Tuesday, July 29, 2014

European ransom payments constitute half of Al Qaeda's revenue

Kidnapping Europeans for ransom has become a global business for Al Qaeda, bankrolling its operations across the globe.

While European governments deny paying ransoms, an investigation by The New York Times found that Al Qaeda and its direct affiliates have earned at least $125 million in revenue from kidnappings since 2008, of which $66 million was paid just in the past year. ...

These payments were made almost exclusively by European governments, who funnel the money through a network of proxies, sometimes masking it as development aid, according to interviews conducted for this article with former hostages, negotiators, diplomats and government officials in 10 countries in Europe, Africa and the Middle East. ...

While in 2003 the kidnappers received around $200,000 per hostage, now they are netting up to $10 million, money that the second in command of Al Qaeda’s central leadership recently described as accounting for as much as half of his operating revenue. ...

Only a handful of countries have resisted paying, led by the United States and Britain. Although both these countries have negotiated with extremist groups — evidenced most recently by the United States’ trade of Taliban prisoners for Sgt. Bowe Bergdahl — they have drawn the line when it comes to ransoms.

It is a decision that has had dire consequences. While dozens of Europeans have been released unharmed, few American or British nationals have gotten out alive. ...

Negotiators believe that the Qaeda branches have now determined which governments pay.

Of the 53 hostages known to have been taken by Qaeda’s official branches in the past five years, a third were French. And small nations like Austria, Switzerland and Spain, which do not have large expatriate communities in the countries where the kidnappings occur, account for over 20 percent of the victims.

By contrast, only three Americans are known to have been kidnapped by Al Qaeda or its direct affiliates, representing just 5 percent of the total.

“For me, it’s obvious that Al Qaeda is targeting them by nationality,” said Jean-Paul Rouiller, the director of the Geneva Center for Training and Analysis of Terrorism, who helped set up Switzerland’s counterterrorism program. “Hostages are an investment, and you are not going to invest unless you are pretty sure of a payout.”
--Rukmini Callimachi, NYT, on the upward-sloping supply curve of kidnappings

Monday, July 28, 2014

Asian plastic surgery is not about looking white

“The general idea then [in the 1960s]—and I keep hearing it even today—was that Asians who have facial and eyelid surgery want to ‘Westernize,’ ” says [plastic surgeon Robert] Flowers. “And that’s even what Asian plastic surgeons thought they were doing then as well. But that’s not what Asians want. They want to be beautiful Asians.” Flowers advocated subtler surgeries, pointing out that naturally creased Asian eyelids—which he estimates occur in perhaps half of Asians—are not the same as Caucasian lids. Compared with Asian eyes, the white eye is more deeply set and the crease tends to run more parallel to the lashline. Asian creases may be narrow or nonexistent at the inner eye—the goopy pink corner may be covered by downward-angled skin called an epicanthic fold—but flared up at the outer edge, creating an overall tilted eye shape. ...

Facial contouring is popular in Korea and includes procedures like V-line jaw shaving, which turns round faces into hearts in pursuit of an ideal more manga than Playboy, softening the angles of a square jaw and creating a daintier chin. ...

To Westerners, facial contouring is among the most mysterious of Asian procedures. When I looked at before-and-after pictures of women with sharply jutting cheekbones who’d had their faces narrowed and smoothed via zygoma reduction, I inevitably thought they were prettier before. Without looking up from the pictures, Kwan replied, “Cheekbone reductions are just ethnic. Asians hate this kind of cheek.” But white people never seem as fascinated with this surgery as they are with double eyelids, he added. ...

Why do white people fixate on the “Westernizing” elements of ethnic plastic surgery? While working on this article, I found that people of all races had principled reservations about and passionate critiques of these practices. But the group that most consistently believed participants were deluding themselves about not trying to look white were, well, white people. Was that a symptom of in-group narcissism—white people assuming everyone wants to look like them? Or is it an issue of salience—white people only paying attention to aesthetics they already understand? Or is white horror at ethnic plastic surgery a cover for something uglier: a xenophobic fear of nonwhites “passing” as white, dressed up as free-to-be-you-and-me political correctness?
--Maureen O'Connor, New York, on ethnicity-specific beauty standards

Sunday, July 27, 2014

Reducing traffic jams through ruder merging

Of all of the reasons for traffic snarls, impending lane closures bring out a particularly brutal combination of road rage and etiquette confusion. Most drivers know the pain of approaching two lanes in this situation; the left one is backed up much further because the right one will close in less than a mile thanks to, say, construction.

