An economist’s visit to a nightclub

Living 3 years in Sydney I finally found a free weekend to make my second visit to a nightclub.

Nightclubs are weird. Both women and men spend many hours if not days to prepare their outlook in order to simply impress a bunch of strangers. A guy from our company practically spent the whole evening trying to impress me with his drinking skill by indiscriminately engaging all kinds of alcohol and by illustrating his achievements from the past with pictures.

As turned out later when we went to the dance floor that guy’s act was the least weird thing that night. Men making awkward attempts to bond and jumping around a hoping to get a woman’s attention. The funniest of all is a little tribal circle that exchange studends and work collegues tend to create. Why is it happening?

Imagine that a manager at the company wants to pick the most productive guy for a job, or a girl that tries to pick the most devoted admirer for a boyfriend, or even a member of an admission committee that has to pick the ablest college applicants.

An ideal solution is to rank all candidates along an important for particular context characteristic and pick the best one. Then the most hardworking gets a job, the most loving gets a girlfriend and the smartest goes to college. The problem, however, is that such a ranking requires us to see what can’t be seen. The true level of productivity, devotion or ableness are unobserved. Asking candidates won’t work, all of them have an incentive to lie to be selected.

The solution, however, can be found by recognizing that the most productive is likely to have the highest educational degree, the most devoted is likely to bring the biggest present on Valentine’s Day, and the smartest is likely to have highest exam marks.

These relationships are not accidental. All three were intentionally created as a cultural truth-telling solution in the contexts where knowing the observable is important but candidates lack an incentive to reveal them truthfully.

In fact, the efficiency of a market economy is built on this truth-telling property. An economic system achieves maximum efficiency if those who value resources the most also possess them. Simply asking won’t do due to misaligned incentives, that is why we ask everyone to name a price they comfortable to pay. A willingness to pay contains information on the importance of a good to an economics agent. That is how a resource gets an efficient allocation.

Ok, that was cool, but how does it relate to what is happening in the club?

Dating and friendship, while being deeply important are not very well defined. The key game theoretical gimmick of a common knowledge does not capture a belief formation process of the participants in the slightest. The alcohol messes up rationality.

But are not participants usually decide to visit the club much earlier in the week while being sober? Are not they know exactly what they getting into and what they want from the club’s visit? I think there is a really cool way to capture all of it in a game theoretical framework. I’ll certainly do it, in a little while.

Here is, however, one exciting  way to explain that. Check this picture

Next time you go to club you have to realize that what you see is a version of Maasai jumping dance — a device created to reveal an unobservable to facilitate sorting on the marriage market. A man capable to jump the highest gets a chance to distinguish himself and drastically increases the chances of marrying the most desired woman. The jump contains an otherwise unobserved information about how good of a hunter a man can be. Even though participants hope to reveal an unobserved quality of a hunter, it is not about animal hunting per se.

Today Massai barely hunt to avoid unnecessary animal killing, yet success of the member of this community is defined entirely by hunting skills. For example, to become a man a boy needs to survive a night in a camp without a fence, which induces a non trivial probability to be eaten by an predator. The key point is that the one who jumps the highest has the highest chance to do well in other competitions of the community, which all happened to have a common theme — hunting. Likewise in the club one is not interested in someone’s expensive cloths, generasity or friendship. The interest is in those in possession of the same type of endowment that let do well in related culturally self-imposed competitions.

So even though we not particularly fond of seeing ourselves as a tribesman who tries to jump the highest in front of the whole tribe, conceptually and behaviorally we are. We constantly pick and being picked. In fact, forming groups with the person with an unobserved quality is and always was essential for human and communal survival and prosperity. It is noted that the human’s capacity to play a non-zero sum games with large number of genetically unrelated players is unique to animal world. Labels “bad”” and “good””, morality and other fictions are evolutionary hard wired into out brain as a decision making short-cuts to facilitate sorting for a better group formation. When the human activities were limited the preference relation “good is better the bad”” that is uncovered by rumors was sufficient to aid welfare beneficial sorting. However, as the societies grew in size and complexity sorting people along many other dimensions became important. Thus, humans attempted to improve upon sorting by inventing novel cultural solutions for further bolstering quality of matching.

