A moral victory

In Tajikistan, I argued with Arianna about Europe versus the US. It's an old chestnut. Arianna thinks the US is a hideous capitalist maw where the poor sell their kids to Walmart as frozen turkeys. I know the truth -- the US is a glorious country of Freedom, unlike Europe which is inevitably doomed to Euro-Islamo-welfaro-infertili-sclerosis. So, in the spirit of Rousseau's remark in the Social Contract --

"What is the end of political association? The preservation and prosperity of its members. And what is the surest mark of their preservation and prosperity? Their numbers and population."*

-- I bet her that there were more immigrants from the EU to the US than vice versa. "No way", she said. "Five times more", I said, as a proportion of the source area's population. And we bet a dinner on it.

The best estimates of migrant stocks I know come from the Global Migrant Origin Database, which comes out of Sussex IIRC. Actually, for our purposes, OECD stats would be fine. We did the calculations today while waiting for our follow-up vaccinations. (PS: Arianna, Malta is so in the EU; others, therefore these calculations are slightly inaccurate.)

TOTAL IMMIGRANTS FROM EU-27 TO US: 4 730 294.
Divided by EU population, which can't possibly be more than 500 million, so let's say it is that: 0.9%. (Actually, according to Eurostat, it is almost exactly 500 million.)

TOTAL IMMIGRANTS FROM US TO EU-27 ... 571 706. Accidentally including Croatia.
Divided by US population of about 300 million: a paltry 0.19%.

OK, not five times, but four times. I owe you dinner, but the moral victory is mine!

(NB also: not much is changed by excluding Eastern Europe.)



* though Rousseau excluded "naturalisation or colonies" as external aids.

Bullshit from many angles

Some facts about the THES universities rankings story, in case anyone in the UK was wondering.

1. Five out of the top fifty universities is a pretty good score, given that we have about 5% of total OECD population.
2. If your universities slide in a single year, this is unlikely to be due to a sudden collapse in quality. It is more likely because the ranking method has changed, which is just what happened in this case.
3. It seems exaggerated to call the THES rankings "the major global benchmark of worldwide university performance", as the THES editor does.There are several different rankings out there. The most respected, I would say, is the Academic Ranking of World Universities published by Shanghai Jiao Tong university. In the 2010 version, the UK gets five out of the top fifty spots... and the same number in 2009... and in 2008.
4. Previous THES rankings seemed crazily pro-UK to me. Four out of the top ten universities in the world? Seventeen in the top 100, with the University of Manchester beating UCLA, and Bristol beating Northwestern and Berkeley? I don't find that plausible.

Summary: this non-story should be headlined CHANGE IN METHODOLOGY CAUSES RANDOM DRIFT IN PROXY FOR DIFFICULT-TO-MEASURE VARIABLE. For useful information about university rankings, see Wikipedia.

1. Dushanbe to Khorog

 When we arrived at Dushanbe airport, the scary plane ride to Khorog wasn't going, so made our way to the taxi station where you can hire 4WDs for the journey. The station was dusty, dirty and poor, with a store selling biscuits and tea, and the first of many very disgusting toilets. I felt happy as soon as I got there.

We cut a deal for 150 Somani (35 EUR) per person to go in the back of a Mitsubishi Pajero. The hierarchy of 4WDs is, in ascending order:

1. UAZ (pronounced Wox) - basic green Soviet-era jeeps, but very fixable
2. Pajero
3. Toyota Landcruiser

Our driver Petrus turned out to be super reliable, driving safely but fast when he could -- not often -- and bribing cops smoothly at the ten or so checkpoints we hit during the ride.

Tajik roads are dreadful. At best they are like a very old English country lane. At worst, it is more comfortable to drive off-road: the bumps in the road are harder to anticipate. After a few days, we got used to constantly being shaken up and down, and it became oddly soothing.

We got to Khorog in 15 hours, which the guys at the guesthouse said was an incredibly good time. Every few hours we stopped to stretch our legs and buy fruit from village kids, or eat. It was Ramadan, but you don't need to fast if you are traveling: despite this, one of our fellow-passengers did. He was a Tajik returning from Moscow. Emigration to Russia for work is common in all the stans, and a lot of people bemoan the brain drain.

A lot of the road passes along the Afghan border, which is formed by the Amu-Darya (Oxus) river. The difference is striking: Tajikistan seems poor, but it has roads and electricity. Afghanistan looks unchanged since the middle ages.

We arrived at the very nice Pamir Lodge, around midnight, and got the last free room. In the morning, Khorog looked poor and messy. (But next time we arrived, on our way back from Murghab, it would seem large, rich and colourful.)

