Author: Tom Slee

Online advertising: when better is worse

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There I was, reading this paper called “Online Advertising, Identity and Privacy” by Randal Picker of the University of Chicago Law School, and learning quite a bit from it. He’s obviously thought hard about the conflicts (privacy) and opportunities (advertising) that arise when people provide their identity to online services, and about what kind of regulation may be needed to ensure those services behave responsibly with the data they collect. After all, as he says:

In the past, we have regulated intermediaries at these transactional bottlenecks – banks, cable companies, phone companies and the like – and limited the ways in which they can use the information that they see. Presumably the same forces that animated those rules – fundamental concerns about customer privacy – need to be assessed for our new information intermediaries.

In introducing the topic of advertising, Picker makes the standard point that “Ads in these [traditional] media are targeted to rough demographics. The Internet, in contrast, promises advertising matched to me”. And this, he claims, is a good thing: “Think about TV advertising and how many ads that you see for products that you never consume. Those ads are almost all wasted. Behavioral advertising [ie, personalized, online advertising] offers the promise of tailoring ads to individual consumers greatly increasing the efficiency of each ad dollar spent”.

And then it clicked. I’d never realised it before, but the assumption that accurate advertising is better for me than inaccurate advertising is completely wrong. 180 degrees wrong. The truth is that accurate, targeted advertising is not a good thing, it’s a terrible thing.

To be slightly more nuanced, there are two kinds of ads in the world: listings and intrusions (I’m sure there are better names out there, but that’s all I can think of), and while accurate listings are OK, accurate intrusions are a terrible thing, because they intrude more effectively.

Listings are ads that I seek out: If I’m looking to buy a second-hand chest of drawers I’ll look in the back of the local paper, or on Craigslist or on Kijiji, and here I want to be able to find what I’m looking for, just like Randal Picker says. An ad for a car is no use if I’m looking for a chest of drawers. if I were looking for a job I’d want ads that match my skills and interests. So when we’re talking about listings, accuracy is good.

But then there are all those ads that you try to ignore, because they work by getting in your way when you’re not looking to buy anything at all. TV ads, radio ads (thank heavens for the CBC), some newspaper and magazine ads are all intrusions. They work by intruding into something else that you’re doing and catching your attention. And what I want from these ads is for them to be as obviously wrong and inaccurate as possible, because then I know I can ignore them safely. The more inaccurate they are, the less they drag at my attention, and the less likely they are to pull me away from what I’m trying to do. More accurate ads are a more effective distraction. And while that may be good for the advertiser, and even for the owner of the delivery medium, it’s bad for me.

This is not some fancy rhetorical point – it’s actually how I experience newspapers and the Internet, and I suspect you do too.

Think about Adwords. When you carry out a search, you don’t want the advertised listings, you want the “honest”, unpurchased listings. Try it yourself. If you are interested in finding out more about the subject of this post you may google [online advertising]  (go ahead and click: the link opens a new window). Do you want any of those listings down the right hand side? No you don’t. Do you want to go to those top three advertised links? No you don’t. Fortunately, they are all pretty much obviously outfits you don’t want anything to do with and you can easily ignore them. But if they were closer to what you were really interested in, you’d have to look over them, wonder whether to click them, decide whether to discard them or not. It’s all effort and attention and I’m lazy enough that I really don’t need it. The closer those ads are to what I’m looking for, the more distracting they are, and the more effort it is to drag my eyes away from them to the results I actually want.

Fortunately, despite the promises of individually targeted ads that know my inner desires and motivations, we don’t have to worry about them becoming too accurate to ignore in the near future. After all, right now all we get is weight loss ads on Facebook and everywhere else and everyone gets to see those. Unless… you do see them too, don’t you?

