The Softer Side of Science

From the Sci Fi Museum in Seattle:

That’s right, we’re just as scientific as Biology!

Scrabulous and Other Failures of the Coase Theorem

So, as many of you know, the Facebook application Scrabulous went down today for American and Canadian users. Due to legal action on the part of Hasbro, the rights-holder in the US, the Indian-based developers took down the site. A full write up can be found on the front page of the major news outlets (below the excellent stories about a SoCal earthquake that makes me glad to live in Michigan again and Ted Stevens finally getting indicted for being corrupt). Here’s the Times on the subject:

Scrabulous Barred to North American Users

NEW DELHI — The Calcutta-based brothers who developed the popular online game Scrabulous bowed to legal pressure Tuesday and barred North American users from playing the game on Facebook.
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Both Hasbro and Mattel introduced Facebook versions of Scrabble to compete with Scrabulous this year, but neither gaming giant has attracted the users or praise of Scrabulous. The Agarwalla brothers put the game on Facebook in 2007, and it quickly became a hit, attracting millions of registered users.

Hasbro on Tuesday seemed to thank Facebook for helping to get the application removed. “Hasbro is pleased that the developers have voluntarily removed their infringing Scrabulous application on Facebook, and we appreciate Facebook’s assistance in expediting this matter,” said Hasbro in a statement. “In deference to the fans, we waited in pursuing legal action until Electronic Arts had a legitimate alternative available,” Hasbro said, referring to its online games partner, and added that it invited fans to try out the “authentic” game.

Hasbro introduced its own Facebook version of Scrabble, called Scrabble Beta, earlier this month through Electronic Arts, which is based in Redwood City, Calif. The game has attracted about 15,000 daily users, and mixed reviews, including criticism from Facebook reviewers for its “pathetic” load up time.

The official Hasbro game was only sporadically working on Facebook on Tuesday. Several times when would-be players tried to log in, they were greeted with a frozen screen. Hasbro’s public relations person referred questions about the online game’s functionality to Electronic Arts. An Electronic Arts spokeswoman, Trudy Muller, said, “We’re working on some tech problems and Scrabble will be ready to play as soon as possible.”

I love the Times coverage of Scrabble Beta and its “pathetic” load time. I think there might be a bit of sympathy there… But to get to the title of this post, does anyone else see a serious failure in Coasian bargaining?

To quickly recap, the economist Coase argued in one of the most highly-cited papers ever that the assignment of property rights will not alter the outcome of a dispute as long as there is transation-cost free bargaining. His killer examples included the decision to build a fence to keep a herd of animals from grazing on a neighboring farm. If the fence is cheaper than the damage to the crops, it will not matter who is obligated to pay for the fence, it will get built anyway. If the farmer has the right to receive damages, the shepherd will instead build the fence. If the sheperd is not responsible for damages, then the farmer will build it. Similarly, if the fence is not cost-effective (“efficient”) then it will not get built either way. Ergo, the assignment of property rights alters distribution of resources but nothing else. This result is called the “Coase Theorem”.

Unfortunately, like many economics theorems, it rarely if ever obtains and should not be read as a description of reality. Instead the theorem highlights the importance of transaction costs, in line with Coase’s earlier groundbreaking work on the firm (where he argued that firms exist because there is a cost to using the market mechanism, i.e. a literal transcation cost, and thus if you had to make the same transaction over and over again it was cheaper to do it in a firm than on the market).

Ok, so back to Scrabulous. Why did Hasbro and Mattel not bargain with the creators of Scrabulous, using their property rights to exercise a claim on the profits from those programs, but letting the outcome stay the same (i.e. that I get to play Scrabble on Facebook with software that doesn’t stink). Better yet, why not hire the creators of Scrabulous and buy out their software? Either of these options seem more efficient than shutting the program down and losing the massive userbase Scrabulous has accumulated. Were the creators trying to hold out for too good a deal? Or, more likely, did Hasbro and Mattel think they could get everything? In any case, it looks like there was a failure in bargaining (transaction cost) that has led to an inefficient outcome (no Scrabble).

Sad.

Agents: Rational, Natural or Open Systems?

If there is one meta/theoretical debate in Sociology that continually frustrates me it is the dichotomy between agency and structure. Maybe I missed a meeting early on in my sociology education where someone usefully defined them in a coherent way, but these two terms have continually struck me as underdefined, confused, and more harm than help, especially when employed casually and without a rigorous and consistent set of definitions.

A brief example of the kind of thing I’m talking about: As part of a summer program for new graduate students, I attended a presentation on finding good mentorship given by a couple of professors of higher education. The presentation itself was bland but not useless – a few tips here and there about making sure to actively seek mentorship if you don’t happen upon it with your initial advisor, how to make sure you get connected with important faculty so you can find a job, etc. One of the professors leading the presentation then went on to make an extended argument about how you have to exercise agency against the structure of the system. In particular, he meant taking an active role in seeking out resources and assistance from faculty and staff rather than assuming that existing organizational routines will provide adequate amounts without any work on your part.

