Opaque fragile systems dominate.

“Out of the crooked timber of humanity no straight thing was ever made.”

All systems compete against each other for users.  I believe opaque fragile systems dominate transparent robust systems.  First I believe individuals choose shrouded systems which more tightly bounding their rationality.  Second I believe even when individuals know a system is fragile they believe they will not be victim to its fragility; the greater fools will be.

Firstly sophisticated consumers like price discrimination while myopic consumers are ignorant they are being discriminated against or unwilling to commit the time needed to exploit the system.  Information asymmetry is a feature of the system not a bug.

See “Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets” http://aida.wss.yale.edu/~shiller/behmacro/2003-11/gabaix-laibson.pdf for more detail.

Second sophisticated individuals, even when they perceive the system to be fragile, often subscribe to the the greater fool theory.  They feel they will win out over the greater fools, but they do not understand how tightly bound their rationality has become due to the layers upon layers of shrouding.  The myopics of course are largely ignorant of the risks.

This is a very pessimistic view that offers no solution to the problem of system fragility.  I think though most solutions to fragility only create larger equally fragile systems.

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Phone Data Plans: Why not offer rollover?

In my last post I argued that throttling a users bandwidth after they exceed a monthly usage cap is a reasonable way of providing customers with a service free of data overage changes while still limiting the amount of data consumers can download.

An alternative to throttling, that provides some protection from overage fees, is giving consumers data rollover. It would function identically to rollover minutes and for many provide smoothing required not to incur data overage charges.

Better yet though, add rollover to plans with throttling.  Throttling is protection from overage charges and rollover is protection against throttling.

If I was to create a set of plans with the general customer in mind I would market them based off the unthrottled bandwidth they provide and almost silently include unlimited throttled bandwidth. I would offer a rollover option that does not reset at the beginning of the year but cap the amount of data that can be accrued to 3x the plans data.

Phone Data Plans: Conditional throttling is fair.

Virgin Mobile jumped on the bandwagon. The fine print is clear; it is fair.

http://virginmobileusa.marketwire.com/easyir/ceom.do?easyirid=F4ABAEBA3A27ECD9&pagesec=vm_price

As long as the rules around when you trigger bandwidth throttling are clear and the trigger point is set at a reasonably farout location, 2.5GB is probably good for most, it is a great solution for most consumers. The average consumer gets the security of having month long access to data, with no risk of overage charges. The existence of conditional throttling allows the carrier to provide this “unlimited” access at a more reasonable rate.

For those who turn their phones into a wi-fy hotspots (I do it when I go to central park…) it was great while it lasted but as long as throttling is reset at the start of each month and only triggered when you go over a published cap it is hard cry foul.

Eyewitness Research

The September 2008 issue of Applied Cognitive Psychology is a special issue on eyewitness research. The Psychology and Crime News blog has this summary.

http://www.crimeandconsequences.com/2008/09/eyewitness_research.html

Federal Sentencing Data from US Sentencing Commission

Doug Berman posted the links to three new data sets that the US Sentencing Commission posted on its website this morning. His post has links to the September 2008 update of the U.S. Sentencing Commission Preliminary Post-Kimbrough/Gall Data Report; the FY2008 3rd Quarterly Sentencing Update; and Preliminary Crack Cocaine Retroactivity Data Report. Berman promises more on the new tables once he has a chance to “chew” on the data.

http://www.crimeandconsequences.com/2008/09/blog_scan_73.html

Software Spots Spin In Political Speeches

According to an article in NewScientist Tech, there is now software that can identify the amount of spin in a politician or candidate’s speech.  The article goes on to analyze the amount of spin in each of the candidates running for president.  Obama spins the most while McCain clinically depressed.

In another article about six months ago recall reading about new software to detect lies from phone calls.

Think of a new reality TV show which shows politicians being monitored while speaking.  I imagine it would be a strange mix of candid camera and the morning political talk shows.  The right producers could make it rather funny and at the same time inject a bit of wonkishness into the American population.