Wikibollocks: Lawrence Lessig/Kevin Kelly Edition

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I don’t usually read Wired so I didn’t see Kevin Kelly’s article called “The New Socialism: Global Collectivist Society is Coming Online“. I didn’t miss much. It was a precis of Clay Shirky’s book Here Comes Everybody (my views on that are here), about how the Internet is dramatically enhancing our abilities to cooperate, collaborate, share, join and do all kinds of groupy things, prefaced by a few paragraphs in which he tried to claim that this groupiness is “socialism”. In that it’s social, or something. KK doesn’t really care if it’s socialism or not of course, but using the word in the pages of a Condé Nast-owned publication sounds daring and provocative, so why not? And what else would you expect from someone who calls himself “Senior Maverick at Wired Magazine” [link]? (In the comments section of the first link of the following paragraph, Seth Finkelstein says all this more energetically.)
Law professor Lawrence Lessig took umbrage at the dread word, because “at the core of socialism is coercion” so “I will never agree to call what millions have voluntarily created on the Net ‘socialism.’ That term insults the creators, and confuses the rest.” I didn’t read his posts when they first came out either, so I missed the sentence “No one forces Wikipedia editors to build a free encyclopedia”, which is close enough to a certain book title to catch my eye.

But I did see Henry Farrell’s fine post, calling Lessig’s arguments “a horrible, horrible mess”:

“Item one: under Lessig’s definition, when the Young Socialists League of the Socialisty Socialists of America organizes its volunteer commune in Ann Arbor, this commune isn’t a socialistic one, because no-one is being forced to join. Item two – that if you are to deplore your critics for having mysteriously misinterpreted you as associating coercion with Stalin, you probably shouldn’t have been arsing on about Stalin, collective farms und so weiter in your original post. This class of rhetorical maneuver is what we call running with the hare and coursing with the hounds in the country where I grew up.”

This sent be back to the original articles, which I read with increasing irritation. I’m eagerly awaiting Henry Farrell’s promised longer post on the subject, but there’s no sign of it yet. So as a substitute here’s what gets me pissed off about the Lessig/Kelly debate. 
It’s not what they disagree about that annoys me. Is this socialism or is this just love? At some point the label doesn’t matter: you say tomayto and I say tomahto, a rose by any other name, sticks and stones, etc.
No, it’s what they agree on that drives me spare. The idea that the technological innovation surrounding the Internet is a transformative social movement and, what’s more, a political movement in the broad sense. LL and KK ascribe explicit political consequences to open source software, the hacker ethos, Wikipedia, and so on. They adopt and share with others an implicit belief in technological determinism, in which new technology is inherently linked to a particular kind of progressive and liberating social change. Clay Shirky is another who looks at the world this way:

“The internet’s output is data, but its product is freedom, lots and lots of freedom. Freedom of speech, freedom of the press, freedom of association, the freedom of an unprecedented number of people to say absolutely anything they like at any time, with the reasonable expectation that those utterances will be globally available, broadly discoverable at no cost, and preserved for far longer than most utterances are, and possibly forever.” [link]

KK calls the development of open source and social software “an alternative to capitalism and corporatism”, and LL sees the debate in explicitly political terms:

… sloppiness here has serious political consequences. When a founder of the movement which we all now celebrate calls this movement “socialist,” that plays right in the hand of those would attack everything this movement has built. 

Here’s the problem. 
This rhetoric of liberation has led many a talented and idealistic young person to believe that coding, especially for free, is a political statement. In the guise of an anti-establishment, scrappy, can-do underdog attitude, LL, KK and their colleagues have created an environment in which well-intentioned people really believe that the commercialization of friendship by Facebook is a democratizing force, that it’s progressive for technology entrepreneurs to make billions from the work of artists who get nothing, and that posting book reviews on Amazon and movie reviews on Amazon-owned IMDB is contributing to a public good. In which otherwise intelligent people believe that Google and Twitter are somehow morally different from Microsoft and Wal-Mart because their employees are younger and because they use phrases like “radical transparency” without living up to them.
Some of those young people have created great things. Others have been suckered into digital sharecropping efforts believing that they are doing something worthwhile, painting a fence for some Tom Sawyer with a venture capitalist behind him who makes a mint off their efforts. And others have become those rich young men (almost always men) with their private jets. As Time Magazine wrote in its portrait of Flickr founders Caterina Fake and Stewart Butterfield: “IPOs? Web 1.0. Building it and flipping it to Yahoo, Google or Microsoft? Web 2.0”.

So let’s get some things clear. 

