i highly recommend the following 3 books:

1. judgement under uncertainty : heuristics and biases (eds. kahnemann et al)

2. fooled by randomness (nassim nicholas taleb)

3. the black swan (nassim nicholas taleb)

i am taking time off to do a review of the field for the magazine and i will post it as soon as i am done. meanwhile, i feel this is a good introduction to cognitive biases and their applicability to economics/finance/life.

now i need to look at myself and wash clean of superstition.


If reading a blog is ever interesting to you, it is when your favorite blogger honestly writes something embarassing for him or her. People tend to hide things that they think are embarassing. But such information tends to be interesting (or even either useful or encouraging) to other people because you don't hear it often.

-masayuki kudamatsu, lse phd student

I have never been a person to follow the 'blogosphere', not in the sense where I have a list of favourite blogs and journals which I follow on a regular basis. I do look at the blogs of my friends, but perhaps when something comes to mind that reminds me of them or i find someone who consistently writes things in an interesting way which is more or less amenable to how i think.

i'm sitting in the lse library now. i could have been out teaching at a secondary school, or back home after packing bags. in any case, here i am in the library, taking a break after looking again and again at my applications. i always experience moments of self-doubt after periods of stress, and here i feel doubt on two levels:

(i.) myself? am i really good enough, especially when you read the stories, or you gather facts about everyone else who is intending to do the same thing you're doing
(ii.) about the choice. if i do do research, is it really something worth doing, or pure self-indulgence?

you could have 2 answers to the questions. one is not to answer the question. self-doubt? it is there to be overcome? self-indulgence? why take yourself so seriously? why believe your actions make a difference in the grand scheme of things anyway, and doesn't self-indulgence guide us all?

it is also possible to be harsh on yourself, and force yourself to answer these questions. after all, we have at the lse economics society managed to invite nicholas taleb, who wrote about black swans and being fooled by randomness, to give a talk. one of his main points is that we attribute too much to directed research and discovery, when the most important things which have changed the world have been achieved through trial and error by doers and failures.

but that's a more difficult question, and it also involves things i don't know the answer to, because i lack experience. anyway, my break at the library involved looking through blogs of how people at lse managed. vinayak was one of the teachers at the LSE (i wasn't under him but i attended his revision classes), teaching econ 102 while an masters student at the LSE... funny, personable, and puts in a fair amount of passion into his teaching. he did his undergraduate degree in india, which as he admits isn't rigorous enough. he was younger than me at the point when he was teaching and taking his masters, due to the fact that i've given 2 years of my life to the nation (and however more they may want and i am prepared to give). it shouldn't be a zero sum game, i did take something, but you can't do calculations for these sorts of things. i digress. maybe i should just buy into ayn rand, read "atlas shrugged" cover to cover and dispense with the social guilt.

but yeah he has passion to burn, effort, dedication, and he's thought of being everything from a stand-up comedian (although probably with jokes a bit too geeky) to a fixed income trader what is economics? no, economics is not about choice. economics is the course you take to signal you are quick enough mathematically and grasp some of the concepts needed to be a fixed income trader. just ask the students graduating this year. philosophically it justifies being in finance, after all, efficient markets mean everyone putting in effort trying to beat the market, thus wonderfully using human computing power to endogenously determine the dollar-euro or dollar pound or what the valuation of a company should be, so that nobody in the UNITED STATES bureau of economic planning (which doesn't exist, by the way) has to do a vast matrix setting exogenously all the above information. so for everyone who thinks financiers or people who work in finance don't produce anything, they produce information! don't dish them, they are deservedly well-paid computers with a large ego and computers which also happen to have a keen sense for human psychology. the computers who win are paid more, so incentives are beautifully aligned (except for the herd mentality bit, which, if we could have computers that didn't have incentives to follow the crowd would be perfect, but then such computers would know nothing about the world at all). no, don't get me wrong, i am not trying to divisive, just getting an image out of my head.

