There are Free Lunches Statement of Intentions

There are Free Lunches: Behavioral Clues to Live Happy in the Economic World is a blog that intends to present updated and relevant information about the "hidden" and only recently uncovered dimensions of the economic science: the behavioral factors. With this blog we intend to promote in Europe and in the rest of the World, the top research articles and perspectives on behavioral economics, decision making, consumer behavior, and general behavioral science. We aim to be followed by journalists, academics, managers, civil servants, and everyone who wishes to improve their daily interaction with the economic world and consequently, their lives' happiness.

Thursday, 27 September 2012

CO2 #3 Jamie Galbraith on Inequality and Instability (via Naked Capitalism)

Real News Network interviewed Jamie Galbraith on his new book, Inequality and Instability, in which he argues the two phenomena are linked. This extract will give you a flavor of the discussion. Per Galbraith:
There has been a prevailing doctrine, a dogma in Europe, which holds that Europe, which has suffered from relatively high unemployment since the early 1970s compared to the United States, was suffering that unemployment because it was holding on to strongly egalitarian policies, strongly social democratic or even socialist economic institutions.
And we looked at that problem from a couple of different perspectives. One was to look at the relationship between unemployment and inequality inside the European countries. And what we found is that in fact there’s just no basis for the claim that I just described….And the fact on the ground is that countries which are more unequal in Europe have higher unemployment, much higher unemployment than the more egalitarian countries…

And then the question was: well, what about the comparison between Europe as a whole and the United States? The Europeans have been lectured for decades by their orthodox economists that what they need is a more flexible labor market like the United States and then they will have lower unemployment. And what we found, in contrast, is that this overlooks the fact that Europe has been integrating and has been coming together as a single continental economy. And when you do that, when you take what had been isolated labor market situations and bring them into direct interaction with each other, you have to measure the inequality on the new basis, on the new foundation. And nobody had done that. And what we found was that in fact when you do that, European inequality, taking into account the differences that exist between, let’s say, Germany and Poland or between Norway and Portugal, is actually larger in wages than it is in the United States. And that was a very interesting, striking finding, which then basically said that the data between the United States and Europe further support the argument, the basic argument that I would make, the basic argument that we would come to, which is that the more egalitarian system measured at the right level will tend to have lower unemployment.
Watch the video about Galbraith's new book - Inequality and Instability - here: Inequality&Instability 

CO2 #2 Study shows Gender Bias in Science is Real. Here’s why it Matters. (via Scientific American)

It’s tough to prove gender bias.
In a real-world setting, typically the most we can do is identify differences in outcome. A man is selected for hire over a woman; fewer women reach tenure track positions; there’s a gender gap in publications. Bias may be suspected in some cases, but the difficulty in using outcomes to prove it is that the differences could be due to many potential factors. We can speculate: perhaps women are less interested in the field. Perhaps women make lifestyle choices that lead them away from leadership positions. In a real-world setting, when any number of variables can contribute to an outcome, it’s essentially impossible to tease them apart and pinpoint what is causative.
Read how the authors find a way to overcome obstacles and study the Gender Bias in Science: GenderBiasScience 

CO2 #1 A Case for the Maximum Wage: David Le Page at TEDxTableMountain (via TED)

David Le Page is a sustainability journalist and editor living in Cape Town. He has worked in advertising, for the Mail & Guardian and the Treatment Action Campaign. His writing concentrates on the deep cultural and social roots of the sustainability challenge, and the potential for creating a restorative economy. He is a huge fan of ecological restoration and its immense potential for recreating a world with as much life and wonder as that inherited by our ancient forebears. In his talk, David explores how across the world, and in South Africa particularly, extreme and growing inequality is one of the greatest root causes of economic, environmental and political destruction and instability. We claim to hate poverty yet shrink from understanding that extreme poverty is an effect of the existence of extreme wealth. Much greater equality -- between classes, countries, biological domains and generations -- would benefit everyone, including today's very rich. More than that, it has become essential to our very survival.

