Crab got your tongue?
21-Mar-02
http://www.efficientfrontier.com/ef/198/returns.htm
William J. Bernstein
What's the bottom line here? Take another look at the above table. Even at a real rate of return of 3%, the result of a 2000 year investment of one dollar is billions of times greater than the world's current wealth. In other words, over the long term a real rate of return in excess of 1% is mathematically impossible. If you're planning for 5%-7% real returns over the next 30 years to fund your retirement, you may or may not wind up being very unpleasantly surprised.
Say you had a very, very thoughtful and considerate ancestor living in Octavian's Rome, who invested the purchasing equivalent of one modern dollar for you at a constant real (inflation adjusted) rate of return. After 2000 years, you'd have the following amounts at the given rates:
Real Rate of Return
Principal in 1997
Radius of Gold Sphere (at $280/oz.)
1.0%
$440,000,000
8.1 meters
3.0%
$4.7 x 1025
3,800 kilometers
5.0%
$2.4 x 1042
1,400,000,000 kilometers
7.0%
$5.9 X 1058
4.1 x 1014 kilometers
(Thanks to my daughters for lending me their scientific calculator; my financial calculator proved inadequate to the task.)
Even at 1%, you are now wealthy beyond most of your rational desires. At 3% your accumulated wealth buys a sphere of gold larger than the moon. At 5% the gold sphere has a radius reaching to Saturn's orbit, and at 7% it is 43 light years in radius, a tidy sum indeed. (To give due credit, the above paradigm isn't mine, it's Peter Bernstein's.)
What is the point of this exercise? Well, perhaps we need to question the current universal assumption of high expected equity returns. Over the past 200 years English speaking investors have been very lucky indeed, earning real equity returns of about 6%. If were you a stock investor elsewhere in the world (say, Germany, Japan, or South America) you weren't so lucky, with long term returns not greatly exceeding inflation.
Unless you dropped out of school long before you reached puberty (or perhaps spent too much time watching MTV and Fox) the speedbumps on your road to the above theoretical wealth are pretty obvious. Little things like the sacking of Rome, dark ages, plague bacillus, and assorted European and global Armageddons.
Have we gotten any smarter in the interim? For starters, publicly traded equity is a relatively modern invention. The first recorded publicly traded stock was probably that of a water mill in southern France, at Bazacle. Built about 800 AD, its ownership was divided up into shares around 1100, with more or less continuous pricing from 1400 on, until the French government nationalized the mill a few decades ago. (But then again, what do you expect from a culture which finds subtext in Jerry Lewis movies?) So maybe it is different this time. One can only hope.
The long term economic growth of the world economy can be looked at from another perspective. Let's be wildly optimistic and assume that the productivity of the average citizen had increased by a factor of 1,000 since Roman times. This translates into an annualized per capital growth rate of 0.35% over the past 2 millennia.
What's the bottom line here? Take another look at the above table. Even at a real rate of return of 3%, the result of a 2000 year investment of one dollar is billions of times greater than the world's current wealth. In other words, over the long term a real rate of return in excess of 1% is mathematically impossible. If you're planning for 5%-7% real returns over the next 30 years to fund your retirement, you may or may not wind up being very unpleasantly surprised.
You say you're planning a 10% return to fund your retirement? Sure, go ahead. Just don't set up any trust funds for your distant descendants.
How to get pregnant from a blowjob
16-Mar-02
http://www.ncbi.nlm.nih.gov:80/entrez/query.fcgi?cmd=Retrieve&db=PubMed&list_uids=3191066&dopt=Abstract
British Journal of Obstetrics and Gynecology. September 1988, Vol. 95,
pp. 933-934
Oral conception. Impregnation via the proximal gastrointestinal tract in
a patient with an aplastic distal vagina. Case report.
Douwe A. A. Verkuyl
Case report
The patient was a 15-year-old girl employed in a local bar. She was
admitted to hospital after a knife fight involving her, a former lover and
a new boyfriend. Who exactly stabbed whom was not quite clear but all
three participants in the small war were admitted with knife injuries.,
The girl had some minor lacerations of the left hand and a single
stab-wound in the upper abdomen. Under general anaesthesia, laparotomy
was performed through an upper midline abdominal incision to reveal two
holes in the stomach. These two woulds had resulted from the single
stab-wound through the abdominal wall. The two defects were repaired in
two layers. The stomach was noted empty at the time of surgery and no
gastric contents were seen in the abdomen. Nevertheless, the abdominal
cavity was lavaged with normal saline before closure. The condition of
the patient improved rapidly following routine postoperative care and she
was discharged home after 10 days. Precisely 278 days later the patient
was admitted again to the hospital with acute, intermittent abdominal
pain. Abdominal examination revealed a term pregnancy with a cephalic
fetal presentation. The uterus was contracting regularly and the fetal
heart was heard. Inspection of the vulva showed no vagina, only a shallow
skin dimple was present below the external urethral meatus and between the
labia minora.
