Recently I read Stephen Baker’s book The Numerati, all about “the mathematical modeling of humanity,” and Bob Garfield’s long ode to data mining in Ad Age, which strikes very similar themes about the power of algorithms.
More recently I listened to a 60 Minutes report about the recent troubles on Wall Street and beyond (via podcast). Here’s a bit taken from the news show’s online textual recap of that segment:
These complex financial instruments were actually designed by mathematicians and physicists, who used algorithms and computer models to reconstitute the unreliable loans in a way that was supposed to eliminate most of the risk.
“Obviously they turned out to be wrong,” Partnoy says. [Frank Partnoy, a former derivatives broker and corporate securities attorney, who now teaches law at the University of San Diego.]
Asked why, he says, “Because you can’t model human behavior with math.”
Hm.
What say you? Can human behavior be mathematically modeled, or not?
Not to come across like president of the Jason Zweig fan club or anything, but he has another very good column today, tying some recent research about feelings of lost control and pattern invention to some of the more conspiracy-minded responses to the current market/economic turmoil.
The research is summarized briefly in this Discovery.com article, and at more length in this recent Science Friday radio broadcast (I linked to both of these in the sidebar the other day; much earlier and unrelated Murketing post on the subject of pattern invention, or pareidolia, here). The upshot is that when people feel that they have no control over their circumstances, they are more likely to believe in false patterns and conspiracy theories and the like.
From Mr. Zweig’s column:
In a related experiment, investors who had been stripped of their sense of control by market volatility were convinced that they had read more negative evidence about a company than they had actually seen — and were less willing to buy the company’s stock.
In other words, when our sense of control is threatened, we feel the natural urge to pretend that whatever information we do have is more complete and reliable than it is. Imagining that we know what’s coming next (even if we think it will be bad) gives us a slight feeling of comfort.
Posted Under:
Consumer Behavior by Rob Walker on October 7, 2008
Comments Off on Out-of-control pattern invention
It occurs to me that I have an easy rejoinder to those who continue to insist that the last ten years have shown a notable uptick in consumer savvy. That rejoinder is: “Premium denim.”
But maybe I’m wrong about that. Interested as I was to see this brief photo essay of a Kentucky denim factory that “specializes in distressing high-end jeans,” I was really interested in what the photographer said about his visit:
I used to scoff at paying a premium for jeans that come with holes in them already. Then I saw just how much work goes into distressing jeans, and I realized that these people are artists.
Hm. Well, I’m sure they do work very hard and have lots of skill and so on. But is the idea that seeing a lot of work go into something you thought was kind of pointless thereby redeems that thing? Would you find Crocs (or whatever it is you find absurd in consumer culture) more appealing if you knew they were really hard to make?
If this question interests you, don’t miss the spirited debate in the comments appended to the photo essay.
Via BB.
I just somewhat belatedly read this story about “design thinking,” which is described as focusing on “people’s actual needs rather than trying to persuade them to buy into what businesses are selling.” This, of course, is not a new idea, although it’s always useful, I guess, to find new ways for businesses to remind themselves about the difference between innovation and novelty.
That said, what struck me as odd about the piece was the main specific example offered.
Although a company called ServiceSource asked [consulting firm] C2 to create a written report for business analysts to read, C2’s design thinkers reframed the problem to focus on what ServiceSource was trying to tell the analysts in the first place. (ServiceSource wanted the analysts to recognize that its ability to renew service contracts on behalf of technology providers could increase those providers’ revenue.)
Wait a minute. That sounds to me like this business is “trying to persuade [customers] to buy into what [it is] selling.” Right? I don’t see anything here about ServiceSource changing its business model to better reflect customer needs it hadn’t been aware of or was under-serving. It sounds like they’ve got this service they’re peddling, and that’s that.
Rather than producing a report that would probably be tossed unread into the nearest wastebasket, C2 sent the analysts a “High-Tech C.F.O. Action Figure” — a roughly 12-inch-tall male doll dressed in a business suit that delivered a brief, recorded message when its “Talk” button was pushed. …
Months after ServiceSource’s report would have been thrown away, analysts who received the “action figures” still have them.
Huh? Is this the sort of sophisticated result of “design thinking”? An action figure that bleats a sales pitch? What’s good about that? Am I missing something?
Well, after last week’s posts here on optimism, and pessimism, and optimism vs. pessimism — it’s looking pretty grim out there! As I type, the Dow has fallen 600 points below the 10,000 mark. Other lousy economic news abounds, and the presidential race is disintegrating into bitterness and tomfoolery.
The NYT’s story on how consumers are faring is not exactly shocking: “Full of Doubts, U.S. Shoppers Cut Spending.” Looks like consumer spending for the third quarter will be down 3 percent, per projections, “the first quarterly decline in nearly two decades.”
“The last few days have devastated the American consumer,” said Walter Loeb, president of Loeb Associates, a consultancy, who said he worried that the constant drumbeat of negative news about the economy was becoming a self-fulfilling prophecy. “They all feel poor.”
