Joy Recommends Toys 2020

We at EWED are making recommendations for holiday gifts. This post is about items that my kids are actually using.

I’ll be putting up links for your convenience. I have gotten lots of kid stuff from neighbors, either buying through websites or just be getting hand me downs. I love the idea of re-using kid items and clothes.

FUN remote-control car. “RC Cars Stunt Car Toy, Amicool 4WD” It doesn’t get stuck. It can flip over and go over many terrain types. It’s not large, meaning it doesn’t take up a lot of room in your house, but it delivers a lot of fun! Can be fun both indoors and outdoors. ($25)

Bikes: You have probably heard about balance bikes. We started on a Strider balance bike (no wheels, kids just kick to go forward).

I wanted to make the transition from balance bike to pedal bike and skip the training wheels stage. I was able to do that, but another item was necessary. Get a pedal bike that is SMALL. I actually got mine from a neighbor, but I found a link that looks similar. The bike in the link has training wheels, but I assume you can take them off. If the wheels of their first pedal bike are SMALL, then they can’t get hurt and the can’t go very fast. My 5-year-old thinks this is really fun. I don’t have the headaches of either him getting injured or worrying that he’ll take off and be out of sight quickly.

Great cheap toy for a toddler. My 2 year old loves the Melissa & Doug Minnie Wooden Magnetic Dress-Up. This has inspired hours of play and conversation. ($10)

Let’s be honest. The kids are getting screen time. When the pandemic hit and daycare (temporarily) closed, I decided to get much more lenient than I had been before about screen time.

Magnus Kingdom of Chess is a great tablet game ($8). My 5-year-old son plays it on an iPad mini. I had made some unsuccessful efforts to interest him in real chess before buying the game. He loves the video game, but what’s amazing is that since he’s started playing the video game, he has become much more interested in playing actual chess with me. In fact, he asks me to play him in chess now. Before I used to worry that how would he even succeed if he hadn’t mastered chess by age 5. Now, he’s actually asking me to play him in chess and I’m thinking secretly ‘I don’t have time for this. Shouldn’t you be playing outside?’. (In our case, my son got some help from parents with playing the game. He might have had a hard time doing it completely by himself.) Let me be quite clear, my son has NOT mastered chess, but his understanding of the pieces really went up because of the video game.

There are also several completely free great apps made by Khan Kids and PBS Kids.

Gen Z on “The Social Dilemma”

Undergraduate student of data analytics, Liza Thornell, writes her reaction to the documentary on social media. My earlier post on the same topic is here.

A new Netflix documentary has recently caught the public’s attention. The Social Dilemma has caused speculation to form around big tech companies and has also sparked the deletion of social media applications across the nation. The Social Dilemma explores the steps that were taken to create the powerhouse social media platforms, along with exposing the negative effects the platforms have on its users.

Social media platforms, such as Facebook, gain the majority of their revenue through advertising. Due to its privacy settings (or lack thereof) Facebook is able to obtain astronomical amounts of data about its users. The data that is collected from social media platforms entices marketers because they can reach more customers for less money. These platforms market specific products based on the data that they collect through their users. According to The Social Dilemma not only can social media market products to you, it can also mold and shape your opinion as well, changing your preferences over time. In the Social Dilemma several former Silicon Valley executives explain why this can be bad.

According to the documentary, social media is harmful due to its design and how it affects mental health. The purpose of these apps is to hold your attention captive for as long as possible. In order to do so, it is important that the app keeps providing fresh new content that is relevant to your preferences. Everything we do on our phones becomes predictive data for what we will do next. The ideal situation for social media platforms is that you will end up down the ‘rabbit hole’ of specifically tailored content because the longer you spend scrolling and clicking through social media, the more data these platforms can collect about you. According to the Social Dilemma, the rabbit hole is a dangerous place to be.

