Daily Archives: January 15, 2016

Everything You Need to Know About Free-Market Manipulation

BOOK REVIEW

Phishing for Phools: The Economics of Manipulation and Deception, Authors: George A. Akerlof and Robert J. Shiller.

By George A. Akerlof and Robert Shiller – The economic system is filled with trickery, and everyone needs to know that.

We all have to navigate this system in order to maintain our dignity and integrity, and we all have to find inspiration to go on despite craziness all around us.

We see the basic problem as pressures for less than scrupulous behavior that is incentivized in competitive markets.

Free markets are terrific at incentivizing and rewarding businessmen heroes with innovative new products for which there is real need.

However, unregulated free markets rarely reward a different kind of heroism, of those who restrain themselves from taking advantage of customers’ psychological or informational weaknesses. Because of competitive pressures, managers who restrain themselves in this way tend to be replaced by others with fewer moral qualms.

The slot machine is a blunt example. It is no coincidence that before they were regulated and outlawed slot machines were so common that they were unavoidable. more> http://goo.gl/lwCllw

A Neuroscientist Says There’s a Powerful Benefit to Exercise That is Rarely Discussed

By Wendy A. Suzuki – Let’s start with one of the most practical immediate benefits of breaking a sweat: exercise combats stress.

Exercise is a powerful way to combat feelings of stress because it causes immediate increases in levels of key neurotransmitters, including serotonin, noradrenalin, dopamine and endorphins, that are often depleted by anxiety and depression. That’s why going for a run or spending 30 minutes on the elliptical can boost our moods immediately—combatting the negative feelings we often associate with chronic stressors we deal with every day.

In my lab, we have also demonstrated that exercise improves our ability to shift and focus attention. more> http://goo.gl/dVvEMG

Let’s Rethink Space

By George Musser – If a rhinoceros is also able to hurt me, it must be close, too. And if both a lion and a rhino are able to hurt me, then the lion and rhino should also be able to hurt each other. (Indeed, my survival depends on it.)

From this patterning of influences, we extract space. If the threat posed by predators couldn’t be expressed in terms of spatial distance, space would cease to be meaningful.

A less morbid example is triangulation. The signal bars on your mobile phone indicate the strength of the phone’s connection to a cell tower and therefore your distance from that tower. In an emergency, the phone company can locate your phone by measuring your signal at several towers and using triangulation or the related technique of trilateration.

The fact that the measurements converge on a single location is what it means for you to have a location.

The nice thing about defining space in terms of structure is that it sidesteps some of the long-running disputes over the nature of space. more> http://goo.gl/3IYOPD

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The Cannibalized Company

By Karen Brettell and Timothy Aeppel – Share repurchases are part of what economists describe as the increasing “financialization” of the U.S. corporate sector, whereby investment in financial instruments increasingly crowds out other types of investment.

The phenomenon is the result of several converging forces: pressure from activist shareholders; executive compensation programs that tie pay to per-share earnings and share prices that buybacks can boost; increased global competition; and fear of making long-term bets on products and services that may not pay off.

It now pervades the thinking in the executive suites of some of the most legendary U.S. innovators. more> http://goo.gl/8ZIgb0

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