In general, however, one does not need to go to college to be smart, or to church to be kinds. It is done for a show, and there is someone paying to see it. Thus, going to clubs is rational and in fact has a very importan social role.

Science is art

Some people have an ear for music. Hm… can one have an eye for a movie, an arm for a music instrument… or a wrist for theoretical theory? Is it really about a particular organ or is it about the brain’s capacity to “listen” and “sing”? Does the brain of an artist work any different from that of a scientist?

A scientific paper is not building bridges or agricultural irrigations, its intention is not to change the world. Its sole purpose, however, to be beautiful. A beautiful proof of a theorem, an insightful outlook on a phenomenon or a clever econometric identification strategy. Conceptually and behaviorally it is indistinguishable from a poem or a painting. An idea packed into a collection of symbols. However, to unpack the symbols and to understand the true meaning of idea one needs training (one need to go through a specific type of experience).

A collection of sensations create an idea, something that is born and dies in the confines of one’s mind. Yet one can pick a metaphor to mimic the idea. A surface of a metaphor is a collection of symbols, but the creator’s hope is to communicate the idea. A metaphor can be mathematical, visual or acoustical. The amazing minds who lived centuries ago also chose to be artists. The world of today offers millions of activities to choose from, but centuries ago the menu was limited: agriculture, army, church or making selfies for the nobles (for an arbitrarily chosen collection of people who manage the resources, again, in an arbitrary way). Michelangelos of today don’t do art, they do science because they are not limited in their choice. Art is a degenerated form of science.

Using metaphors comes naturally to a human mind and mathematical family of metaphors have a lot of advantages. One could say “that guy looks like a hockey player”. If that is true, then by studying a hockey player we can understand “that guy”. A political talk show is a great demonstration of limitation of verbal reasoning. Authors change definitions, make contradictory statements and the worst of it they talk too much. The (Occam’s) principle of parsimony is hard-wired into mathematics. Verbosity in mathematics looks silly but considered a embellishment in verbal reasoning. Reasoning needs to be compact to overcome the brain’s processing limitations.

Some will be able to understand the idea from the symbols, but some will never go beyond memorizing the symbols. Religious is most often misunderstood as a collection of silly symbols. A sad outcome when sinners are fooled to believe that by observing the signs of an idea they adhere to the idea itself. Or theomachists who always fight the signs of religion, being oblivious to the concepts of faith, peace, will, patience and love (all religions exhort us to be – in the language of n player prisoners dilemma game – unconditional contributors).

A true creator perpetuates the beauty of his mind by picking metaphors that live longer than his body. He packs a dense collection of processed unobserved sensations into a something that lives on.

How to get completely nuts about the number plates

Ever since can remember myself, I was (among other weird things) summing numbers on the number plates, e.g.
274 \;\;78
gives you 1 if you do the following
2+7+4+7+8=28 \to 2+8=10 \to  1+0=1.

A weirdness comes after the observation that no matter the order you always get 1

I found a trick that brought much joy to much childhood – you can always drop a number 9, which, among many things, means you can drop all combinations
1\;8,2\;7,3\;6,4\;5

In this case, you can drop first two digits 2 and 7 straight away, then depending on your arithmetics methods you get number 1 at most two-step.

This method comes from one interesting property of numbers and there is a cool dependency between the number of digits in the numbers and a maximum possible combination to squeeze that one last digit that contains information on the original number.

An example. A plate with
9372
containes  a number 3 because you drop 9 and 7+2.
A long way would be
9+3+7+2=21 \to 2+1=3.

