Wednesday, October 20, 2010

Costly voting and polls

This week, I am working mostly on a paper with the awesome Laurence Wilse-Samson, about voting after a poll  where the set-up is better suited to a small-scale thing, i.e. a small committee or something.

First, the voting problem: in a huge election, your probability of being "pivotal", i.e. for your vote to count, is really small. If you have a small cost of voting, e.g. time, you shouldn't go vote. However, if nobody votes, then you will always matter.
In real life, with a cost of voting, it is hard to explain why so many people vote. With no cost, or a benefit, it is hard to explain why so many people abstain.

Since we are economists, we are trying to see how people might behave strategically. The main model right now just says that people have a small cost of voting(that can be negative if you like to go vote). If G is your gain from winning the vote compared to losing, and p is the probability that you are "pivotal", then you will go vote if


That's the equation you want to have in mind to think about it.

In any case, you can show several things with this. If people have different cost of voting, people with low costs will vote and those with high cost will not. If you have a binary vote, you will see that people in the minority will vote with a greater probability. The reasoning  is that with a cost, the guys in the majority should free-ride and let the others vote in their place. Then they still win, and do not bear the cost.

Now, let's introduce polls. Given the effect above, you might see what can happen. Assume that everybody participates in the poll. They have an incentive to misrepresent their position: by saying they are Democrats instead of Republicans, they make Democrats believe the election is in the pocket, they turn out less, and Republicans win.

In our model, with a simple cost of voting that differs across agents, we find that the only symmetric equilibrium(where everybody plays the same thing) is the equilibrium where the poll is completely uninformative, i.e. where people randomly state their position on an issue.
This is weird: we tend to think that polls contains at least some information

Now we are thinking about different things. The sexy idea is the cost of lying literature. A lot of laboratory experiments showed that people tend to tell the truth more often than necessary. More on that in the next post.

Monday, June 21, 2010

On how to run useful lab experiments: Why you shouldn't call a Southerner an asshole:

Why you shouldn't call a Southerner an asshole:: "

Three experiments examined how norms characteristic of a “culture of honor” manifest themselves in the cognitions, emotions, behaviors, and physiological reactions of southern White males. Participants were University of Michigan students who grew up in the North or South. In 3 experiments, they were insulted by a confederate who bumped into the participant and called him an “asshole.” Compared with northerners—who were relatively unaffected by the insult—southerners were (a) more likely to think their masculine reputation was threatened, (b) more upset (as shown by a rise in cortisol levels), (c) more physiologically primed for aggression (as shown by a rise in testosterone levels), (d) more cognitively primed for aggression, and (e) more likely to engage in aggressive and dominant behavior. Findings highlight the insult–aggression cycle in cultures of honor, in which insults diminish a man's reputation and he tries to restore his status by aggressive or violent behavior.

Source: 'Insult, Aggression, and the Southern Culture of Honor: An 'Experimental Ethnography'' from Journal of Personality and Social Psychology, Volume 70(5).May 1996.945–960

Friday, June 11, 2010

North Korea

It's hard to get a grip on what's happening in North Korea. The NYT had a great piece yesterday and a picture that says it all:

Also, a nice video report from the BBC here

One striking feature is the belief in an outsider plot organized by the US and South Korea. From the NYT piece

At least two of those interviewed in China hewed to the official propaganda line that North Korea was a victim of die-hard enemies, its impoverishment a Western plot, its survival threatened by the United States, South Korea and Japan.
South Korea’s charge that North Korea sank one of its warships, the Cheonan, in March was just part of the plot, the party official’s wife said.
“That’s why we have weapons to protect ourselves,”

Also, it seems like a substantial part of the population is employed by the state on paper, but they  don't actually do any work for it. They pay the company to make sure they are reported present so that they don't get caught by the state.

On paper, he said, a Chongjin state construction company employs him. But the company has few supplies and no cash to pay its employees. So like more than a third of the workers, the worker said, he pays roughly $5 a month to sign in as an employee on the company’s daily log — and then toil elsewhere.

Thursday, June 10, 2010

Friday, June 4, 2010

Blogger-Reader link tests

The last posts were mostly links from Google Reader to Blogger. I am trying this for now, so I am not commenting on the shared links, but I will later on. I promise

Hungary like the wolf

Hungary like the wolf: "

THE sovereign debt crisis has a new potential casualty with the new government of Hungary raising the possibility of default. The adminstration may be following the classic path of an incoming chief executive - blame all your problems on the previous management - but needs to learn some market-handling skills. Don't even mention the word default. It is a bit like hesitating when your spouse asks if you're having an affair; your subsequent guilt tends to be assumed. As it is, Hungary can expect to pay more to borrow.