Social media in its initial design was not created to be hurtful. It was made to bring people together. The Social Dilemma states that big tech companies have strayed away from their initial creation story. Now, social media is about holding its audience captive, molding public opinion, and increasing sales through tailoring marketing. The content is distracting us from the serious ramifications that can come from spending all of our free time scrolling instead of engaging with the world around us. It makes us crave instant approval at all times, from people and the media.

The Social Dilemma does not condemn social media. This documentary supports social media, just not the way it’s currently working. The biggest take away from this documentary is that we have gotten lost in the rabbit hole and have to find our way out to preserve our privacy.

From the standpoint of a college student, I found this documentary to be eye opening. I believe that the average college student struggles with being addicted to social media platforms and our attention spans are shortening as a result. Reliance on social media directly correlates with the decline of in-person interaction and interpersonal communication skills. Companies such as Apple have released features on phones that track screen time in order to enlighten consumers on their usage. The ability to track usage is a tool for managing and limiting social media use. For college students, cutting down on social media consumption can positively impact mental health and productivity.

Election Forecast by 538

I teach a data analytics course and I asked some students to write blogs on data and current events. This blog is by Jake Fischer.

Every four years, the United States seems to turn upside down with the Presidential election. Now, the nation has turned its eyes to predictive analytics to understand the future of our country. As of October 22, the time of the writing of this post, Joe Biden stands an 87% chance of winning the critical swing state of Florida. This seems like a significant margin, but how did we come to this understanding using data? How reliable is this fivethirtyeight forecast?

For starters, the 87% chance of winning is based on a simulation run by data analysts in 40,000 different scenarios, all of which are measuring different factors from voter turnout to demographics to the economic forecast of the day. This prediction also factors in the polling averages for each candidate from 8 different polls, each of which is given a grade of reliability and weighted accordingly. Hundreds of factors come into play when predicting an election, yet confidence in many of these numbers is at an all-time low. So, in answer to question two, the outlook is anything but certain.

This doubtful outlook is because, although Biden wins 87% of the elections, this does not factor in the margin he wins by. When truly looking at the data, you see that over half of the outcomes weighed in this 87% are decided by less than 1% of votes. Unfortunately, this does not leave much more for a margin of error as is required in most data analysis. 

This very popular website does not factor in the impact that the website itself has on voters. With millions of people reading this data and seeing that Biden stands a 87% chance of winning, there is a high likelihood that voters will simply not turn up at the polls. This distinct percentage of voter turnout that may chose not to turn up at the polls because of analytics like this, would significantly impact the data set and could actually throw the results in the entire opposite direction, particularly when the decision is already being decided by such a slim margin.

Even though data analysis has turned into a booming industry, with more accurate results than ever before, there are some instances in which predictive analytics has placed significant limitations on the outcome of important decisions, such as the presidential election. I say all of this to not place doubt on analytics, nor the credibility of the FiveThirtyEight organization, but rather to remind readers of the important factor that is the human condition. At the end of the day it is important to exercise your right to vote no matter what side of the aisle you stand on, and without allowing polling data to influence your decisions. Vote!

Gen Z reads The Complacent Class, Review #2

Another one of my undergraduate students has written a review of The Complacent Class. His name is Vinny Russo and he’s going on to great things. Here’s a link to the first review published earlier by a different student.

For the simple are killed by their turning away, and the complacency of fools destroys them

Proverbs 1:32

When I read the Bible, I see God disrupting the lives of his people and moving them. People get moved as punishment, as well as for a reward or rescuing, including Adam and Eve’s expulsion from the garden and the Jew’s exodus from Egypt. Good things come from the movement of Israel and its people. The United States needs movement, too. Although I wouldn’t wish for a modern-day abusive Pharaoh to force us into some kind of exodus, I do think that Americans can learn from Tyler Cowen and his manifesto for mobility and taking risks. The future of America depends on it.