The Free Market For Gasoline

Of course, the top of that chart needs to be revised pretty extensively as well. Agricultural policy in the US, Europe, and elsewhere is about as remote from laissez-faire capitalism as can be. Price supports, government-sponsored research, tariffs, safety and health regulations, laws prohibiting or allowing unions (for example, in the US, farmworkers are not covered by the National Labor Relations Act, although there is an agricultural version in California specifically), etc. Still, a very amusing comic.

The Primaries in Retrospect: Polling Edition

The Fix, one of the Washington Post’s political blogs, has an excellent post today looking at new polling results to see if the divisions from the primary have carried over much to the general election. It seems like they haven’t too much.
Inside the Post Poll: What Obama-Clinton Divide? – The Fix:

Among women, the strongest pillar of Clinton’s support in the primary, Obama holds a wide 54 percent to 39 percent lead over McCain. And, even among white women, who were one of Obama’s weakest constituencies in the primary season, he fights McCain to a statistical draw — 47 percent to 46 percent. Compare that to the 2004 presidential race in which Sen. John Kerry (Mass.) lost white women by 11 points to President George W. Bush and won women overall by just three points.

As for the white, rural, blue-collar voters of whom much was made following large Clinton victories in places like Ohio, Kentucky, Pennsylvania and West Virginia, there also seems to be no entrenched resistance to Obama’s candidacy.

While Obama is losing among white voters (50 percent McCain, 42 percent Obama), there is no gap between how he performs among whites with college degrees and those without a college education; McCain lead 51 percent to 44 percent among white college graduates and 50 percent to 41 percent among white non-college graduates.

I did not realize that Kerry lost white women by quite so much. Also, it’s very interesting to see that although Obama did far better among highly-educated whites in the primaries, the same does not hold true in the general. It’s almost as if primaries are an entirely different contest with a different set of choices.
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Oh wait, they are. I wonder if anyone will remember this four years from now.

The Fix uses this data, reasonably enough, to point out the seeming lack of a divide leftover from the Obama-Clinton fight. I would also argue that it speaks more broadly to the problem of trying to infer the preferences of voters in a general election from the smaller set in a primary, or more generally, the problem of trying to infer the preferences of people choosing between A and C by looking at how they chose between A and B.

Here are some earlier posts where I talked about this problem.
Electability by the Numbers
Wherein I Express Displeasure With Lou Dobbs

On The Road

Traveling this week, first to lovely San Francisco to read papers by the ocean with a grad school friend. Then off to Seattle to be a groomsman in a wedding (which still feels super weird).
To amuse in the mean time, a neat word thingie via Understanding Society. Here’s one for this blog:

Embeddedness Made Easy (Polanyi Meets Indexed?)

With inspiration from indexed, xkcd and WickedAnomie, I present Embeddedness Made Easy (or, Polanyi Made Simple):

A Follow-Up on the Mortgage Crisis and Performativity

I posted awhile ago on the mortgage crisis and the performativity of economic models and ratings agencies. In that post, i made the argument (via proxies like the NYT) that the models used at the major credit rating agencies (and, in particular, a faulty independence assumption) were at least partly to blame for creating the subprime mortgage mess. Another ratings agency-related explanation also makes sense, probably contributed at least somewhat to the crisis, and is a bit simpler:

Study Finds Flawed Practices at Ratings Firms – NYTimes.com:

The analyst at the credit ratings agency was blunt: “Let’s hope we are all wealthy and retired by the time this house of cards falters.”

That candid assessment, sent by e-mail to a colleague in December 2006, referred to the market for certain investments linked to subprime mortgages – investments that were assigned top AAA ratings from major agencies, only to later plummet in value.

That e-mail message and dozens like it were disclosed Tuesday in a blistering 37-page report issued by the Securities and Exchange Commission, which confirmed what many on Wall Street had long suspected: the major ratings firms, including Fitch, Moody’s and Standard & Poor’s, flouted conflict of interest guidelines and considered their own profits when rating securities, among other suspect practices.
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The agencies continued to issue ratings despite frequent complaints from managers that they had neither the time nor manpower to measure the safety of investments sufficiently.

“We do not have the resources to support what we are doing now,” a managing analyst wrote in an e-mail message in February 2007.
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The agencies also considered changing their ratings criteria to better compete with their rivals. “We are meeting with your group this week to discuss adjusting criteria for rating C.D.O.’s of real estate assets this week because of the ongoing threat of losing deals,” a business manager wrote in an August 2004 e-mail message, referring to collateralized debt obligations.

