This is the first post in what will become a regular feature on this blog: A look back at previous posts that are related to newly-discovered content.
Further support for prediction markets.
Trading on the Wisdom of Crowds (Wall Street Journal)
How accurate are prediction markets in U.S. elections? (Yahoo! Answers)
Earlier: How to predict the future
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What are your odds of dying from a given injury?
Odds of Dying (National Safety Council)
Earlier: Suicide hotlines
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Economists, on the question of organ markets as a solution to the organ donor shortage.
Human Organs for Sale, Legally, in ... Which Country? (Freakonomics Blog)
Financial Compensation for Organ Donors is Working (Marginal Revolution)
Earlier: Kidneys for sale?
Tuesday, April 29
Sunday, April 27
Frequent flying
We Love to Fly and It Shows: Inside the World of Mileage Running (Wired)
A fun look inside the strange practice of "mileage running," in which the goal is to accumulate a large amount of frequent flyer miles at the lowest cost per mile. Practitioners actually try to add as many connections as possible into their flights (as long as it doesn't increase the cost), solely for the purpose of racking up additional miles. The most dedicated mileage runners travel to faraway places purely to earn miles, and don't actually spend any time at their destinations!
So why take up such a hobby? It sounds like the main motivation is receiving the perks associated with being a frequent flyer, as well as the joy of solving a complex problem and feeling like you are "beating the system."
Strange, but true.
A fun look inside the strange practice of "mileage running," in which the goal is to accumulate a large amount of frequent flyer miles at the lowest cost per mile. Practitioners actually try to add as many connections as possible into their flights (as long as it doesn't increase the cost), solely for the purpose of racking up additional miles. The most dedicated mileage runners travel to faraway places purely to earn miles, and don't actually spend any time at their destinations!
So why take up such a hobby? It sounds like the main motivation is receiving the perks associated with being a frequent flyer, as well as the joy of solving a complex problem and feeling like you are "beating the system."
Strange, but true.
Wednesday, April 23
The more things change...
All change? (Economist)
Without question, liberals in the U.S. have (for years) been desperate for the departure of George W. Bush from the presidency, confident that a change in leadership will turn the country around. This Economist article warns that at least in the area of foreign policy, the likelihood is that the next President (regardless of who it is) will not make drastic policy changes, nor should they.
A highly opinionated, thought-provoking piece.
Without question, liberals in the U.S. have (for years) been desperate for the departure of George W. Bush from the presidency, confident that a change in leadership will turn the country around. This Economist article warns that at least in the area of foreign policy, the likelihood is that the next President (regardless of who it is) will not make drastic policy changes, nor should they.
A highly opinionated, thought-provoking piece.
Monday, April 21
Facebook: destined for obscurity?
Everywhere and nowhere (Economist)
Although I love Facebook, and have always felt that they offer the premier online social networking tool, my gut tells me that as a company they may very well fail. Part of the reason is that they are a one-trick pony: They do one thing, and they do it really well. But what's the likelihood that in ten years (or five even), they will still be the dominant player in the social networking arena? Contrast that with Google, who is still king of online searching, but at the same time seems to be releasing a new product every other week in an attempt to diversify their offerings.
This very smart Economist article adds some meat to my argument. It asserts that closed social networking tools (like Facebook), which force you to visit their website and use their specific tools to communicate with your friends, are "a drag" and will ultimately lose out to "open social networks." These open networks would be integrated into your core Internet tools (such as e-mail), would infer your "social graph" from the actions you already take (who you e-mail the most, or how you tag people in your address book), and would be transparent and work almost automatically. In short, they would remove the annoying and needless complexity of managing your online social life (your profile, photos, groups, friend lists, etc.) through mulitple websites.
There are already existing tools (such as FriendFeed) which can aggregate your online life into one space, but these tools do nothing to break down the barriers between the various closed social networks. Something more revolutionary is needed, and I have no doubt that it is technologically feasible.
The only question is: Who will be the one to innovate, and who will fold as a result?
Although I love Facebook, and have always felt that they offer the premier online social networking tool, my gut tells me that as a company they may very well fail. Part of the reason is that they are a one-trick pony: They do one thing, and they do it really well. But what's the likelihood that in ten years (or five even), they will still be the dominant player in the social networking arena? Contrast that with Google, who is still king of online searching, but at the same time seems to be releasing a new product every other week in an attempt to diversify their offerings.
