So says John Hawks in Slate.

How bank bonuses let us all down:

…Because banking is not about true risks but perceived volatility of returns: you earn a stream of steady bonuses for seven or eight years, then when the losses take place, you are not asked to disburse anything. You might even start again, after blaming a “systemic crisis” or a “black swan” for your losses. As you do not disgorge previous compensation, the incentive is to engage in trades that explode rarely, after a period of steady gains.
…
If capitalism is about incentives, it should be about true incentives, those resistant to blow-ups. And there should be disincentives to remove the asymmetry of the free option. Entrepreneurs are rewarded for their gains; they are also penalised for their losses. Now, by comparison, consider that Robert Rubin, the former US Treasury secretary, earned close to $115m (€90m, £80m) from Citigroup for taking risks that we are paying for. So far no attempt has been made to claw it back from him – only UBS, the Swiss bank, has managed to reclaim some past bonuses from its former executives.

One of the issues that comes up in predictions about political prospects is that the party in power tends to be buffeted by the business cycle, and receives both the credit and the blame, even though they may only control the dynamic to a modest extent. In this way many of the large financial firms resembled governments; they blew up on the bubble, and now with the collapse it’s rather clear that they didn’t add all the value that they claimed. But as readers have pointed out on an individual level those who received windfalls through a winner-take-all-system have no incentive to avoid risks. I think the chance of non-trivial clawbacks is close to zero (I’ll be happy to be proven wrong!).
The contrast with entrepreneurs is telling. The .com bubble & burst was tragic, but it did produce notable technologies, the seed of later gains in economic productivity. The asset and finance bubble seem unlikely to generate the same positive externalities in the wake of correction of irrational exuberance. But all that being said, even though we are moving past an age of massive economic parasitism due to principle-agent problems the potential engines of productivity through innovation remain. There are still entrepreneurs, and with the shrinking of the financial industry the pool of those who engage in the real game of risk and reward is increasing in size.

A few days ago I mentioned that the story about a bumper crop of twins in a German town in southern Brazil was notable because of the elevated frequency of identical, not fraternal, twins. A reader points out that that was an error, and The New York Times has appended a correction:

The Cândido Godói Journal article on Monday, about the unexplained proliferation of twins born in the farming town of Cândido Godói in southern Brazil, misstated the type of twins usually associated with a genetic tendency of the mother. They are fraternal twins — like a majority of those born in the town. They are not identical twins, which are generally believed to be conceived by chance.

As I noted before, variation between populations and due to environmental inputs that affect twinning rates affect the rate of fraternal, not identical, twins. Inbreeding* or some environmental parameter, or a combination, probably explain this then.
* Since twinning is somewhat heritable, the alleles which modulate twinning rates could have increased in frequency in an inbred population through drift.

Mark Chu-Carroll has an excellent smack-down, Financial Morons, and Quadratics vs. Linears. Mark notes:

There’s one minor problem with that argument: it doesn’t work. A couple of weeks ago, some idiot at JP Morgan circulated a chart that was supposed to summarize just how bad the financial disaster has been. The chart circulated for a couple of weeks – bounced from mailbox to mailbox, sent from one financial genius to another.
Only the chart was blatantly, obviously, trivially wrong, and anyone who had the slightest damned clue of the assets those businesses managed – i.e., the kind of thing that the idiot who drew the chart was supposed to know – should have been able to tell at a glance how wrong it was. But they didn’t. In fact, the damned thing didn’t stop circulating until (of all people) Bob Cringely flamed it. Go look at the chart – it’s up at the top of this post.

What Mark is pointing to is a pretty clear cognitive bias in terms of how we humans take in quantitative data presented in graphical form. You don’t have to be a moron, you just have to be processing on the the reflexive and implicit cognitive level. Here’s the problem: people were being paid a lot of money because of their presumed ability to extract themselves out of their animal milieu and operate as rational actors who engaged in reflective analysis. There’s not that much value-add in gut-level intuition. Below the fold is a commercial that anyone who has worked with MBAs might find amusing.

Read More

Just a heads up, the old “AlphaPsy” weblog is now Cognition & Culture. One of the contributors is Dan Sperber, who I interviewed a few years ago.