No surprise, then, that the post here last week that got the most response was the pessimism one, which also happened to ask: “Is Main Street a bunch of spoiled overspending babies?” More specifically, I brought up some comments from a Sunday chat show in which some observers contended that one of the issues America is going to have to work through is that many Americans have been living well beyond their means for years, and in denial about it.
The comments were mixed, to say the least. However, I wanted to follow up in a general way to make a broad point that’s not aimed at any of those comments specifically. Please continue…
SUBCONSCIOUS WARM-UP
Wearing a jacket like the one Michael Phelps wore can’t make you a faster swimmer. Or can it?
This week in Consumed, a look at the possibility of, in effect, a subliminal placebo. Recent research suggests that non-conscious exposure to brands can influence not just purchase decisions — but actual behavior. That research focused on the Apple brand and creativity. And maybe it suggests that buying a Speedo jacket like the one Michael Phelps wore isn’t quite as useless a move as you might assume.
“The trick is, the first time you wore the warm-up parka,” it wouldn’t have any effect, one of the researchers says. “Because you’d realize, Oh I’m being ridiculous.” Wear it often enough, though, and you’ll probably stop ruminating about it. “Below the level of conscious awareness, you’d put the jacket on, and what’s activated in your mind is maybe Michael Phelps going very fast,” he continues. “And those things could actually kick up your motivation to go faster.”
Read the column in the October 5, 2008, issue of The New York Times Magazine, or here.
Consumed archive is here, and FAQ is here. The Times’ Consumed RSS feed is here. Consumed Facebook page is here.
To make a point about Consumed that you think readers of The Times Magazine would be interested in: “Letters should be addressed to Letters to the Editor, Magazine, The New York Times, 620 Eighth Avenue, 6th Floor, New York, N.Y. 10018. The e-mail address is magazine@nytimes.com. All letters should include the writer’s name, address and daytime telephone number. We are unable to acknowledge or return unpublished letters. Letters may be edited for length and clarity.”
I like reading other sites’ month-in-review posts, so I thought I’d try one, too.
Actually though … I’ll open with a question: If you have a site, what do you use to track your stats? I’m using a WordPress plug-in that I’m not that crazy about. I’ve never really cared about stats before, but if I’m going to do this, maybe I should use some service that’s more detailed and accurate. Recommendations welcome.
Okay so on we go:
* The most commented-on item of the month is this one, Pessimism (Or: Is Main Street a bunch of spoiled, overspending babies?). These are also the best comments of the month, I think, and I’m still mulling them over and hope to have more to day on this subject soon.
* The most “active” (most views, I guess) items were this Q&A with Harriete Estel Berman, and this post Bias, rhetoric, and cognitive dissonance. A different plug-in (ShareThis) indicates that the Berman Q&A is also the “most shared” item of the month.
* The item I thought would get more comments was this one on Expressions of musical fandom in the digital era.
* The item I thought would get the most attention and “sharing,” but didn’t, was this on 3M apparently biting an ad idea. Or at least, it didn’t get a lot of attention here. Consumerist did a post about the same thing a few days later that probably drew more traffic than this site gets in a month. (That’s not in any way a knock on Consumerist, which I am confident came to the topic through its own channels, not by reading Murketing.com. I’m just a little disappointed that their 9/15 post got a lot of traction and my 9/12 one got none — for instance, about a thousand Diggs for them vs. zero for me. Ah well!)
* My personal favorite posts that haven’t already been mentioned were this excellent Q&A with Little Friends of Printmaking, and this bit of Mad Men Musing: Changing Times.
The playlist for September is after the jump if you’re interested. Please continue…
Brandweek said recently (9/15/2008 issue, but I can’t find a link to the story) that Target is making Domo a centerpiece of its Halloween promotional efforts.
Erik Nakamura declares Domo is now dead, backs up his argument with pictures.
[Domo licensing was the subject of this July 22, 2007 Consumed.]
On a brief visit to Portland back in April, I had a chance to stop by a pretty cool show at the Museum of Contemporary Craft, titled “Framing: The Art of Jewelry.” Among the pieces that I found most interesting were some by Harriete Estel Berman, a jewelry maker based in California. So I was really pleasantly surprised when Berman coincidentally contacted me a few months later.
After learning a little more about the breadth of her work, which is consistently fascinating both in terms of her actual mastery of craft and materials, and in terms of its thematic exploration of consumer culture.
I immediately figured she’d be a great Q&A subject here, and after some delays that were entirely my fault, I got some questions together for her. Her answers did not disappoint. And here (after another delay that was again my fault) they are. Read on for Berman’s thoughts on advertising language, on where she gets the raw material that she converts into art, about consumer culture and identity, trying to imagine sexy furniture at Ethan Allen, and her take on the impact of Etsy/the DIY scene/the Internet on creators such as herself, so far.
[Plus: It happens that she also has work at a show that opened more recently at the Museum of Contemporary Craft, called Manuf®actured: The Conspicuous Transformation of Everyday Objects, which is up through January 4, 2009 and sounds pretty interesting.]