See this video-mark of sustainability: MaximumWageLePag 

Monday, 24 September 2012

O2 #3 Ten Ways to Get People to Change (via Harvard Business Review)

How do you get leaders, employees, customers — and even yourself — to change behaviors? Executives can change strategy, products and processes until they're blue in the face, but real change doesn't take hold until people actually change what they do.
I spent the summer reviewing research on this topic. Here is my list of 10 approaches that seem to work.
1. Embrace the power of one. One company I worked with posted 8 values and 12 competencies they wanted employees to practice. The result: Nothing changed. When you have 20 priorities, you have none. Research on multi-tasking reveals that we're not good at it. Focus on one behavior to change at a time. Sequence the change of more than one behavior.
2. Make it sticky. Goal theory has taught us that for goals to be effective, they need to be concrete and measurable. So with behaviors. "Listen actively" is vague and not measurable. "Paraphrase what others said and check for accuracy" is concrete and measurable.
3. Paint a vivid picture....
Check this fresh review on change management by Professor Morten Hansen: 10WaysChange 

O2 #2 Make Healthy Choices Easier Options (via Scientific American)

Making bad choices harder is actually the best way to help people get healthier, say public health experts. Katherine Harmon reports.

Telling people to change unhealthy behaviors doesn’t work. Otherwise, we would all already be slim, fit, nonsmokers.
Whether it's habit, the temptation of an ad or just the easiest option, we often rely on automatic behaviors to get us through the day. And even though we know taking the elevator, grabbing a beer or drowning a salad in ranch dressing are not the healthiest choices, we keep making them. Unless those bad choices become too inconvenient.
Hear the podcast about a new approach to Healthy Choosing here: HealthyChoicesEasier  

O2 #1 David Byrne and Neuroscientist Daniel Levitin discuss the Inner Workings of Music (via Explore)

David Byrne and neuroscientist Daniel Levitin, author of This Is Your Brain on Music, discuss the inner workings of music. Byrne’s new book, How Music Works, is an absolute must-read.
The conversation is part of SEED magazine’s Science Is Culture series, pairing artists and scientists to explore the intersection of science and society.
Watch here, the full video: ByrneLevitinMusic 

Friday, 21 September 2012

CO2 #3 A Tory Case for Delaying Cuts (via Stumbling&Mumbling)

In the Times, Danny Finkelstein argues against a temporary fiscal loosening:
Summoning up the will and retaining the minimum of political support is incredibly difficult. And fragile...Once we return to a policy of borrow and spend, how will we ever summon up the will to stop again?
I'm not sure about this. If I were a Tory wanting smaller government - and this, rather than concern about the national debt, is the reasonable argument for cutting public spending - I'd have three concerns.  
1. Delaying cuts gives us the chance to make more intelligent ones. It gives us the opportunity to consult workers on where best to make efficiency savings; these are better identified from the bottom-up than from the top down. Quick cuts are bad cuts, which risks discrediting the aim of shrinking the state. 

Read this short but incredible opinion about public spending: DelayingCuts 

CO2 #2 What Business Is Wall Street In? (via Hufftington Post)

Wall Street doesn't know what business it is in. Regulators don't know what the business of Wall Street is. Investor/shareholders don't know what business Wall Street is in.
The only people who know what business Wall Street is in are the high frequency and automated traders. They know what business Wall Street is in better than everyone else. To traders, whether day traders or high frequency or somewhere in between, Wall Street has nothing to do with creating capital for businesses, its original goal. Wall Street is a platform. It's a platform to be exploited by every technological and intellectual means possible. 

Read here this enlightening article from Mark Cuban: WallStreetBusiness  

CO2 #1 French Rats Fed GMOs Turn Out Looking Shockingly Like Americans Fed GMOs. (via FearLess)

The GMOs in the French study were approved for human consumption in the US after just a 90 day rat feeding study. Subsequently, they have gone into our American food supply and today more than 70% of the food we consume contains Genetically Modified Organisms. Over the same period of time we've become a very sick nation while countries who have avoided/banned or labeled GMOs have faired much better. France has been very skeptical of GMOs and has required labeling on any product consuming GMOs. Their recent study is one of the only long term feeding studies, unless of course you include the feeding study being conducted on the American public. Perhaps that's why the results look so much like the epidemics we are facing as a nation. More tumors. More damaged organs. 