  • The Internet doesn’t have one product, it has many products. Some of which are wonderful and some of which are politically reactionary. It has produced some admirable and exciting cultural innovations, and it has also led to a huge influx of money to the pockets of Silicon Valley billionaires and away from proprietors and employees of small-scale, independent outfits that are vital to our cultural health.
  • The Internet is not inherently anti-corporate and it is not anti-state. If you want to be part of an anti-corporate movement, simply doing your digital thing is not enough.  
  • Google is not an upstart. Anyone who can read their statement about making YouTube profitable and still think Google is run by coders, not bean counters, is kidding themselves. 
  • The open source “movement” is not a political movement and open source is not a political virtue. Open source is perfectly compatible with businesses as conservative as they come. The largest death machine on the planet has its own open source initiative [link]; anything key to IBM’s strategy is not an alternative to capitalism. Of course, Google says that in building its new Chrome OS on top of Linux “We have a lot of work to do, and we’re definitely going to need a lot of help from the open source community to accomplish this vision” [link]. So go ahead, help them, but don’t think you’re doing something progressive.
  • I’m not saying that the Internet is inherently reactionary, any more than it is inherently progressive. Political activists are spending a lot of time building digital tools to help maintain movements and promote worthwhile causes, to promote worthwhile goals, and these are useful activities. Even I use Drupal and CiviCRM for groups I am a member of. But let’s not think that these tools make this generation of activists materially different from previous generations. Elsewhere on this blog Phil Edwards (blog here) relayed a question he asked John Curtice: “has pervasive Internet access been a force for good in terms of expanding participation, i.e. were people who wouldn’t previously have been informed & involved using the Net to get informed & involved? His answer was, um, no, not really – political activism was a minority pursuit & always had been, and the Net hadn’t made it any less of one. Afterwards I asked the Shirky/Howard Dean question – had the Net been a negative influence, in that the frictionless ease of Net activism actually attracted people away from real-world politics? His answer was, um, no, not really – political activism was a minority pursuit & always had been, and in all probability the same minority were going to the physical meetings and joining the Facebook groups” [link].
Somehow the digirati choose to ignore the fact that the major media corporations they love to knock are doing just fine in the brand new world of the Internet – but then a Condé Nast publication may be expected to believe that. LL’s talk of a “hybrid economy” is filled with optimistic assumptions about the behaviour of the new corporations and breezy acceptance, even approval, of the fact that his young children’s everyday social interactions are now a legitimate target of advertisers. Even when a cool kid shows signs of disillusionment, as Boing Boing’s Cory Doctorow did recently, he wraps his claims in qualifiers:

I sympathize with companies and creators who want to keep Google or Amazon from becoming gatekeepers on culture. Not because of who runs Amazon or Google — I know senior people at both companies whom I believe to be honorable and decent — but because no one should be that gatekeeper. I’d oppose consolidation in distribution and sales channels, even if the companies involved were Santa Claus Inc., Mahatma Gandhi Ltd., and Toothfairy Enterprises LLC. [link]

Cory – you’re on the right track, but why would you think that the character of the people you know matters a damn? It certainly sounds like you think the “honorable and decent” nature of people at Google and Amazon ameliorates the impact of those companies. The problems with the mainstream institutions you have so little time for are nothing to do with levels of honour and decency among their senior people. This is not a matter of good guys and bad guys. As someone who knew a bit about socialism once said “In the social production of their existence, men [and women too] inevitably enter into definite relations, which are independent of their will, namely [the] relations of production appropriate to a given stage in the development of their material forces of production.”

I’m not anti-technology. But it’s time to think about the Internet and digital technology in the same way that we think of the road system or other pieces of our social infrastructure. It would be ludicrous to claim that roads have one product. I just watched my son drive off with a car full of friends to a weekend at a cottage – a form of freedom possible only because of the technology of the road. But I worry a little, as any parent does, because roads are dangerous places too (as a scar on forehead from when I was eight years old reminds me). Few people are pro- or anti-road in general any more; instead the interesting questions are about how to make the most of the benefits roads can bring and how to limit the damage they can cause. The same goes for the Internet: let’s not assume its progressive nature, let’s not assume that everyone working in an open source manner or building new technologies is somehow on the same side, let’s appreciate those who are building progressive spaces on the Internet because they are progressive spaces, not because they are on the Internet.

Googling Barbie Again

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My writer’s block has writer’s block. Still, I don’t want this place to be abandoned completely so I’m going to revisit an oldie but goodie: what do you see when you google barbie?

Yochai Benkler made a big deal of the Google search results for Barbie in his book The Wealth of Networks (2006), where he claimed that, whereas other search engines gave you only sales-related Barbie sites in the top ten, Google’s “radically decentralized” algorithm revealed an entirely different picture of Barbie. “The little girl who searches for Barbie on Google will encounter a culturally contested figure. The same girl, searching on Overture, will encounter a commodity toy”.

