What we’re reading (9/10)
“Simple Models Predict Behavior At Least As Well As Behavioral Scientists” (Dillon Bowen, Wharton). “How accurately can behavioral scientists predict behavior? To answer this question, we analyzed data from five studies in which 640 professional behavioral scientists predicted the results of one or more behavioral science experiments. We compared the behavioral scientists’ predictions to random chance, linear models, and simple heuristics like “behavioral interventions have no effect” and “all published psychology research is false.” We find that behavioral scientists are consistently no better than - and often worse than - these simple heuristics and models. Behavioral scientists’ predictions are not only noisy but also biased. They systematically overestimate how well behavioral science “works”: overestimating the effectiveness of behavioral interventions, the impact of psychological phenomena like time discounting, and the replicability of published psychology research[.]”
“Outlook for Tech Stocks Darkens After Rocky Stretch” (Wall Street Journal). “Investors are bailing out of technology-focused mutual and exchange-traded funds at the fastest clip since early February, when the tech selloff was first intensifying, according to data from Refinitiv Lipper. They yanked about $2.4 billion from such funds in the three weeks ended Wednesday.”
“Anyone Who Thinks We’re Not In A Recession Is ‘Crazy,’ Says RH CEO” (CNN Business). “Gary Friedman, the CEO of luxury home goods retailer RH, is often a colorful speaker who doesn't mince words. That was on full display during the company's earnings call Thursday night as he bemoaned New York City breakfasts, dunked on industry rivals and declared that anyone who thinks the United States isn't in a recession is ‘crazy.’ […] ‘I think the Fed finally really understands what they have to do. And it's not going to be pretty when interest rates go up the way they are,’ Friedman said.”
“Massive Rail Strike Next Week Could Deal Another Blow To America’s Economy” (CNN Business). “Freight railroads have been around since the 19th century, but you can't run a 21st century economy without them. The looming possibility of a strike by unions representing more than 90,000 workers at the nation's freight railroads has businesses nationwide worried. The unions are poised to go on strike on September 16, a move that could bring nearly 30% of the nation's freight to a grinding halt, according to data from the Bureau of Transportation Statistics.”
“The Obscure Economist Silicon Valley Billionaires Should Dump Ayn Rand For” (Vanity Fair). “[Henry] George’s masterwork, published in 1879, was Progress and Poverty, which set forth to explain how ‘increase of want’ could go hand in hand with ‘increase of wealth.’ Thus George took on precisely the question we face today: not the general question of poverty or inequity, but why specifically are middle-class incomes stagnating, and incomes of people at the bottom falling, while those at the top continue to rise?”