Check the source of this study here: RatsGMO  

Monday, 17 September 2012

O2 #3 The Psychology of Morality - Time to be Honest (via The Economist)

A simple experiment suggests a way to encourage truthfulness.

“IS SIN original?” That is the question addressed by Shaul Shalvi, a psychologist at the University of Amsterdam, in a paper just published in Psychological Science. Dr Shalvi and his colleagues, Ori Eldar and Yoella Bereby-Meyer of Ben-Gurion University in Israel, wanted to know if the impulse to cheat is something that grows or diminishes when the potential cheater has time for reflection on his actions. Is cheating, in other words, instinctive or calculating?
Appropriately, the researchers' apparatus for their experiment was that icon of sinful activity, the gambling die. They wanted to find out whether people were more likely to lie about the result of a die roll when asked that result immediately, or when given time to think.

Check here to read this The Economist article about how to encourage Truthfulness: Honesty 

O2 #2 What is Value? What is Money? (via Simoleon Sense)

But in that future, is there going to be more value or less value? I would argue there's going to be more value because value would be whether people are able to get on time to the places that they need to go, if they're able to get there safely, and if they're able to get there comfortably. In a world in which you have a lot of self-driving cars there's going to be less traffic. It's going to be safer because probably the self-driving cars are going to be very bad at getting drunk and doing other things that would get them in trouble. They could be very comfortable, because since you need to build less of them, you can build very nice, robust, comfortable cars. But there's going to be maybe a smaller ability to appropriate the value of all of this mobility.

I see a big difference between the generation of value and the appropriation of value. What I see about the generation of value is that usually it's more about reducing the cost to a very small amount, to reducing the cost sometimes even to zero. When you reduce the cost to zero, and you make something accessible, you have generated a lot of value. But when you reduce the cost to zero and you make something universally available, you cannot appropriate any of it. There's a big contradiction between these two dimensions, and that's something that I've been thinking a lot about recently.

I see the difference between the industries that have been generating value now, and the ones that are appropriating value now, and the ones that are appropriating value tend to be more financial industries. Industries in the financial sector are in the appropriation value business. They're not in the generation value business. I would argue that in many countries, these have been actually very bad at even generating the little value that they are responsible to generate: the proper allocation of capital. In many cases, like recently in Spain, financial entities were not able to allocate capital properly and there have been important bailouts associated with these misallocations. These bailouts are much larger than the amounts that we would see on all of the other businesses that are generating new forms of value, like all of these online companies.

Check here this wonderful and timely piece of reflexion about the difference between Value & Money: ValueMoney 

O2 #1 10 Commandments for Social Media Managers (via PR Daily)

1. You shalt feed your community, not your ego.

2. You shalt recognize followers with gratitude.

3. You shalt share content useful to the community

4. You shalt not moderate comments.

5. You shalt post community rules.

6. You shalt be transparent in all decisions.

7. You shalt not feed the trolls.

8. You shalt converse and not broadcast.

9. You Shalt Respond to All Queries Quickly

10. You Shalt Listen Before Speaking

Here is the link for the 10 commandments: 10CommandmentsSocialMedia 

Saturday, 15 September 2012

A Tribute to my Country, Portugal.


No dia 15 de Setembro, pela terceira vez na vida, o meu país conseguiu arrepiar-me a pele. Pôr-me o sangue a ferver. Fazer-me os olhos brilhar. Desde que o Lusitânia Expresso cruzou os mares de Timor e que o Ricardo defendeu sem luvas o penalti Inglês, que Portugal não me fazia sentir assim.

Lá fora, no estrangeiro onde vivo, através das imagens permitidas por uma ligação online, o Povo Português fez-me sentir o mesmo que a Humanidade sente quando lê um poema do Pessoa, quando contempla um quadro da Paula Rego, quando ouve uma música dos Madredeus. Comoção. Gratidão. Respeito. Aquilo que sentimos pelos poucos de nós que têm a coragem e o amor ao mundo necessários para fazer aquilo que todos os outros gostavam que acontecesse.

