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Silly Humans Can't Count: The 29% Effect

From a new study in the Journal of Consumer Research, how humans can't count:

Consumers often have a distorted view when they compare information that involves numbers, according to a new study in the Journal of Consumer Research.  “As a consumer, would your preference for a dishwasher depend on whether its warranty level is expressed in months rather than years?” write authors Mario Pandelaere (Ghent  University, Belgium), Barbara Briers (Tilburg University, the Netherlands), and Christophe Lembregts (Ghent University, Belgium).

To most consumers, the answer is “yes.” The difference between an 84-month and a 108-month warranty looks bigger than the difference between a seven-year and a nine-year warranty, despite the fact that both differences are exactly the same.

“Qualitative information can usually be specified in alternative units,” the authors write. “In many cases, however, the specific unit in which information is described is arbitrary. For instance, product quality ratings may be expressed on a scale from 0 to 10 or on a scale from 0 to 100,” the authors write. “People typically fail to realize that the unit of quantitative information is arbitrary. They just focus on the number of scale units used to express a certain difference.”

As a result, higher numbers seem to represent bigger quantities. This “unit effect” is the reason why consumers perceive a bigger difference between ratings 90 and 95 out of 100 than they do between a 9 or 9.5 out of 10.

Source:

How to Make a 29% Increase Look Bigger: The Unit Effect in Option Comparisons. Mario Pandelaere, Barbara Briers and Christophe Lembregts. The Journal of Consumer Research, August 2011 [-]

 

Lord of the Rings from Mordor's Perspective

Heady stuff: Lord of the Rings from Mordor's perspective.

 

 

Field Notes: Snow, Data, Oil, Trading, Narco-Subs, etc.

• La Nina fading (Source)
• Summary of record snowfalls this season (Source)
• Big data vs bad data (Source)
• Oil Falls to 11-Week Low on Outlook Gasoline Supply to Increase (Source)
• JPMorgan Has Three Perfect Trading Quarters in 2010 (Source)
• Warmth This Week to Challenge 100-Year-Old Records (Source)
• Colombian military seizes 100-foot drug sub capable of holding 8 tons of cocaine (Source)

 

Your Dose of Ski-Speedriding

Your daily dose of ski-speedriding. So, so intense, especially the slot canyon and the fences.

 

Saskatchewan is Kind of Like Your Sister

This admittedly has a narrow constituency, and losing momentum toward the end, but the first half of this NSFW video on resource investing in Saskatchewan had me laughing.

 

Summarizing Spider-man Savagery

The critics have had a field day flailing the new Spider-man play on Broadway. I tried to do a word cloud of the ten nastiest reviews, but that didn't really get the savagery across. As another stab at it, here is an OS X auto-summary of the 5,844 words in those reviews:

It's my understanding that was trying to create a sense of the jokey-jokey comic book aesthetic with things like cardboard cut-outs and a tiny  doll that flies up the length of the stage during a climactic falling moment, but it just comes off as a huge middle-finger to the people who, again, paid hundreds of dollars to take their families to the show.

Hey, that's pretty good.

 

Maxwell: Oil to $300 by 2020

Thoughtful comments on oil from veteran oil analyst Charlie Maxwell in weekend Barron's:

What's the current capacity for global oil production?

We are producing about 87 million to 88 million barrels a day, and I would put global capacity at another five million barrels on top of that. So our capacity is about 92 million to 93 million barrels a day, and I see our capacity as reaching perhaps as much as 95 million barrels a day at the peak in about four or five years, probably around 2015. But I think production will go very modestly above that point, if at all, and, in effect, we will reach a plateau. It will be a little bumpy in 2015, 2016, 2017 and 2018. But by 2020, the first signs will become very evident that we can't go any higher than that in production. So we will begin to settle very slowly and gradually in a world in which we need more oil each year, but we can't get more.

How high will the price of oil go?

By 2020, I'm looking for about $300 a barrel, which is closer to $225 a barrel in today's dollars. So it reaches a production plateau around 2015 or 2016 and stays flattish on a bumpy plateau until about 2020, at which point output starts to recede slowly.

