Tuesday, July 22, 2014

Procrastination goes back to the dawn of civilization

The tendency to procrastinate dates back to the very beginnings of civilization. As early as 1400 B.C., [psychologist Piers] Steel told me, ancient Egyptians were struggling with basic time management. “Friend, stop putting off work and allow us to go home in good time,” read some hieroglyphs, translated by the University of Toronto Egyptologist Ronald Leprohon. Six hundred years later, in 800 B.C., the early Greek poet Hesiod voiced a similar feeling, warning us not to “put your work off till tomorrow and the day after, for a sluggish worker does not fill his barn, nor one who puts off his work.” In 44 B.C., Cicero deemed “slowness and procrastination” always “hateful.” (James Surowiecki wrote about philosophers’ interest in procrastination in the magazine, in 2010.)

The sentiment survived intact through more recent times. In 1751, Samuel Johnson remarked, “The folly of allowing ourselves to delay what we know cannot be finally escaped is one of the general weaknesses which, in spite of the instruction of moralists, and the remonstrances of reason, prevail to a greater or lesser degree in every mind; even they who most steadily withstand it find it, if not the most violent, the most pertinacious of their passions, always renewing its attacks, and, though often vanquished, never destroyed.” He concluded that it was “natural,” if not praiseworthy or desirable, “to have particular regard to the time present.”
--Maria Konnikova, New Yorker, on the unchanging nature of human nature. HT: OM

Monday, July 21, 2014

Why the theory of disruptive innovation is not that useful for managers

At the heart of the theory is a type of technology — a disruptive technology. In my mind, this is a technology that satisfies two criteria. First, it initially performs worse than existing technologies on precisely the dimensions that set the leading, for want of a better word, ‘metrics’ of the industry. So for disk drives, it might be capacity or performance even as new entrants promoted lower energy drives that were useful for laptops.

But that isn’t enough. You can’t actually ‘disrupt’ an industry with a technology that most consumers don’t like. There are many of those. To distinguish a disruptive technology from a mere bad idea or dead-end, you need a second criteria — the technology has a fast path of improvement on precisely those metrics the industry currently values. So your low powered drives get better performance and capacity. It is only then that the incumbents say ‘uh oh’ and are facing disruption that may be too late to deal with.

Herein lies the contradiction that Christensen has always faced. It is easy to tell if a technology is ‘potentially disruptive’ as it only has to satisfy criteria 1 — that it performs well on one thing but not on the ‘standard’ stuff. However, that is all you have to go on to make a prediction. Because the second criteria will only be determined in the future. And what is more, there has to be uncertainty over that prediction.

To see this, suppose that it was obvious that criteria 2 was satisfied. Then it will be obvious to all — entrants and incumbents — what the future might look like. This is precisely what happened for web browsers when Microsoft ‘wised up’ and saw the trajectory. In that situation, a disruptive technology does not end up disrupting the establishment at all. They have seemingly an equal shot of coming out on top: indeed, a better shot when you consider they already have the customers.

What is required for the theory to be complete is that it is not known whether criteria 2 is satisfied or not. That is what creates the ‘dilemma.’ For an incumbent, it is costly to bet on a new, unproven technology when things are going fine with the old one. And as Lepore points out: there are plenty of situations where incumbents have gone with the new too soon only to have huge losses as a result. ...

If it had all stopped there, this would have been respectable. But Christensen did not. He saw his theory as predictive even though its own internal logic says prediction is impossible. That’s why he missed the mark on the iPhone. That is why his case studies can be right unless you wait a little longer in which case they are no longer predictive. The Innovator’s Dilemma is like Heisenberg’s Uncertainty Principle. You can’t get around it and Christensen’s failing is that he has sold it as something you can get around.

Take his prescription that established firms ‘disrupt themselves.’ This is crazy talk to an economist (which is one reason he doesn’t like us). Suppose you take resources and invest in your own disruptor. If disruption occurs, you still lose the entire value of your existing business. All that has happened is that you have kept your name alive. The retort may be that something can be preserved but remember, Christensen is essentially saying firms need to act as if nothing can be preserved. I don’t mind the idea that established firms should not be complacent but hastening their demise on speculation seems weird when there is no upside.