Hungary was expected to have a budget deficit of 4.5% of GDP this year (figures from the Economist Intelligence Unit); that seems to have jumped to 7% on the new government's numbers. According to the OECD, its gross debt-to-GDP ratio is around 90%, the level at which Reinhart and Rogoff argue tends to generate problems. (The country already had one bailout, in 2008.) It is not in the euro zone and its currency, the forint, has been falling since March. Its current account is roughly in balance. Inflation is running at almost 6%, unemployment is in double digits and GDP is forecast to show a small decline this year.

Credit default swaps on Hungarian debt jumped 83 basis points to 393bp, according to CMA Datavision (by way of comparison, Portugal is around 376 and Greece 787). The economy is small (around $150 billion on World Bank figures) but even a small European country defaulting would not be good for sentiment at the moment.


Thursday, June 3, 2010

Caught in the oil

Caught in the oil: "
A short entry - AP Photographer Charlie Riedel just filed the following images of seabirds caught in the oil slick on a beach on Louisiana's East Grand Terre Island. As BP engineers continue their efforts to cap the underwater flow of oil, landfall is becoming more frequent, and the effects more evident. (8 photos total)

A bird is mired in oil on the beach at East Grand Terre Island along the Louisiana coast on Thursday, June 3, 2010. (AP Photo/Charlie Riedel)

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Louisiana - Oil spill - BP - United States - Bird"

Tuesday, June 1, 2010

Minority Report

Interesting Ted Talk...

Because Pharmaceutical Doping became boring

Some story is going on about Fabian Cancellara(Triple world time trial champion)'s use of motors in his bike. The two video examples are quite awesome, when you have the motor story in the back of your head. Anyway, Cancellara, of course, refuted the accusations(e.g. here). All this seem to be pretty absurd, but if it's true, it would be quite funny.

Here is the video:

Nice picture

Usually, I don't like those kind of easy pictures, but I don't know why I liked this one

Via Daily What:

Monday, April 26, 2010


Following on this story where

A senior Iranian cleric says women who wear immodest clothing and behave promiscuously are to blame for earthquakes

it seems that... it was right. via Gawker, the New York Post has the story

Boobquake, a day of action that calls on women worldwide to dress scandalously and prove wrong an Iranian cleric who blames natural disasters on immodest cleavage, has started disastrously, reported Monday.
At 11am (local time), a 6.9 magnitude earthquake hit Taiwan, no doubt causing thousands of Boobquake fans to hastily button up.


So we're all going to die. The interest rate paid by Greece on its debt just rose by 300 basis points today. Greece is riskier than Venezuela and Pakistan.

Felix Salmon lists several bullet points here. I still don't understand how one could talk about Greece exiting the euro zone just like if it was nothing.  See some explanations here for instance.

Saturday, April 24, 2010

This day in awesomeness

The Foreign Service Institute is linking to its language courses online here (via Lifehacker). What is "tagalog"?

Update: This day is quite awesome. Amazon has 1700 free songs here. Via Kottke

Thursday, January 7, 2010

SuperFreakonomics best critic ever

Superfreakonomics has generated a lot of fuss. Whatever is your position on the issue, this is one of the best line in the history of blogging, from Dan Davies:

if you find yourself writing, in all seriousness, as a practical proposal, the phrase "pumping large quantities of sulphur dioxide into the Earth’s stratosphere through an 18-mile-long hose, held up by helium balloons", it is probably time to take a step back and ask yourself if something has gone a little bit wrong with your life.

Israel airport security

Annie Lowrey discusses the differences between Israeli and US airport security. This is a topic that has been around for a couple of days, and this article makes a good summary of the pros and cons.(the article here for instance just makes fun of American new security measures, that one is a bit more objective but slightly).

Lowrey explains that

By every available metric, Israel's system works better at preventing violent attacks. The country, under constant terrorist threat, hasn't faced a hijacking incident since 1969. A plane leaving Ben Gurion, the airport through which I traveled, never has. The latest deadly security incidents have involved attacks within airports, rather than from planes.