So, the combination of bad models and a bit of Williamsonian “self-interest seeking with guile” under bounded rationality?

Favorite Papers

So, as I continue reading for my impending prelims, I’ve begun to realize that I have a set of favorite papers and books*. In Sociology (as in most social science-y disciplines, I would imagine) there are good papers, and important papers, and important straw-man papers, and part of the socialization process in becoming a practitioner is learning to recognize these things and properly categorize them (e.g. seeing “Meyer and Rowan 1977, Dimaggio and Powell 1983” is a pretty instant tip off of impending neoinstitutionalism). Sometimes a paper will get used repeatedly by practitioners of one variety of social science as the straw man of another – with justification or not- for example, Williamson 1975 for New Institutional Economics. Other papers, like Granovetter 1985, are just so important (and, frankly, good) that everyone cites them and knows them.

But then there’s another set of papers which may or not be truly excellent, but which hold a special place in one’s heart for some reason. Seeing one of these papers cited makes me smile, and makes me think the author is a kindred spirit. I’ll list a few of mine and some parenthetical thoughts on why I like them. Some of these are classics cited thousands of times, others have only a handful of cites.

Jepperson 1991 “Institutions, Institutional Effects, and Institutionalism” (Best definition of an institution I’ve ever seen, if only everyone could get on board and be consistent with it.)

Schelling 1960 “The Strategy of Conflict” (Game theory done awesome. It’s really too bad most Rat Choice gets such a bad name, since it makes scholars predisposed to ignore the incredible insights tucked inside the tradition in volumes like this one.)

Schelling 1984 “Self-command in practice, in policy, and in a theory of rational choice” (Like above, but more specific to the particular problem of stable preferences and what bullshit that is. The writing is pretty incredible.)

Johnson 1997 “Communication, Criticism, and the Postmodern Consensus: An Unfashionable Interpretation of Michel Foucault” (Political theorist Jim Johnson makes sense out of Foucault and begins to make him useful, to me anyway.)

Lukes 1974 “Power: a radical view” (Ok, I admit I haven’t finished reading this one all the way through, but I know whenever I see it cited that the author has some idea how to talk about power. It’s so frustrating to read something in, say, the corporate control literature, for example, that throws around terms like ‘control’, ‘discretion’, and ‘power’ as if they had singular, stable, common-sensical meanings.)

Mitchell 2002 “Rule of Experts: Egypt, Techno-politics, Modernity” (The first chapter is titled “Can the Mosquito Speak?”. It’s pretty awesome, and does a nice job of bringing things (objects, animals, nature) back into social analysis without forgetting the social.)

Krippner 2001 “The elusive market: Embeddedness and the paradigm of economic sociology” (Krippner makes sense out of the conflicts between Polanyi and Granovetter, and suggests a way forward for economic sociology that’s not just about proving the economy isn’t disconnected from other social ties.)

And as a bonus, I also love any time my favorite fiction author, J.L. Borges, gets cited (especially if it’s not just someone citing Foucault citing “The Analytical Language of John Wilkins”. I mean, that story is good and all, but there’s other amazing stuff in Borges, for example, “On Exactitude in Science” is brilliant and brief.). A favorite example of this: In “Frame Analysis”, Goffman has a footnote wherein he applies his frame analytical technique to Borges’ corpus and argues that much of the effectiveness of his stories involves making and breaking frames superbly well. Reading that footnote made me grin for hours. I don’t entirely know why.

So, what are your favorites? What citations bring a smile to your face? … Or is it just me?
Also, putting in all those links may or may not have just been a procrastination effort…

* I realized this while reading Dobbin’s “Forging Industrial Policy”, which cites Jepperson 1991 and Lukes 1974, so far anyway.

All Quiet on the Econ Soc Front

Sorry for the lack of recent posts, faithful readers. Prelim reading has kicked into high gear as the date approaches (about 55 days from now, not that I’m counting or anything). Other recent highlights have included reconnecting with my nerdiness (which I am not at all ashamed of, unlike some people*), which included a trip to Origins and joining a D&D4E game.

To connect, briefly, to economic sociology: A lot of the business history on our prelim list focuses on the rise of the large corporation, and thus on the rise of the railroad industry (see especially Chandler 1977, Dobbin 1994). Reading page after page about struggles over interoperability of lines, gauge-widths, and rate wars led to an entirely satiable desire to play one of many railroad games. Yesterday, as part of our demure celebrations, we played Railroad Tycoon. My Southern Strategy narrowly lost to a Northeastern one engineered (look, a pun!) by my brother. The Railroad business is cutthroat indeed. But now at least I can get back to reading about it.

*I wonder who would win a nerd-off amongst Sociology bloggers. I feel like I would make a strong showing, but it is quite hard to beat this.