New work in progress up: "Group Reciprocity"

We've got a first draft of the paper on Group Reciprocity up. I blogged about the results from the first experimental session before. The end results aren't quite so strong but are still interesting.

Experimental economists have worked a lot on reciprocity: when you harm (or help) me, I harm (help) you back. Group reciprocity adds a twist: you harm me, so I want to harm somebody else in your group. Group could be almost anything: gender, ethnicity, football team supporters ....

Group reciprocity might be an important cause of things like war, ethnic tension and racial discrimination, so it would be useful if we could study it in the lab. The paper is a first attempt to do that. I think there's still a lot more to be done.

Atlanta Race Riot 1906

Calculating the standard error of marginal effects using the delta method, in R

Here's a little piece of code I used to calculate marginal effects on probabilities in a non-linear (bivariate probit) model, using the Delta Method.

Warning: I am not a proper statistician. Use at your own risk!

# to create the model:

library(VGAM)
mbvp.1 <- vglm(cbind(decision_matrices.1-1, decision_matrices.6-1) ~ defect_other, binom2.rho, data=ds, trace=TRUE)

# needed to compute the gradient of my function numerically

library(numDeriv)
# needed for a multivariate normal distribution
library(mvtnorm)
# bv is a vector of betas
# this calculates the change in predicted probabilities
f <- function (bv) {
    rho <- rhobit(bv[3], inverse=T)
    p <- array(dim=c(2,2,2))
    for (c1 in 0:1) {
        for (c2 in 0:1) {
            for (d_o in 0:1) {
                sgn1 <- 2*c1 - 1
                sgn2 <- 2*c2 - 1

                ############################################

                # the probability of making choice (c1,c2) 

                # when the independent variable

                # defect_other=d_o:
                ############################################
                p[c1+1,c2+1,d_o+1] <- pmvnorm(upper=c(sgn1*(bv[1]+bv[4]*d_o),sgn2*(bv[2]+bv[5]*d_o)), corr=matrix(c(1,sgn1*sgn2*rho,sgn1*sgn2*rho,1), nrow=2))
            }
        }
    }
    # I use the global firstdec so that the function conforms to what grad() expects
    # the total probability of choosing 1 for either the first
    # or the second decision:
    if (firstdec) p[2,2,2]+p[2,1,2]-p[2,2,1]-p[2,1,1] else p[2,2,2]+p[1,2,2]-p[2,2,1]-p[1,2,1]
}


firstdec <- TRUE
pred[1] <- f(coef(mbvp.1))
gradient <- grad(f, coef(mbvp.1))
# ===== this is the delta method ====
predse[1] <- sqrt(gradient %*% vcov(mbvp.1) %*% gradient)

firstdec <- FALSE
pred[2] <- f(coef(mbvp.1))
gradient <- grad(f, coef(mbvp.1))
predse[2] <- sqrt(gradient %*% vcov(mbvp.1) %*% gradient)

margprobs <- cbind(pred, se=predse, Z=pred/predse, p=2*pnorm(-abs(pred/predse)))
print(margprobs, digits=3)

Gellner

Yes, why aren't there more Gellnerians?

Very interesting discussion about academia

... over at The Atlantic.

My tuppenorth:

• at least half the added value of university for undergraduates is the other undergraduates. If you hang around with clever, interesting people, that expands your brain - and most 18 year olds pay more attention to other 18 year olds than their professors, for some reason - plus, if your friends go on to be important and influential, then you have a network.
• this means that for universities, nothing succeeds like success. (Economic term: multiple equilibria.) No matter how good a community college's teaching, it will be less attractive than Harvard because Harvard has Harvard students.
• This gives famous universities the chance to extract rents: they can charge a lot more than they actually provide by way of teaching etc. You are paying for the name and the networking.
• These rents go into research. 
• The authors are damn right that a lot of research is useless. The problem is, research is like advertising: half of the money spent on it is wasted, but nobody knows which half.

A few tidbits from the pilot experiment

Subjects were divided into three groups. Each played a prisoner's dilemma against another subject from a different group (the "prisoner's dilemma partner" or "PD partner"). Then, each of them made a set of allocations between themselves and other subjects - who were identified by group and player number, but who were not the same as their PD partner.

We call the group of each subject's prisoner's dilemma partner the MET group;  the third group is the OTHER group.

When the PD partner defected, subjects made more allocations that harmed the other player. This difference was larger when making allocations against others from the MET group:

The effect is clearer for subjects who had themselves cooperated in the prisoner's dilemma:

For some decisions, being nasty to the other player actually cost the subject money. Not surprisingly there were fewer of those allocations, but the same pattern is observed:

and again the pattern is even stronger for PD cooperators.