Kinda cool phrases

These phrases are kinda cool:

x) Fish don’t know they’re in water until they experienced air;
x) A man can do as he will but not will as he will;
x) Economics is a lie – simple economics theory models are the most honest of all these lies. The world is in big trouble when economists start thinking that they are engineers and create models that most of them do not understand.
x) Mathematics is a profession where you can not tell if a person is working or sleeping;
x) If you don’t read the newspaper you are uninformed; if you do read the newspaper you are misinformed;
x) All models are wrong but some are useful;
x) In god we trust the rest bring data;
x) An idea that survived several relabeling becomes immortal.

Почему сейчас так же как и сто лет назад Россия в три раза беднее США?

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Логарифм подушевого ВВП США и РФ. Угадайте где какая страна?

Простой статистический факт. 100 лет назад по ВВП на душу населения мы отставали от США точно также как мы отстаём сегодня. За последние 100 лет среднегодовой рост в США и в России составлял 3%. Если мы периодами и догоняли кого-то, то только сами себя.

ВВП на душу населения характеризует капиталовооруженность, что, в свою очередь, характеризуем технологичность россиянина. То есть выходит, что мы также игнорируем применение современных технологий, как и 100 лет назад. И это не только о технологии производство танков или ракет, но и о культурные технологии такие как методы ведения бизнеса, методы организации государства, и различные сортировочные механизмы, такие как высшее образование, которые позволяют образовывать эффективные группы внутри общества.

Выходит, что мы просто тот же самый человек, который просто поменял одежду. В то время как развитые страны применяют все доступные технологии и находятся на пределе своих производственных возможностей, мы также, как и когда-то давным-давно обладаем какими-то особенностями, которые делают так что не технологии и знания к нам не проникают. А то, что проникает не присваивается и живет в каком-то изолированном маленьком пространстве.

Чтобы ответить на этот вопрос по существу нужно послушать не экономистов, антропологов. В целом обе области знаний говорят примерно одно и тоже, но смысловой акцент немножко другой.

Ответ лежит в плоскости понимание общественных институтов. Это писаные и неписаные правила по которым живет общество. Эти правила очень сложно переписать. Общепризнанно что страны способны переформатировать свои институты в результате очень сильных исторических потрясений, чаще случайных, чем спланированных. К примеру, благоприятные для роста благосостояния институты в Англии появились в результате чёрной смерти – масштабное эпидемии чумы 14 века. Дефицит крестьян увеличил их переговорную позицию, что в итоге привело к созданию правил по которым их было сложнее грабить. Аналогично, Латинская Америка считается бедной, потому что испанцы придя туда намеренно создали институты, которые позволяли порабощать населения. Таких примеров очень много. (Вот еще)

При отсутствии сильных исторических событий уклад жизни мигрирует из поколения в поколение, подобно тому как родившийся младенец не говорит и думает, как россиянин, но к четырём годам начинает думать и говорить, как он. Известно, что, начиная с периода полиомиелита особенностями homo sapiens является то что мы способны организовываться в большие группы. К примеру, неизвестно ни одного случая чтобы наши ближайшие генетические родственники образовывали группу более 80 обезьян. Чем больше группа, тем больше вероятность конкуренция за ресурсы и кровопролития.

Люди же смогли организовываться в большие группы, потому что научись верить в фикцию. К примеру, обезьяны способны сказать, что у реки находится лев, человек же способен сказать, что дух Льва живущую у реки является хранителем нашего племени. Способность передавать информацию о несуществующих вещах единственное что делает людей уникальными. Таким образом если священник наденет определённое платье и скажет определённые слова, то кусок хлеба превращается в плоть сына Господнего или же юрист который разложил бумаги и расставил подписи в определенном порядке создает организацию. (подробнее)

Условия для того, чтобы люди могли образовывать большую группу и эффективно координироваться в ней является вера в определенную фикцию. Для того чтобы рыночная экономика работала люди должны в неё верить. Мы не говорим, что Адам Смит выдумал рыночную систему, мы говорим, что он её обнаружил, а создана она была самой природой или Господом Богом.