An emergency lower segment caesarian section was performed under spinal
anaesthesia and a live male infant weighing 2800 g was born, with Apgar
scores of 7 and 9 at 1 and 5 minutes, respectively. On exploration,
through the nearly completely dilated cervix, it was found that the normal
uterus ended in a 2 cm deep vagina and that the vagina did not exist more
distally.
The uterus, adnexa and renal tract appeared normal. Routine closure of
the uterus and abdomen followed; a large tube drain was left in the
uterine cavity.
While closing the abdominal wall, curiosity could not be contained any
longer and the patient was interviewed with the help of a sympathetic
nursing sister. The whole story did not become completely clear during
that day but, with some subsequent inquiries, the whole saga emerged.
The patient was well aware of the fact that she had no vagina and she had
started oral experiments after disappointing attempts at conventional
intercourse.
Just before she was stabbed in the abdomen she had practiced fellatio with
her new boyfriend and was caught in the act by her former lover. The
fight with knives ensued. She had never had a period and there was no
trace of lochia after the caesarian section. She had been worried about
the increase in her abdominal size, but could not believe she was pregnant
although it had crossed her mind more often as her girth increased and as
people around her suggested that she was pregnant. She did recall several
episodes of lower abdominal pain during the previous year. The young
mother, her family, and the likely father adapted themselves rapidly to the
new situation and some cattle changed hands to prove there were no hard
feelings.
The postoperative course was uneventful and the drain was removed on the
6th day. She started complaining about lower abdominal pain 8 months
postpartum while she was still breastfeeding. An attempt was made to
construct a vagina by tunneling between the urethra and rectum. A
proximal vagina filled with old blood was found after 3-4 cm as described
by Jeffcoate (1975). The tunnel was now dilated with appropriate
instruments. It was found impossible to suture the skin of the introitus
to the wall of the proximal vagina as advocated by Jeffcoate and
criticized by others (Dewhurst 1981). A mould was constructed from a 20
cm^3 plastic syringe cylinder with the distal end removed. The mould was
fixed with nylon sutures to the labia and left in place for 2 weeks. The
patient was discharged with a few oversized cervical dilators and
instructed in their use. Follow-up was difficult, the patient was seen
only some moths later with a stenosed vagina and lower abdominal pain.
Another reconstruction was attempted though scar tissue with much the same
result.
Because she refused to have a hysterectomy and her cryptomenorrhea was
very painful, high doses of depot medroxyprogresterone were used to induce
amenorrhea. This was partly successful, but a hysterectomy become
necessary to afford her relief from crippling pain when were son was 2.5
years old. By that time the son looked very much like the legal father.
Comments
A plausible explanation for this pregnancy is that spermatozoa gained
access to the reproductive organs via the injured gastrointestinal tract.
It is known that spermatozoa do not survive long in an environment with a
low pH (Jeffcoate 1975), but it is also known that saliva has a high pH
and that a starved person does not produce acid under normal
circumstances (Bernard & Couman 1976).
It is likely that the patient became pregnant with her first or nearly
first ovulation otherwise one would expect that inspissated blood in the
uterus and salpinges would have made fertilization difficult. The fact
that the son resembled the father excludes an even more miraculous
conception.
Asimov died from AIDS
16-Mar-02
According to a recent collection of essays edited by his wife Janet, Isaac Asimov died as a result of complications from AIDS
My Mormon Name
14-Mar-02
O.K. I've finally succumbed. But only because I was raised Mormon, and my given name is my Mormon name. However, The Mormon Name Generator thinks it should be:
Kaiden Chipper Cache
Actually, I kind of like it.
Rubber Band Machine Gun
13-Mar-02
Oh yeah, baby. Gimme some rubber.
Lifted from Slashdot
Dan Klein quotes
13-Mar-02
In bed, Sunday morning, cares for the day come to mind. Let's get things done! Searching for resolve I head for the grapefruit juice, but on the way slip on a grease spot: the morning paper, a cafeteria of easy amusement. Two hours later I try to recall the first care on the list. Some people spend hours every day following the press. A simple pleasure, we might say — some deem it productive for the valuable knowledge it bestows. Could be, but for some I'd call it addiction. The spouses, children and pets tend toward this view. Books are surely a Good thing — isn't reading the first purpose of primary school? Still there is excess, “the bibliobibuli . . . who are constantly drunk on books, as other men are drunk on whiskey… They wander through this most diverting and stimulating of worlds in a haze, seeing nothing and hearing nothing.”(10)