Instead, the focus on the doomed incumbent leads Christensen away from the obvious alternative. The incumbent should ‘wait and see.’ They will see all manner of potentially disruptive technologies being deployed and instead of removing them from their radar as irrelevant, they should continue to monitor them to see what happens. Because, when the one in ten or a hundred or whatever turns out to be successful, they can then move to acquire them and realise a more ‘orderly transition’ to the new technology.

Saturday, July 5, 2014

Why Hollywood comedies are a dying genre

Comedy films as a percent of total releases, 2010-2014
As the above chart from Nomura shows, the output of comedies as a proportion of total releases at the biggest Hollywood studios is in structural decline. Blame it on (or thank, if you prefer) the globalization of box office returns.

While fewer Americans are going to the movies, it is a totally different story in many other parts of the world, where cinema is booming. Non-U.S. moviegoers accounted for about 70% of global box office receipts last year (which hit $35.9 billion) compared to about 63% in 2007. ...

But the emerging world enthusiasm for Hollywood films does not extend to comedies, or at least not relative to its love of action movies and animated films. In China, for example, U.S. comedies account for only 10% of box office spending, compared to 25% in the U.S., Nomura says. By contrast, Hollywood action films are 44% of the box office in China (the latest Transformers release has broken just about every box office record in the country) as against 36% in the U.S.

Comedy is the least profitable genre for the studios.

Average total profit per film, 2004-2013
--John McDuling, The Atlantic, on the least common denominator at work

Friday, July 4, 2014

Airlines would like you to pee before getting on the plane

All of this got us wondering: Just how much fuel could an airline save by shaving excess weight from a flight? We decided to use an aircraft performance model developed at the Massachusetts Institute of Technology to find out. ...

It costs Southwest about $1.2 million per year in added fuel when every passenger carries a cellphone, with larger costs of $7 million if every passenger brings a tablet computer, and $21.6 million if everyone totes a laptop. Using Southwest’s network as a proxy for similar-sized airlines carrying embedded in-flight entertainment systems, we found that fuel costs to carry these systems are approximately $39.7 million per year. When compared with installing embedded systems in the seats, simply handing everyone an iPad when they stepped onboard could save about $32.7 million per year in fuel costs. ...

If airlines were extremely aggressive about weight savings, they could provide incentives for passengers to go to the restroom before getting on a flight; doing so could save Southwest about $2.1 million per year. Less aggressive ways to save on fluid weight can come in the form of $2.4 million per year in savings by ditching the small water bottles provided to passengers during a flight. Budget airlines, like Spirit, have realized this expenditure and now only provide water for a fee.
--Luke Jensen and Brian Yutko, FiveThirtyEight, on small savings adding up. HT: Marginal Revolution

Thursday, July 3, 2014

Millennial 20-somethings aren't actually more likely to live with their parents

More young people than ever are living in their parents' basements.

You've surely heard that one before. The Washington Post, the New York Times, the New Republic, Salon, and others have repeated it over and over in the last few years. More than 15.3 million twentysomethings—and half of young people under 25—live "in their parents’ home," according to official Census statistics.

There's just one problem with those official statistics. They're criminally misleading. When you read the full Census reports, you often come upon this crucial sentence:
It is important to note that the Current Population Survey counts students living in dormitories as living in their parents' home.
...

As you can see in the graph below, the share of 18-to-24-year-olds living at home who aren't in college has declined since 1986. The share of college students living "at home" is the one category that has increased. But, remember, "living at home" for a college student can mean "living in a dorm that for inexplicable reasons the Census considers your parents' house." Upshot: The Millennials-living-in-our-parents meme is almost entirely a result of higher college attendance.
--Derek Thompson, The Atlantic, on a survey artifact that became a meme

Wednesday, July 2, 2014

Why we should colonize Venus, not Mars

The second planet from the Sun might seem like a nasty place to build a home, with a surface temperature hot enough to melt lead and an atmosphere so dense it would feel like being submerged beneath 3000 feet of water. But the air on Venus thins out as you rise above the surface and cools considerably; about 30 miles up you hit the sweet spot for human habitation: Mediterranean temperatures and sea-level barometric pressure. If ever there were a place to build a floating city, this would be it.