Daniel Gross of Slate has a piece up, Dumb Money: The villains of the financial catastrophe aren’t criminals. They’re morons. I just love the use of the term “morons.” As Gross notes though there was plenty of g to go around, but that didn’t prevent moronic behavior. But, I do think it is worth considering whether the behavior was really that stupid. After all it isn’t as if wizards of high finance are going to go through the same sort of crash toward subsistence or penury of middle class borrowers who recklessly increased consumption during the bubble years. Remember that the individuals at the heart of the colossal f**k-up that was Long Term Capital Management not only avoided personal bankruptcy and remained safely in the upper middle class, but most of them are back working in the financial sector. If you’re a finance type who burns out and drops out of the industry you are likely to have a relatively soft-landing compared to an autoworker who is laid off. Not only do you likely have greater innate intelligence, but you can liquidate assets you’ve accumulated and move far down the consumption ladder without really affecting first-order pleasures proportionality.*

Read More

Not news to many readers, I’m sure, but Nicholas Wade has a nice article on epigenetics and gene regulation. Some people in the article complain about the lack of a focused investment by the government in this area. I found this a little odd–isn’t quite a bit of large-scale work being done by the ENCODE project?

A new paper by Bilalic et al. (2009) (read the PDF here), tries to account for male superiority in chess by appealing to a statistical sampling argument: men make up a much larger fraction of chess players, and that the n highest extreme values — say, the top ranked 100 players — are expected to be greater in a large sample than in a small one. In fact, this explanation is only a rephrasing of the question — why are men so much more likely to dedicate themselves to chess.

Moreover, data from other domains where men and women are equally represented in the sample, or where it’s women who are overrepresented in the sample, do not support the hypothesis — men continue to dominate, even when vastly underrepresented, in domains that rely on skills that males excel in compared to females. I show this with the example of fashion designers, where males are hardly present in the sample overall but thrive at the elite level.

First, the authors review the data that male chess players really are better than female ones (p.2):

For example: not a single woman has been world champion; only 1 per cent of Grandmasters, the best players in the world, are female; and there is only one woman among the best 100 players in the world.

The authors then estimate the male superiority at rank n, from 1 to 100, using the entire sample’s mean and s.d., and the fraction of the sample that is male and female. Here is how the real data compare to this expectation (p.2):

Averaged over the 100 top players, the expected male superiority is 341 Elo points and the real one is 353 points. Therefore 96 per cent of the observed difference between male and female players can be attributed to a simple statistical fact — the extreme values from a large sample are likely to be bigger than those from a small one.

Therefore (p. 3):

Once participation rates of men and women are controlled for, there is little left for biological, environmental, cultural or other factors to explain. This simple statistical fact is often overlooked by both laypeople and experts.

Of course, this sampling argument doesn’t explain anything — it merely pushes the question back a level. Why are men 16 times more likely than women to compete in chess leagues? We are back to square one: maybe men are better at whatever skills chess tests, maybe men are more ambitious and competitive even when they’re equally skilled as women, maybe men are pressured by society to go into chess and women away from it. Thus, the question staring us in the face has not been resolved at all, but merely written in a different color ink.

The authors are no fools and go on to mention what I just said. They then review some of the arguments for and against the various explanations. But this means that their study does not test any of the hypotheses at all — aside from rephrasing the problem, the only portion of their article that speaks to which answer may be correct is a two-paragraph literature review. For example, maybe females on average perform poorer on chess-related skills, and so weed themselves out more early on, in the same way that males under 6’3 would be more likely to move on and find more suitable hobbies than basketball, compared to males above 6’3. Here is the authors’ response to this hypothesis (p. 3, my emphasis):

Whatever the final resolution of these debates [on “gender differences in cognitive abilities”], there is little empirical evidence to support the hypothesis of differential drop-out rates between male and females. A recent study of 647 young chess players, matched for initial skill, age and initial activity found that drop-out rates for boys and girls were similar (Chabris & Glickman 2006).

Well no shit — they removed the effect of initial skill, and thus how well suited you are to the hobby with no preparation, and so presumably due to genetic or other biological factors. And they also removed the effect of initial activity, and thus how enthusiastic you are about the hobby. And when you control for initial height, muscle mass, and desire to compete, men under 6’3 are no more or less likely to drop out of basketball hobbies than men over 6’3. How stupid do these researchers think we are?

So, this article really has little to say about the question of why men excel in chess or science, and it’s baffling that it got published in the Proceedings of the Royal Society. The natural inference is that it was not chosen based on how well it could test various hypotheses — whether pro or contra the Larry Summers ideas — but in the hope that it would convince academics that there is really nothing to see here, so just move along and get home because your parents are probably worried sick about you.

Now, let’s pretend to do some real science here. The authors’ hypothesis is that the pattern in chess or science can be accounted for by their statistical sampling argument — but of course, men dominate all sorts of fields, including where they’re about as equally represented in the pool of competitors, and even when they’re outnumbered in that pool. Occam’s Razor requires us to find a simple account of all these patterns, not postulating a separate one for each case. The simple explanation is that men excel in these fields due to underlying differences in genes, hormones, social pressures, or whatever.