But that was in 2006. Since then things have changed in the google-sphere. I posted about this 18 months ago in Barbie slinks back to the confines of feminist-criticism symposia. Here were the Google first page results from 2006 as reported by Benkler:

barbie.com
Barbie Collecter
AdiosBarbie.com
Barbie Bazaar
If You Were a Barbie, Which Messed Up Version would you be?
Visible Barbie project (macabre images…)
Barbie: The Image of us all (1995 undergraduate paper)
Andigraph.free.fre (Barbie and Ken sex animation)
Suicide bomber Barbie
Barbies (dressed and painted as countercultural images)

and here were the results in January 2008:

Barbie.com – Activities and Games for Girls Online! (together with eight other links to My Scene, Evertythingggirl, Polly Pocket, Kellyclub, and so on).
Barbie.co.uk – Activities and Games for Girls Online!
Barbie – Wikipedia, the free encyclopedia
Barbie Collector –     (The official Mattel site for Barbie Collector)
Barbie Girls
Mattel – Our Toys – Barbie
The Distorted Barbie
YouTube – barbie girl – aqua
Barbie – Barbie Dress up – Fashion for Barbie
Barbie.ca

and I concluded that “this search is basically owned by Mattel. Clicking the top link takes you to a pink page with “Think Pink” written in the middle of it, and the majority of the sites feature pink prominently. No more defining the cultural symbols of our day for you, nine-year-old girl! Quit the self-aware political discourse and get back to dressing that doll in gender-appropriate colours (as selected for you by Mattel).”

Every now and again I google barbie and see what’s changed as the Google search engine becomes more elaborate. So here are today’s results (from southern Ontario).

Barbie.com – Activities and Games for Girls Online! (together with eight other links to My Scene, Evertythingggirl, Polly Pocket, Kellyclub, and so on).
Barbie.com – Fun and Games
Barbie – Wikipedia, the free encyclopedia
News results for barbie (with several other links)
Barbie Collector –     (The official Mattel site for Barbie Collector)
Barbie.co.uk – Activities and Games for Girls Online!
Barbie.ca
Barbie Girls – and a sublink
Celebrate 50 Years of Barbie
Video results for barbie – with two links to Aqua’s Barbie Girl video
Searches related to barbie – all strictly orthodox except for one about Taiwanese actress and singer Barbie Xu.

Yes, the little girl who searches for Barbie on Google will now encounter a commodity toy.

The one big change in the last 18 months is that the remaining countercultural site from 2008 has now been pushed over the edge to page 2 of the search results, displaced by two Google-owned collections of links (News and Videos). I’m sure you’ve seen this in your own searches. Google presents more links on and around the “top ten” results, in “related searches”, and in collections of video, news, and image links. One effect of this change is that Google now often gets one more click from you before you leave their domain. Google is extending its role from pointing you vaguely towards your destination to guiding you more precisely, and more profitably, all the way along the path.

Of the other top-level links, seven are owned by Mattel (Two to barbie.com, Barbie collector, Barbie Girls, barbie.co.uk, barbie.ca, Celebrate 50 years of Barbie) and the remaining link is to Wikipedia, now the only non-commercial site on the front page. Following Nick Carr’s informal experiment we may have expected Wikipedia to move even higher in the results, but it has just held its place.

Independent sites are out there in their millions of course, but they are unfortunately being pushed to the periphery of our field of vision by commercial efforts – of Mattel in this case. It should be no surprise that as the web has become mainstream, and as corporations realise the necessity of investing in their web presence, the web begins to look more like other mainstream media. Perhaps more evidence that the Web’s counter-cultural moment is over.

Netflix Prize: Basically Won

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The Netflix Prize has a winning entry. There are i's to dot and t's to
cross, but there is now an entry that has achieved the 10% improvement
over Netflix's existing system that the prize demanded.

Moz-screenshot

Judging
from the team name, the winning entry is a joint effort between three
leading teams: BellKor, Pragmatic Theory, and BigChaos. 

Congratulations to
the winners!