Фикции не бывают плохими или хорошими, моральными или аморальными. Месопотамия делила людей на рабов и не рабов. Современная Америка делит людей на бедных и богатых. Фикции существует только для того, чтобы в них верить. И она работает и приносит пользу только если в неё верят все и каждый верит, что другой верит в неё.

Концептуально это не отличается от светофора. Зелёный и красный цвет сам по себе является просто светом, вера в него позволяет людям разъезжаться на перекрестках.

Когда американец идет в суд в качестве свидетеля он кладет руку на Библию. В Америке вся система законов включаю Конституцию исходит из того что Господь Бог наделил всех одинаковыми правами. Любая убедительная фикция строится на допущении что оно было дано свыше: Богами, самой природой или великими предками.

Во что же верит современная Россия? Во что она должна верить? Она может верить во всё что угодно. Любая страна может верить во всё что угодно, но верить надо дружно. Если мы не будем дружно верить во что-то, ты мы всегда будем отставать от ведущих стран в три с половиной раза и через что сто, и через двести лет.

В этом смысле, самое главное технология в обществе — это не технология производства каких-то благ или услуг. Первопричинная технология — это способность к изобретению и нахождению культурных решений для того, чтобы лучше организоваться и координироваться внутри общества. Технология переработки материалов в продукты и услуги — это лишь последствия нашей способности координироваться. Экономисты собирательно называют это качеством человеческого капитала.

Вот пару любопытных примеров. Надо понимать, что таких примеров множество. Возьмем, к примеру, проблему нахождения устойчивых пар в условиях информационной асимметрии. Представим женщину которой предстоит произвести невозвратную инвестицию в отношении с каким-то мужчиной, скажем, что она ищет себе отличного мужа. Во время одного свидания невозможно сказать насколько мужчина будет хорошим мужем. Но поскольку важны лишь относительные, а не абсолютные качества мужчины женщины сортируют мужчин по определенному критерию. Что же это за критерий?

Известно, что в период полиомиелита охота на больших зверей была выбрана мужчинами как способ показать женщине что он (1) обладает нужными качествами для того, чтобы преуспеть в данной культурной среде (быть охотником) и что он (2) ценит определенную женщину. Доход женщин был примерно постоянен, мужчина же охотой на больших животных временами имел в своем распоряжении очень крупный кусок мяса, который отдавал женщине, которая ему нравится. Добыть кусок мяса для мужчины было чрезвычайно сложно, и другого у него не будет таким образом кусок мяса содержал информацию насколько мужчина ценит женщина и насколько он хороший охотник. (вот подробнее об этом)

Более современный пример — это когда нам нужно выбрать умных студентов и отправить их в университеты, но мы не можем просто спросить у студентов кто из них умный, потому что каждый из них имеет стимул соврать чтобы поступить в лучший университет. Чтобы выявить кто из студентов более способный мы заставляем их сдавать экзамены, которые являются прокси для навыка студента или для его желания инвестировать в образование.

Самый вырожденный примеры, когда мы используем прокси для сортировки людей это когда мы стоим в очереди. Очередь — это настолько простая и обыденная вещь что мы даже не думаем о том, что в действительности это является одним из механизмов который позволяет нам лучше координироваться.

Другой излюбленный пример современности это рыночная система. Рыночная система позволяет существовать ценовому сигналу, который содержит в себе очень полезную информацию и позволяет координироваться большому количеству людей. Зачастую люди находясь в разных странах способны координироваться для того чтоб сделать, скажем, самолеты. Ценовой сигнал также информируют нас о том, что какой-то специалист является хорошем или же стимулирует нас покупать недвижимость в более дешевых районах.