This very smart Economist article adds some meat to my argument. It asserts that closed social networking tools (like Facebook), which force you to visit their website and use their specific tools to communicate with your friends, are "a drag" and will ultimately lose out to "open social networks." These open networks would be integrated into your core Internet tools (such as e-mail), would infer your "social graph" from the actions you already take (who you e-mail the most, or how you tag people in your address book), and would be transparent and work almost automatically. In short, they would remove the annoying and needless complexity of managing your online social life (your profile, photos, groups, friend lists, etc.) through mulitple websites.
There are already existing tools (such as FriendFeed) which can aggregate your online life into one space, but these tools do nothing to break down the barriers between the various closed social networks. Something more revolutionary is needed, and I have no doubt that it is technologically feasible.
The only question is: Who will be the one to innovate, and who will fold as a result?
Saturday, April 12
How to predict the future
Betting to Improve the Odds (New York Times)
In my opinion, one of the greatest developments to come out of the Internet is the ability to effectively harness the knowledge of a wide variety of people (also known as "wisdom of the crowds") for projects such as Wikipedia. With Wikipedia, the goal is to organize and share information, but the wisdom of the crowds can be used for many other purposes.
This New York Times article discusses "prediction markets," in which individuals can essentially place bets on the outcome of a particular event (such as "Will Hillary Clinton be the Democratic nominee for President?"). Placing bets ("trades") in a prediction market is kind of like stock trading, except that the "share price" stays between 0 and 100 and reflects the current probability (in the minds of the traders) that the event will occur. In the Hillary Clinton example, her market at Intrade is currently trading at 15.4, meaning that traders believe her current probability of clinching the nomination to be 15.4%. If a trader thinks the likelihood is greater than 15.4%, they can buy shares (hoping the market will go up), and if it does they will make money. Eventually, all markets resolve at 100 (if the event happens) or 0 (if it does not happen), but in the meantime the share price is determined purely by trading activity.
I'm a big fan of prediction markets because the traders have an incentive (i.e. making money) to research the most likely outcome of events, and thus as long as the markets are being actively traded, the markets should demonstrate the probability of an outcome occurring much more accurately than polling, individual research studies, or any other predictive tool. Furthermore, those individuals with insider information and/or expert knowledge about these events have the greatest incentive to participate in prediction markets, which should further increase the accuracy of the markets.
The Times article describes how prediction markets are now being used internally by corporations as a way to improve their forecasting, such as predicting whether a new product will launch on time. As long as there are incentives (such as money or prizes) for predicting outcomes correctly, the "wisdom of the crowds" should indeed shine through in the market activity.
Legitimate concerns do exist about prediction markets, such as the possibility that someone could profit from participating in a market in which they can determine the outcome, or other types of market manipulation. As well, there are markets that could be considered tasteless, such as the Pentagon's failed Policy Analysis Market (in which bets could be placed on the likelihood of terrorist attacks) or the Celebrity Dead Pool (in which bets are placed on who will die this year).
Regardless, I have no doubt that prediction markets are here to stay, and will increasingly be used to tap our collective wisdom. And as long as participation increases, incentives remain, and systems are put in place to prevent fraud, prediction markets should only become more and more accurate.
In my opinion, one of the greatest developments to come out of the Internet is the ability to effectively harness the knowledge of a wide variety of people (also known as "wisdom of the crowds") for projects such as Wikipedia. With Wikipedia, the goal is to organize and share information, but the wisdom of the crowds can be used for many other purposes.
This New York Times article discusses "prediction markets," in which individuals can essentially place bets on the outcome of a particular event (such as "Will Hillary Clinton be the Democratic nominee for President?"). Placing bets ("trades") in a prediction market is kind of like stock trading, except that the "share price" stays between 0 and 100 and reflects the current probability (in the minds of the traders) that the event will occur. In the Hillary Clinton example, her market at Intrade is currently trading at 15.4, meaning that traders believe her current probability of clinching the nomination to be 15.4%. If a trader thinks the likelihood is greater than 15.4%, they can buy shares (hoping the market will go up), and if it does they will make money. Eventually, all markets resolve at 100 (if the event happens) or 0 (if it does not happen), but in the meantime the share price is determined purely by trading activity.