Neste dia eu percebi que a revolta contra a barbárie pode ser tão sublime quanto escrever um poema, pintar um quadro, ou compor uma música. Pode exigir ainda mais coragem, quando essa barbárie, apesar de ter acólitos, não tem rostos, como de resto todas as ideologias. Vive em menor ou maior quantidade na mente de alguns, que por infelicidade da civilização convergiram para as cadeiras de poder do mundo ocidental.

Essa ideologia acha que promover o auto-interesse individual é a melhor forma de alcançar o bem-estar comum, que por isso a desigualdade extrema é legítima, que o mercado financeiro é a realidade, e que mesmo quando essa realidade é trágica não a podemos mudar mas apenas, resignadamente, piorar o país e a vida daqueles que nele trabalham.

Hoje Portugal escreveu um poema com a mensagem que o sistema financeiro deve servir as pessoas e não o contrário. Hoje Portugal pintou um quadro onde expressa que se o sistema financeiro não serve, deite-se fora o sistema porque as pessoas não são descartáveis. Hoje Portugal compôs uma música onde as pessoas não se “modelam”, mas os sistemas sim, haja coragem política. Podemos perder tudo o resto, mas hoje ganhámos o País.

CO2 #3 Stephen Hawking: 'There is no heaven; it's a fairy story' (via The Guardian)

In an exclusive interview with the Guardian, the cosmologist shares his thoughts on death, M-theory, human purpose and our chance existence.

A belief that heaven or an afterlife awaits us is a "fairy story" for people afraid of death, Stephen Hawking has said.
In a dismissal that underlines his firm rejection of religious comforts, Britain's most eminent scientist said there was nothing beyond the moment when the brain flickers for the final time.
Hawking, who was diagnosed with motor neurone disease at the age of 21, shares his thoughts on death, human purpose and our chance existence in an exclusive interview with the Guardian today.

Check here this disturbing interview with the Britain's most important scientist: NoHeaven 

CO2 #2 Dan Ariely on Why We Lie and How We Justify our Actions (via GoodLifeProject)

This episode features famed psychologist, behavioral-economist and bestselling author of Predictably Irrational and The Honest Truth About Dishonesty, Dan Ariely. In his late teens, a horrific accident burned 70% of his body and sent him into the hospital for three years. And it was that experience that incited a deep curiosity about how we behave in the world, how we experience and make choices about pleasure, pain and value, what we believe and the stories we tell ourselves.
This led Ariely into a stunning career as a leading behavioral economist, psychologist, acclaimed professor and bestselling author and speaker. 
Check here an extensive interview with this immense author: DanArielyEpisode 

CO2 #1 Column: How Wall Street creates criminals (via USA Today)

It is time to admit that Wall Street has lost its moral compass. Each day brings a new story of banks misleading clients, hedge funds' insider trading or investment banks manipulating prices. In one breathtakingly brazen scandal, Barclays and many of the largest banks in theU.S. and the U.K.— including Bank of America, Citigroup, HSBC, JPMorgan Chase andRoyal Bank of Scotland— are being investigated for possibly rigging the Libor interbank lending interest rate that determines the interest charged on countless credit cards and bank loans.

The tsunami of scandals cannot be explained away as the work of a few "bad apples." Our financial services industry is in ethical crisis. To assess the depth of the problem, Labaton Sucharow, a law firm where one of us works, commissioned an anonymous survey of 500 financial services professionals in the United States andUnited Kingdom. The results are alarming.

Check here, this enlightening article about Wall Streets (lost) moral compass: WallStreetCriminals 

Monday, 10 September 2012

O2 #3 The Veil of Opulence (via New York Times)

More than 40 years ago the philosopher John Rawls, in his influential political work “A Theory of Justice,” implored the people of the world to shed themselves of their selfish predispositions and to assume, for the sake of argument, that they were ignorant. He imposed this unwelcome constraint not so that his readers — mostly intellectuals, but also students, politicians and policy makers — would find themselves in a position of moribund stupidity but rather so they could get a grip on fairness.