Любопытно, что люди обладают гибкостью в плане смены культуры и они очень эффективно адаптируются, для того чтобы включаться “в игру”. Таким образом, если взять самого традиционного русского и отправить в Америку, (но только не в неё русскоговорящую часть) ты он поведенчески превратится в американца. Хорошо известно, что для продвижение общественных фикций используется ритуалы. Такие ритуалы как военные парады, памятники богам, или любым другим персонажем существует для того, чтобы человек мог удостовериться что другой человек, с которым он должен взаимодействовать содержит в своей голове ту же фикцию что и у него. Любопытный пример такого ритуала — это видео Навального где он пытается убедить одного потенциального протестующего в том, что другой протестующий тоже будет протестовать. (про ритуалы и их роли)

Последняя любопытная особенность фикций. Зачастую фикции делают так что одни члены общество живут гораздо лучше в чём её другие члены. То есть люди, которые выигрывают от этой фикции и имеют очень сильный стимул эту фикцию поддерживать. Сегодня хорошо понято, что именно нежелание людей, которые проигрывают от изменений менять что-то является первопричиной тому что мы имеем бедные страны. Латинская Америка, Индия, Африка и, конечно, же Россия бедны лишь потому, что их граждане верят в глупости, и они никак не могут поверить во что-то еще, потому что существуют люди с ресурсами и с интересом которые делают всё чтобы это не менялось. Любопытно, что они могут делать это искренне даже не считая себя плохими людьми. Им просто более понятный их личные проблемы чём проблема кого-то еще кого они не видели и не знают.

Мне как гражданину России непонятно зачем Путину нужно придумывать какие-то чудеса про 9 Мая и Великую победу, когда самая распространённая фикция во всех развитых странах это борьба с коррупцией и за равноправие. Это простая не противоречивая идея, которая сплочает нации со времен французской революции. С моей точки зрения, тот факт, что вместо того, чтобы объединить всех вокруг этой простой чёрно-белый идеи, он выбирает что-то другое самое убедительное доказательство тому что он такой же подлец и вор как и всё его окружение, которое волей случая добралось до “корыта”. Он и его окружение никогда самовольно не уйдут из власти, к сожалению, наша работа состоит в том, чтобы выгнать его. Это тяжёлый труд, но другого пути нет.

Решил добавить еще этот график к дополнению к тем двум. Квартальный ВВП систематические собирают с 1947. На этом графике логарифм годового американский ВВП на душу.

About maths in economics…. hmm

Von Neumann: “As a mathematical discipline travels far from its empirical source, or still more, if it is a second or third generation only indirectly inspired by ideas coming from “reality”, it is beset with very grave dangers. It becomes more and more purely aestheticizing, more and more purely l’art pour l’art. This need not be bad, if the field is surrounded by correlated subjects, which still have closer empirical connections, or if the discipline is under the influence of men with an exceptionally well-developed taste. But there is a grave danger that the subject will develop along the line of least resistance, that the stream, so far from its source, will separate into a multitude of insignificant branches, and that the discipline will become a disorganized mass of details and complexities. In other words, at a great distance from its empirical source, or after much “abstract” inbreeding, a mathematical subject is in danger of degeneration.”(source)

Marshal: “I had a growing feeling in the later years of my work at the subject that a good mathematical theorem dealing with economic hypotheses was very unlikely to be good economics: and I went more and more on the rules — (1) Use mathematics as a shorthand language, rather than an engine of inquiry. (2) Keep to them until you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life. (5) Burn the mathematics. (6) If you can’t succeed in 4, burn 3. This last I did often.” (source)

Social dark matter

If you look at the ants you see that they are able to coordinate their actions. They navigate in the uncertainty by sharing some information amongst each other, and they do it by licking another ants’ acid (that’s kinda gross). Ants are able to share important information that can be used to coordinate their actions so that all of them become better off.

People don’t leak acid for this purpose most of the times. However, the most important exchange of information is still done by exchanging fluids. An exchange of genetic information.

But how do people are able to exchange information and coordinate their actions? They do this because of the ideas that they have in their minds. Crazy! You know that there is a table, you know that there is a glass of water. But ideas are not real, they don’t exist. Yet, they do exist and are real, but only for one species on earth.

Imagine that you are an alien that hovers above Earth and observes peoples’ actions. You would be amazed to see that somehow people manage to coordinate with each other. You’ll see someone at one part of the planet makes, idontknow, a windshield for an airplane that is assembled in another part of the planet.