I'm a big fan of prediction markets because the traders have an incentive (i.e. making money) to research the most likely outcome of events, and thus as long as the markets are being actively traded, the markets should demonstrate the probability of an outcome occurring much more accurately than polling, individual research studies, or any other predictive tool. Furthermore, those individuals with insider information and/or expert knowledge about these events have the greatest incentive to participate in prediction markets, which should further increase the accuracy of the markets.
The Times article describes how prediction markets are now being used internally by corporations as a way to improve their forecasting, such as predicting whether a new product will launch on time. As long as there are incentives (such as money or prizes) for predicting outcomes correctly, the "wisdom of the crowds" should indeed shine through in the market activity.
Legitimate concerns do exist about prediction markets, such as the possibility that someone could profit from participating in a market in which they can determine the outcome, or other types of market manipulation. As well, there are markets that could be considered tasteless, such as the Pentagon's failed Policy Analysis Market (in which bets could be placed on the likelihood of terrorist attacks) or the Celebrity Dead Pool (in which bets are placed on who will die this year).
Regardless, I have no doubt that prediction markets are here to stay, and will increasingly be used to tap our collective wisdom. And as long as participation increases, incentives remain, and systems are put in place to prevent fraud, prediction markets should only become more and more accurate.
Thursday, April 3
A uniquely American business
Illegal Globally, Bail for Profit Remains in U.S. (New York Times)
A fascinating article about the uniquely American business of bail bonds, in which private businesses post bail for criminal defendants in return for a fee. Though the system lends itself to corrupt practices and leaves a great deal of decision-making power in the hands of private citizens (who are free to set their own fees and accept or reject clients at will), the article suggests that it is actually remarkably effective at ensuring that defendants appear in court or are captured if they do flee -- all at no cost to the taxpayer. (Score one for American private enterprise!)
This follow-up post on the Freakonomics blog by economist Ian Ayres also argues in favor of the bail bond system: His research shows that the market competition inherent in the system serves to reduce (not increase) judicial discrimination against minority defendants, and may also serve to protect poor defendants.
A fascinating article about the uniquely American business of bail bonds, in which private businesses post bail for criminal defendants in return for a fee. Though the system lends itself to corrupt practices and leaves a great deal of decision-making power in the hands of private citizens (who are free to set their own fees and accept or reject clients at will), the article suggests that it is actually remarkably effective at ensuring that defendants appear in court or are captured if they do flee -- all at no cost to the taxpayer. (Score one for American private enterprise!)
This follow-up post on the Freakonomics blog by economist Ian Ayres also argues in favor of the bail bond system: His research shows that the market competition inherent in the system serves to reduce (not increase) judicial discrimination against minority defendants, and may also serve to protect poor defendants.
Friday, March 28
Sicko and health care: Guest post #3
Post by Dr. Kao-Ping Chua, M.D.
About the Canadian health care system:
Pros: Universality, administrative simplicity, equality, high quality, free choice of doctors and hospitals (not true in the U.S.)
Cons: Quickly escalating costs (because doctors are paid fee-for-service and have an incentive to over-order), rationing of health care results in wait lists for elective surgeries (but this is completely blown out of proportion by the American media - you don't wait for emergnecies).
Is it a better system? Depends on your definition of "better." If by better, you mean more affordable and equitable, then definitely. If by better, you mean more technology, then definitely not. By my criteria, I think Canada has a better health care system for the vast majority of diseases, but if I had a rare disease or needed super-specialized care, I'd opt for the U.S. As an average citizen, though, I'd much rather deal with the Canadian health care system than the American one. As a doctor, I'd also much rather deal with Canada since there'd be fewer insurance hassles and you wouldn't have to worry about your patient's financial status - they'd get the care they need.
About the British health care system:
The British health care system (NHS) is an incredibly inexpensive, economically efficient system. It has one of the strongest primary care/preventive care systems in the world. Unfortunately, it suffers from massive wait lists, old facilities, and a lack of specialists. This is mostly due to a lack of funding, though the recent British government has been putting a lot of money into the system. I think Sicko portrayed only the good parts of the NHS, but it portrayed them very well - virtually free care, strong popular support, good pay for doctors (not quite as good as the U.S. but not bad either).
About the French health care system:
I don't have first-hand knowledge of the French health care system, but it's regarded to be the best in Europe by the WHO [World Health Organization]. It's true that people pay taxes out the wazoo for the system, but on the other hand, they got extremely high quality care.
