depth first search

There’s been some coverage in the New York Times of the recent e-book pricing dispute between Amazon and Macmillan focusing on the potential for consumer backlash over e-book prices. The coverage includes the following quote:

“The sense of entitlement of the American consumer is absolutely astonishing,” said Douglas Preston, whose novel “Impact” reached as high as No. 4 on The New York Times’s hardcover fiction best-seller list earlier this month. “It’s the Wal-Mart mentality, which in my view is very unhealthy for our country. It’s this notion of not wanting to pay the real price of something.”

I certainly suspect that in today’s retail culture, basic economic reasoning often gives way to a kind of applied psychology. The prevalence of $x.99 prices, the strategic use of “discounts,” and the variety of tricks and techniques that raise retail bottom lines are certainly proof that this kind of tactical salesmanship does something (which studies seem to support). 

But really people, boycotting based on price isn’t exactly a new or serious problem, which is probably best seen if we consider the more common name for this practice — shopping.

This editorial on Microsoft in today’s NYTimes is interesting on many levels. Part elegy, part exposition, even the choice to run an editorial of this sort is in many ways a bit of a puzzle to me. I suppose I’m too far down the Ubuntu rabbit hole to remember how common Microsoft is for most people. In the eternal war between Coke and Pepsi, I’m drinking RC cola in the corner like some kind of deviant.

I don’t really disagree with anything in the editorial, but there is one sin of omission that is worth noting. Microsoft had (and may still have) a reputation among entrepreneurs as a place startups go to die the brutal death of being copied into obscurity instead of acquired. This led to a situation where people running startups would accept invitations to speak at Microsoft and end up giving comically (and purposely) misleading presentations about the various ideas they were trying to develop. (Compare this with the kind of talks given at Google, who’ve shown a real willingness to spend some serious money in pursuit of good ideas.)

This attitude and reputation extended Microsoft’s own internal problems with innovation out into the community at large. Microsoft was for a key period of time a cash rich but thrifty intellectual property aggressor. Change meant a threat to market dominance in the same way that internal innovation created threats to the working order of various company power silos. That’s probably why when web 2.0 became viable, Microsoft had such a small part in it. It’s also probably why Apple has such an easy time hitting out of the park on a regular basis. Microsoft’s business model created such a rut that just getting out of it was enough to guarantee intellectual capture among technological elites.

Unfortunately, I don’t see how Microsoft can change. They make a lot of money bringing poor user experiences to people on a daily basis, yet their mindshare among process oriented business people remains high. They’ve been doing anti-competition so long they’ve forgotten what real competition looks like (say, for example, that between Apple and Google).

I think creative people ought to avoid getting bent out of shape the second the sturm und drang of capitalism interferes with their cash flow. In many ways, the attacks on Amazon are getting so much purchase because many authors have sandboxes and and are not afraid of using them.

But here is another view. Amazon is facing serious competition in almost every business unit. Macmillan, on the other hand, is a constitutionally mandated and congressionally protected monopolist in the sense that they have the exclusive right to sell certain content.

Yet Jane Smith, Amazon engineer is not taking to the internet to whine about how her livelihood is imperiled because Macmillan is charging too much for e-books in an environment where fewer people are reading paid content, even though her personal security is possibly in greater jeopardy (iPad anyone?). Instead all we hear is John Smith, mid-list Macmillan author, describing how evil and anti-competitive Amazon is.

Look, the authors will be fine (at least modulo any future societal decline in reading), and if they turn out not to be, it won’t be because of Amazon.

Update: Consider.

In an otherwise interesting but ill-thought-out comparison of cuckoldry and rape, I found this little nugget:

We all know that women tend to be more expressive about their complaints – you can’t beat ‘em for wailing and gnashing of teeth.

Really? That hasn’t been my experience. And anyway, even by the flimsy standards of economics this particular claim is entirely unsupported.

This serves to reinforce my outsider view of the discipline: you folks spend all your time trying to formulate counterintuitive claims that you can support with limited data and faulty statistics. In the process you routinely boil morality, ethics, and the human condition down to single estimates of utility in conveniently succinct but laughably unsupportable ways. Then, model in hand, you commit the cardinal sin of economics: you confuse your model with reality.

Jeebus. Doesn’t the other 90% of your intellect tell you that your conclusions are totally ridiculous? When I get to such a perverse place in my own thinking I usually ask myself where I went wrong instead of tumbling forward like some goddamn moron.