But how is this possible? How is this happening that we people developed something that is real only for us and we use it to do much more than we would have done if we were alone?

The most amazing thing is that we don’t think explicitly that emotions inside us and the ideas that follow actually exist and emerged so we would be able to do more by to coming together.

Just like an and that is licking someone else’s acid doesn’t see the full picture he’s just taking one step at a time following a familiar taste.

Morals. Right. Wrong. Prices. God. Education. Marriage. Patriotism. Love. Anger. All of it a exist in us not for its own sake but for us to be able to become stronger by coordinating actions with each other.

So it means that there is an enormous collection of objects that are not actually real, don’t exist in a physical form, yet they are real for people.

In some sense ideas – from the point of view of an alien that hovers above Earth and doesn’t actually observe ideas but see the result of their existence indirectly –  is a dark matter.

This dark matter that nobody directly observes serve as the glue that keeps people together.

A good question is that who are scientists, especially social scientists, especially those who are able to actually say something meaningful. In the universe of ants, they are the ones that for some reason instead of following a familiar smell to make a step forward raise their heads and look around. In some sense, they stop being ants and they become aliens that hovers about above Earth. An advantage that they have over aliens is that they actually see what aliens can only guess exists.

Scientists create ideas and most of the scientific papers don’t do anything good; don’t build bridges, don’t treat patients, don’t grow vegetables. They just collect, create and structure ideas. And this is where an alien that hovers above Earth is the most confused.

Why would someone like an idea of a fixed point in a multidimensional space, or Nash equilibrium or a measure theory? Very little will be ever used to make a physical world any better.

Why is there so many ideas and people care about them? What does it take to come up with an idea that is useless but so beautiful that people allow those freaks who came up with it to exist in a society and even prosper?

Some theories I guess are useful. It seems like people due to their computational limitations are unable to perceive the world in its true complexity. That’s why we need theories that degenerate reality, turns something very complicated into something much more simpler. In some sense, we need theories and they exist because we are unable to process the world as it is. We can focus on one force at a time, one concept at the time. In this sense, the reality is a million theories that happen at the same time but we fail to see it.

Personally, an explanation that makes sense to me is that due to evolution human brain became a very a complicated system. A probability of a glitch in the complicated system is much higher. Most talented scientists are indeed a little bit crazy.

That’s why scientific methods are so time-consuming to learn. We never evolved to use our brains for this. We great at gossiping and calling people “bad” and stuff.

I like this post on it.

Math is the extension of common sense

What makes math? Isn’t it just common sense?

Yes. Mathematics is common sense. On some basic level, this is clear. How can you explain to someone why adding seven things to five things yields the same result as adding five things to seven? You can’t: that fact is baked into our way of thinking about combining things together. Mathematicians like to give names to the phenomena our common sense describes: instead of saying, “This thing added to that thing is the same thing as that thing added to this thing,” we say, “Addition is commutative.” Or, because we like our symbols, we write:

For any choice of a and b, a + b = b + a.

Despite the official-looking formula, we are talking about a fact instinctively understood by every child.

Multiplication is a slightly different story. The formula looks pretty similar:

For any choice of a and b, a × b = b × a.

The mind, presented with this statement, does not say “no duh” quite as instantly as it does for addition. Is it “common sense” that two sets of six things amount to the same as six sets of two?

Maybe not; but it can become common sense. Eight groups of six were the same as six groups of eight. Not because it is a rule I’d been told, but because it could not be any other way.

We tend to teach mathematics as a long list of rules. You learn them in order and you have to obey them, because if you don’t obey them you get a C-. This is not mathematics. Mathematics is the study of things that come out a certain way because there is no other way they could possibly be.