Review: Market Rebels, by Hayagreeva Rao

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Market Rebels: How Activists Make or Break Radical Innovations, Hayagreeva Rao, Princeton University Press 2009

For decades, economists have extended their intellectual reach beyond mere money in an attempt to encompass all the social sciences in their analytical framework. But now the boot is on the other foot and it looks like even core economic observations may be better explained by other social sciences. Robert Solow apparently said that attempts to explain differences in economic growth across countries typically end in "a blaze of amateur sociology". The focus on psychology in explanations of the banking crash shows that growth is not the only area of economics where the discipline runs out of steam before reaching its destination. The rise of behavioural economics, surely a last-gasp attempt by economists to match their models to the real world without changing departments, suggests that the condition goes deep.

Despite its title, Hayagreeva Rao's Market Rebels (Open Library link, publisher's page) challenges the economic analysis of innovations. At 180 pages and full of case studies it's easy to read quickly, but I was so taken by it that I went through it a second time and found much that I had missed. Rao does not hammer the reader over the head with the implications of his case studies, but for me as a non-sociologist and non-economist the implications are huge and I'll be thinking about the book for a long time.

The case studies are diverse, but are centered around a single claim: the "joined hands of activists" play an important part in the creation, diffusion, and blocking of innovations. Collective action matters. Rao describes how hobbyists were key to the cultural acceptance of the car and the development of the personal computer; how microbrewers brought diversity back to beer; how nouvelle cuisine grew from the rebellious student movements of Paris 1968; how shareholder activism has pushed large companies to change behaviours; how community activists attempted to stall the spread of chain stores and then of big-box stores; how the green movement blocked the development of biotechnology in Europe. These studies, many based on his own research, help to bring activist groups and their campaigns out from the wings and into the spotlight as we think about innovation and social change, and by doing so Rao is performing a valuable service.

The book is not strong on systematic analysis. The closest he gets to describing what determines whether movements succeed or fail is that successful movements must create "hot causes" and "cool mobilizations". Both concepts are tied in to the concept of "identity", which for Rao is the underlying motive that causes people to join with or against social movements. A "hot cause" is the spark that successful activists use to light a fire. It's a lightning-rod incident or issue that arouses strong emotions such as pride or anger. Examples include the frustrated demonization of "big beer" by real ale enthusiasts; the outrageous bonus paid to Home Depot CEO Robert Nardelli which crystallized the shareholder rights movement. But "hot causes" by themselves are not enough for a prolonged campaign. "Cool mobilizations" are actions that keep a movement going forward by "engaging audiences in new behaviors and new experiences that are improvisational and insurgent". Examples include setting up a microbrewery or formulating shareholder resolutions. The concepts are useful, but it's a shame Rao doesn't have a stronger turn of phrase. Naming concepts can be key to owning them, and "hot cause" and "cool mobilization" are too literal and clumsy to take on the weight they need. But this is a detail (and I don't have better ideas).

For someone who has spent most of their non-fiction reading time reading economics and economics-inspired books in recent years, Rao's is a welcome and refreshing change. Economic analysis too-often reduces the political left-right split to the false dichotomy of market vs state, but this reduction maps badly on to the real experience of political activism. Those who protest Monsanto's private-sector use of genetic engineering are often the same as those who protest state-driven wars. Many of those who oppose new Wal-Mart stores also oppose the extension of surveillance powers by the state. Where do such activists see themselves in a market vs state debate? For many, they don't: market vs state is not what it's about. So it's not surprising that economists have a blind spot when it comes to social movements, and that the discipline systematically minimizes their impact. By putting social movements at the centre of his stories, Rao shows that they can and do have an influence, and that they deserve a place in any serious look at institutions that shape social change.

Although he says almost nothing about the Internet and digital collaboration, Market Rebels' focus on innovations makes the book obviously relevant. Rao's analysis is a welcome alternative to the usual focus of widely-read writers like Yochai Benkler and Clay Shirky. These writers take the economics point of view and focus on issues such information as a public good, lowering transaction costs for online exchanges, and the vanishingly small marginal cost of reproduction of digital information. Rao's unspoken counterargument, which convinces me, is that group formation is not a problem of information, it's a problem of identity. If he is right then although we can expect to see many examples of successful groups in the online world, we won't see not a huge flowering of groupiness compared to the information-starved analogue world.

