Daniel Kahneman, a trainee psychologist, has substantially contributed to economics, particularly behavioral economics. He is also the author of one of my favorite books, Thinking Fast and Slow — or, as I call it, a manual for the human mind.
Before you think this is boring, let me tell you what Kahneman gave us.
Prospect Theory describes how people make choices in situations where they have to decide between probabilistic alternatives that involve risk. And before I do bore any of you…
Imagine yourself at your local CVS, and you need allergy medicine. You tried Claritin, and two days later, that didn’t work. You return to CVS, get Zyrtec, and keep trying new OTC meds. The perception of potential risk is low because people generally don't associate over-the-counter meds with harmful side effects, and the perception of potential benefit is high. You are basing your trial and error on allergy medications by associating them with a low-risk approach.
Here’s another example from the opposite spectrum: Why do so many people avoid specific medical tests, let's say, a cholesterol check? To most, there is no benefit, only negative. They will expect a bad result and perceive a 50% risk of getting bad news. You might think the 50% chance of a negative test is a benefit, but most people will perceive that as "status quo" since there is no real gain. No one associates corrective measures for cholesterol as a positive.
The Endowment Effect is another excellent contribution that tells us that human beings value things/items they own vs whatever the going rate is for the said item.
An individual is attempting to sell a piece of furniture initially priced at $500, believing that $350 represents an attractive offer. However, they may not fully grasp the current market dynamics. Potential buyers are often hesitant and concerned about the item's condition, or it might not suit their needs as perfectly as it did for the first owner. Additionally, the inconvenience of traveling 30 minutes to reject a single item potentially contrasts sharply with the experience of exploring a showroom filled with various options.
Another example is a home seller who thinks the house is perfect because it took ten years to make it exactly what they want and a buyer who states they will have to redo the kitchen.
By blending psychology with economic theory, Kahneman's groundbreaking work has profoundly influenced economics and public policy, law, health, and marketing by providing deeper insights into human behavior and decision-making.
Read of the Week!
When I read something, I’d like to know if it’s going somewhere. If there isn’t a road, the reading should be even better to keep me interested. This one takes us back to the ‘70s, and what a lovely, chill ride it was.
Searching for Susy Thunder goes back to phone hacking, the foundational group of people who touched so much of the security aspect of phones and computers that the policies applied back then are still applicable today. After reading it, it just underlined how lonely, sad, and coming from abuse, most of these hackers were—not just Susy but everyone involved in that era. If you were born after the 1980s, I would take the ride and read how this particular era gave birth to cybersecurity.
Circle To Search For Everyone!
Well, almost everyone. Google announced this week that its AI goodies are coming to older phones (as far back as the Pixel 6 series) and Samsung phones.
I wanted to show you real-life instances where this comes in handy. We stayed at a place with one of those Keurig coffee machines that was unintuitive about where the water went. No, seriously, it wasn’t obvious.
I whipped out my S23U, took a snapshot of the coffee machine, and voila.
I could then click on the model and find everything I needed.
Another fun application? I follow many accounts, but no one challenges me more than this guy with old goalies trivia. When he asks, “Who is this goalie? I answer with Google Circle to search. Yes, I cheat!
The circle to search is probably the most used feature out of all AI features.
More tech stuff
These are still rumors, but the Apple Watch 10 (or X) may have two things that will change people’s lives.
Scanning for Sleep Apnea is something that everyone should be profiled through. It will do this by going around the central issue of you ceasing to breathe for seconds. It will use the following to help you see if you should pursue the issue with your doctor measuring the following:
Fluctuating respiratory rate
Occasional drops in blood oxygen levels
Frequent changes between sleep stages
A higher proportion of light sleep or awake periods
The watch uses motion sensors to analyze when a person is in light sleep, deep sleep, or awake
The watch also monitors heart rate and blood oxygen levels during the night
This is a step in the right direction. Just like the Apple Watch not being able to diagnose you having a heart attack, there has been a plethora of examples of when the Watch would indicate an issue that prompted people to go to an ER — and consequently saving their own lives. We all know by now just how important sleep is.
Blood Pressure monitoring is another area that the Apple Watch 10 may include. Again, this won’t be a function where you look at the watch, and it tells you 120/80 reading. No, what it will do is go around about ways of measuring and then give you trends only. If you are already in a Hypertension area and constantly read 140/90 at the doctor’s office, all this will tell you is that you are trending higher or lower than your foundational read.
I like this less than Sleep Apnea monitoring, but reading blood pressure is also more complicated, and at this stage, I will take something over nothing.
Bad News Good News - Story within Story
The bad news is that we could have potentially suffered a cybersecurity event that we’ve never seen before. The good news is that one of the good guys found out before it became just that.
Andres Freund, a Microsoft developer, found a malicious backdoor in popular open-source software last week. Programmers scrambled to fix the problem but warned that if they hadn’t, it could have led to hundreds of millions of compromised devices and a catastrophic cybersecurity breach.
To most folks, Freund's observations didn't raise immediate concerns. However, this seasoned developer's instincts drove him to dive deep, uncovering a sneaky backdoor in the code that could let hackers access computers worldwide. The suspected culprit? Someone using the alias Jia Tan. Volunteers do most of the maintenance in open-source software, but earning the trust to release updates is no easy feat. Tan had spent years gaining trust within the coding community. While Tan's true identity remains a mystery, cybersecurity experts speculate that a skilled group of hackers, possibly backed by a powerful entity or nation, orchestrated this complex scheme. You can guess which.
You probably didn’t hear much about this because of how humans view news like this. If 9/11/01 was thwarted, do you think it would get a lot of press?
But another controversy stemmed from a New York Times Tech writer's lack of knowledge about tech, and they were dragged for it.
How it should be written about can be found right here.
Need a Printer?
Verge offers some recommendations; here’s mine: always buy Brother. Why? The initial printer cost is negligible compared to ongoing toner expenses. After trying various brands, I consistently find Brother reliable and cost-effective in terms of toner.
The Verge article offers a few.
Economy
It’s still too hot, in a nutshell. The latest Department of Labor report revealed that the US added a whopping 303,000 jobs last month, surpassing expectations. Surprisingly, this upbeat news didn't freak out investors about the Fed cutting rates – stocks went up. Why? The cheery update might give Jerome Powell more reasons to take it slow. The report showed more folks jumping into the workforce and a slowdown in wage growth, suggesting the job market can expand without causing inflation fears.
Of course, when you start investigating which jobs were added (more gigs/PT), things are not as rosy.
The bigger picture is inflation (groceries are up 37% in four years), and if the job market is still too hot, The Fed won’t cut rates, which will prolong many negative things for corporations.
And for the lighter side of things…
Nothing like mom shaming…
What’s going on with Hockey arenas? This is just horrific.
And this thread.
Could have sworn I looked for comment section below and there wasn't one. I must just be "that old guy" now. Great post, Leon.
Was referenced an article recently about the passing of the creator or AutoCAD (probably by you lol). It was mind blowing how little fanfare there was for him given his influence on Engineering tools that we have now. There really should be some sort of software HOF or Oscars...or something, to recognize these kinds of things.
The mom-shaming? That's classic because one of the best moves I made recently was going to the $6.99/mo Netflix tier from $20+. It is WAY worth the few commercials I see now.
Looking forward to that phone hacking article. Mitnick used to fascinate me so this is right up my alley.
Good stuff! Oh it's not just Hockey all sporting events and concerts got crazy expensive. Btw people complaining about cost of living but notice tens of thousands travelered in US to see eclipse for 3.5 minutes spending a $1000 a night on a room and hundreds on air fair.