The Atlantic Monthly, December 2008



In this issue, Virginia Postrel reports on the rising discipline of “experimental economics.”  The experiments are similar to those to which psychologists routinely subject their undergraduate students.  A group of test subjects plays a game that is supposed to simulate a market phenomenon.  The experimenters then analyze the results.  (As it happens, I recently posted a link to a discussion of the theoretical limitations of this sort of attempt to translate one game into another.) 

The studies Postrel discusses deal with the origin and nature of speculative bubbles.  Even games in which players are given perfect information from the outset regularly generate bubbles.  Experience matters; repeat players generate smaller bubbles.  One point particularly arrested my attention.  When teams of players have gone through a trading game often enough that they no longer generate ruinous bubbles, experimenters sometimes rearrange the players into new teams.  These new teams, even though they are composed of experienced players, then proceed to behave just as wildly as the teams had at the beginning of the game.  Postrel quotes one of the founders of experimental economics, Caltech professor Charles Plott,  to the effect that the experience that matters is not at the level of the individual trader, but at the level of the organization through which that trader operates.  So the key thing about experience in particular and information in general may be how the organizational principles of a given group allow that information to be deployed.  

Disgraced stock analyst Henry Blodget gives a first person account of the way the organization of his former employer, Merrill Lynch, guided his deployment of information.

A few miscellaneous things elsewhere in the magazine.  Evidently there is such a thing as gourmet mozzarella cheese.   A database called ChessBase has changed the nature of elite chess by putting enormous numbers of games online in searchable form.  Barry Cunliffe’s Europe Between the Oceans takes an extremely lofty view of the history of the last several thousand years, for example proposing that “even the Roman Empire was just an interlude, and perhaps its main achievement was to institutionalize through its ports, roads, and market-centers Europe-wide networks of exchange that had been operating since the Middle Stone Age.”  The Twilight series of vampire novels prompts Caitlin Flanagan to proclaim that an adolescent girl “is a creature designed for reading in away no boy or man, or even grown woman, could ever be so exactly designed, because she is a creature whose most elemental psychological needs- to be undisturbed while she works out the big questions of her life, to be hidden from view while still in plain sight, to enter profoundly into the emotional lives of others- are met precisely by the act of reading.”  The pseudo-scientific language and grandiose gender-determinism of this passage sound to me very much like something you might find in a novel teenagers would love.  A reissue of Richard Yates’ Revolutionary Road, a 1961 novel about deeply unhappy suburban lives, includes the obligatory reference to Malvina Reynolds song “Little Boxes,” including Tom Lehrer’s opinion that “Little Boxes” was “the most sanctimonious song ever written.”  Annie J. Randall has written a book about Dusty Springfield, Dusty!  Queen of the Postmods.  P. J. O’Rourke goes to Disneyland to see the new “House of the Future.”  They won’t let him in, so he writes about how much he liked the original “House of the Future” with its cruciform ground plan (the windows on each extremity of the cross let in a lot of light) and how what’s he’s heard about the new one isn’t very good.

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