Tuesday, January 28, 2003

NY Times: Sifting Through the Online Medical Jumble. Now there are a few services that, for a fee, promise to take over that work, to weed through the deluge of information, selecting effective treatments and trashing fakes. The conundrum is no longer evaluating health advice, but evaluating the evaluators. [Tomalak's Realm] As medical information slowly becomes more available to the general public, as the monopoly on treatment information crumbles, you will see the medical community go up in arms.  This is another step in that direction; not perfect, certainly, and it has its risks, but one can see the trend. 8:19:48 PM    comment []

Today's quotes from Professor Jack Soll, in Applied Statistics. First quote: [as he is putting together a random distribution in Excel showing the number of green M&Ms in a packet, he accidently clicks on "Moving Average" instead of "Uniform".  The amphi denizens (amphizens?) all catch it:] "That's moving average!  You want uniform!" "OK, I see... of course we don't want moving average... M&M's don't move." Second quote, when asked why the mean of a sample converges toward zero per the Central Limit Theorem: "There are some technicalities that we shouldn't discuss at 6:56p..." [class ends at 7:00p]   The Central Limit Theorem is exceptionally interesting, as it explains why we see bell curves (normal distributions) all around us.  Height, weight, IQ, compensation, years of education... averaging several factors will produce a normal distribution in the final result.  Astounding. 8:15:16 PM    comment []

Today's readings for the class "Ethical Dilemma" are superb.  Four readings were assigned, of which I read two-and-a-half.  They were: "The Social Responsibility of Business Is to Increase Its Profits", Milton Friedman (1970) "Economic Theories of Organization", Charles Perrow "Moral Codes and Economic Success", Amartya Sen "Social Norms and Economic Theory", Jon Elster I never imagined that reading for Ethics class would be so in line with some of my obscure economics interests.  Tomorrow's class is focused on ethics and economics, which is the leitmotif behind the readings. Milton Friedman delivers a cogent argument against what is now faddishly called "corporate social responsibility" (CSR).  He does a fine job of illustrating why capitalism works and how to separate political issues from corporate issues. The second article compares agency theory and transaction cost theory in light of their descriptive ability of corporate structure.  There is a brilliant example (quoted from Alchian and Demsetz) of how agency theory is responsible for the birth of capitalism.  Most of the article explores transaction-cost economics (TCE), and highlights many areas where additional work may enhance the utility of the theory. In the third article, Amartya Sen counters that capitalism is much more than pure exchange; he uses the areas of production and motivation.  He expresses how cultural norms of trust, among other qualities, affect the cost of executing transactions, and show an example of how, in absence of this societal trust, other entities like the Mafia would naturally arise to fill this need.  On the topic of needing "ethical" leaders to promote "ethical" governance, he brings forth this timeless quote: "If the measuring line is true then the wood will be straight, not because one makes a special effort, but because that which it is 'ruled' by makes it so.  In the same way if the ruler is sincere and upright, then honest officials will serve in his government and scoundrels will go into hiding, but if the ruler is not upright, then evil men will have their way and loyal men will retire to seclusion."  -- Hui-nan Tzu, China, 122 BC   2:11:45 AM    comment []