Which lane should a driver pick in this scenario? Steer to the left as soon as you see a closure notice and you'll almost certainly go slower; stay in the right and you'll catch stink-eye, honks, and even swerving drivers. Everyone is upset that you're about to essentially cut in line—an act that will require a tense, last-minute merge of your own. ...

This week, however, Washington state joined Minnesota in sending a clear message to drivers: merge rudely. It's actually faster and safer.

There's a name for it: late merging, though advocates prefer the term "zipper merging" because it doesn't have a negative connotation. ...

It works as follows: in the event of an impending lane closure, drivers should fill in both lanes in equal measure. Within a few car lengths of a lane ending, both lanes' cars should take turns filling in the open lane and resuming full speed.

If roads are clear enough that everyone is already driving close to the speed limit, zipper merging isn't as effective, but in the case of congestion, Johnson said that this method reduces backups by a whopping 40 percent on average, since both lanes approach the merge with equal stake in maintaining speed. "When the queue backup is reduced, the access points behind a work zone, like signals or ways to get on and off the freeway, those aren’t blocked," Johnson pointed out. "People have a better opportunity to get off or on the system at that point.
--Sam Machkovech, Ars Technica, on inefficient etiquette. HT: Marginal Revolution

Saturday, July 26, 2014

Does Apple deliberately slow down old iPhones?

I often grumble to my graduate students that every time a new iPhone comes out, my existing iPhone seems to slow down. How convenient, I might think: Wouldn’t many business owners love to make their old product less useful whenever they released a newer one? When you sell the device and control the operating system, that’s an option. ...

But there are two simple reasons that planned obsolescence might not maximize profits. First, the legal risk. Second, competition and consumer rationality should combine to thwart this strategy. All a competitor needs to do is to offer a smartphone that doesn’t become a brick as quickly, and more people should buy it.

But these are theoretical arguments. And my experience, though constituting a sample size of one, is empirical. ...

Laura Trucco, a Ph.D. student in economics at Harvard, followed a hunch. She wanted to see whether my experience was unique. But how? When people become frustrated with a slow phone, she reasoned, they search Google to figure out what to do about it. So, in theory, data on how often people search for “iPhone slow,” as provided by Google Trends, can measure the frustration globally. ...

Because this data is available weekly, she was able to cross-reference these searches against release dates of new phones. The charts show the results, which are, to say the least, striking. In the top chart, there are six distinct spikes, and they correspond to releases of new iPhones.



Perhaps... hearing about a new release makes you contemplate getting a new and faster phone. And you suddenly notice how slow your old phone is.

To test if this is the reason, we can use an important difference between Apple and Google Android. ... Google has the means (it controls the Android operating system), but not the motive because it doesn’t make money directly from selling new hardware. Conversely, Samsung or other sellers of Android phones have the motive but not the means. ...

The second chart shows searches for “Samsung Galaxy slow.” In this chart, there are no noticeable spikes or anything correlated to the release of new Galaxy phones. Try other types of Android phones, and, similarly, there are no new spikes. This is suggestive, though it’s important to note that new releases of Apple products inevitably draw much more media attention than those of other phones.

Still, if attention on new devices is what makes old ones feel slow, why are the spikes on Apple product release dates, and not when the company announces the new products? In 2008, for example, the iPhone3G was announced a full month before its release. There was a spike at the release, but not at the announcement.



