My wife is very humorous sometimes.

Her: Can you get a cheesecake from the store?

Me: Ok. If they don’t have any cheesecakes, what’s your second choice?

Her: In that case, I’m gonna be very unhappy!

I don’t like blogging about politics, especially US politics. But I like this quote (from Rational Angle, via O’Reilly Radar):

Q: “Buffett, why are you a Democrat?”

A: I have what I call the minus 24 hour genie test. Imagine a genie poofed up 24 hours before you were born and asked you what kind of world you would want to live in. And you being the smart minus 24 hour baby would ask, “what’s the catch?” And the genie would respond that you would have to participate in the “ovarian lottery” and draw one of 6 billion tickets. Things such as born United States or Bangladesh; white, brown, or black; male or female; smart or dumb; these would all be completely up to chance. Well then, what kind of world would you create? And my [Buffett’s] world would be a society with equality that treated everyone fairly. And the Democrats seem to be better at doing that.

It’s a little old so you might have seen it, but I just came across this interesting video. A photographer took a photo once a month from 1969 to 2004 from the same position in Shinjuku, the ‘new’ downtown centre of Tokyo. The video shows the sequence of photos in 10 seconds. I wish I could find the original photos. Anyway it’s pretty amazing what people can do in a few decades …

It seems that Stickk.com’s inaugural customer, Tim Harford, is stickking to his commitment to do 200 sit-ups and push-ups per week for 10 weeks or lose US$100 a week. I noticed that Tim said the money goes to charity if he doesn’t keep his promise and I wonder if this reduces the per-dollar commitment effect a little as the money at least goes to a worthy cause. In fact I think that Stickk.com should offer additional options for its customers who want a greater bang for their buck, so to speak, in terms of the level of punishment that they contract upon themselves. For example, other options could include: Stickk.com keeping the money itself, or paying the money to someone you hate, or giving the money to the opposite political party from what you support. Or for the ultimate in commitment power, how about setting the cash on fire and sending you a video of it burning? (Question for macroeconomists: Does this increase or decrease GDP??).

Google is testing a system that competes with Wikipedia. There are two key differences in Google’s version. One is that authors of entries are identified. Second is that Google encourages competition among authors and will rank different pages about the same topic using some algorithm that it has developed. Another difference is that authors can put ads on their entries (surprise …!).

The second of these two innovations is the most interesting to me. The problem with Wikipedia is that it’s hard to judge the quality of entries unless you’re an expert on the subject, but if you’re already an expert, you probably don’t need to read about it on Wikipedia. To maintain high quality, Wikipedia depends on self-moderation by its authors — if someone writes some nonsense, another author is supposed to see that and correct it. Google, on the other hand, it not an expert about everything (yet …) but it is very good at ranking things. So instead of relying on a disorganised and decentralised process to rank results, Google generates a ranking using a centralised algorithm. Since most people already know that Google is good at ranking web search results, it can leverage this credibility to get people to trust its rankings of other things.

To me, it still seems to be an open question as to which process — centralised or decentralised — is better at sorting the good from the bad. For a decentralised system to work, it depends on the incentives of the individuals involved being aligned in the right way. This is hard to do, as websites like Digg have discovered. The ‘crowds’ are often quite good at sorting the good from the bad, but there are opportunities for gaming and other effects that let some bads get mixed up with the goods. A centralised process, on the other hand, perhaps lacks the flexibility to respond to changes, and is also prone to gaming once people figure out how the algorithm works, but may be easier to implement compared to setting up the right incentives for everyone.

In any case, it’s going to be a very interesting experiment to see which model performs better. The only problem is that Wikipedia already has a massive head-start, and I don’t know if authors of Wikipedia pages will want to switch to Google, even if they can earn ad revenues. On the other hand, since Wikipedia content is Creative Commons licensed, switching is more or less just a matter of copy and paste …

HT: CoreEcon