Believe it or not, a floating city might be a feasible project. Scientist and science fiction author Geoffrey Landis presented a paper called "Colonizing Venus" [PDF] at the Conference on Human Space Exploration, Space Technology & Applications International Forum in Albuquerque, New Mexico back in 2003. Breathable air floats in Venus's soupy carbon dioxide atmosphere, which means on Venus, a blimp could use air as its lifting gas, the way terrestrial blimps use helium to float in our much thinner atmosphere. ...

One of the biggest problems with a lunar or Martian colony is that an astronaut’s bones and muscles deteriorate in low gravity. No one knows yet how much gravity a human needs to prevent deterioration, but Venus's gravity is the closest to Earth's, at about 9/10ths. Mars only has a third of the gravity that the Earth does, while the moon has a mere sixth.

Atmospheric pressure is also crucial. Think of the difference between jabbing a car tire and letting air out of a half-inflated balloon. Gases seek equilibrium. Since there's barely any atmosphere on the moon or Mars, a rip in the hull of an enclosed human habitat would suck oxygen out at tremendous force. Thirty miles above Venus, it would merely seep out. This also means a Venutian cloud colony wouldn't need as much reinforcement. Venus has other boons, too. Its rich atmosphere blocks radioactivity and could be mined for useful materials. And with a gentle temperature, far less energy would have to be spent on heating or cooling the colony.
--James McGirk, Citylab, on a new planet to love. HT: Chris Blattman

Some plants can hear

It has long been known that some plants can respond to sound. But why would a plant evolve the ability to hear? Now researchers are reporting that one reason may be to defend itself against predators.

To see whether predator noises would affect plants, two University of Missouri researchers exposed one set of plants to a recording of caterpillars eating leaves, and kept another set of plants in silence. Later, when caterpillars fed on the plants, the set that had been exposed to the eating noises produced more of a caterpillar-repelling chemical.

Evidently, the chomping noises primed the plant to produce the deterrent. “So when the attack finally happens, it’s kaboom,” said Heidi Appel, a chemical ecologist and an author of the study. The chemical comes “faster and often in greater amounts.”

Plants exposed to other vibrations, like the sound of wind or different insects, did not produce more of the chemical, suggesting they could tell the difference between predator noises and atmospheric ones. The researchers published their work in the journal Oecologia.

Previous research on plants and sounds have found that two genes in rice switch on in response to music and clear tones, and that corn roots will lean toward vibrations of a specific frequency. (Research from the 1970s suggesting that plants prefer classical to rock music has largely been dismissed.)
--Douglas Quenqua, NYT, on plant senses

Pepsi CEO on why women can't have it all

This is about 14 years ago. I was working in the office. I work very late, and we were in the middle of the Quaker Oats acquisition. And I got a call about 9:30 in the night from the existing chairman and CEO at that time. He said, Indra, we're going to announce you as president and put you on the board of directors ... I was overwhelmed, because look at my background and where I came from — to be president of an iconic American company and to be on the board of directors, I thought something special had happened to me.

So rather than stay and work until midnight which I normally would've done because I had so much work to do, I decided to go home and share the good news with my family. I got home about 10, got into the garage, and my mother was waiting at the top of the stairs. And I said, "Mom, I've got great news for you." She said, "let the news wait. Can you go out and get some milk?"

I looked in the garage and it looked like my husband was home. I said, "what time did he get home?" She said "8 o'clock." I said, "Why didn't you ask him to buy the milk?" "He's tired." Okay. We have a couple of help at home, "why didn't you ask them to get the milk?" She said, "I forgot." She said just get the milk. We need it for the morning. So like a dutiful daughter, I went out and got the milk and came back.

I banged it on the counter and I said, "I had great news for you. I've just been told that I'm going to be president on the Board of Directors. And all that you want me to do is go out and get the milk, what kind of a mom are you?"

And she said to me, "let me explain something to you. You might be president of PepsiCo. You might be on the board of directors. But when you enter this house, you're the wife, you're the daughter, you're the daughter-in-law, you're the mother. You're all of that. Nobody else can take that place. So leave that damned crown in the garage. And don't bring it into the house. You know I've never seen that crown."