About the American health care system:
Obviously, this movie was up my alley since I worked on universal health care in DC for a year. I think it did a great job of humanizing the problem - the stories that I heard were all very familiar, but that didn't make them any less devastating. I don't think the movie was intended to give a fair comparison of the American health care system to other systems - I think Moore intended to just shatter some illusions that Americans have about third-world health care in socialized systems like England/France, and he did that very well. The best part of the movie in my mind was the end where Moore had a monologue about American values (e.g. why can't we be a place that's willing to take care of others). Changing values is the crux of all social change, and I was thrilled that Moore seemed to recognize that.
Did I think the movie is fair? Of course not - it's liberal propaganda, in some ways. But like I said, I don't think it wasn't supposed to be intellectually fair, but rather about raising awareness, changing perceptions, and hopefully chipping away at some of our misguided social values.
Kao-Ping received his medical degree from Washington University in St. Louis and is currently a resident at Boston Children's Hospital. Previously, he worked for the American Medical Student Association on the issue of universal health care.
Earlier: Sicko: Is Michael Moore right?
Earlier: Sicko and health care: Guest post #1
Earlier: Sicko and health care: Guest post #2
About the Canadian health care system:
Pros: Universality, administrative simplicity, equality, high quality, free choice of doctors and hospitals (not true in the U.S.)
Cons: Quickly escalating costs (because doctors are paid fee-for-service and have an incentive to over-order), rationing of health care results in wait lists for elective surgeries (but this is completely blown out of proportion by the American media - you don't wait for emergnecies).
Is it a better system? Depends on your definition of "better." If by better, you mean more affordable and equitable, then definitely. If by better, you mean more technology, then definitely not. By my criteria, I think Canada has a better health care system for the vast majority of diseases, but if I had a rare disease or needed super-specialized care, I'd opt for the U.S. As an average citizen, though, I'd much rather deal with the Canadian health care system than the American one. As a doctor, I'd also much rather deal with Canada since there'd be fewer insurance hassles and you wouldn't have to worry about your patient's financial status - they'd get the care they need.
About the British health care system:
The British health care system (NHS) is an incredibly inexpensive, economically efficient system. It has one of the strongest primary care/preventive care systems in the world. Unfortunately, it suffers from massive wait lists, old facilities, and a lack of specialists. This is mostly due to a lack of funding, though the recent British government has been putting a lot of money into the system. I think Sicko portrayed only the good parts of the NHS, but it portrayed them very well - virtually free care, strong popular support, good pay for doctors (not quite as good as the U.S. but not bad either).
About the French health care system:
I don't have first-hand knowledge of the French health care system, but it's regarded to be the best in Europe by the WHO [World Health Organization]. It's true that people pay taxes out the wazoo for the system, but on the other hand, they got extremely high quality care.
About the American health care system:
Obviously, this movie was up my alley since I worked on universal health care in DC for a year. I think it did a great job of humanizing the problem - the stories that I heard were all very familiar, but that didn't make them any less devastating. I don't think the movie was intended to give a fair comparison of the American health care system to other systems - I think Moore intended to just shatter some illusions that Americans have about third-world health care in socialized systems like England/France, and he did that very well. The best part of the movie in my mind was the end where Moore had a monologue about American values (e.g. why can't we be a place that's willing to take care of others). Changing values is the crux of all social change, and I was thrilled that Moore seemed to recognize that.
Did I think the movie is fair? Of course not - it's liberal propaganda, in some ways. But like I said, I don't think it wasn't supposed to be intellectually fair, but rather about raising awareness, changing perceptions, and hopefully chipping away at some of our misguided social values.
Kao-Ping received his medical degree from Washington University in St. Louis and is currently a resident at Boston Children's Hospital. Previously, he worked for the American Medical Student Association on the issue of universal health care.
Earlier: Sicko: Is Michael Moore right?
Earlier: Sicko and health care: Guest post #1
Earlier: Sicko and health care: Guest post #2
Tuesday, March 25
The end of privacy
A Company Promises the Deepest Data Mining Yet (New York Times)
An Inalienable Right to Privacy (Coding Horror)
Is privacy possible in the digital age? Privacy through obscurity used to be a great strategy; the idea was that there are so many people "out there" that there's virtually no chance you will be noticed. And even if you were noticed, even if information was being kept about you, what are the odds that the information from various sources would be consolidated into one place? Who cares if you download porn, or search the Internet for information about depression, or write love notes to your secret girlfriend? And what are the chances that the information will fall into the hands of your boss, your spouse, or your insurance company?