10 H.L. Mencken, Minority Report: H.L. Mencken's Notebooks (New York: Alfred A. Knopf, 1956), p. 59.
Wilhelm von Humboldt said, a society “in which the citizens were compelled . . . to obey even the best of [behaviors], might be a tranquil, peaceable, [and] prosperous [one]; but it would always seem to me a multitude of well-cared-for slaves, rather than a nation of free and independent men.”(22)
The Economics of Immediate Gratification
13-Mar-02
http://citeseer.nj.nec.com/cache/papers/cs/1426/http:zSzzSzelsa.berkeley.eduzSz~rabinzSzjbdm.pdf/t-h-e-e.pdf
THE ECONOMICS OF IMMEDIATE GRATIFICATION
Ted O'Donoghue
Department of Economics
Cornell University
and
Matthew Rabin
Department of Economics
University of California, Berkeley
Abstract: People have self-control problems: We pursue immediate gratification in a way that we ourselves do not appreciate in the long run. Only recently have economists begun to focus on the behavioral and welfare implications of such time-inconsistent preferences. This paper outlines a simple formal model of self-control problems, applies this model to some specific economic applications, and discusses some general lessons and open questions in the economic analysis of immediate gratification. We emphasize the importance of the timing of the rewards and costs of an activity, as well as a person's awareness of future self-control problems. We identify situations where knowing about self-control problems helps a person and situations where it hurts her, and also identify situations where even mild self-control problems can severely damage a person. In the process, we describe specific implications of self-control problems for addiction, incentive theory, and consumer choice and marketing.
Keywords: Hyperbolic Discounting, Immediate Gratification, Procrastination, Self Control, Time Inconsistency.
JEL Classifications: A12, B49, C70, D11, D60, D74, D91, E21
Picoeconomics
13-Mar-02
George Ainslie, Picoeconomics: The Strategic Interaction of Successive Motivational States Within the Person (Cambridge University Press, 1992, Pp. 440)
KENT BACH
There is a simple view of motivation on which desires are like pain-killers: they come in different strengths, and their strength determines their efficacy. That is, the stronger a desire the greater its motivational force and, when two desires conflict, the stronger one “wins out” over the weaker. This view makes it puzzling how anyone could ever exhibit “strength of will” (“weakness of will” is the traditional puzzler) and act on the weaker desire, even when it is a desire for something more highly valued than what is more strongly desired. When the will, as the agent of reason, enters the fray, an explanation of what a person is motivated enough to do must reckon not only with competing desires and their motivational forces, but also with the will’s capacity to be affected by different ones in ways not proportional to their force. However, this complication sheds little light, for if the will must bestow its stamp of approval on a desire before the desire leads to action, then, it would seem, motivational force should be measured by strength of effect on the will. And if that’s the way to measure motivational force, then, since by that measure one always acts on the desire that affects one’s will more, there is no problem of strength of will after all. But the problem seems real, however inapt the label.
George Ainslie does not pit the will against desire but instead adds a whole new dimension to the simple view of desire. He applies this enriched model to a host of fascinating psychological phenomena, including impulsiveness, addiction, compulsion, ambivalence, procrastination, back-sliding, and self-deception. Although he is by profession not a philosopher but a psychiatrist, and although his writing is tinted by behaviorist jargon, his ideas are of great philosophical interest. I would go so far as to say (note its subtitle) that Picoeconomics (micro-microeconomics) is to intrapersonal conflict what Thomas Schelling’s The Strategy of Conflict (Harvard 1960) was to interpersonal conflict.
Ainslie starts with the platitude, which appears in Plato’s Protagoras (356), that people, when tempted, tend to favor the immediate and discount the distant. But he gives this platitude a new twist and applies it in a variety of surprising ways. The basic idea is that this tendency to discount temporally distant rewards (negative “rewards” included) is built into our psychology, and is not based not merely on specific factors like uncertainty about the future, distraction from long-term goals, conditioned responses to immediate stimuli, and gratification of biological needs. Ainslie’s idea of temporal discounting of personal rewards is the intrapersonal counterpart of Hume’s conception of sympathy for others (the more distant people are, in space, time, or kind, the less our sympathy for them). The added twist is that when we quantify this temporal drop-off, we find that its rate is anything but linear–it is hyperbolic. Ainslie’s graphical representations illustrate situations in which one desire is generally preferred over the other but there is a region of time during which the preferences are reversed. For example, on Sunday afternoon one might prefer being rested and alert on Monday to watching a certain late movie; that night, as show time approaches, watching the movie becomes more and more attractive; Monday morning, being rested and alert is again valued more highly. Relying on the idea of conflicting temporal perspectives, Ainslie proceeds to make intelligible the puzzling phenomena enumerated above (unfortunately, his graphs and often his discussion do not take retrospective attitudes like regret and guilt or satisfaction and relief into account). He suggests ways in which people’s inchoate appreciation of their changing temporal preferences leads them to adopt various strategies of impulse-control and self-reward. He cleverly applies certain game-theoretic concepts to conflicts of intrapersonal interest and identifies intrapersonal versions (involving competing interests rather than persons) of such predicaments as Newcomb’s problem, the paradox of deterrence, the backwards induction paradox, and the iterated prisoner’s dilemma.