Of course this is just the pilot, and I haven't yet done any rigorous statistical significance tests.

Why don't evolutionary economists believe in equilibrium?

This is a provocative question for Arianna and others of her persuasion. Much of it goes over similar ground to Paul Samuelson's address to a conference of evolutionary economists a couple of years ago.

Evolutionary economics takes its cue from biology and sees the economy as an ecosystem, with an endless variety of different "species" (firm strategies) competing, right? And as a result EEers reject the rationalistic concept of equilibrium, whether market or game-theoretic. The world is always moving forward, never at rest, and behaviour is never perfectly adjusted between different actors.

I find these claims pretty plausible, and ironically more plausible in my field -- political economy, where straight Nash Equilibrium is completely dominant -- than in the study of markets.

But.

1. Biologists use equilibrium concepts all the time, and these concepts were adapted from game theory by John Maynard Smith. Indeed, instead of being looser than "rational" game theory, evolutionary game theory concepts actually make tighter predictions: an Evolutionarily Stable Strategy is always a Nash Equilibrium, but not the other way round.

2. Equilibrium has been tested in the lab, and holds up pretty well -- e.g. in auction markets. I am not claiming we can naively generalize from the lab to real markets. But if it works well in the lab, doesn't that support the underlying theory?

3. One major use of equilibrium predictions is to generate comparative statics (ie predictions that if parameter X varies, outcome variable Y will vary with it in some specific way). Even if economies never reach equilibrium, the forces pushing them towards equilibrium may still generate the same comparative statics. For example, although the voting behaviour that we observe is not compatible with the main equilibrium voting models -- people vote too much -- still, they vote less when the election is less competitive, as the models predict.

4. Social science is all about the search for surprising insights. Equilibrium concepts -- more fundamentally, the idea that people react to incentives -- are a good way to generate these insights. (One random example: smoking bans in pubs might increase child cancer, because more people stay at home and smoke there.)

So, what's wrong with equilibrium?

New paper

There's a new work-in-progress on my website. It's with Ro'i Zultan and is called "Brothers in Arms: Cooperation in Defence". A poster is here.

We started this paper to try and resolve a puzzle in social science and biology. Often, unrelated individuals help each other when they face an external attacker. For example, an estimated 200,000 people were active members of the French Resistance in World War II. In the laboratory, we can observe a similar phenomenon under controlled conditions: cooperation increases in the presence of an external threat. Non-humans do it too. For instance, musk oxen band together to drive off wolves.

This is a puzzle because, economically, helping others seems to have costs but no benefits. Or, biologically speaking, this behaviour should decrease the fitness of the animals who display it.

We explain this cooperation by invoking signalling theory. Some groups are  prepared to cooperate, for example because they are kin, or because they are in long-term cooperative relationships. Other groups consist of self-interested individuals. Attackers are strategic: they prefer to attack groups who will not help each other. (Think of the bandits in the Magnificent Seven.) If they start to think they are attacking a very cooperative group, they will look for another target. Then, even self-interested individuals have an incentive to help each other during an attack, as this will deter further attacks.

So far you might get with common sense. However, economists and others may be asking "surely the group's reputation for cooperativeness is a public good, just like defence itself, and will be underprovided". Here, our theoretical model shows one possible answer: the series of repeated attacks gives this public good a "weakest-link technology". That is, if you are the first person not to help during an attack, then the attacker immediately recognises that previous helping was fraudulent and can no longer be deterred. This in turn gives a strong incentive to help when it's your turn.

The paper is here.

At the demo

Arianna persuaded me to go to the anti-Nazi demo in Gera today. The local fascists were having a sort of annual picnic.

Gera is quite pretty, not like the stereotype of a run-down East German town. If I were an artist I'd buy myself 1000 sq m of old warehouse, cheap as chips.

We avoided the Black Bloc, who looked like teenagers out for a fight, and joined the main crowd on the bridge. Tons of police. Some Christians playing samba. A couple of guys doing capoeira. Soon th Nazis come across the bridge, under heavy police escort. They have to cross in single file, accompanied by our chants of "Nazis raus!" Most are big, tough, aggressive-looking guys. A few scrawny girls. They look as if they enjoy the hate, so is it really effective? Maybe the point is to make sure that people who don't enjoy the hate are put off.

We go and eat at the Sächsische Bahnhof, a cool place in a beautiful old run-down building. When we get back, the demo is gone and the Nazis are listening to speeches. The world Volk appears a lot. We must not allow our Volk to be destroyed!