... At what point do those price increases start to put too much pressure on the world economy?

Strangely enough, I don't think that it would bring the economy down. Rather, it is the suddenness of change that does that. That rise we saw three years ago, where in one year it went from $62 a barrel on average to $100, created a huge amount of economic damage. On a more gradual scale, and giving the effect of inflation its due, we will probably simply walk away from two-tenths or three-tenths or four-tenths of a percentage point of potential gross-domestic-product growth, which we will give up by being caught in this energy vise. But the world economy will advance, and it won't be brought down by this. However, it will touch off a huge effort to change the cars and the aircraft engines—and to use a greater amount of substitutes for oil, such as coal and natural gas. And, of course, this has a lot of positive aspects as well, because in the longer term, we would have to begin making these changes anyway. But it seems that we can't be asked to do that. We must be forced to do that, and price is the means by which that force is applied.

More here.

 

Field Notes

• The collapse of Asian private equity (Bronte)
• Bubblemania: Is It Time to be Skeptical of the Skeptics? (NYO)
• Bill Ackman's Soft Power (BW)
• At home with Russian oligarch Oleg Deripaska (G&M)
• On the World’s Largest Cruise Ship the Sea Is an Afterthought (NYT)
• Clarence Thomas Keeps 5-Year Supreme Court Silence (NYT)
• Singularity: Kurzweil on 2045, When Humans, Machines Merge (Time)
• Climate change felt in Alaska's national parks (Reuters)

 

The Printing Press & City State Change

Fascinating new study show step function in growth among cities that adopted the printing press earlier versus those didn't in the 1450-1500 period. Fully study follows (with permission):

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Information technology and economic change: The impact of the printing press<

Jeremiah Dittmar
11 February 2011

Despite the revolutionary technological advance of the printing press in the 15th century, there is precious little economic evidence of its benefits. Using data on 200 European cities between 1450 and 1600, this column finds that economic growth was higher by as much as 60 percentage points in cities that adopted the technology.

Read the rest of this entry »  

Strange Like We Are

I'm sort of hooked on Campfire Ok's "Strange Like We Are". It's like The Birds meets Radiohead.

Strange Like We Are from Christian Sorensen Hansen on Vimeo.

 

Tesla on Invention

Be alone, that is the
secret of invention; be alone,
that is when ideas are born.

Nikola Tesla (via Projectionist)

 

Tranformational Media Moment?

This feels like one of those transformational media moments. I have Egypt streaming over web TV (Al-Jazeera via YouTube), over Twitter, etc., creating a level of moment saturation that is unprecedented. Leaving aside whatever impact these same new media have had on the Egypt situation in terms of accelerating it, which seems undoubtable, its effect on following events there is truly remarkable.

 

Field Notes: Facebook, Earthquakes, NYSE, Lists, etc.

• Los Angeles Basin long overdue for major earthquake: Lake-effect theory sinks, but quake timing questions go on (Source)
• Top 10 Changes at the NYSE Under German Rule (Source)
• Facebook Contemplates a $1 Billion Tender Offer for Employee Shares (Source)
• Lists: Ranking Economic Data (Source)
• Down in the data dumps: Researchers survey a world of information (Source)

 

Extreme Events on Complex Networks

From a new paper on extreme events & resilience, more links matter:

Extreme events on complex networks

Vimal Kishore, M. S. Santhanam, R. E. Amritkar

(Submitted on 9 Feb 2011)

We study the extreme events taking place on complex networks. The transport on networks is modelled using random walks and we compute the probability for the occurance and recurrence of extreme events on the network. We show that the nodes with smaller number of links are more prone to extreme events than the ones with larger number of links. We obtain analytical estimates and verify them with numerical simulations. They are shown to be robust even when random walkers follow shortest path on the network. The results suggest a revision of design principles and can be used as an input for designing the nodes of a network so as to smoothly handle an extreme event.

 

The Loneliness of the Goalkepper

Great new audiosegment from BBC, via Radiolab: The loneliness of the goalkeeper.