Ainslie’s insightful and often virtuosic discussion of assorted examples of psychological conflict and irrationality sometimes seems to go beyond the conceptual resources of his model. This raises the question of just how much of the explanatory work is actually accomplished by the model itself. Take the concept of second-order attitudes, on which philosophers rely in addressing the fact, e.g., that people often realize that their values are disproportional to the strengths of their desires and may attempt to act on or else knowingly resist that realization. Ainslie uses that concept (in effect, if not explicitly) in his discussion of such phenomena as procrastination, vacillation, backsliding, precommitment, personal rules, and control of attention. However, it is not obvious that his model is equipped to capture second-order attitudes, inasmuch as hyperbolic discount curves reckon only with moment-by-moment preferences. Intersecting discount curves can represent changing preferences over time (never mind the unrealistically precise numerical quantification presupposed in plotting these curves), but it is not clear how this model is supposed to incorporate not only the play of conflicting interests at each of various times but the effect, at any given time, of assessments of those interests over time. In Ainslie’s model, though not always in his discussions, the agent is situated only at some particular point in time and able then only to weight future rewards relative to that time. So how can it matter to him now how something will matter to him later? In other words, how can the model explain why should strategic considerations ever prevail over tactical ones?
The worry here is that despite the sophistication of Ainslie’s psychological hedonism, with its marketplace of motivations, it may not fully succeed in accounting for the rationality of bargaining with one’s future selves. For example, despite his emphasis on the strategem of precommitment, as when one adopts a “personal rule,” for reducing the motivational effect of impulses, he does not make clear how, on his model, it is rational to obey the rule one adopts for resisting recurrent temptations. Why not one last fling or one more bite? Even if the personal rule does have motivational force, why should it? Related to this is the problem of integrating temporal perspectives and determining to what extent each is authoritative. There is the prospective outlook (when the tempting attraction is not yet available), the immediate perspective (when the reward is imminent), and the retrospective point of view (where some combination of satisfaction or relief and guilt or regret may be expected). A related problem is that Ainslie attempts to turn his descriptive model of the interplay of motivations into a normative model of how to manage that interplay. He gestures towards a kind of biological account of how hyperbolic discounting should have been selected for (his arguments seem inspired by evolutionary game theory), but there is a threat here of recreating the naturalistic fallacy.
The worries registered above do not undermine the liberating effect of Ainslie’s model. His book may be rambling and sprawling, but it offers a whole new take on a wide variety of psychologically fascinating and philosophically perplexing phenomena. One hopes that in the near future the author will heed some of his own strategic guidelines and produce a clearer and more concise edition of Picoeconomics, preferably with a more straightforward title, like The Strategy of Inner Conflict
Getting Hooked
13-Mar-02
http://uk.cambridge.org/politicaltheory/catalogue/0521640083/
Getting Hooked
Rationality and Addiction
Edited by Jon Elster, Ole-Jxrgen Skog
Contributors | Description | Contents
Contributors
Jon Elster, Ole-Jørgen Skog, Karl Ove Moene, Olav Gjelsvik, George Ainslie, Eliot Gardner, James David, Helge Waal, George Loewenstein, Thomas Schelling
Description
The essays in this volume offer the most thorough and up-to-date discussion available of the relationship between addiction and rationality. This is the only book-length treatment of the subject and includes contributions from philosophers, psychiatrists, neurobiologists, sociologists, and economists. The volume offers an up-to-date exposition of the neurophysiology of addiction, a critical examination of the Becker theory of rational addiction, an argument for a ‘visceral theory of addiction’, a discussion of compulsive gambling as a form of addiction, several discussions of George Ainslie’s theory of hyperbolic discounting, analyses of social causes and policy implications, and an investigation of the problem of relapse.
Chapter Contents
Preface and acknowledgments; Notes on contributors; Introduction Jon Elster and Ole-Jørgen Skog; Addiction and social interaction Karl Ove Moene; Addiction, weakness of the will, and relapse Olav Gjelsvik; The dangers of willpower George Ainslie; The neurobiology of chemical addiction Eliot Gardner and James David; To legalize or not to legalize: Is that the question? Helge Waal; Rationality, irrationality, and addiction – notes on Becker’s and Murphy’s theory of addiction Ole-Jørgen Skog; Gambling and addiction Jon Elster; A visceral account of addiction George Loewenstein; Epilogue