Rawls charged his readers to design a society from the ground up, from an original position, and he imposed the ignorance constraint so that readers would abandon any foreknowledge of their particular social status — their wealth, their health, their natural talents, their opportunities or any other goodies that the cosmos may have thrown their way. In doing so, he hoped to identify principles of justice that would best help individuals maximize their potential, fulfill their objectives (whatever they may happen to be) and live a good life. He called this presumption the “veil of ignorance.”

Check this insightful article about why the origins of inequality are rooted in our brain: VeilOpulence 

O2 #2 São Paulo: A City Without Ads (via Adbusters)

In 2007, the world's fourth-largest metropolis and Brazil's most important city, São Paulo, became the first city outside of the communist world to put into effect a radical, near-complete ban on outdoor advertising.

In 2007, the world's fourth-largest metropolis and Brazil's most important city, São Paulo, became the first city outside of the communist world to put into effect a radical, near-complete ban on outdoor advertising. Known on one hand for being the country's slick commercial capital and on the other for its extreme gang violence and crushing poverty, São Paulo's "Lei Cidade Limpa" or Clean City Law was an unexpected success, owing largely to the singular determination of the city's conservative mayor, Gilberto Kassab.

Read more about this pioneer measure from a non-communist city here: CleanCityLaw  

O2 #1 The Potentials and Limitations of Rational Choice Theory: an Interview with Gary Becker (via Simoleon Sense)

Gary S. Becker (Pennsylvania, 1930) is a university professor at the Departments of Economics, Sociology, and the Graduate School of Business at the University of Chicago, Illinois. Becker earned his undergraduate degree from Princeton University and was awarded a PhD by the University of Chicago in 1955 for a thesis on the economics of discrimination, under the supervision of Milton Friedman. After teaching at Columbia University from 1957 to 1969, he returned to the University of Chicago where he has been based ever since.
Becker’s work and research interests encompass a wide range of topics, unified by what he calls The economic approach to human behavior (Becker 1976). He considers this refined version of the neoclassical theory of consumer behavior as a method that can be applied to analyzing individual choices beyond the boundaries of traditional economics domains, including discrimination, education (human capital), crime, addiction, the family (marriage, divorce, fertility), and altruism. Becker’s path-breaking work has been recognized with numerous honors, including the John Bates Clark Medal (1967), and the Presidential Medal of Freedom (2007). In 1992, he was awarded the Nobel Memorial Prize in Economic Sciences “for having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including non market behavior” (Nobel Prize press release). 

Professor Becker was interviewed by Catherine Herfeld at his office on the Campus of the University of Chicago on December 8th, 2010. The discussion ranged over a number of issues including the consequences of the recent financial crisis for the economics profession, the role of mathematics in economic modeling and the role of modeling in economics, the significance of the rationality-principle, and the development of Becker’s ‘economic approach’ and its distinctiveness from behavioral economics.

Read the complete interview about economics epistemology here: RationalChoice 

Thursday, 6 September 2012

CO2 #3 Kathleen Vohs on Money’s Situational Effects (via The Situationist)

Money changes people’s motivations — increasing their sense of self sufficiency and even making them keep a greater physical distance from others. After focusing on money, individuals work longer before asking for help, are less helpful to others, and prefer to play and work alone. Kathleen D. Vohs presented at the “Small Steps, Big Leaps: The Science of Getting People to Do the Right Thing” research briefing at the Stanford Graduate School of Business, co-sponsored by the Center for Social Innovation.