Now let’s be fair: not everything in mathematics can be made as perfectly transparent to our intuition as addition and multiplication. You can’t do calculus by common sense. But calculus is still derived from our common sense—Newton took our physical intuition about objects moving in straight lines, formalized it, and then built on top of that formal structure a universal mathematical description of motion. Once you have Newton’s theory in hand, you can apply it to problems that would make your head spin if you had no equations to help you. In the same way, we have built-in mental systems for assessing the likelihood of an uncertain outcome. But those systems are pretty weak and unreliable, especially when it comes to events of extreme rarity. That’s when we shore up our intuition with a few sturdy, well-placed theorems and techniques, and make out of it a mathematical theory of probability.

The specialized language in which mathematicians converse with each other is a magnificent tool for conveying complex ideas precisely and swiftly. But its foreignness can create among outsiders the impression of a sphere of thought totally alien to ordinary thinking. That’s exactly wrong.

Math is like an atomic-powered prosthesis that you attach to your common sense, vastly multiplying its reach and strength. Despite the power of mathematics, and despite its sometimes forbidding notation and abstraction, the actual mental work involved is little different from the way we think about more down-to-earth problems. I find it helpful to keep in mind an image of Iron Man punching a hole through a brick wall. On the one hand, the actual wall-breaking force is being supplied, not by Tony Stark’s muscles, but by a series of exquisitely synchronized servomechanisms powered by a compact beta particle generator. On the other hand, from Tony Stark’s point of view, what he is doing is punching a wall, exactly as he would without the armor. Only much, much harder.

To paraphrase Clausewitz: Mathematics is the extension of common sense by other means.

Without the rigorous structure that math provides, common sense can lead you astray. That’s what happened to the officers who wanted to armor the parts of the planes that were already strong enough. But formal mathematics without common sense—without the constant interplay between abstract reasoning and our intuitions about quantity, time, space, motion, behavior, and uncertainty—would just be a sterile exercise in rule-following and bookkeeping. In other words, math would actually be what the peevish calculus student believes it to be.

A citation from Ellenberg’s “How Not To Be Wrong…” book. Kinda liked it.

A conjecture on mating

What is dating and why do we even need it? Here is mine theory. I have not cross-referenced it with existing sciency literature, thus, it could lack originality or could be just nuts (it’s really just some random thoughts). The theory naturally follows from several observations, so I start with those. Medical science has a good understanding of how a perfect, textbook, human body looks like. In reality, a perfect body does not exist. It is just an idea that is useful to understand what is right and what is wrong with a patient. A deviation from this conceptual body can help in classification. Noteworthy is that there has been a considerable change in classifying deviation into the right and wrong. Many diseases that were classified before as a subject for a treatment, today let roll on their own.

Nature never creates perfect bodies, because it is not sure how a perfect body looks like. The process of a human creation by nature can be understood as following. Design a perfect, textbook, body and then introduce disturbances into some system of the body. The disturbances are known as mutations, and the whole process is known as evolution. Put differently, nature randomizes human bodies and then the environment trims the randomization that was not useful. It is conceptually indistinguishable from how a programmer develops a code of a program. There is a core functionality and over time the programmer introduces features and see if they make the program better. The key difference is that the programmer controls the “trimming” process. He’d know very well which feature came through testing and which require further testing because they are promising, but initial tests were not very successful. Well here is an amazingly awesome news. There is a conceptual analog of a programmer. A woman. Natur is agnostic about which features became successful and which were not. Let’s start with counterposition. If there were no women then the progress of medical science (with its moto “no pain is great”) generates this:

Ok, that might be obvious. So, having woman improves the sorting process and trims unsuccessful mutations. But how exactly? This is the best bit. The process of a woman picking a man has exactly the same characteristics as a patient picking a doctor and a firm picking a worker. When you come to see a doctor you would like him to know medical stuff more than you do. When you come to see a surgeon you would like him to make right choices during surgery when you are asleep and unavailable for consultation. The problem is that when you see a doctor you see a head, two legs, and two arms. These observables are not very useful to infer the unobserved characteristics of a person that actually matter for you. That is why you use potentially useless and silly observables as proxies for unobservables that matter.