Why? For Lowrey,

And it works, Israelis say, because it relies on the so-called "human factor." Israel attempts to stop dangerous people before they come anywhere close to an airliner, profiling to assess each individual's risk

The profiling there is less of a bad word than in the US. There's no mention in either her article of the one linked above, of profiling depending on the country of origin or religion. They are profiling on attitudes. From her experience
Once inside, a team of pleasant airport employees approached me and asked if we could speak for a few minutes. 
So here is the trick. They seem to do a better job. What I like also is that they seem to do a more sensible job in their profiling process. But obviously, having to talk to the security guards has its price:

Israel values its security, and pays for it. According to an analysis by Bloomberg News, Israel spends around 10 times more per passenger than the United States does(...)Say each passenger flying through a U.S. airport received on average 10 minutes of questioning from one guard. That would work out to 7.35 billion minutes, or 123 million hours, of work annually. We'd need 3 million full-time guards to perform it. That's 200,000 more people than the total number of active and reserve military personnel, and twice the number of U.S. Wal-Mart employees. It would cost somewhere north of $150 billion a year.

That's quite worth a reading

Auctioning committee positions

As I am reading papers and writing a paper about the importance of committee placement in the House of Representatives on donations by Political Action Committees, I am wondering whether the process of assigning members to committees is optimal, and how it could be changed in fancy and efficient ways.

For now, committee assignment is a pretty closed process, from  what I understand. Here is what we get from the Office of the Clerk of the House:

Before Members are assigned to committees, each committee's size and the proportion of Republicans to Democrats must be decided by the party leaders. The total number of committee slots allotted to each party is approximately the same as the ratio between majority party and minority party members in the full Chamber.

Members are then assigned to committees in a three-step process. Each of the two principle parties in the House is responsible for the assigning its members to committees, and at the first stage, each party uses a committee on committees to make the initial recommendations for assignments. At the beginning of the new Congress, Members express preferences for assignment to the appropriate committee on committees. Most incumbents prefer to remain on the same committees so as not to forfeit expertise and committee seniority. These committees on committees then match preferences with committee slots, following certain guidelines designed in part to distribute assignments fairly. They then prepare and approve an assignment slate for each committee, and submit all slates to the appropriate full party conference for approval. Approval at this second stage often is granted easily, but the conferences have procedures for disapproving recommended Members and nominating others in their stead. Finally, at the third stage, each committee submits its slate to the pertinent full Chamber for approval, which is generally granted.

Has there been any discussion on whether an auctioning process could lead to a "better" outcome?("better" has to be clearly defined though).

Intelligence in Afghanistan

Maj. Gen. Michael Flynn, "the top military intelligence officer in Afghanistan" and "the top military intelligence officer in Afghanistan" wrote a strong indictment of the US counterinsurgency strategy and the collection of intelligence. Namely, the issue here is that the US is only collecting intelligence for military purposes and not for social reconstruction. Anyway, one very interesting bit from the report is this: 

An NGO wanting to build a water well in a village may learn, as we recently did, about some of the surprising risks encountered by others who have attempted the same project. For instance, a foreign-funded well constructed in the center of a village in southern Afghanistan was destroyed -- not by the Taliban -- but by the village's women. Before, the women had to walk a long distance to draw water from a river, but this was exactly what they wanted. The establishment of a village well deprived them of their only opportunity to gather socially with other women.

Wednesday, January 6, 2010

Term limits

Ezra Klein has a weird post on term limits. He argues that term limits are a "folly"  (as it seems, in the governors case) because multiple terms are a good thing to build experience. Reading his piece, it looked like you can't build experience in other public offices. Here is what I commented:

First, I sympathize with the argument that experience is primordial. However, you seem to assume that before an office term, the politician was not assuming any other public function. Likewise, you seem to assume that after the term, due to term-limit, the politician leaves the public administration in its entirety. Experience could be built in other offices/functions, so I don't really understand your point.
Second, there has been an interesting couple of papers written by Kroszner and Stratmann(2000, 2006) about the committee structure in Congress as a way to reduce an imperfect information problem.
The idea is that Political Action Committees cannot pay legislators to represent them. If they could, they would. Because such contracts are not possible/enforceable, the legislator that gets paid by the PAC(e.g. for campaign financing) has no incentive whatsoever to actually defend the interest of the PAC as soon as it gets the money. Likewise, the PAC has no incentive to pay the legislator if the guy defended the PAC interest on one law.
However, we have a repeated game: congressmen can indeed engage in reputation building. Here is why I think it is linked to your post: one problem with term limits is that you hamper reputation building.
One good thing with reputation building is that you correct the information imperfection: if the legislator does not satisfy the PAC requirement once he has been paid, he can't expect the PAC to pay for his/her campaign in the future.
The committee system is good in this sense because it gives more information on the field of interest/influence of a legislator, and also because usually legislators stand in the same committee over time.
Those papers have been written for congress, but I guess some kind of reputation-building might be at stake with governors and state legislatures too