but anyway, he's decided a phd is not for him (he did apply, but too lonely professionally, and sick of student penury), and he's off to do an ODI fellowship in Guyana (ODI is where economists go to do fellowships in developing countries, to work on their institutions). well, he's off doing something now, though chicago economists will contend that guyana doesn't need institutions and government (don't worry, just taking the piss out of them). but chicago economists have a point, government in developing countries tends to be corrupt so having more institutions is not necessarily better, it's the quality.

every year deserving people like him get turned down from schools anyway. no stress. and then matsuyuki kudamatsu (phd, lse) encapsulates what it feels like to be a wastrel spending your parent's money and doing nothing productive for the human economy. he also blogs about loneliness especially when tomoko leaves london (oh, how tragic!)
so don't say it's not risky/stressful, i think it is every much as risky.

you may question what it's like to come into class everyday, being enthusiastic, but in the end, teaching a useless subject to a bunch of students who are only using it as a stepping stone for bigger and better things, and you are learning the intellectual masturbations of professors who studied measure theory and topology and needed to use it somewhere (very beautiful though, i must say). well, if i had time, i would write how not all of it is just masturbation and that macro nowdays is not is/lm and dumb graphs but dynamic optimization and learning econs at undergrad is doing like doing chemistry in secondary school. you have to throw it away. a textbook takes 30 years to write, and every subheading was the fruit of a few years' labour. whatever, if you think it is useless.

because i used to think we all could lead singapore, abolish slavery, if you were just to break out of your shell and know the right people... i agree... you could work at making yourself a good person. basics include having a work ethic, some humility, some personability, some sense of responsibility and you would be a good basic person. if you learnt leadership you would give back to society and shape it as you saw fit. i think many people imbued with values aspire to them, though not all achieve it. i wish i were more with people like me (with the same interests and passions, and maybe it would have increased them), but then again, i am also guilty of not really mixing around with the widest variety of people. but i am trying to, and even in this field you do have to talk and get to know people. if i had a bit more arrogance (you'd call it confidence) i would be a banker, but i don't, and it was never an overwhelming dream i had since i was young. just look at the books i read when i was young.

of course, you can't always be young, and maybe that is my failing. but i've tried working in an office earning money for other people and myself and money is nice, but i'll be honest, i'm not poor or hungry or look forward to buying that next car. i look forward to telling stories.

i think there's a tendency for all of us rational, secular people to see waste in society, and we'd like everyone to be productive and create better living standards. i would wonder why people become priests. i still respect priests, even though i don't like religion, because i know people are left behind. rich people want to feel better about themselves, poor people want to know things will get better. the priest isn't going to make these things better, but instrumentally, at that sermon or that congregation, people are with other people they are hopefully comfortable with, and that speech may make someone's Sunday, and get him through to Monday-Friday. of course you can hardly claim that economics is 'soulful' like that, but i've always seen that part of it which is the science of society, and stepping back to see how we all act. i've seen it as storytelling, you call it research, but just walk into one of vinayak's classes and see if your day isn't made. and that is what i call giving a damn.

and that is why i am in the library.



why do they save all the awesome papers for MRes courses. I'm doing development economics and it seems like a tedious chore of doing empirics on different data sets (and it is!), but I'm doing research for my research outline right now and it seems like the frontier stuff is really pretty neat and interesting.


What Kids in Britain Are Being Taught

There's this insane series called KNTV, which is something like a kids show exploring the lives of 10 great philosophers. The characters are like beavis and butthead, and they have a rock band. pretty cool stuff.

So Einstein, Newton, Darwin... all good stuff... until they come to Nietzsche.

And then they have montages of people blowing themselves up, teaching kids what Nietzsche said about religion, and having a character act like an emo punk rocker representing Nietzsche. They ended the show with a really cheesy rock song with lyrics like "Superman, Superman, Nietzsche's big idea was the Superman". They also took the mickey out of Nietzsche by mentioning that ultimately "he was no superman, just a sorry bloke with no mates who couldn't get any" They also talked about Wagner, and telling kids about not following herd (slave) morality. All very subversive. Apparently, there is a Marx song too.