I don't think women can have it all. I just don't think so. We pretend we have it all. We pretend we can have it all. ... We plan our lives meticulously so we can be decent parents. But if you ask our daughters, I'm not sure they will say that I've been a good mom. I'm not sure. ...

The person who hurts the most through this whole thing is your spouse. There's no question about it. You know, Raj always said, you know what, your list is PepsiCo, PepsiCo, PepsiCo, our two kids, your mom, and then at the bottom of the list is me. There are two ways to look at it. (laughing) You should be happy you're on the list. So don't complain. (laughing) He is on the list. He is very much on the list. But you know, (laughing) sorry...
--PepsiCo CEO Indra Nooyi (Yale School of Management '80), The Atlantic, on hard tradeoffs. Particularly poignant to me because one of her daughters was a student of mine. HT: JW

Monday, June 30, 2014

I am shocked, shocked that Facebook is manipulating my newsfeed



A new study in Proceedings of the National Academy of Sciences claims to lend support to the popular but controversial notion of “emotional contagion” ...

Working with Facebook, the study's authors grabbed two big groups of the site's users. For one of them, they dialed down the frequency with which positive posts written by their friends appeared on their news feeds; for the other, they did the same thing but with negative posts (as always, users could still see all of their friends' posts by clicking on their profiles). Users in the fewer-happy-posts group subsequently posted in a more negative manner, the researchers write, while users in the fewer-sad-posts group did the opposite, suggesting that good and bad moods were effectively transmitted through the Facebook network. ...

...some folks are freaking out that they were served up manipulated versions of their news feeds, possibly making them (ever so slightly) happier or sadder. ...

...when you actually look at how Facebook's news feed works, the anger is a bit of a strange response, to be honest. Facebook is always manipulating you — every time you log in. Your news feed is not some objective record of what your friends are posting that gives all of them equal "air time"; rather, it is shaped by Facebook’s algorithm in very specific ways to get you to click more so Facebook can make more money...

So the folks who are outraged about Facebook’s complicity in this experiment seem to basically be arguing that it’s okay when Facebook manipulates their emotions to get them to click on stuff more, or for the sake of in-house experiments about how to make content “more engaging” (that is, to find out how to get them to click on stuff more), but not when that manipulation is done in service of a psychological experiment. And it's not like Facebook was serving up users horribly graphic content in an attempt to drive them to the brink of insanity — it just tweaked which of their friends' content (that is, people they had chosen to follow) was shown. ...

Many of the folks most outraged by this seem to be Facebook users (I can tell because they are venting their outrage on Facebook), so if they find this sort of behavior to be unconscionable, they should think twice about using the site.

Wednesday, June 25, 2014

John Roberts's smackdown for privacy

In a major statement on privacy rights in the digital age, the Supreme Court on Wednesday unanimously ruled that the police need warrants to search the cellphones of people they arrest.

Chief Justice John G. Roberts Jr., writing for the court, said the vast amount of data contained on modern cellphones must be protected from routine inspection....

The Justice Department, in its Supreme Court briefs, said cellphones are not materially different from wallets, purses and address books. Chief Justice Roberts disagreed.

“That is like saying a ride on horseback is materially indistinguishable from a flight to the moon,” he wrote.
--Adam Liptak, NYT, on false equivalences

World Cup fake injuries rankings

With this in mind, the Count loaded 32 World Cup matches on the DVR and set out to perform a comprehensive empirical study aimed at determining one thing: Which World Cup participant nation is the world's floppiest? ...

To be fair, it is actually possible to get hurt playing soccer. ... There were nine injuries in total that forced players to be substituted from the game and to miss, or potentially miss, a match. These were discarded. ...

The study showed one thing emphatically: The amount of histrionics your players display during a match correlates strongly to what the scoreboard says. Players on teams that were losing their games accounted for 40 "injuries" and nearly 12.5 minutes of writhing time. But players on teams that were winning—the ones who have the most incentive to run out the clock—accounted for 103 "injuries" and almost four times as much writhing. ...

The Team Most Commonly Seen in Anguish: Brazil. There were 17 incidents in two games when a member of the Seleção was seen on the ground in pain—the most of any country. World Cup poster boy Neymar had five such "injuries," the most on his team. In every case he was back on his feet within 15 seconds.

