Stremf in Numbers
Thursday, June 30, 2011
Path Dependency
I've been reading a book called "Chances Are... Adventures in Probability" by Michael Kaplan and Ellen Kaplan. This passage was so good I had to type it and shamelessly post. Enjoy.
Sometimes you play the game; sometimes the game plays you: situations that are themselves irrational but stable need to paranoid dictator to set them going. Mark Shubik (another RAND staffer) described a particularly worrying party game. He would offer to auction a dollar bill to the highest bidder; the only difference from a traditional auction was that the second-highest bidder would also have to pay. So if you bid 70 cents for the dollar and your neighbor bids 75, he gains a quarter while you lose your money-and also lose face. Even if you have to buy the dollar for $1.10, at least you've lost only a dime; the underbidder has lost much more. The bidding would usually slow as it approached the dollar mark, but once past would zoom well beyond it. People were buying a dollar for an average price of $3.40, just to avoid being the person who had bid so much for nothing. ...it applies to much more than just auction or political assassinations-it describes engineering white elephants, strikes, dead-end weapons development, and all the little conflicts that escalate relentlessly.
McGeorge Bundy, who had been Kennedy's and Johnson's security and Indochina man, once visited a Boston secondary school during the early seventies, at the height of protests against America's involvement in Vietnam. It was not a welcoming audience: the young, earnest faces surrounding him glowed with righteous disdain for the compromised warmonger. In a quiet voice, Bundy began: "I'll take you through the events as they happened, starting in 1945; when you hear me come to the place where we should have stopped, raise your hand." He started with simple, innocent matters: helping a damaged British navy, bolstering a weak France, supporting a newly independent friendly country, shoring up a local army - a policy here, a commitment there... penny bids. Each further step seemed no more than a logical way to protect the position already established, and there was already so much to lose. The audience nodded; the first hand did not go up until Bundy had reached the point of full commitment of regular troops: hot war. The students, like the U.S. government, had bought the dollar several times over. ¶ 10:59 AM 0 Comments
Sometimes you play the game; sometimes the game plays you: situations that are themselves irrational but stable need to paranoid dictator to set them going. Mark Shubik (another RAND staffer) described a particularly worrying party game. He would offer to auction a dollar bill to the highest bidder; the only difference from a traditional auction was that the second-highest bidder would also have to pay. So if you bid 70 cents for the dollar and your neighbor bids 75, he gains a quarter while you lose your money-and also lose face. Even if you have to buy the dollar for $1.10, at least you've lost only a dime; the underbidder has lost much more. The bidding would usually slow as it approached the dollar mark, but once past would zoom well beyond it. People were buying a dollar for an average price of $3.40, just to avoid being the person who had bid so much for nothing. ...it applies to much more than just auction or political assassinations-it describes engineering white elephants, strikes, dead-end weapons development, and all the little conflicts that escalate relentlessly.
McGeorge Bundy, who had been Kennedy's and Johnson's security and Indochina man, once visited a Boston secondary school during the early seventies, at the height of protests against America's involvement in Vietnam. It was not a welcoming audience: the young, earnest faces surrounding him glowed with righteous disdain for the compromised warmonger. In a quiet voice, Bundy began: "I'll take you through the events as they happened, starting in 1945; when you hear me come to the place where we should have stopped, raise your hand." He started with simple, innocent matters: helping a damaged British navy, bolstering a weak France, supporting a newly independent friendly country, shoring up a local army - a policy here, a commitment there... penny bids. Each further step seemed no more than a logical way to protect the position already established, and there was already so much to lose. The audience nodded; the first hand did not go up until Bundy had reached the point of full commitment of regular troops: hot war. The students, like the U.S. government, had bought the dollar several times over. ¶ 10:59 AM 0 Comments
Tuesday, June 28, 2011
Foolish Games, But not Child's Play
Game theory offers powerful and sophisticated methods for working problems. But, in parsing down the world into binary decisions and simple games it's easy to enter a hypnotic state of belief in these games as reality. Through familiarity and repetition with these games we begin to trust them as fact. Porn becomes sex.
For example, I found a notebook from 2003 that had a decision tree for the upcoming year. It had all sorts of options relating to finances, school, love and such. But, moving to Oregon and upending my life wasn't even on the map.
Another example: Kennedy's advisers mapped the nuclear situation as a classical PD utility grid.
a. we bomb them first with no retaliation
b. they bomb us first with no retaliation
c. we bomb them first with retaliation
b. they bomb us first with retaliation
This lead to an obvious conclusion that we should not only strike first, but strike immediately. Why bomb tomorrow when you can launch today? Why wait till 3pm when you can fire at noon? They were drawn into the false assumption that these were the only possible outcomes. They never foresaw a 5th possibility, that it might end peacefully.
We may soon be in a similar situation with a nuclearized theocracy that is even less rational than ol' Ivan. My guess and hope is that it will end in a similarly unpredictable way.
For example, I found a notebook from 2003 that had a decision tree for the upcoming year. It had all sorts of options relating to finances, school, love and such. But, moving to Oregon and upending my life wasn't even on the map.
Another example: Kennedy's advisers mapped the nuclear situation as a classical PD utility grid.
a. we bomb them first with no retaliation
b. they bomb us first with no retaliation
c. we bomb them first with retaliation
b. they bomb us first with retaliation
This lead to an obvious conclusion that we should not only strike first, but strike immediately. Why bomb tomorrow when you can launch today? Why wait till 3pm when you can fire at noon? They were drawn into the false assumption that these were the only possible outcomes. They never foresaw a 5th possibility, that it might end peacefully.
We may soon be in a similar situation with a nuclearized theocracy that is even less rational than ol' Ivan. My guess and hope is that it will end in a similarly unpredictable way.
Labels: you've got to keep making decisions - even if they're the wrong ones. Otherwise you're stuffed.
¶ 11:37 PM 0 Comments
Tuesday, June 21, 2011
Indentured Studentude
A Way To Pay For College, With Dividends
Hypothetical:
If you had an undergrad mulligan and could get into any reasonable school, what's the highest percentage you'd be willing to pay? ¶ 8:22 AM 0 Comments
Hypothetical:
If you had an undergrad mulligan and could get into any reasonable school, what's the highest percentage you'd be willing to pay? ¶ 8:22 AM 0 Comments