Let me start with “a flip of a coin in the vacuum”. Imagine all people have perfect, text-book bodies, they are exactly the same. Then people can form a group to archive the economy of scale (to hunt elephants or to produce iphones or to make healthy fat well-nourished kids) with anyone. Then one does not need friends, family or anyone really. There is no need to designate anyone as special. If you feel like having a beer or sex you just talk to the next person next to you ask if he/she don’t mind and just do it. The same happens with kids, you have kids and if you need anyone to babysit you just give a kid to a next person on the street. One does not even have to go home in the same place every night. Just crush to the closest bed. This is a benchmark.

Now imagine nature intentionally introduce noise to every person. Sort of introducing random features and then the environment needs to test the feature by killing the versions that are no good. Now people are different and they possess characteristics that could be useful in the current environment or could be useless. Now it matters who is in your group. To form groups quickly our brain can classify people into a bad person (immoral people) and good person (moral person). There are even the whole institutions that people created to facilitate the sorting, reputation and even… church. The church is kinda like education, it helps to send signals about types. A religious person is an unconditional contributor (speaking a language of public goods provision game). Religious people are usually intense, so for them, it is a computational shortcut (it requires extra commentary, don’t worry about it at this point. In short, usually, people spend tons of time to sort people into bad and good and to come out as good. That’s what peoples’ brain is hardwired to do. Some of us decide not to spend too much time strategizing, but simply contribute all the time (hard working people, like productive scientists), but they expect others to contribute when it is crucial for them).

A family is a special case of a group. A man possesses some properties that are unobserved, thus a woman chooses observable as a proxy. Good physiqueis good, but it is not a sufficient indicator for skills. Money is better. Both already serve as a better proxy, they convey more information. Those observable are more likely to indicate strong providing properties of a person. A woman also wants a man to be responsive to incentives, thus, non-cognitive skill also matter. A woman wants someone who has good social skills. This approach refines the sorting process and makes it very intelligent; you could be narcoleptic, so you probably will lose a fight with a crocodile and won’t survive in a forest a day, but you still do fine as a scientist. In this manner, a narcoleptic gene still persists in the population even though it manifests in a really really weird behavior of passing out randomly during the day. It is not designated for trimming, the opposite it designated as a potential feature that might over year constitute a “perfect” text-book body.

It could be shown that if the world consisted of identical people a woman would interact with whoever is closer, thus it could be stated that the total amount of time a woman interacts with a man (in aggregate) is:

S=M \times T

S is given, it could be that interaction is needed due to a physical property of environment (a group is necessary because there are many dinosaurs or food is scarce, thus several people need to search for it to get a healthy fat kid). For the reasoning at hand is it given. M is a number of men in the social fragment. If all men are the same then a woman is indifferent, thus all stock of man is used because time per a man (T) is high. If the environment is too risky, woman are too cautious and they socialize with less and less per man, thus for given stock of men and in a given environment more and more men are designated for being trimmed.

I think that this conjecture naturally follows the idea that is advocated by any famous social scientists that ever existed (e.g. Hayek, Friedman). People have evolutionarily developed to construct social structures and they do work with fantastic efficiency. States, markets, mating all of these examples of social structures existed way before scientists had any say in it. People should interfere as less with those as possible, any interferences have to be very gentle. A woman has to be free in her choices because if she is not, then tons of terrible men are not trimmed.

Some interesting manifestations of it: ban on divorce produces massive suicide rates and violenceban on abortions produces massive criminalization

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Game theory is ridiculous

Game theory is ridiculous. The first acquaintance with main “solution concepts” usually produces a question “wtf?!” in a man with a good common sense.

Good economics approximates essentials with assumptions to overcome limitations of verbal reasoning. Assumptions in game theory mostly exist to confuse readers without really saying anything that matters.

I believe those are not assumptions but conventions and the only question that a man with a good common sense should be trying to ask is “why so many individually silly things when come together say so many astonishingly amazing stories?!”