What's more, if Rao is right and initiatives such as Wikipedia, blogging and the Open Source movement really are social movements, then they may have a limited lifespan. Digital activist identity is a rebellious and anti-establishement stance, but such a stance can only be maintained while the movement is oppositional. Open Source, with a longer history behind it than Wikipedia or blogging, has changed its identity to being more professionalized, more establishment. Its participants are less likely to be the radicals of yesteryear. Once Wikipedia is established as a success for a few years, rebellion becomes irrelevant as a motive and one may wonder whether the activists will find the "cool mobilizations" to maintain involvement and participation.

If there is an economics tie-in with Rao's analysis, it's with the analysis of identity pioneered by Rachel Kranton and Robert Akerlof (and which I sketched in the final chapter of No One Makes You Shop at Wal-Mart). Rao does little to pick apart the concept of identity and it looks to me like the K&A analysis would have been helpful to him. For Kranton and Akerlof, identity is a set of social categories (car enthusiast, green activist), a set of prescriptions that go along with those categories, and a set of costs and benefits associated with following or not following these prescriptions. We each choose an identity from the range that society provides ("environmentalist", "conservative", etc). Forcing this choice is the object behind Rao's "hot cause": the lightning-rod issue that polarizes participants into supporters and opponents ("which side are you on, boys, which side are you on?", as the greatest living American sings). Once you have chosen an identity, you must affirm it by following the prescriptions associated with that identity (shopping at independent stores, eating nouvelle cuisine, etc) or you pay the price of dissonance if you take actions that go against those prescriptions (shopping at W
al-Mart, eating classical cuisine). Creating a strong set of such prescriptions is the essence of Rao's "cool mobilizations", which serve to maintain a sense of solidarity and identity among movement members.

One of the more common criticisms of No One Makes You Shop at Wal-Mart was that, although I argued in favour of collective action as a corrective force to free markets, I had little to say about what forms that action should take. It's a fair knock, and I'm happy that I can now point such readers to Rao's book. Not only does he take on several of the issues that I cover (Wal-Mart and big-box stores, biotechnology, real ale) but he takes them much further than I could ever had done, and in a wonderfully specific and constructive way that provides concrete guidance to activists. I take my hat off to him.

Google, meet Wal-Mart

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Hey Google, let me introduce you to Wal-Mart.

You’re both looking a little out of place at this swanky party, and you don’t look like natural friends, but actually you have a lot in common and you’ll get along fine. Oh I know you are a lot more attractive than Wal-Mart – younger, cooler, and with much better taste in office furniture. But underneath all the surface appearances you share the same hobbies and even the same values, so you’ll overcome any awkwardness pretty soon. Trust me, you’re birds of a feather.

What hobbies? Well, you love to collect vast amounts of crap and then make it easy and cheap for people to get at it. And guess what? So does Wal-Mart. Don’t get me wrong, Wal-Mart isn’t in your league. He only gets crap from a small number of people compared to you. But he does have some great stories about making bargains. Just ask him to tell about the time he told Coca Cola to go back and redesign their Diet Coke recipe just for him – it’s hilarious.

And you know that crowdsourcing thing you do, where you get other people to work for free because it’s fun? Well he’s pretty good at that too, except he does it with whole companies. Like, he gets deodorant companies to manage his deodorant shelves for him, so he doesn’t have to! Wouldn’t you love to pull a trick like that with NBC or Fox? Look, I know he wears crappy clothes, but he can be a hoot when he’s in the mood.

It’s not too surprising that you have these things in common when you think about it. You’re both really good with technology and numbers to start with. And I heard some stories about you from Eric Clemons. Actually he was telling me that you remind him of airline customer reservation systems (CRSs) Sabre and Apollo. He told me that you come “between the shopper and the ultimate service provider (hotel, airline, retailer, or manufacturer), just as we saw in the case of the airline CRSs. The conditions are right for Google to enjoy enormous market power over service providers, who feel they must bid for positions in Google’s sponsored search keyword auctions.” Well that’s Wal-Mart to a tee.

Plus, you and Wal-Mart both have a sense of mission – that you are acting on behalf of your customers and bargaining for them against these powerful institutions like Coca Cola or CBS. You know what Wal-Mart says? He says “There is  only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else”. Isn’t that the kind of thing you would say? Except you would be classier about it. You wouldn’t talk about anything as crass as money.

