The Ethics of Financial Accounting

At first it seems obvious that manipulating performance measures is unethical: teachers teaching to the test, managers manipulating earnings upward to sell its shares at a high price, and so forth. But things are more subtle than they seem!

Serving Up Bebe: The Real Tiger Moms

The provocative ideas about discipline and child-rearing in Amy Chua's book, Battle Hymn of the Tiger Mother, have stimulated a smorgasbord of competitors, such as Pamela Druckerman's Bringing Up Bebe about virtues of French moms. But it's mothers from the ancient Greek tradition who beat them all.

Contagion of Social Confidence

In my last post I suggested that overconfidence might spread between CEOs, since CEOs tend to socialize with each other. My conclusion was a resounding "maybe."

Do Corporate Managers Make Each Other Overconfident?

Does overconfidence spread from CEO to CEO like the flu?

Are Overconfident Managers Better Innovators?

The same traits that made Steve Jobs a great CEO drove him to put his company, and his investors, at risk." Was his overall success because of, not despite, his colossal self-confidence?

Not To Be Antisocial, But...Why Don’t You Leave Me Alone? Part III

The friendship paradox is the finding that on average your friends have more friends than you have. I argued that this meant that they are highly gregarious people who issue lots of invitations—more than most of us would like to see. I now consider an objection, and a response: signaling.

Not to Be Antisocial, But ... Why Don’t You Leave Me Alone? Part II

In Part I, I discussed how the conviviality externality can cause people to issue too many social invitations, which on average makes people worse off. We'll now see that the problem of over-conviviality is exacerbated by the friendship paradox from the theory of social networks.

Not to Be Antisocial, But—Why Don’t You Leave Me Alone? Part I

Have you ever felt deluged by invitations, festivities, celebrations, get-togethers, gatherings, blasts, soirees, shindigs, and Super Bowl tail-gates, when all you wanted to do was spend a nice quiet evening with your dog and the Internet?

It’s mod, it groovy, it’s FAB! – Financial Access @ Birth

A big problem for the poor is lack of financial access. It's hard to borrow without collateral. And strangely, it's also hard for the poor to lend. A group of financial economists, entrepreneurs, and ethicists are proposing an innovative way to help the poor gain financial access---guarantee it from birth.

Cash for Clunkers: What Is Seen and What Is Not Seen

Politics is a battle for attention. This is why soundbites, slogans, and anecdotes are so powerful. Since our minds our limited, attention allows us to deal with the world effectively. Sometimes. In the realm of politics, the vagaries of attention often mislead us. For example, we do not mind hidden taxes nearly as much as transparent ones. Income tax withholding, by reducing the salience of taxes paid on April 15, may make higher levels of taxation tolerable to the public. And politicians like to direct attention to the stimulating effect of spending, as on "cash for clunkers", and away from the depressing effect of the taxes used to raise that cash.

The realm in which fantasy rules

To Dan Ariely, the invisible hand---the market force that gets people to help others, even when that is no part of their intention---is a pleasant fantasy. Unfortunately, Dan argues, the recent financial market crisis shows that the self-interest of financial managers led to cataclysm. Dan blames this on "our unblinking faith in the invisible hand," which, in Adam Smith’s version, "… does not exist." According to Dan, the real invisible hand is human irrationality, "pushing and prodding us along a path can lead to destruction." But how does irrationality cause market mirages, and political ones?  And instead of either blind faith in markets or blind faith in government, can we form a balanced critical assessment of each?

What’s in a name—the political psychology of ‘stimulus’

What unsung political genius labeled the $787 billion spending plan `economic stimulus'? With unemployment soaring, critics argue that it is ineffective, and not delivering on its promises. Some proponents, on the other hand, favor a second stimulus. Regardless of who's right on the economics, there's a fascinating puzzle about language and political attention. Why did even opponents adopt the `stimulus' terminology, and thereby ensure their own defeat?... when they could have called it the 'job vaporizer,' ‘prosperity Propofol,' ‘growth-retardant system,' ‘resource-flush scheme,' or ‘recovery off switch'?