“Economists see migration as a kind of investment. You give up something in the short run, namely the home, job, friends, and conveniences, in the hope of achieving something different and better somewhere else. In the beginning, the move is not supposed to be easy, but it’s a sign of hope, faith in the future, and a belief that a new start can lead to something grander and more glorious.” – (Cowen, Page 24). After joining the military right out of high school, joining a Christian Missions agency, as well as coming to Samford University in Birmingham, Alabama for Undergraduate studies (I am from New York City), I can very much relate to this quote. Every move was difficult in its own way, but the growth in and from the process is invaluable. Should everyone enlist in the military, become a missionary or go to Samford? No. Can most Americans, after completing High school, go to school or find a job in a city other than the one they grew up in? Yes. If more 18-year-olds did this, they would be richer and their actions would boost production in the United States. If you have not done so already, take a leap of faith and pursue your God-given dream, or read Tyler Cowen’s The Complacent Class. Both can change your life. Thanks for reading!

Gen Z reads The Complacent Class

One of my undergraduate students has written a review of The Complacent Class. Her name is Hannah Florence and she’s going on to great things.

In his speech at Rice University about the United States’ intention to reach the moon, President Kennedy declared these iconic words: “We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard…the challenge is one that we are willing to accept, one we are unwilling to postpone.

 I am struck by how out of touch his words are with the current political environment. Is there a challenge that we are currently not unwilling to postpone? Never mind reaching new frontiers; Congress has been unable to address issues in its direct purview for decades.

The ambition and boldness of Kennedy’s speech directly contrasts with the lack of urgency that characterizes the public square and American life in general. On a societal level, the current political class has not taken the initiative to exercise creative problem-solving with substantial nationwide issues. Yet on an individual level, Americans are more risk-averse in all areas. Despite the perception of increasing American dynamism due to information technologies, Tyler Cowen details the “zeitgeist of community-enforced social stasis” in The Complacent Class (Cowen 7). 

Americans used to be inventive and imaginative. Now Americans are less mobile, less innovative, and more reluctant to sacrifice comfort and safety for the chance at a better life. Cowen discusses how the restlessness of the 1960s – as evidenced in Kennedy’s speech – converged with the trends of the proceeding decades to create the foundation for the rise of The Complacent Class (5).

Cowen’s thesis is that people are less willing to disrupt the status quo, which is making us, writ large, worse off. More Americans don’t want to move or start a new business because the uncertainty of a better future is not worth risking the comfort of their current circumstances.

This thesis takes a different angle on a claim that has often been repeated in various social commentaries: many Americans, willfully or not, are stuck in a cultural and economic malaise. In The Decadent Society, Ross Douthat argues that following the Apollo mission, Americans underwent a period of economic stagnation, demographic decline, and intellectual and cultural repetition (Douthat). In a more dated, but highly prescient argument, Robert Putnam empirically chronicles the decline in volunteerism, political participation, church attendance, and associational involvement. He poignantly illustrates the decline of communal life of many American communities—we used to join bowling leagues, and now we bowl alone (Putnam).

The common thread among these views is that something is amiss with the status quo and yet we are unwilling to challenge it. Across these different writings, there is a common cultural pivot point in the 1980s. Cowen argues that following the social and political turmoil of the 1960s, the Reagan era was a period of newfound wealth and prestige. The safety, prosperity, and stasis of the 1980s provided the means for Americans to dig in (Cowen 11). Douthat pinpoints the Challenger explosion in 1986 as the end of the era of space exploration (2). Putnam attributes a significant part of the decrease in civic involvement to the generational transition from the silent generation to the baby-boomers.

The three authors discuss a variety of different cultural phenomena – increasing income segregation, declines in political participation, institutional sclerosis to name a few – but they utilize the same vocabulary of stagnation, complacency, and resignation. Across all the texts, there is a sense that the grit, audacity, and optimism that characterized the generation that was raised during the Great Depression and served their community through WWII has been lost. If the Space Age represented the idea that tomorrow might hold something new; the ethos of our current era is the fear that it actually will.

The effect of these developments can be seen in the toxicity of our politics. During an ugly election in a strenuous year, we ultimately are the victims of our own complacency. We look to national elections to address our issues, with neither the grit nor audacity to serve our communities or change our circumstances. The high ideals espoused in decades past of service, mutual self-sacrifice, and courage seem beyond our reach.

