Does a run of wins make winning more likely ?

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A self-fulfilling fallacy?

Lady Luck is fickle, but many of us believe we can read her mood. A new study of one year’s worth of bets made via an online betting site shows that gamblers’ attempts to predict when their luck will turn has some unexpected consequences. A common error in judging probabilities is known as the Gambler’s Fallacy. This is the belief that independent chance events have an obligation to ‘even themselves out’ over the short term, so that a run of wins makes a loss more likely, and vice versa. An opposite error is the belief that a run of good luck predicts more good luck – when a basketball player succeeds in a number of successive shots, they are said to have a ‘Hot Hand’, meaning a better chance of succeeding with their next shot. While the hot hand might be possible in games of skill, it is a logical impossibility for truly chance events. Juimin Xu and Nigel Harvey from University College London, set out to study the role these fallacies might play in a highly relevant real-world setting: real bets made by people gambling online. ….[READ]

Can high-frequence trading be regulated?

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Michael Lewis on Exposing Wall Street’s Biggest High-Tech Swindle

Author Michael Lewis’ newest book, Flash Boys: A Wall Street Revolt, topped The New York Times bestseller list a week after release, and a screen version is rumored to be in the works with bigwig film producer Scott Rudin, whose long list of credits includes There Will Be Blood, The Girl with the Dragon Tattoo, and Lewis’ book about the Oakland A’s, Moneyball. Flash Boys explores the world of high-frequency trading, a scheme in which traders use ultra-fast network connections to sniff out the intentions of other, slower traders, thereby acting before others can respond. Critics of the practice–Lewis chief among them–argue that high-frequency trading creates something akin to insider trading: a predatory environment for less advantaged investors. WIRED spoke with Lewis at an event organized by Live Talks in downtown Los Angeles. WIRED: The central character in your book, Brad Katsuyama, calls today’s stock trading system “a Pandora’s box of ridiculousness.” What does he mean? ….[READ]

Do we prefer unusual and distinctive looks?

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That beard is only hot because it’s not cool

Every hipster knows that something is only cool before it becomes popular. There’s no point in liking a band once it hits the big time. That shirt is no good once it’s no longer ironic. And it’s certainly not enough to go clean shaven or grow a short beard — that’s much too mainstream. Recent years have seen a resurgence of moustaches, mutton chops and Fu Manchus. A style that really stands out sticks it to conformity. It turns out that when people buck the facial hair trend, they may end up making themselves more attractive. A new study published April 16 in Biology Letters shows that either clean-shaven or fully bearded looks become more attractive when they are rare in the population. The study suggests that humans may practice what’s called negative frequency-dependent selection — people rate rare looks as more attractive than they might otherwise. But when we try to figure out why, the interpretations can get pretty hairy. ….[READ]

Are stressed women more “prosocial” than men?

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Empathy and Stress – Women Are the Stronger Sex

I learned many of life’s great lessons while watching Audrey Hepburn movies with my grandmother. To this day, I cannot hear the word “empathy” without being reminded of the first time I heard that word in the movie Funny Face. Empathy is difficult to study, owing to its many dimensions and facets, but it is essential to human interaction. And new evidence suggests that women may be better at it than men. In the movie, Audrey Hepburn plays Jo, a shy bookkeeper who wants to spend her days studying the theories of empathicalism. When Fred Astaire (as Dick Avery) asks her about her philosophy, she explains: “Sympathy is to understand what someone feels; empathy is to project your imagination so that you can actually feel what the other person is feeling; you put yourself in the other person’s place.”Recently, researchers examined empathy in males and females under stressful conditions. When the men were stressed, they were less able to engage in socially appropriate and empathetic interactions with other people; men became more egocentric when stressed. Women, on the other hand, were more empathetic toward others when they themselves were under stress. ….[READ]

Monetary incentives for vaccinations

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Should at-risk patients be paid to receive interventions?

It is hard to think of a study that is more definitive, ostensibly valid, practical, or relevant to public health than that reported by Tim Weaver and colleagues in The Lancet. Their study addressed the global problem of how to reduce the spread of hepatitis B virus (HBV) by drug users,2 and in particular the practical problem of increasing full compliance with the recommended regimen of three HBV vaccinations spread over a 3 month period.3 In a cluster randomised trial done in the UK, the investigators showed that modest, contingent financial rewards significantly increased the likelihood of completion of all HBV vaccinations in this difficult to access and high-risk group. Provision of £30, delivered either in equal or graduated instalments in return for as-scheduled attendance for the three injections, raised the rate of full adherence from 9% (six of 67 participants) in the treatment-as-usual group to more than 45% in the contingency management groups (35 of 78 [45%] and 32 of 65 [49%] participants receiving fixed or escalating value rewards, respectively; odds ratios 12·1 [3·7—39·9] and 14·0 [4·2—46·2]). Larger financial incentives therefore might produce even greater adherence of patients and public health protection for the UK’s population. But is it ethical to use this reward mechanism, is it practical, and is it smart policy? ….[READ]

Tips for fighting bad financial habits

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Apps that might help nudge you into financial health

Willpowering up. The Web site StickK, co-founded by two Yale University professors, is designed for those times when willpower isn’t enough to achieve your goals. On the site, you might commit to repaying credit card debt, keeping track of your spending or saving money by bringing your lunch to work. To add motivation, you can put money on the line. If you fail, it goes to charity. For even more motivation, you can commit to having it sent to a political organization you hate. You also can choose a “referee” — say, a co-worker who knows your lunch habits — to make the final determination and keep you honest. Power play. What lowers energy use? Behavioral research shows appeals to citizenship and the environment and even promises of cost savings fall flat. Peer pressure, however, works. ….[READ]

We should try to avoid jumping to conclusions

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The Irrationality of Irrationality: The Paradox of Popular Psychology

In 1996, Lyle Brenner, Derek Koehler and Amos Tversky conducted a study involving students from San Jose State University and Stanford University. The researchers were interested in how people jump to conclusions based on limited information. Previous work by Tversky, Daniel Kahneman and other psychologists found that people are “radically insensitive to both the quantity and quality of information that gives rise to impressions and intuitions,” so the researchers knew, of course, that we humans don’t do a particularly good job of weighing the pros and cons. But to what degree? Just how bad are we at assessing all the facts? To find out, Brenner and his team exposed the students to legal scenarios. In one, a plaintiff named Mr. Thompson visits a drug store for a routine union visit. The store manager informs him that according to the union contract with the drug store, plaintiffs cannot speak with the union employees on the floor. After a brief deliberation, the manager calls the police and Mr. Thompson is handcuffed for trespassing. Later the charges were dropped, but Mr. Thompson is suing the store for false arrest. ….[READ]