Tatyana Deryugina

After more than a three-year hiatus (during which I occasionally blogged for the Center for Business and Public Policy), I decided to revive my blog. The honor of the first post goes to this week's threats against the movie "The Interview" and Sony's subsequent decision to cancel the release of the movie.

To recap (skip this paragraph if you've been following the news), Sony made a comedy in which two not-so-competent journalists are set to interview North Korea's Kim Jong-Un. They are approached by the CIA and asked to help assassinate him. I'm guessing North Korea didn't like the plot of the movie. According to the FBI, someone from North Korea hacked into Sony, stealing and subsequently releasing various emails and documents. The hackers also threatened violence in movie theaters that showed the movie, and that's when things started to get ugly. Sony allowed movie theater chains to not screen the movie (usually, they sign contracts for these kinds of things) and all major movie theater chains (along with non-major ones) said they wouldn't screen it. Sony then said they wouldn't release the movie at all (according to them, because no one has volunteered to show it, in theaters or otherwise). Even Obama has weighed in on this, saying Sony's decision was a mistake (Sony responded that it had no choice).

So is there a scenario in which things could have turned out differently? If we apply the basic principles of economics here, it's hard to see how the people making the threat wouldn't have "won" as long as there is even a tiny possibility that it was real (Homeland Security says there is no evidence that it was, but of course it's hard to rule out a 1 in a 100 million chance). Standing up to the terrorists by going to the movie theater despite the (tiny) threat is a public good - you bear the risk if you go, but society as a whole benefits. This leads to a temptation to "free ride" - hope that others go to the theaters while you stay home. But the problem is, many people are thinking this way, and the result is a drop in movie ticket sales (so to be clear, the theory doesn't predict 0 moviegoers). Now if you're a theater, you face a similar problem. You may want to screen the movie to stand up to the terrorists, but you're bearing all the costs of doing so (lost ticket sales) while society bears much of the benefit. So there's the free rider problem again. Theaters could have also put in extra security, but the problem of costs again.

From this point of view, the only way "The Interview" had a chance is if Sony had not allowed movie theaters out of their contracts to show the movie. But I'm guessing that this would have been a huge PR disaster for Sony and perhaps some smart lawyer would have figured out a way for theaters to get out of their contracts anyway. Unfortunately, public good theory predicts that it's very easy for threats to have this effect in all areas of our lives.

From an interesting New Scientist article about a simulated rat that learns:

"The more fundamental issue is that brute-force computation cannot compare with the functioning of a real brain. Human intelligence arises not from logic, but from our ability to respond to ambiguity and adjust to rapidly changing situations. "The idea that human expertise can be formalised in logical rules turned out to be a fundamentally wrong assumption,” says Rolf Pfeifer, an AI researcher at the University of Zurich in Switzerland.”

Even more interesting:

"A brain consumes less power than a light bulb, and occupies less volume than a 2-litre bottle of soda,” says Dharmendra Modha, a computer scientist at IBM.

I just saw a story claiming that TSA agents are developing cancer from working near the body scanner machines and that the TSA is covering it up. Personally, I do wonder about the cost/benefit of the scanners. Of course, cancer "clusters” could be random, and the article didn’t mention anything about statistical testing. It also made the following statement: "Of course, if TSA workers who are merely standing near the scanners are already developing cancer, frequent flyers are also putting themselves in harm’s way by standing directly inside the radiation-firing machines.”

There is direct evidence that endorphins are released following a period of strenuous exercise. What it takes for endorphins to be released is unclear (and probably varies from person to person), but the consensus seems to be that the body has to cross over some threshold of strain before endorphins are released. I’ve certainly experienced this myself (I think). The first two miles or so of my recent runs are usually pretty tedious and unpleasant.  I get tired and want to stop. Sometimes I get side pains. But then I start feeling better and am able to run another three miles without significantly slowing down. I’ve never gotten side pains during the second part of a long run (and it’s not because I selectively stop running). So I do think the time-delayed endorphin release is real.

Last month’s Journal of Economic Behavior & Organization has an interesting article titled "Hayekian anarchism”. I’m reposting the abstract below, but here’s the punchline: "Hayek should have been an anarchist.”

I’ve been a subscriber of Scientific American (paper, not online) for several years. For various reasons, I decided to stop subscribing to it and look for another source of detailed science news (one that went into more technical detail than the Economist’s Science and Technology, SciAm or Discover). After finding various potential candidates, I decided to square them against each other in an RSS Feed War. The best one gets a print subscription from me. After subscribing to the feeds, I realized that a paid subscription may prove redundant. 

 I have to admit that although I first heard the terms "Sunni Muslims” and "Shia Muslims” years ago, I never bothered to figure out what the differences between the two sects of Islam were. Recently I finally sat down and looked it up. Turns out, the differences aren’t major. But the origins of the sects are pretty interesting – they arose over a disagreement about who should succeed Muhammad, someone elected by the the people or a blood/undemocratically chosen heir. You can find the details here. Here’s a nice chart with the major differences in beliefs between the two.  

 For those who have heard that scientists in the 1970′s believed a new Ice Age was imminent, I recommend reading this article, which investigates what the true consensus was back then. To give away the punchline, the title of the article is "The Myth of the 1970s Global Cooling Scientific Consensus”. It’s non-technical and very well-written.  

I finally finished reading "Moonwalking with Einstein” by Joshua Foer, where he documents his quest to win the US Memory Championship (even though the quest starts out with a less ambitious goal).  It was a very easy to read and contained a lot of interesting facts. For one, I had no idea that memorization was such a big part of life in ancient times. When you think about it, it makes sense – many people didn’t know how to read and those who did couldn’t afford to own every book. But I never really thought about it.

I just finished reading "Poor Economics” by Abhijit Banerjee and Esther Duflo, both MIT economics professors. The book was amazing and I highly recommend it. In summary, it is an excellent, evidence-based discourse about the behavior of the poor and the policies that work and don’t work to improve their lives. Abhijit and Esther cover how the poor make decision about how much to save, eat, and spend on their children’s education, why so many poor households run businesses but don’t become rich, and how political institutions can be improved.