Although comfortable (for some) in the short-run, Americans will be hindered in their abilities to meet the challenges and opportunities of an increasingly interconnected world without new ideas and people willing to spearhead them. This message is particularly relevant for current students (myself included) who are well-placed to take up this mantle but epitomize many elements of the Complacent Class. Our ambitions are tempered by our anxieties, and our resources are too often used as means of distraction rather than improvement.

In order for my generation to challenge the bulwark of economic and cultural stasis, we need to push against the guardrails we have grown up with. This won’t be an easy for a cohort that has long perfected their test scores and resumes. As I talk to other classmates about The Complacent Class, there is a general consensus that our generation won’t settle for the status quo we have inherited.

            However, the irony of reading The Complacent Class in an international pandemic is that everyone has been forced to adapt to the ‘new normal.’ The coronavirus—and not gen z or millennials– has proved to be the ultimate killer of complacency.  This means that the post-pandemic future may provide the needed margin to create a more dynamic economy and society. One that can bring those on the periphery into the fold and create opportunities for those who had been told to play it safe.

Works Cited

“John F. Kennedy Moon Speech – Rice Stadium.” Nasa.gov, er.jsc.nasa.gov/seh/ricetalk.htm. Accessed 12 Oct. 2020.

Cowen, Tyler. The complacent class: The self-defeating quest for the American dream. St. Martin’s Press, 2017.

Douthat, Ross. “The Decadent Society: How We Became the Victims of Our Own Success.” (2020).

Putnam, Robert. “Bowling alone: The collapse and revival of American community.” (1991).

Joy on Books for 2020 Holiday

I have, I’ll have you know, bought some adult books and read some of them in 2020. Two that I hope to eventually review properly here are One Billion Americans and The Property Species. For now, I’ll just say that I recommend them if your interests overlap with mine.

The books that I read are usually children’s books. I read them out loud, every night.

These are some classics that my 2-year-old is currently asking for on a nightly basis. She is in the repetition stage and also edging into the stage of development where she will flip through a book and “narrate” from the bits that she remembers. “Cow jumpin’ da moon!” is one of the lines she will use when flipping through Goodnight Moon.

Two classic books that are a little more complex for 2 are Make Way for Ducklings and The Little Engine That Could. Sometimes I’ll only read half of the words to keep the pages flipping faster for her.

I’ve got another classic recommendation. I don’t think it’s bad to recommend classics that you have already heard of. At this point, there are so many classics that people still need to choose between them. The Narnia series is really great. The plots are good. Kids are always being told to “be nice”, but children are going to see a portrait of goodness in these books that will serve them well. What does it mean to be good and why do we bother? We just got to the part where King Caspian abolishes the slave trade on an island.

Even though I’m currently reading through the series with my 5-year-old, I would recommend a different strategy to most parents. Wait until age 6. Start off with The Lion, the Witch, and the Wardrobe just one page before Lucy goes into the wardrobe. That way your kid will immediately start meeting magical creatures. Once your child is invested in Narnia, they can probably sit through the entire first chapter on a second read-through.

Two more random kid’s recommendation: (1) We got Germs out of the public library last year. When my son was 4 (well before Covid), he asked for that book every night for months. We checked it out over and over. In the time of Covid, I think this is a great intro to the immune system.

(2) Aunt Flossie’s Hats is a good way to sneak in some history without it feeling like school. The story involves a woman relating memories to her granddaughters. (bonus points for being anti-racist)

If wages fell during a recession

A paper I wrote with Dan Houser is forthcoming in the Journal of Economics Behavior and Organization. “If wages fell during a recession”

https://www.sciencedirect.com/science/article/abs/pii/S0167268120303577

The title comes from Bewley’s famous book “Why Don’t Wages Fall During a Recession?” In that book, Truman Bewley asks managers why they do not cut wages in a recession when equilibrium analysis tells us that the price of labor should fall.

