Continuous Productivity

The Earth is Still Flat

Despite a court-ordered ban on the teaching of creationism in US schools, about one in eight high-school biology teachers still teach it as valid science, a survey reveals. And, although almost all teachers also taught evolution, those with less training in science – and especially evolutionary biology – tend to devote less class time to Darwinian principles.

Unbelievable as it seems, it does not surprise me.  It's a shame that 16% of the educators that are responsible for teaching our children scientific fact don't believe it themselves. 

Irrationally Rational

An excellent article at The New Yorker reviewing a couple of books on behavioral economics:

From the perspective of neoclassical economics, self-punishing decisions are difficult to explain. Rational calculators are supposed to consider their options, then pick the one that maximizes the benefit to them. Yet actual economic life, as opposed to the theoretical version, is full of miscalculations, from the gallon jar of mayonnaise purchased at spectacular savings to the billions of dollars Americans will spend this year to service their credit-card debt. The real mystery, it could be argued, isn’t why we make so many poor economic choices but why we persist in accepting economic theory.

The bold above is mine to emphasize what every business person already knows.  People, in fact, are far from rational actors.  Whether it's "investing" in tech stocks in the late '90's to the recent real-estate "flipping" boom, people have shown their inability to act rationally.  So, it shouldn't really be a surprise that we will add books to our purchase at Amazon to get free shipping.  The interesting part is that we seem to be systematic about our irrationality.  That is, we seem to make the same mistakes over and over:

“Our irrational behaviors are neither random nor senseless—they are systematic,” he writes. “We all make the same types of mistakes over and over.” So attached are we to certain kinds of errors, he contends, that we are incapable even of recognizing them as errors. Offered FREE shipping, we take it, even when it costs us.

In fact, smart business people have already exploited our inherent biases in their pricing strategies:

This effect is called “anchoring,” and, as Ariely points out, it punches a pretty big hole in microeconomics. When you walk into Starbucks, the prices on the board are supposed to have been determined by the supply of, say, Double Chocolaty Frappuccinos, on the one hand, and the demand for them, on the other. But what if the numbers on the board are influencing your sense of what a Double Chocolaty Frappuccino is worth? In that case, price is not being determined by the interplay of supply and demand; price is, in a sense, determining itself.

To conclude:

“If I were to distill one main lesson from the research described in this book, it is that we are all pawns in a game whose forces we largely fail to comprehend,” he writes.

We Need to Pay for Things We Don't Use

Thanks to the always wonderful Kedrosky blog, I was led to this article about us delusional humans.  One short paragraph sums it up:

The economics of health clubs are simple: you need thousands of members who never come. The gym could never accommodate them all if they did.

The article also has a link to a study that basically says that we are overconfident about the amount of self-control we have.  Even when we think we will go to the gym regularly, we don't.  Beyond that, we refuse the cancel our membership even when it would be much cheaper to pay by the day:

Two Californian academics, Stefano DellaVigna and Ulrike Malmendier, studied three US health clubs and discovered that 80 per cent of members used the gym so infrequently that they would have been better off paying the $10 fee for each individual visit. Many also left substantial gaps between their last visit and cancelling their membership.

Maybe Expensive Wine Doesn't Taste Better

I had previously linked to a study about the physiological effects of expensive wine on brain scans.  Alex Tabarrok has an excellent response to the study:

Living in a market economy the association in the brain between price and quality is constantly reinforced so it's not surprising that sometimes the brain can "jump the gun" in expectation.  But don't imagine that the association can be easily exploited for long.  Why do you think these sorts of studies always use wine?  Could it possibly be because most people can't tell the difference between a cabernet and a merlot let alone between higher and lower quality wine?   But try telling people that a $5,000 car is $45,000 and let's see if the medial orbitofrontal cortex lights up with experienced pleasantness.

Not a Good Day for Short People?

Or maybe this one just indicates that people like long legs.

You're Not Hot (Part II)

So it seems that I missed this posting when it came out back in November, but it reverberates how we view our own physical attraction, our partner's, and how we adjust.  Some interesting conclusions from the academic study with data obtained from Hot or Not:

...the fact that nearly all users are in agreement about who is pretty and not-so-pretty and that, despite this, unattractive people were more open to potential dates than attractive people, lead the researchers to conclude that ugly people who date other ugly people do in fact know the pedigree of their partners.

How do less attractive people cope? In a separate study, the researchers asked 24 participants of an online speed-dating event to complete a short survey in "which they indicated, on a ten-point scale, how much they weighed each of six criteria (physical attractiveness, intelligence, sense of humor, kindness, confidence, and extroversion) when selecting potential dates." After the event, the participants then rated the attractiveness of all those they'd talked to. It turns out that less attractive people put relatively less weight on the physical appearance of potential partners and relatively more weight on other qualities than attractive people do.

So, basically, if you can't get a hot girl, you convince yourself that she is funny, or nice, or smart, or whatever.

Expensive Wine Tastes Better

A very interesting study by a few Cal Tech academics indicating that people think wine tastes better if it is priced higher.  It doesn't surprise me that people perceive expensive wine tastes better and would indicate as such on a survey.  It does (somewhat) surprise me that there is a physiological reaction to the wine price:

The testers' brains showed more pleasure at the higher price than the lower one, even for the same wine, Rangel reports in this week's online edition of Proceedings of the National Academy of Sciences.

Clearly, that is one of the huge pricing advantages of the luxury market - the ability to price perception and prestige.  It's still intriguing to note that the brain reacts to these factors. 

You're Not Hot

Very interesting article that I came across as I was cleaning out my inbox.  Apparently, my proclamation that I look better in person is not true at all:

You hate photographs of yourself, don't you? A tiny minority of people are terribly photogenic (I recall one girl in high school who was maybe a 7 in person, but a 9.75 in an 8X10 glossy) and like having their pictures taken; everyone else in the world is convinced that they don't photograph particularly well.

A cognitive scientist at the University of Chicago explained why to me last winter. When we look at ourselves in the mirror, in any given session we tend to anchor on the time slice image that makes us look our best. That, we decide, is the "real" us.

So, apparently this entire time I was making eyes at myself in the mirror, it was only me that found me
attractive.

I have some saving grace, though:

[Your significant other] is probably the best gauge of how attractive you are; how attractive are the hottest people who want to go out with you? They're probably only slightly more attractive than you are.

So, either I am attractive or lucky.  I choose lucky (with a dash of charming).