, culminating in a sentence-level outline that was roughly one line per sentence of the paper. Then I’d write. It worked pretty well. Or horribly, depending on how you look at it. I was able to produce 10-page papers etc. on time. But I think it crippled my writing style for years. It’s taken me a long time to learn how to write directly–to explain clearly what I’ve done and why. And I’m still working on the “why” part. There’s a thin line between verbosity and terseness. I went to MIT and my roommate was a computer science major. He wrote me a word processor on his Atari 800, which did the job pretty well. For my senior thesis I broke down and used the computers in campus. I formatted it in tro
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