We run an experiment in which employers and workers encounter a recession. The employers could cut wages, or they could keep them rigid as we normally observe during recession. The concept of a “cut” assumes a reference point from which to go down from. We establish that reference point by letting the employer set a wage before the recession and repeating that payment to workers for 3 rounds.

We use a Gift Exchange (GE) Game to model the relationship between employers and workers. Employers offer a wage that is guaranteed to the worker. Employers have to trust that workers will not shirk. We do observe a few subjects shirking, and those people are not very interesting to us. We are interested in the workers who respond with positive reciprocity because that means there is “good morale” in the “workplace”. The employers interviewed by Bewley were afraid that wage cuts would damage the good morale that is necessary for a business to run.

After three rounds, there was a recession. The total surplus available in the GE game shrank by 10%.  In the Inflation treatment, the exchange rate of tokens to dollars increased, such that if firms kept nominal wages rigid there would in fact be a 10% real wage cut.

If workers resent nominal wage cuts, then firms should keep wages rigid in a recession. If worker morale falls and workers decrease effort, then firms will be hurt more by the fall in productivity than by a large real wage cost.

In fact, about half of the firms did cut wages. So, we did not observe wage rigidity and we’d like to do follow-up research on that point. It did mean that we had variation and could observe the counterfactual that we were interested in.

Workers don’t like wage cuts. Workers who had been selecting an effort level near the middle of the feasible range dropped their effort significantly if they experienced a wage cut. The real wage cuts under Inflation did not have as sharp of an effect on effort, which suggests some nominal illusion.

Here’s a cumulative distribution of effort choices among workers (Recession treatment had no inflation). After half of the workers experienced a wage cut, the effort distribution moves toward 0.05, the minimum effort level.

We measured loss aversion at the end. We can’t say that loss averse workers resent wage cuts, because everyone resents wage cuts. There’s maybe some evidence that loss averse employers are less likely to cut wages. Thanks for reading! Please reach out through my Samford email if you’d like to know more.

The relationship between loss aversion and wage rigidity deserves more attention from behavioral economics.

Special thanks to Misha Freer, Cesar Martinelli, and Ryan Oprea for conversations that helped us. Also, we are indebted to everyone that we cited, of course, and to all the people we failed to cite.

2020 Nobel Prize to Milgrom and Wilson

The big news in our world is that the Nobel Prize was announced today for economists. (We call it “the Nobel Prize”.)

Paul Milgrom and Robert Wilson win for 2020. They are known for auction theory and design. Here is a popular introduction from the Nobel Committee.

This prize is special to me because auction design was one of the very first practical problems that presented me with a chance to put economic ideas into practice. As an undergraduate at Chapman University, I had the privilege to spend time talking with people like Vernon Smith and Dave Porter. Some people think of Vernon Smith as being someone who “does things in the lab”. The thing that he actually did was often auctions.

My master’s thesis at Chapman University was a project on auctions. A practical problem to motived our inquiry. Students at Chapman were upset about the way that the most convenient parking spots were allocated. Concerns about parking showed up in quantitative student satisfaction surveys.

We designed an auction to price and allocate the most coveted parking spots. In this scenario, multiple items are being sold because the parking lot has many spots. Hence the “multi-unit” in the title of our paper Information Effects in Uniform Price Multi‐Unit Dutch Auctions.

We had an important question, since we were actually going to run an auction that would affect people’s lives. How to we choose from among the different possible auction formats?

Paul Milgrom (with Robert J. Weber) provided guidance to us in their 1982 paper in Econometrica.

Among other things, in that paper, they compare the revenue properties of English auctions and Dutch auctions. In an English auction, the price starts low and bidders compete to out-bid each other until the price is so high that only one bidder remains. That is the popular conception of an auction. There is another mechanism class (Dutch) in which the price starts higher than anyone wants to pay and drops until a buyer jumps in. Once you start thinking about how many ways one could run an auction, then you need some way to decide between all the mechanisms.