The statistical sampling argument can only capture one piece of the pattern — male superiority where males make up more of the sample. Any of the non-sampling hypotheses, including the silly socio-cultural ones, at least are in the running for accounting for the big picture of male dominance regardless of their fraction of the sample.

To provide some data, I direct you to an analysis I did three years ago of male vs. female fashion designers. Here, I’ll consider “the sample of fashion designers” to be students at fashion schools since that’s what the data were. Fashion students are the ones who will make up the pool of fashion designers upon graduating. I included four measures of eminence: 1) being chosen to enter the Council of Fashion Designers of America, 2) having an entry in two major fashion encyclopedias, both edited by women (Who’s Who in Fashion, and The Encyclopedia of Clothing and Fashion), 3) having their collections listed on Vogue’s website, and 4) winning the highest award of the CFDA, the Perry Ellis awards for emerging talent.

The male : female ratio in the pool of fashion students is 1 : 13 at Parsons and 1 : 5.7 at FIT. So, the female majority in the sample of fashion designers is not quite as extreme as that of males in chess leagues, but pretty close. The statistical sampling argument predicts that females should out-number males at the top. But they don’t — the M : F ratios for the four measures above are, respectively, 1.29 : 1, 1.5 : 1 and 1.9 : 1, 1.8 : 1, and 3.6 : 1. Again, this isn’t as extreme as male superiority in chess, but recall that males are so underrepresented in the sample to begin with!

(For other design fields that males tend to have greater interest in, such as architecture, the M : F ratios among the winners of the Pritzker Prize and the AIA Gold Medal are, respectively, 27 : 1 and 61 : 0).

The authors statistical sampling argument is not a null hypothesis that we reject or fail to reject in any particular case — rejecting it in fashion design, and failing to reject in chess. It is not a hypothesis at all, but simply a rephrasing of the observation that men dominate certain fields, only measuring this by their greater participation rates. Again, it does not address why males are so much
more likely to participate in chess leagues to begin with, which could be due to any of the existing hypotheses about male superiority. The point is that it is a widespread phenomenon that requires a single explanation applying across domains.

I find the genetic and hormonal influences on the mean and variance of cognitive ability and personality traits to be the most promising (just search our archives for relevant keywords to find the discussions). But this study of chess players offers nothing new to the debate, and could not do so even in principle, as it doesn’t make a novel hypothesis, apply a novel test to existing data, or apply existing tests on novel data. You can reformulate the observation or problem however you please, but that doesn’t make the testing of hypotheses go away.

Reference:

Bilalic, Smallbone, McLeod, and Gobet (2009). Why are (the best) Women so Good at Chess? Participation Rates and Gender Differences in Intellectual Domains. Proc. R. Soc. B, 276, 1161–1165.

New Safety, New Concerns In Tests for Down Syndrome:

The new tests take advantage of techniques that can isolate and analyze tiny bits of genetic information from the fetus that circulate in a woman’s bloodstream, in this case from cells or free-floating snippets of DNA or the related molecule RNA.
At least four companies are developing such tests, including Sequenom of San Diego, which plans to be the first on the market in June. The other companies hope to have their versions on the market within a year.
“For 50 years, folks have been working to develop a noninvasive genetic test for Down syndrome,” said Sequenom chief executive Harry Stylii. “People have described it as the Holy Grail of genetic testing. We are on the cusp of delivering that.”
At a meeting of the Society for Maternal-Fetal Medicine in San Diego last month, the company reported that results from 858 women showed that its test did not miss a single case of Down syndrome and produced only one false alarm, making it much more accurate than the currently available screening tests and on a par with amniocentesis.

At the current rate Genetic Future should rename itself to Genetic Present.
Related: Down syndrome and abortion rates.

Association Between Serum 25-Hydroxyvitamin D Level and Upper Respiratory Tract Infection in the Third National Health and Nutrition Examination Survey:

The median serum 25(OH)D level was 29 ng/mL…and 19%…of participants reported a recent URTI [recent respiratory tract infections]. Recent URTI was reported by 24% of participants with 25(OH)D levels less than 10 ng/mL, by 20% with levels of 10 to less than 30 ng/mL, and by 17% with levels of 30 ng/mL or more…Even after adjusting for demographic and clinical characteristics, lower 25(OH)D levels were independently associated with recent URTI (compared with 25[OH]D levels of 30 ng/mL: odds ratio [OR], 1.36; 95% CI, 1.01-1.84 for <10 ng/mL and 1.24; 1.07-1.43 for 10 to <30 ng/mL). The association between 25(OH)D level and URTI seemed to be stronger in individuals with asthma and chronic obstructive pulmonary disease (OR, 5.67 and 2.26, respectively).

Some caution from ScienceDaily:

Read More