UPDATE: Because economists might read this let me be a bit more explicit for the slow folks in the room. I often write so as to simulate precisely what I’m writing about, so my universal statement “economists are terrible people” is intended to evoke the precisely kind of distaste that the quoted comment above would. It’s a subtle point that individuals with decent reading skills (who must not be economists [I did it again!]) would understand.

I sometimes encounter arguments in Op-Eds and wonder whether these statements have supporting evidence, so I decided I’d ask the Internet.

Here’s a snippet from the Washington Post today:

If rewards for America’s entrepreneurs and firms are reduced through higher marginal tax rates, their incentives to earn, invest and create jobs will be diminished.

Is this true? It seems like a simple enough statement that I should expect to find an easy justification in some economics textbook somewhere. Unfortunately, I know nothing about the field, so I’m asking the Internet.

Does the economy need the shadow banking system?

So today I found myself trying to figure out how to pickle objects that are based on dynamically constructed classes. This is probably the simplest instance of metaclass magic in Python — the use of the ‘type’ builtin, a metaclass. A metaclass is a class whose objects are themselves class specifications. People use metaclasses to modify the default way classes are built, or in my case to build classes dynamically (say from a soup of mixins).

Anyway, the following code ran into problems.

import pickle
 
classes = {}
classes['ClassName'] = type('ClassName', (),{})
obj = classes['ClassName']()
pickle.dump(obj,open('test.pck','w'))

Attempting to run this code gives:

Traceback (most recent call last):
  File "/tmp/py17808UNS", line 8, in 
    pickle.dump(obj,open('test.pck','w'))
  File "/usr/lib/python2.5/pickle.py", line 1362, in dump
    Pickler(file, protocol).dump(obj)
  File "/usr/lib/python2.5/pickle.py", line 224, in dump
    self.save(obj)
  File "/usr/lib/python2.5/pickle.py", line 331, in save
    self.save_reduce(obj=obj, *rv)
  File "/usr/lib/python2.5/pickle.py", line 401, in save_reduce
    save(args)
  File "/usr/lib/python2.5/pickle.py", line 286, in save
    f(self, obj) # Call unbound method with explicit self
  File "/usr/lib/python2.5/pickle.py", line 562, in save_tuple
    save(element)
  File "/usr/lib/python2.5/pickle.py", line 286, in save
    f(self, obj) # Call unbound method with explicit self
  File "/usr/lib/python2.5/pickle.py", line 748, in save_global
    (obj, module, name))
PicklingError: Can't pickle : it's not found as __main__.ClassName

So what was I trying to do? I’ve implemented a learning agent as an object and constructed a bunch of mixins that specify variations of the training algorithm, reward function, and various other modifiable agent properties. What I want to do is take the cross product of all the variations, testing each on the cluster here at UT. Of course I want to pickle each agent so that I can inspect the resulting performance later without having to rerun a thousand experiments.

I only have a small number of variations, so explicitly naming all the mixin combinations isn’t too onerous, but I am curious as to whether lack of serialization inhibits the use of mixins in Python programming generally.

Or maybe I’m just programming orthogonal to the norm.

Okay, so I’ve been bailout obsessed. I used to work on Wall St. Well, midtown anyway. This will be the last bailout post for awhile.

Some sensible analysis of the bailout.

UPDATE: Deep thought — What if markets actually are functioning, and we just don’t like what they are saying?

Average Joes and Janes are not the holders of the other side of complicated, over-the-counter derivatives contracts. Rather, hedge funds are the main holders. The bailout will involve a transfer of wealth — from the American people to financial institutions engaging in reckless speculation — that will be the greatest in history.

This is one of the few articles that treats “toxic” waste for what it is, not loans, but structured products and derivatives, most of which is not risky any more on account of it being worthless. The bailout is a handout. You want liquidity – capitalize new banks.

My congressman on the bailout.

Here’s an idea: capitalize a couple of new banks with clean balance sheets under a new and intelligent regulatory structure. Treat these banks as safe havens for deposits transfered in from the FDIC from other failing banks. Let everybody else fail.

Key advantages:

1. Eliminates moral hazard.
2. No secret handouts or price inflation.
3. This is a market based solution – government merely introduces new competitors.

The new banks proceed with an implicit government guarantee until things settle down. Then they can privatize (and hopefully make the government some money).