Theory can help you predict who will be better off under different formats. And, in my case, needing to figure out the revenue properties of different auction formats can help you learn economic theory!

American Moments

The presidential debate on September 29, 2020 was an embarrassment. I don’t remember what the candidates said because I just kept panicking thinking about the fact that other people could see what was happening. Didn’t some adult somewhere have a kill switch?

After an hour of listening, I expressed my sincere wish that this had never happened:

Tyler had a more nuanced take:

It’s not just true in America. Much of what passes for “debate” is just people firing off talking points at each other. Usually it’s not quite so obvious and awkward because there are not such clear rules being broken.

If there’s one thing that Americans agree on, it’s that you wait your turn in line. This is the most basic schoolyard etiquette. No matter how rich or famous you are, cutting in line is deeply resented. It felt like President Trump was not taking turns (so then it was strange for me to fact check this and see that Biden spoke only 2 minutes less total than President Trump).

If it were in my power to undo that night I would. However, a new podcast gave me some more to ponder about in terms of what Americans can be proud of. A lot of true news comes out about Americans making mistakes. That can be useful for others. Audrey Tang said of our misdeeds:

COWEN: … the United States, has made … many mistakes … What’s our deeper failing behind all those mistakes?

TANG: I don’t know. Isn’t America this grand experiment to keep making mistakes and correcting them in the open and share it with the world? That’s the American experiment.

Being open about our mistakes might be the next best thing to not making them in the first place.

Tang, a transgender Taiwanese computer policy expert, said something that I think Americans can be happy about.

Speaking of software, here’s a recent conversation with a 5 year old about what exactly is software and what does it mean to buy it. My son imagined that if I bought it in a store I must have picked something up off a shelf. (I could have explained that software is a nonrival good, but I think it’s too soon.)

How Bayesians Read a Think Piece

How likely is it that an opinion critical of [topic] will get expressed by someone on the internet?

My good friend (call her Anne) texted me this week. Anne sent me a link to a blog that declared some of her preferred works of art (i.e. musicals) to be inferior. She loves art, so to be told that her tastes were not exceptionally good was disappointing.

In my reply I wanted to make sure that Anne wasn’t putting too much weight on this new evidence:

How should we incorporate blogs into our beliefs about reality? (I see the irony – I’m writing a blog right now.)

The non-technical summary: you should be skeptical of what you read online.

The technical summary: the fact that some writer said “H” on the internet, should make you only slightly more confident that “H” is true.

I can’t improve on the Wikipedia presentation of Bayes’ theorem, so I’ll just paste in:

Let’s consider the probability that it is true that Anne’s favorite musical is bad. We’ll call that hypothesis “H”. What’s the probability of H, given that one person wrote an article stating that the musical is bad?  

The evidence, E, is the article.

Instead of just evaluating whether the article is convincing or not, Bayesian inference requires that we consider

  1. Were we confident that H was true BEFORE seeing the article? Was there good data up until this point that convinced us H is true?
  2. If H is true, what’s the probability of this article being written?
  3. What’s the overall probability of this article being written, regardless of whether H is true?

The probability that musical is bad given that someone wrote an article saying so is :

P(H|E) = P(bad|article)

P(bad|article) = ( P(article|bad) x P(bad) )/ P(article)

The right side of the equation asks whether we are likely to see the article if the musical is bad. If the musical is actually bad, then we are likely to see it condemned in print. HOWEVER, if we had a prior belief that the musical is not bad, then the numerator gets smaller.

Finally, we consider the denominator, P(E) or the probability of seeing an article that is derogatory towards the musical. If that probability is high, then the probability of the musical actually being bad goes down.

Here’s how Anne should think:

P(bad|article) = ( likely that article will be written if bad x prior evidence suggests not bad) / snobby think pieces get written regardless

so

P(bad|article) = (big x small)/ big = small probability that Anne’s favorite musical is actually bad

You should be just the right amount of skeptical when it comes to internet content. Be Bayesian.