So you could learn a lot from Wal-Mart, but it wouldn’t just be a one-way conversation. I think you could tell Wal-Mart some pretty good stories too. There’s a thing you both do which I love. You’ve both got (I hope you don’t mind me saying) piles of money, but whenever someone asks you to pay for something you have this great way of showing your empty pockets – and they are always empty – and saying “I’d love to, but I just can’t afford it. I’m nearly broke as it is”. It’s a hoot! But you do it even better than Wal-Mart. His line is always that he makes only a penny or two on each sale so he’s nearly broke. Even he doesn’t have the gall to say he makes nothing.

You should tell him the story about the musicians. You know the one. Where you got Billy Bragg and Robin Gibb to work together. Not singing together – that would be a thing – but writing a letter at least. They said that YouTube should pay artists a royalty when someone listens to a song, kind of like when radio broadcasters or TV stations do. And after paying $1.65 billion-with-a-B to buy YouTube from these guys, you just stood there with a straight face and said “I can’t afford it”. It was hilarious! What were your words? Oh yes, you cannot be expected to engage in a business in which you lose money every time a music video is played. And you got plenty of people to buy it as well even though you never said how much money you make on advertising. They think Billy Bragg is the privileged jerk and you’re the poor guy on the corner just trying to make a living and on the side of the little guy. Really, you’ve outdone Wal-Mart on this one.

So let me introduce you. Google, meet Wal-Mart. Wal-Mart, meet Google. You’re two of a kind.

Simulations and Mechanisms

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I've learned two lessons in the last couple of days.

First, if you want to get some attention for a blog post, call it something eschatological like "Online Monoculture and the End of the Niche". If I had called it "Simulation of a 48-product market under simplistic assumptions" somehow I don't think I would be writing a follow up. I don't like this lesson much. But I don't feel too guilty: if I was really trolling for traffic I could have called it "Learning from the Big Penis Book" [see Music Machinery for why].

Second, no matter how hard you try to be clear, many people don't get what you are trying to say. So maybe it's not their fault. For examples, see some of the comments here and here and even a bit here and on the original. The main complaint is that picking two example runs from a simplistic simulation of a small system with a small and fixed number of customers and products doesn't simulate the entire Internet. Where is the statistical sampling, the exploration of the sensitivity to parameters, the validating of the recommendation model? And on and on.

These folks don't get why people do simple models of complex things.

The goal of simulations is not always to reproduce reality as closely as possible. In fact, building a finely-tuned, elaborate model of a particular phenomenon actually gets in the way of finding generalizations, commonalities, and trends, because with an accurate model you cannot find commonalities.

For example (and I'm not comparing my little blog post to any of these people's work), in chemistry, Roald Hoffmann got a Nobel Prize and may be the most influential theorist of his generation because he chose to use a highly simplified model of electronic structure (the extended Huckel model). It is well known that the extended Huckel model fails to include the most elementary features needed to reproduce a chemical bond. Yet Hoffman was able to use this simple model to identify and explain huge numbers of trends among chemical structures precisely because it leaves out so many complicating factors. Later work using more sophisticated models like ab initio computations and density functional methods let you do much more accurate studies of individual molecules, but it's a lot harder to extract a comprehensible model of the broad factors at work.

Or in economics, think of Paul Krugman's description of an economy with two products (hot dogs and buns). Silly, but justifiably so. In fact, read that piece for a lovely explanation of why such a thought experiment is worthwhile.

Or elsewhere in social sciences, think of Thomas Schelling's explorations of selection and sorting in Micromotives and Macrobehaviour, or of Robert Axelrod's brilliantly overreaching The Evolution of Cooperation, which built a whole set of theories on a single two-choice game and influenced a generation of political scientists in the process. All these efforts work precisely because they look at simple and even unrealistic models. That's the only way you can capture mechanisms: general causes that lead to particular outcomes. More precise models would not improve these works – they would just obscure the insights.

That said, there are valid questions. Under some circumstances, aggregating large numbers of opinions into a single recommendation can give this odd combination of broader individual horizons and a narrower overall culture. Are there demonstrable cases of the monopoly populism model out there in the wild (aside from the big penis book)? Is this a common phenomenon or an uninteresting curiosity? Well I don't know. I do think so, obviously, otherwise I would not have written the post. But it's a hunch, a hypothesis, a suggestion, that I find intriguing and which I may or may not try to follow up. Hey, it's a blog post, not an academic paper.