Check this video from Prof. Kathleen Vohs concerning the effect of money reminders on peoples' motivations: MoneyBehavior 

CO2 #2 Is Feeling Bad a Luxury Problem? (via Huffington Post)

In Judith Viorst's classic children's book Alexander and the Terrible, Horrible, No Good, Very Bad Day, Alexander wakes up with chewing gum in his hair -- and everything goes downhill from there. He trips on his skateboard and drops his sweater in the sink. He doesn't get a window seat in the car, and the dentist tells him he has a cavity. His mother makes him get white sneakers instead of the blue-and-red-striped ones he covets. He's forced to eat lima beans for dinner, and there's kissing on TV. To top it all, his nightlight burns out just as he's getting ready for bed.
Alexander's plight resonates not just with kids but with any adult who has ever whined about a luxury problem. Alexander is clearly a very fortunate child. He has food on the dinner table every day, a warm bed for sleep, dental care, a sweater, and sneakers, not to mention real luxuries like a TV and a skateboard. So when we read about the spoiled child's tantrums, we can't help but be reminded that most of the stresses in our adult lives -- the congested commuter traffic, the workplace conflict, the leaky roof -- are also luxury problems.
Read about this interesting study concerning the relation between emotions, health, and GDP worldwide: EmotionsHealthGDP

CO2 #1 Study: Right twists facts. (via Salon)

A new scientific paper suggests political conservatives more likely than liberals to bend reality to their beliefs. 

Last week, the country convulsed with outrage over Missouri Republican Rep. Todd Akin’s false suggestion that women who are raped have a special bodily defense mechanism against getting pregnant. Akin’s claim stood out due to its highly offensive nature, but it’s reminiscent of any number of other parallel cases in which conservative Christians have cited dubious “facts” to help rationalize their moral convictions. Take the twin assertions that having an abortion causes breast cancer or mental disorders, for instance. Or the denial of human evolution. Or false claims that same-sex parenting hurts kids. Or that you can choose whether to be gay, and undergo therapy to reverse that choice. The ludicrous assertion that women who are raped have a physiological defense mechanism against pregnancy is just part of a long litany of other falsehoods in the Christian right’s moral and emotional war against science.

Check this new insightful study here: ConservativesBendReality 

Monday, 3 September 2012

O2 #3 Less-Confident People Are More Successful. (via HBR Blog)

There is no bigger cliché in business psychology than the idea that high self-confidence is key to career success. It is time to debunk this myth. In fact, low self-confidence is more likely to make you successful.
After many years of researching and consulting on talent, I've come to the conclusion that self-confidence is only helpful when it's low. Sure, extremely low confidence is not helpful: it inhibits performance by inducing fear, worry, and stress, which may drive people to give up sooner or later. But just-low-enough confidence can help you recalibrate your goals so they are (a) more realistic and (b) attainable. Is that really a problem? Not everyone can be CEO of Coca Cola or the next Steve Jobs. 
If your confidence is low, rather than extremely low, you stand a better chance of succeeding than if you have high self-confidence. There are three main reasons for this:
If you want to know more about success and self-esteem check it here: LowConfidentSuccess 

O2 #2 The Norwegian action plan to reduce commercial pressure on children and the young people. (via Norwegian Government)

Adolescent children are increasingly exposed to commercialisation. Consumption is on its way to becoming a major element in the life of children and youngsters. Advertisers, the advertising business and the media contribute to affecting the young’s consumption as well as their attitudes in general, with regard to their relation to body, looks, sexuality, drugs and violence.
The government’s goal is to reduce the commercial pressure on young people, and to make them and their parents more aware, and better capable of meeting, the influence that they are exposed to. In 2001, a government appointed committee presented the report “Adolescence with a price tag” (NOU 2001:6). In this survey, the subject of children and commercialisation is discussed in full, and a number of actions are proposed.
Check the plan from the Norwegian Ministry of Children and Family Affairs here: ChildrenCommercialPressure  

O2 #1 Pam Warhurst: How we can eat our landscapes. (via TED)

What should a community do with its unused land? Plant food, of course. With energy and humor, Pam Warhurst tells at the TEDSalon the story of how she and a growing team of volunteers came together to turn plots of unused land into communal vegetable gardens, and to change the narrative of food in their community.
Pam Warhurst cofounded Incredible Edible, an initiative in Todmorden, England dedicated to growing food locally by planting on unused land throughout the community.
Check here the video with the quote "There's so many people that don't really recognize a vegetable unless it's in a bit of plastic with an instruction packet on the top.”EatLandscapes