Q: We’ve been in touch for a while, and I’ve wanted to do this Q&A for a while, but part of what’s slowed me down is that you’ve done so much interesting work and I don’t know where to start. So I’m actually going to start at the end. What are you working on right now — and how does it fit into the general themes you’ve been exploring since (I think I have this right but correct me if not) about 1980.
A: Usually, I am working on several different pieces at the same time, all at different stages of progress. Generally, this is a necessity, as ideas often gestate for months to years or time is needed to collect the right tin cans for a specific idea.
Currently, I am in the middle of a series of work called, Bermaid, the California Collection. (Image above.) These three-dimensional fruit crate labels and bracelets are constructed from recycled tin cans providing layers of images and symbolism. The images and repurposing of post consumer material to construct the fruit crate labels and bracelets reflect upon California as both the archetypal consumer culture and a leader in the recycling movement and green design. Please continue…
Back in the 1990s I worked as an editor at various personal finance and business publications, and one of the very smartest people I ever crossed paths with was Jason Zweig. So I was very interested in his WSJ column today, not least because of this point countering those who might think we’re headed toward another Great Depression:
When you spend time studying the Crash of 1929 and the depression that followed, what stands out the most is the dearth of doomsayers. Even Roger Babson, the economist known to posterity as “the man who called the crash,” did no such thing; he forecast only a 15% to 20% drop, not the apocalypse that actually occurred. Depressions start not when lots of people are worried about them, as we have today, but when no one is worried about them, as in 1929.
Interesting! Also this:
Furthermore, U.S. nonfinancial companies have just under $1 trillion in cash on their books. Even though Wall Street is dead, innovation is not: In the months to come, clever new financial go-betweens will spring up and find a way to get that cash flowing again. It’s hard to see how a depression could get under way when so much capital is waiting in the wings.
As a counterpoint to the anonymous J, mentioned yesterday, there was an unbelievably gloomy roundtable on This Week Sunday, most interesting to me because in addition to the usual beatdowns to government and Wall Street, the participants went after Main Street consumers.
Here’s a link to the video, but I’ll give you the highlights, or lowlights (with selected bolding to underscore the most interesting stuff). The first 10 minutes or so is boilerplate hemming and hawing about the bailout and craven politicians and all that. Then about halfway through, Washington Post writer Steven Pearlstein said: Please continue…
I do not pretend to know whether the House should have voted down the bailout today. I do know I’m surprised. And, perhaps, a bit freaked out.
Also, I’m thinking about an absolutely fascinating conversation I had a few days ago, and about the nature of optimism.
The conversation was with a guy I’ll call J. Clearly a very smart guy, J is actually connected to the investing business. I met him on a day when the markets had been pretty nuts a week solid. I was curious what he made of it. The bailout idea had already been floated and the markets seemed to like it. I told him that I understood the basic concept but I didn’t get the details — notably how the government would value these exotic securities it was proposing to buy up. I thought maybe J would have some insight on this and certain other structural issues I find confusing.
Instead, he shrugged. He was almost supernaturally calm, particularly for somebody in his line of work. I wasn’t taking notes but here’s a paraphrase of what he had to say, as I remember it:
I don’t know the details either. Haven’t looked into it. But I’m sure it will be fine. I trust them to come up with the right solution. I trust that they are the right people to do it, and that they understand the details and will do the best things, and that everything will work out.
The truth is, I don’t even vote, because I trust other people to decide which politicians are the best ones to handle whatever problems might come up. And I’m sure that’s happened, and there’s nothing to worry about. Things will work out.
Needless to say, this wasn’t the answer I was expecting. And probably needless to say, this point of view is rather at odds with the way I tend to look at the world.
It gave me pause. Like I said, this guy seemed smart, and he seemed reasonable. I talked to him about a number topics, and he was certainly not an ignorant man, in fact he probably had more facts in his head than I do. (That’s why I’d introduced the topic in the first place.) And he wasn’t being provocative. He was calm, and matter of fact.
Honestly, it kind of made me wish I could see the world the way he does.
POLITICAL SPECTACLES
How Sarah Palin’s glasses fit into electoral aesthetics
Speaking of politics, Consumed this week — in anticipation of the vice presidential debate — is about Sara Palin’s specs: In addition to pondering what it is that’s made people buy Kazuo Kawasaki 704 frames just like the candidate’s, the column puts her apparent style-setting in the context of electoral aesthetics, past and present. Also: Kawasaki’s U.S. distributor suggests a more fashion-forward alternative for Joe Biden.
Read it in the September 28, 2008 issue of The New York Times Magazine, or here.
Consumed archive is here, and FAQ is here. The Times’ Consumed RSS feed is here. Consumed Facebook page is here.
To make a point about Consumed that you think readers of The Times Magazine would be interested in: “Letters should be addressed to Letters to the Editor, Magazine, The New York Times, 620 Eighth Avenue, 6th Floor, New York, N.Y. 10018. The e-mail address is magazine@nytimes.com. All letters should include the writer’s name, address and daytime telephone number. We are unable to acknowledge or return unpublished letters. Letters may be edited for length and clarity.”
"
. With 
.
.
Kim Fellner's book 
.
A 