This data has an even more benign explanation. Every major iPhone release coincides with a major new operating system release. Though Apple would not comment on the matter, one could speculate — and many have — that a new operating system, optimized for new phones, would slow down older phones. This could also explain the Samsung-iPhone difference: Because only 18 percent of Android users have the latest operating systems on their phones, whereas 90 percent of iPhone users do, any slowdown from a new operating system would be naturally bigger for iPhones.
--Sendhil Mullainathan, NYT, on an Apple conspiracy theory

What to do with 422 million AmEx points?

A Chinese collector who bought an ancient Chinese ceramic cup for a record HK$281 million (US$36 million) at auction in April got an unexpected bonus when he paid for it today: almost 422 million American Express points.

Liu Yiqian, who used his Centurion Card to pay for the cup from Sotheby’s Hong Kong, hadn’t even thought about the rewards until he was contacted by Bloomberg News. ...

Liu’s daughter said he used his credit card, which is denominated in yuan, because currency restrictions won’t allow him to transfer that much money directly from China to Hong Kong. Individuals are limited to moving $50,000 per year outside the country because of capital controls.

So what can 421,860,000 AmEx points get? According to the American Express Co.’s website, they can be converted to more than 28 million frequent flyer miles or about $180,000 worth of vouchers at Hong Kong retailer ParknShop.

Liu, who drank Chinese tea from the cup shortly before he paid for it, had to sign 24 separate AmEx receipts because the system can only swipe transactions of up to HK$12 million at a time, said Nicolas Chow, head of Chinese ceramics and works of art and deputy chairman of Sotheby’s Asia.
--Frederik Balfour, Bloomberg, on membership having its privileges

Europeans now mock their public figures for bad English

If you stumble or make mistakes when trying to speak a foreign language, spare a thought for Europe’s hapless politicians. Recently, the continent’s political masters have been slapped by a new form of satirical attack—Bad English Shaming. A viral-video sub-trend, Bad English Shaming sees public figures foolhardy enough to let their rusty English be recorded on camera getting mocked and mauled for their poor foreign language skills. ...

There’s a striking connection between these three little spats: The ridicule all came not from native English speakers, but from the politicians’ own compatriots. ...

Clearly, something radical has changed. It probably isn’t the growth of American or British influence per se, as politically and culturally, these are either no greater than before or slightly on the wane. European English seems in fact to be uncoupling itself from native anglophones, a runaway caboose careering down its own track. The dominance of English as a European lingua franca is so total nowadays that it’s a basic tool for interaction even in countries where Brits and Americans rarely tread, as well as between Europe and other continents. This map shows just how far moderate English fluency has spread in Europe.

--Feargus O'Sullivan, CityLab, on being lucky to be a native English speaker

Friday, July 25, 2014

Could you outrun the Boston Green Line T?

Even before this iconic showdown between Rita Jeptoo and the C Line at the 2014 Boston Marathon, we’ve all thought as we wait for the MBTA Green Line Train to get us...anywhere, anywhere at all:

“I wonder if I could outrun this thing.”

Well, some dedicated RunKeeper fans decided to take on the B Green Line trolley train, once and for all. ...

The course: Boston College T stop to Blandford Street T stop ...

So, indeed, you can outrun the Green Line. But you have to run four 6-minute-miles.
--Chelsea Rice, Boston.com, on the odious pace of the Green Line. You can read the play-by-play tweets in the linked article.

Wednesday, July 23, 2014

Why the Third Pounder hamburger failed

One of the most vivid arithmetic failings displayed by Americans occurred in the early 1980s, when the A&W restaurant chain released a new hamburger to rival the McDonald’s Quarter Pounder. With a third-pound of beef, the A&W burger had more meat than the Quarter Pounder; in taste tests, customers preferred A&W’s burger. And it was less expensive. A lavish A&W television and radio marketing campaign cited these benefits. Yet instead of leaping at the great value, customers snubbed it.

Only when the company held customer focus groups did it become clear why. The Third Pounder presented the American public with a test in fractions. And we failed. Misunderstanding the value of one-third, customers believed they were being overcharged. Why, they asked the researchers, should they pay the same amount for a third of a pound of meat as they did for a quarter-pound of meat at McDonald’s. The “4” in “¼,” larger than the “3” in “⅓,” led them astray.

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