Tag Archives: Economics

Social capital & the strength of weak ties

Following a RT from the Herdmeister this presentation has much to get your head around.  For me the exploration of weak and strong ties, social capital and norms echoes a book on economics I read on holiday last week ( I know, I have a real life on order, just Amazon couldn’t deliver in time) – Diane Coyle’s “The Soulful Science”.

From the slideshow it looks like the Guardian are trying to measure connectedness, a theme of econometrics geeks as well. As behavioural economics inches closer to social sciences and indeed social marketing there is a niche market opening up perhaps…

Oh and Diane Coyle has one mention of transport planners in the 250+ pages, in the concluding section on where economic research has “improved policy and made people’s lives better”:

“Not all transport planners make use of good economics, but where they have the efficiency and impact of the schemes has been transformed”

Thanks, that will be us then 🙂

So what is the risk?

From the Digital Life, Design 2009 conference I found this video of a discussion with Daniel Kahneman (2002 Nobel Prize winner in Economic Sciences) and Nassim Nicholas Taleb (author of “Fooled by Randomness” and “The Black Swan”). In “Reflections on a Crisis” they explore how economic behaviours, bias and risk taking got us to where we are in the global recession and how counter-intuitive actions may help us recover.

DLD is not a conference that I was too aware of until recently, but with the benefit of offering all their sessions on video we can all get the benefits without a trip to Munich (although I may be making the case for a ticket to next years event!). Other speakers videos this year well worth watching include Dan Airely (of course!), David Weinberger “Knowledge in the Age of Abundance” , Mark Zuckerberg of Facebook growth and where next and a panel on Internet Politics in the age of the first “Internet President”.

Standup economist

Avoiding work constructively and so enjoyed some old clips from Yoram Bauman, PHD and the self styled world’s first “standup economist”- although a little theoretical knowledge might help in crossing over the humour barrier for mere mortals (or neo Keynesians).

Recent gigs at Chartered Financial Analyists local meetings… World tour promised, the LSE should book him now.

He was also on PBS today (which why I checked out his YouTube back catalogue, in a long tail sort of way) and in a relatively straight interview, surprise, surprise, he got asked about the recession – almost missed the reference to Black Swans, though.

“Motorcycles finally go green” – really?

Wired Autoblog closes the year with a roundup of the half a dozen green bike orientated stories it has already run. No “new” news but OK as an intro to the subject. The article and comments pickup on the difference (for existing bikes) between good fuel economy – tick – and low pollution – uh, not really. As my Aprilia hardly gets 30mpg and 120 miles on a tank I am not even sure on the first point…

The more discussion the better, but I can’t see a lot more R&D money going into it in the next few years unless battery technology really changes.

PS why? – as usual the US comments have their kicks at the liberals and big government, or hit back at the failure of free markets – is every blog post on any topic grist to the mill for this poorly thought out rhetoric? Play nicely, children…

Smartest guys in the room

Imagine the scene – you get Dan Kahneman, Richard Thaler, Sendhil Mullainathan in a room in California to deliver a master class on behavourial economics, courtesy of Edge. In the audience you have Jeff Bezos, Nathan Myhrvold, Danny Hillis, Ev Williams, George Dyson and other A listers.

6 sessions, with videos and text, plus Q&A.  As an example  – session 1 – Thaler’s Nudge theory, choice architecture and “libertarian paternalism” are explored – interesting that he was going to call his book “Everything Matters”.  I like the phrase “one click paternalism” as well if not the possible negative outcome. Maybe we can get the opt out choice architecture right on our company car share scheme.

While its not an instant fix – behavioral econ rarely is – its worth the investment in time to get up to speed on the basics.

BTW The use of the Enron film title is just me being ironic…

Choice, perception & behaviour

The New York Times adds its voice to the emerging acceptance of behavioural elements in economics and markets generally, in an op-ed by David Brooks.  Lots of good lines-

“”My sense is that this financial crisis is going to amount to a coming-out party for behavioral economists and others who are bringing sophisticated psychology to the realm of public policy. At least these folks have plausible explanations for why so many people could have been so gigantically wrong about the risks they were taking.”
 
“So perhaps this will be the moment when we alter our view of decision-making. Perhaps this will be the moment when we shift our focus from step three, rational calculation, to step one, perception.”

 

The writer’s comment that “choice architecture”, as per Richard Thaler’s Nudge theory, will only work in limited cases echoes my own views, but if markets and governments fail to influence the decision making process then what?  back to the individuals non rational decision making again…

And with halloween approaching read how the Vancouver Sun charcaterises current markets as Motivated by Fear, with yet another mainstream introduction to neuroeconomics – also on BBC Radio 4 yesterday –“Money on the Brain”

Somethings happening in this area when the big guys start to pay attention.