The Overall Writhing-Time Champions: Honduras. Los Catrachos spent the most time on the ground or being tended to by trainers: seven minutes and 40 seconds to be exact. Naturally, five minutes and 10 seconds of that came in the first half against France when the match was tied (which would have been good enough for them).

The Team Most Likely to Grin and Bear it: Bosnia and Herzegovina. These World Cup newbies obviously don't get how this works. They only had two "injuries" in two games for a total of 24 seconds of writhing time.

The Team With the Most Carnage in One Game: Chile. While they protected an early lead against Spain, the Chileans tallied 11 "injuries," more than 24 other teams had in two games.

The Fastest "Injury" Yet: Enner Valencia, Ecuador. Against Honduras, Valencia was on the ground, clutching his leg after four seconds.

Worst Use of a Stretcher: 5 players (tie) Of the nine players carried off in these matches, five returned—all in less than 90 seconds, including American DaMarcus Beasley.

--Geoff Foster, WSJ, on the worst part about soccer

Tuesday, June 24, 2014

Student debt is not a bigger problem than before



The misperceptions matter because they distract us from the real trouble with our higher education system. It’s not the graduates of expensive colleges who are struggling to get started on a career. Such graduates make for good stories (and they tend to involve the peer group of journalists), but history suggests that most of them will do just fine.

The vastly bigger problem is the hundreds of thousands people who emerge from college with a modest amount of debt yet no degree. For them, college is akin to a house that they had to make the down payment on but can’t live in. In a cost-benefit calculation, they get only the cost. And they are far, far more numerous than bachelor’s degree holders with huge debt burdens.
--David Leonhardt, NYT, on the myth of exploding student debt

Monday, June 23, 2014

Why you look more attractive in sunglasses

Why does nearly everyone instantly look more attractive with sunglasses on? ...

Because they really do make your misshapen face look better. Put on a pair of sunglasses, and voilà – instant symmetry! The dark lenses cover up any asymmetrical oddities around your eyes, and research on facial attractiveness shows a clear link between symmetry and our perception of beauty.

As an added bonus, [senior lecturer or art and design at Nottingham Trent University Vanessa] Brown pointed out, sunglasses provide a kind of scaffolding effect, imposing the appearance of an external, extra-chiseled bone structure on top of your relatively softer-featured face.

Because mystery. Many of the snap judgments we form about people come from looking them in the eyes; shade yours, and you’re instantly a more intriguing presence. ...

It's colloquial wisdom that an air of mystery increases sexual desire, and research bears that notion out. ...

Because of their historical link with edginess and glamour. We take their ubiquity for granted today, but sunglasses are a relatively modern everyday accessory, Brown said. Sales started to pick up in the 1920s, but they didn’t become commonplace until about two decades after that. The way sunglasses were most often used prior to their commercialization helps explain some of their inherent coolness, Brown said, because in their early days sunglasses were primarily used during risky water and snow sports, and were also associated with new technologies like airplane travel, which made them seem “daring and thoroughly modern.”

Soon after that, Hollywood stars of the 1950s and 1960s started wearing sunglasses to defend themselves from being recognized by the public or harassed by paparazzi, whose flashbulbs would often explode violently, sometimes literally in their faces, Brown said. But regardless of practicality, movie stars’ adoption of the accessory cemented the link between sunglasses and glamour.
--Melissa Dahl, New York, on answers to a profound mystery

The government's hidden tax of time

In particular, people who hold offshore mutual funds must file IRS Form 8621 for each investment, even if several different funds are held in a single account. The IRS estimates that each form will take more than 35 hours to complete—after the taxpayer spends 11 hours to learn the requirements.
--Laura Sanders, WSJ, on the leviathan

Saturday, June 21, 2014

Drunken behavior depends on cultural norms

A basic anthropological insight about drugs and alcohol is that the effect of a drug is a result not just of biology, but also of culture. The classic argument on this is “Drunken Comportment,” a 1969 book in which Craig MacAndrew and Robert B. Edgerton said that the effects of alcohol depended on local expectations. They wrote that when Americans drank, they fought, argued and were much more relaxed about sex.