In the digital age, I'm sad to say that privacy through obscurity has thoroughly collapsed. Once companies realized a few years ago that consumers will rarely pay for content on the Internet, the focus shifted to targeted ads as the primary way to generate revenue on the Internet. And with that shift, there has been a mad dash to collect and consolidate as much information as possible about every Internet user. There is a lot of money to be made by gathering as much information as possible about you and selling that information to every company that might want to market to you.
This short New York Times piece describes the efforts of one such company, Phorm, that has developed a tool to track every single action you take on the Internet. They are trying to negotiate deals with major broadband Internet providers in the U.S., such that their tool will be used by the Internet provider to generate massive amounts of data about each of its users, which will then be sold to third parties. Three major Internet service providers in Britain have already signed on with Phorm, which gives Phorm access to the surfing habits of 70% of British households with broadband.
This technology is not new, for sure: Spyware and other covert mechanisms for tracking your Internet activity have existed for many years. However, participation by Internet service providers represents a fundamental shift in the power and scope of this technology.
I can only begin to address the implications of technology that can compile a profile of your complete Internet behavior, especially when that profile will be connected to and meshed with the other digital data that exists about you. Unquestionably, your personal data will be sold without your permission. It will make its way to individuals and companies that you wish didn't have access to that data. It will be lost (probably without your knowledge), it will be filled with errors (which you probably won't be able to correct), and it will be sold on the black market. Imagine if you could purchase a file listing the complete Internet habits of any individual for a small price. Would you buy it, to learn about your potential mate, or to get back at your ex? Would your potential employer buy it, to learn about your personal habits? Would your insurance company buy it, to see if you have written any emails about a medical condition? This is just the beginning.
Still not convinced that your privacy is worth protecting? This post on Coding Horror argues that you should protect your privacy, even if you don't think you have anything to hide.
An Inalienable Right to Privacy (Coding Horror)
Is privacy possible in the digital age? Privacy through obscurity used to be a great strategy; the idea was that there are so many people "out there" that there's virtually no chance you will be noticed. And even if you were noticed, even if information was being kept about you, what are the odds that the information from various sources would be consolidated into one place? Who cares if you download porn, or search the Internet for information about depression, or write love notes to your secret girlfriend? And what are the chances that the information will fall into the hands of your boss, your spouse, or your insurance company?
In the digital age, I'm sad to say that privacy through obscurity has thoroughly collapsed. Once companies realized a few years ago that consumers will rarely pay for content on the Internet, the focus shifted to targeted ads as the primary way to generate revenue on the Internet. And with that shift, there has been a mad dash to collect and consolidate as much information as possible about every Internet user. There is a lot of money to be made by gathering as much information as possible about you and selling that information to every company that might want to market to you.
This short New York Times piece describes the efforts of one such company, Phorm, that has developed a tool to track every single action you take on the Internet. They are trying to negotiate deals with major broadband Internet providers in the U.S., such that their tool will be used by the Internet provider to generate massive amounts of data about each of its users, which will then be sold to third parties. Three major Internet service providers in Britain have already signed on with Phorm, which gives Phorm access to the surfing habits of 70% of British households with broadband.
This technology is not new, for sure: Spyware and other covert mechanisms for tracking your Internet activity have existed for many years. However, participation by Internet service providers represents a fundamental shift in the power and scope of this technology.
I can only begin to address the implications of technology that can compile a profile of your complete Internet behavior, especially when that profile will be connected to and meshed with the other digital data that exists about you. Unquestionably, your personal data will be sold without your permission. It will make its way to individuals and companies that you wish didn't have access to that data. It will be lost (probably without your knowledge), it will be filled with errors (which you probably won't be able to correct), and it will be sold on the black market. Imagine if you could purchase a file listing the complete Internet habits of any individual for a small price. Would you buy it, to learn about your potential mate, or to get back at your ex? Would your potential employer buy it, to learn about your personal habits? Would your insurance company buy it, to see if you have written any emails about a medical condition? This is just the beginning.
Still not convinced that your privacy is worth protecting? This post on Coding Horror argues that you should protect your privacy, even if you don't think you have anything to hide.
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