Herd Mentality

Mark Earls blogs on his own site and the Marketing Society site, yet again hitting several topical nails on their heads. Read the full blogpost here, but I can’t help myself in picking a choice quote:

“To be honest, copying is much more important than independent thinking to shaping human behaviour and is much more common: as Nobel Laureate Daniel Kahnemann puts it, humans are to independent thought as cats are to swimming. We can do it if we really want to but will avoid it like the plague if we can…”

With the reference to BrettConsult’s favourite behavioural economist how can he go wrong?

In related news my new model for travel behaviour change is getting some attention (virally, of course) and another article beckons. My paper for European Transport Conference has been published and a copy is available here – aet-paper-081006.  As always some feedback would be welcome.

US GDP comparison map

This map has been around since early last year and I can’t find the original source, (blogged by StrangeMaps in June) but does it say more about the US economy (probably pre recession) than the comparison states – the UK won’t be on the map because we still earn more than California…just.

low cost cars – the global challenge

I found this interesting Business Week article on the development of really cheap cars by chance, but it raises some fundamental questions, albeit from an American perspective:

Link

Some further thoughts:

  • the comparison with no frill airlines and cheap clothes retailers (H&M, etc) is right in this context – if the western consumers can go low cost the emerging markets can start at low cost and the global market for very cheap products increases
  • Imagine a $2,500 (£1,250) car’s impact on developing countries traffic levels, when India and China’s emerging middle and upper working class can join in (or as the article suggests we are already seeing a $7,000 car impacting on poorer populations in eastern Europe and increasingly on the west…like the Dacia/Renaut Logan)
  • You can hear the complaint from the emerging nations – “why shouldn’t we have personal individual mobility like you have had for the last 100 years, to cover for your guilt about environmental damage and climate change” (Thanks, Gottfried Daimler, btw)
  • From my personal perspective I muse – what does this do to the motorcycle and scooter market – will Japanese, Korean, even the Chinese and Indian manufacturers who are currently growing, go the way of Triumph, BSA, Ariel – all world dominating businesses when a motorcycle was the first step on the mobility ladder. Better go for plan b, Honda… and dont even start to think about what China’s bicycle manufacturers will turn to next (the usual reference point in discussions about developing countries and cars)
  • I recall a similar article in Car magazine some 15 years ago and its predictions certainly came true – your European car is likely to be assembled anywhere labour is cheap (uh…Derby, Sunderland, Swindon? OK, but point taken) out of bits from Brazil, Indonesia and for all I know Chad, and finally discounted to get the metal out of the the fields near the ports and onto your drive
  • can a developing world cheap car achieve the same role in society again as the original VW, Fiat Cinquecento, Citroen 2CV or even Mini – and will these new ugly boxes on wheels become anti-fashion statements – they may become the first teenage car of choice for cash strapped parents, but I can’t see the Chery, Geely, Great Wall Motor, Nanjing, Hafei, Zhongxing, or Brilliance China (all rising Chinese brands) capturing the Fiesta, Saxo or Corsa market.

Economists and buses

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Stephen Dubner, of “Freakonomics” fame comments yesterday on bus stop behaviour in New York. Gaming the bus system must come more naturally to UK passengers, especially in London, where I will often go “upstream” to ensure I get on the bus and get a seat. Any other user tricks of trade please post to the comments section… 

Davos

From Peter Scwartz, futurist and scenario planner (!) – A good report on why Davos is important, although not in the way it used to be.

“Looking back over the week it feels like there was little sense of urgency in the world. There was a lot of discussion of the big problems: climate change, water, trade, economic imbalances, the dollar, religious and ethnic conflicts, rising China and India, extreme poverty and many more. But in the background was a global economy that felt fairly robust and from a business perspective times are good and no big threats appear imminent. You might call the mood complacent. There were no obvious big surprises or unanticipated crises.The upside of that complacency was a sense that first of all the problems are well recognized and that we can even imagine how most, if not all can be addressed. There was, for example, a broad consensus that climate change was an urgent issue but the only real question was what was the mix of solutions.

Will it be the same in 12 months time, particulary as climate change battle lines get drawn in the sand?

The Long Tail

Chris Anderson explains it all, now all I have do is find how to apply it to my business?

Although in this clip he reminds of  Dave Gorman!

(or if you would rather read the original article from Wired) – yes I know this is old stuff, but few in our business are thinking about it yet…