When American undergraduates get drunk, they throw sofas out of the frat house and wake up next to people they didn’t think they knew. That’s because we Americans think that alcohol is disinhibiting and that we can’t really control what we do.

That’s not necessarily the case in other cultures. Mr. MacAndrew and Mr. Edgerton gave example after example of people in other cultures who drank plenty of strong alcohol but didn’t behave as Americans did when drunk. In these societies drunks became silent, “thick-lipped,” or they grew talkative, but not violent. ...

How people act when drunk, these anthropologists argue, is a learned behavior. People learn what it is to be drunk and what drunkenness permits.

Since then, anthropologists have demonstrated that this principle applies — to some degree — to the experience of many different drugs. As Eugene Raikhel of the University of Chicago summarizes the literature, drug experience is determined not only by the body’s chemistry but also by local ideas about what those drugs should do.

Right now, for many people, marijuana conjures up the mellow calm of the Rocky Mountain high. But that mellowness is associated with a set of cultural cues that may not be shared by all who buy legal cannabis. Alcohol is a factor in about 40 percent of violent crimes, according to surveys of perpetrators. Let’s hope that the meaning of being high doesn’t migrate.

Friday, June 20, 2014

When consulting case interviews don't work

It is a glorious spring Sunday, the day before commencement at Yale University in New Haven, Connecticut. Among the many alumni returning to the campus is billionaire Chinese financier Zhang Lei, 41, who is a familiar figure here. In 2010 he announced a gift of the propitious amount of $8,888,888 to Yale School of Management, the largest donation made to the business school from one of its graduates. ...

I ask how he came to be a student at Yale. Born in 1972 in Zhumadian, a village in Henan province, central China, Zhang doesn’t come from a wealthy background. He scored the highest marks in the province on his college entrance exams and so won a scholarship to Renmin University in Beijing, where he studied finance.

He wanted to go on to graduate school abroad but didn’t have the money. “The reason I just applied to graduate schools in the US was simple – they were the only ones I knew that gave scholarships,” he explains in lightly accented US English. “I received a scholarship from Yale. Unfortunately, when I first came to Yale I did not even realise that the scholarship I got was for only one year [of the three-year course]. I urgently needed to find work. So I got a job at the investment office.” ...

He tells me that at one point, desperate for an internship, he had an interview with one of the management consultancies in Boston. It was an ill-fated encounter. Short of funds, Zhang had asked the firm to pay for his train ticket in advance rather than being reimbursed later, as is the norm. “They asked me about a case study about how many gas stations should a certain company ideally have within a certain region. I asked, ‘Why do people need gas stations?’

“When you think about it, it is not a foolish question. What is the function and can it change? Is it, for example, a good place to do grocery shopping? Can it be replaced? Become obsolete, say, because of electric cars? But this person looked at me pityingly and said, ‘Perhaps you don’t have the intellect to be a consultant.’ I had many first round interviews but I rarely was invited for the second round.”
--Henny Sender, FT, on culturally biased interview questions. Kind of like the time I was asked to estimate how many loaves of bread were sold each year in Indiana, and the interviewer couldn't hide his contempt for my evidently ridiculous guess of how many loaves of bread a white family eats in a week.

Wednesday, June 18, 2014

Quantifying the bamboo ceiling in Silicon Valley

Asians make up 57 percent of Yahoo’s tech workers, compared with the 35 percent of the tech work force that is white. Yet when it came to leading technology teams, nearly four out of five of the bosses were white and less than a fifth were Asian.
--Vindu Goel, NYT, on stalling careers. Statistical discrimination or taste-based discrimination?

Tuesday, June 17, 2014

Soccer is actually a British term

In May, Stefan Szymanski, a sports economist at the University of Michigan, published a paper debunking the notion that "soccer" is a semantically bizarre American invention. In fact, it's a British import. And the Brits used it often—until, that is, it became too much of an Americanism for British English to bear. ...

If the word "soccer" originated in England, why did it fall into disuse there and become dominant in the States? To answer that question, Szymanski counted the frequency with which the words "football" and soccer" appeared in American and British news outlets as far back as 1900.