East Germany is really not a multicultural place: I don't know what they are afraid of. As it happens, I think there are some legitimate reasons to worry about immigration. But actual anti-immigration sentiment always seems to be irrational and driven by primal human fear of strangers.

If this is Europe's biggest Nazi-fest as the flyers said, we have little to fear. There were maybe 1000 people there. The event was a bit smaller than Wivenhoe village fête.

The demo was supported by Die Linke, Germany's Left populist party. I think they are a much bigger threat to European democracy than the neo-Nazis. But they play by democratic rules so they have to be tolerated. And the populist threat is not just from the Left. The French assembly is preparing to ban the Burqa. This is a direct assault on liberal freedoms. But some people misguidedly support it because of an ill-thought-out feminism. Have I quoted J S Mill before? Never mind: "His own good, whether physical or moral, is not a sufficient warrant."

CAP

OMG listen to this vile political gitweasel!

"In looking at the EU budget, Lyon admitted that there would be downward pressure from member states facing their own economic crises but believed that the benefits from a robust CAP far outweighed any reason to reduce the cash in this particular part of the EU budget."

 Screw the CAP, man. It's just a prime example of a policy that benefits nobody. It's like a canker on the rotting corpse of European policy. What the hell are the benefits from it? There are zero Goddamn benefits, except for a few fat-arsed dole-blodging millionaire farmers.

Robust CAP? Gag me with a spoon.



I think it's time for breakfast.

Interesting Haaretz article.

Straight people having gay marriages

Very interesting article here. Interesting comments too. Re my previous blog post... does marriage-lite help or hinder commitment?

What's good for the goose...

I'm a Thatcherite. I believe in the magic of competition. I just can't help it. When I see an overregulated industry with a few lazy, inefficient incumbents, I instinctively think "tear down the barriers to entry!"

That should apply to politics too. What Britain has had for 60 years is a two-party duopoly. People are now sick of both parties. It would be much healthier if they faced some bracing competition from smaller, nimbler players. We should tear down the main barrier to political entry, which is the First Past The Post electoral system. Demand a referendum on PR now!

Money well spent?

"The immediate political liability for this lies with Mr. Brown and the Labour Party, which engaged in a spree of epic proportions after taking power in 1997, spending at a rate that has outstripped inflation by 41 percent. The current budget of about $1.1 trillion includes more than $150 billion on the state-run National Health Service, triple the amount when Labour came to power.

One in every four pounds the government spends is borrowed, a pattern that economists say will require the next government to make cuts on a scale not experienced since the Great Depression, as well as painful tax increases."

New York Times

The dilemma

The Lib Dems are loons. Their policies are a mix of the interesting and the bloody silly. In the ordinary course of politics, sometimes the main parties nick their best ideas. I would not be thrilled to experience their worst ones. And Nick Clegg... well, to me he seems like a blank space on to which the electorate are projecting their hopes. Mr Not The Other Two.

But the Lib Dems are loons *because* of the two party system. If you want to go into government, you have to join the Tories or Labour. The Lib Dems get the leftovers. If they had more chance of getting into office, they would attract more talented politicians. Electoral reform would let that happen. And liberal ideas -- the deep underlying ones, not the wacko policy proposals -- are pretty decent ones. Liberalism is more alive as a set of ideas than anything Labour has got.

So, do you vote for the loons now, in the hope of getting something better later?

Election thoughts 2

Dream: a Tory - Lib Dem alliance. Clegg forces electoral reform on to the agenda and we get a referendum between the status quo and some moderate form of PR like the Alternative Vote system. Vince Cable becomes chancellor instead of that little pink feller Osborne. Tory radicalism on education is tempered with a concern for equality. The Libs' dafter ideas are sidelined.

Nightmare: a Lib-Lab alliance. Labour have austerity for two years, then resume pouring money into the public sector. It doesn't work, of course, and public cynicism extends to include the Lib Dems. We gradually become more like a normal European economy - slow-growing, sclerotic and riven by the populism of an embittered majority.*

In between these I would obviously prefer Tory to Labour.

Quite a tough choice therefore - go for strengthening Clegg's hand or play it safe and vote Tory?... Anyway, I voted by post so now it's up to you lot.

* [purple passage]

New New Labour

Economic nationalism
Authoritarianism
... what's to like?

Leaving the uk tomorrow

Been weird coming back here. The place feels like it's waking up with a hangover, from a party which turned really sour. Atmosphere of congealed greed and mistrust. (Not wanting to go overboard here. But.)