Archive for May, 2007

Moral compass in the invisble hand

Wednesday, May 9th, 2007

I love this line from the Financial Time’s blog.

With staggering faith in the moral compass of market forces, the Economist sanguinely concludes…”

People to seem to become sympathetic to certain issues only when they show up in their living room.

Risk v.s. Benefit

Wednesday, May 9th, 2007

The “Ben Franklin” is a decision making device who’s legitimacy rests on Ben’s fame and the authority of arithmetic.  You make two columns and in the first you enumerate the reasons for proceeding and in the other you enumerate the costs.  Finally you, presumably, sum up the two columns and make your decision.  This is all well and good until you discover that the same technique is prescribed as a good closing device for the saleman.

The advice to the closer is to pull out a sheet of paper; draw two columns and then fill in one column with all the reasons to buy the product.  You then hand the paper to your customer and invite him to fill in the second column.  The nominal reason why this approach works is that you, the salesman, will be well prepared for this pop quiz while the buyer won’t.  There is a secondary rational based on availablity; i.e. when you hand over the list your list of positive reasons will be close by while the objections won’t be.
I was reminded of this yesterday after reading a few papers upstream from a paper that Bruce Schneier pointed out.  The paper he pointed out The myth of the Superuser is an interesting and provocative paper; but I enjoyed more the work it rests upon, i.e. a body of work that attempt to dig into the puzzle of how people think about risk.  There are lots of amusing facts in that body of work; as well as a tremendous amount of posing.  Each paper is just like being handed the Ben Franklin by a salesman.
One of the fact’s I’d not noticed before says there is some experimental evidence that people are not able to treat the two columns as independent.  As you learn of benefits you tend to discount the risks and visa versa as you learn of risks you tend to discount the benefits.  Oh dear, the landscape we make decisions upon is ill-formed.  It is easier to push choices in some directions versus others.  If you try to push a decision, say to clarify it’s benefits, you running against the natural grain of the choice making surface.  You will have an easier time if at the same time you make a counter vailing points clarifying the risk.  If we visualize the choices as sitting on a x-y plane of risk v.s. benefit it is hard to move the discussion along the 45% line; and easy to move the perpendicular to that line.

our marbles roll naturally to into the gutters on one or another axis.   The Ben Franklin forces the decision onto this two dimensional plane.   That’s why it makes a great closing device.  We are good at making decisions and good at getting comfortable with them.  Time spent in the middle of that plain is a pain; and it’s more painful in it’s higher regions.  Specialists (technocrats, scientists, the thoughtful) who are skilled at surviving in the inner regions and high altitudes of this landscape are a pain in the neck for other people.
People, the literature reports, have a difficult time holding in their head options that are both high-risk and high-benefit.  Scenarios that feature that combination tend to be converted by the mind into something else.  Going into the war in Iraq is reasonable example.  The desired benefit was high and the risk was high.  The inability of individuals (and I presume it the same for groups) to hold in their head that extreme combination rapidly leads to polarized views of the situation.

Loyality Oath

Tuesday, May 8th, 2007

The HR department is administering the loyalty oath.  This is annual event.  We are requested to testify, via a form, to all our professional affiliations.  To a degree I am, of course, joking.  This invasion of our personal privacy is motivated by three concerns: concerns about possible conflict of interest (i.e. that the best interests of the employer might not be #1), concern that we might be not do what we are paid to do but rather work on some outside project, and finally that we might leverage the employer’s good name to the outsider’s benefit.  I gleaned that list from the sections of the policy manual the form points to.

Social networks are a particularly interesting test case for looking at issues of the multihoming since of course they are where you make you home.  I have account memberships in about a half dozen different social networking sites; but I don’t actually participate in any of them.  Though that all depends on your definition of social networking site.  If your more generous in your definition, including say all the on-line forums and mailing lists that include a social (v.s. purely on-topic) component then the number of sites I have accounts at explodes.  A quick review of my password wallet suggests the number gets up toward a hundred; the phrase ‘a gross’ seems useful at this point.  An then some percentage of the blogs I read have a social (or community) subtext.

Some of these places are quite social.  The shaving and diet forums for example. The Oil Drum and Crooked Timber are two nice examples of blogs that sustain a community around them.  Others are semi-social; the one for my PDA for example.  It’s worth noting in passing that the social can make it a bit tough to keep the sites useful for their nominal on-topic purpose.

Where you sit changes how you look at the question of multihoming and social networking sites.  If you have a large stake in one; owning LinkedIn for example but even if you have invested a lot of your social energy into a particular one your profession for example, then you are likely to be interested in ways of reducing the degree of multihoming.  There is certainly plenty of literature on how to execute on that.

Lots of people interested in knowledge flows have noticed that that individuals that cross between two social/professional networks often account for critical knowledge transfers.  So if your interested in encouraging that kind of thing then you might be interested in how to manage and enable increased multihoming.  I don’t think I’ve ever worked for employer who failed to consciously, though rarely conscientiously, encourage a modicum of that kind of thing.

Multiple social networks create some diversification, which in turn can be a buffer against various risks.  Two risks bear mentioning.  If a social network goes bad having other networks enables members to exit, but also it enable them to be critical and that critique can be key to fixing what going wrong.  Having multiple social networks also allows members to take risks, not just of criticism, but also to take risks that may do irredeemable damage to their reputation; such risks are much harder to take if there no other network to retreat into.

None of this helps to puzzle out the question of exactly how many of my ‘professional’ associations I should enumerate on this form.  I’m sorely tempted to enumerate the complete list of all the on-line forums I’m a member of to which I both feel some loyalty and have any overlap with my employer’s vast range of activities.  Just for fun.  Oh, but curiously I appear to be in a job category where they decided to wave the requirement.  Well golly, now my feelings are hurt - they don’t seem to care if I’m a two timing disloyal abuser of the brand!

Multihome

Tuesday, May 8th, 2007

Yeah, here’s an idea.  Why can’t I set my Firefox browser to distribute my search randomly across N selected search engines?  That would let me continually test which search engine is coughing up the best results with the least offensive ads.  It would erode the monopoly power of the search engines and increase competition.  Well, why not?

Two-sided networks tend to become highly condensed, in the exaggerated case this is called “winner take all.”  One driver toward condensation is the cost for players on either side to maintain relationships with two competing networks.  You could own multiple computers, and run multiple operating systems, but by and large you don’t.  You could use multiple search engines/portals, but by and large you don’t.  The cost of coordinating two homes tends to make it unusual.

The motivation for maintaining two or more homes seem to come down to competition; but in reducing them to that we lose something.  It helps to back out what the benefits of competition are.  I won’t go into that, but terms like choice, reducing provider pricing power, a modicum of self regulation, and innovation all come to mind.

Motivations for multihoming are, presumably, the a vein that can be mined to find counter vialing forces to the natural tendency of two-sided networks to condense.  You can then draw out those players who most strongly feel the benefit to create advocates for a less condensed market structure.

Intermediaries, middlemen again, seem like one way that can happen.  The irony here is that two-sided networks are, at their heart, about reducing the cost of search out or coordination work with the population on the other sided of the network.  I.e. they reduce the cost of multihoming; and enable interoperability.  This irony is one of the reasons that powerful hub owners tend to swallow the intermediaries adjacent to them - the adjacent intermediaries are a source of competitive threat; not because they compete but because they can enable other competitors.

When Google pays the Firefox folks for premiere slot in the UI they are, of course, working around the problem.