What he found is fascinating: "Soccer" was a recognized term in Britain in the first half of the twentieth century, but it wasn't widely used until after World War II, when it was in vogue (and interchangeable with "football" and other phrases like "soccer football") for a couple decades, perhaps because of the influence of American troops stationed in Britain during the war and the allure of American culture in its aftermath. In the 1980s, however, Brits began rejecting the term, as soccer became a more popular sport in the United States.

In recent decades, "The penetration of the game into American culture, measured by the use of the name 'soccer,' has led to backlash against the use of the word in Britain, where it was once considered an innocuous alternative to the word 'football,'" Szymanski explains.
--Uri Friedman, The Atlantic, on linguistic backlash

Monday, June 16, 2014

Behavioral economics comes to Chili's

Chili's recently made a big change to its in-store ordering system. The chain partnered with Ziosk, the restaurant-targeted tablet-maker, to develop a series of tabletop devices that allow customers to order their meals without the pesky interference of a human. ...

And here's the intriguing thing: Chili's is doing all that because de-humanizing the restaurant is, it turns out, good business. In 2013, in a pilot program, Chili's installed tablets at nearly 200 of its stores. And the chain found, Bloomberg Businessweek reported, that the presence of the tablets could "reliably increase the size of the average check." By, often, a fairly large margin.

That's in part because the tablets set defaults for tip amounts. The machines automatically suggest a tip of 20 percent; you can go lower than that (or higher), but you'll need to actively decide to make that change. Chili's is finding the same thing that New York City taxis have: Default settings are, behavioral economics-wise, powerful. ...

But the most intriguing finding takes us back to the whim thing. Ziosk has found that eliminating the wait for a human server can boost impulse orders of appetizers at the beginning of a meal—orders that seem to be encouraged by the digital menus' large images. If you come hungry and you don't have to wait for a server and you're looking at an enormous picture of gooey nachos... there's a good chance you will order those nachos. Ziosk claims to have found a 20-percent increase in appetizer sales, as compared with standard, server-based ordering strategies.

And the bump translates to post-dinner offerings, as well. The Chili's version of the Ziosk menus is programmed to have images of dessert (a molten chocolate cake, say) pop up while customers are still eating their main courses. This has led, Chili's says, to a 20-percent increase in dessert sales. (Ziosk claims a 30-percent dessert-sale bump for its clients overall.) Coffee sales are apparently up, too. The digital menus are constantly present at the table—constantly reminding, constantly beckoning. And constantly promising, even and especially if you order that molten chocolate cake, not to judge.
--Megan Garber, The Atlantic, on defaults and cues for profit

At what income does one become "rich"?

I asked survey respondents to tell me how much money the people in their household would have to earn in a year for them to consider themselves rich. I evaluated answers that began at $10,000 and went through $4 million. In households in the lowest quartile of income, those earning less than $25,000 a year, people thought they needed about $293,000, on average, to consider themselves rich. And in households earning between $30,000 and $60,000 of annual income, the magic number was closer to $394,000. As people earn more, the multiplier on current income goes down, but the absolute number goes up in a somewhat linear fashion.

In households with annual income between $60,001 and $120,000, the dream of becoming rich comes true at $426,000, on average; and, for the top 15 percent of incomes ($120,000 and up), the average number was $501,000.

Most of us, it turns out, are chasing the elusive dream of multiplying our income to become rich, and, like Joe the Plumber, would be surprised if someone told us we were already rich. In the 2008 campaign, Mr. Obama was trying to tell voters that he would raise taxes on other people, “rich people.” This works because most voters don’t think they are rich. ...

The next time you hear candidates talking about “the rich,” ask yourself what they mean by that. Better yet, ask them. And remember some basic facts about American household income: According to the Census Bureau’s 2012 Current Population Survey, roughly 4 percent of households earn $200,000 a year or more. Median household income is about a quarter of that — near $51,000 a year. And 25 percent of the households in America are getting by on less than $25,000 a year.

Still, about a quarter of the population thinks they could be rich one day — something both Democrats and Republicans agree on — and the pattern is clear: The more you make, the more you think it takes to be rich.
--Lynn Vavreck, The Upshot, on the ever-receding green light