June 25, 2008 by Sanjay.

The success of prediction markets in the electoral arena hinges on the idea that while talk is cheap, nothing sharpens the mind like real money. Combining the wisdom of the crowd with real money yields better predictions.

So, if how third-party observers choose to use their money tells us what they really think, can the same be said for campaign expenditures? (Key: Expenditures as opposed to campaign rhetoric.) Now, we could dissect the strategy of either presidential campaign (e.g., the famous McCain Strategy Briefing). But we have to contend with incomplete information, possible misdirection, and sample bias. It may be more instructive to analyze the financial actions of the most interested market actors: congressional candidates.

We want to know - where are congressional candidates up for election putting their hard-bought campaign dollars? Are Republican candidates, for instance, tying themselves to the GOP candidate? Or are they assuming a posture of independence from the party establishment? (It goes without saying that all candidates in the 2008 cycle are either attacking or ignoring President Bush.) How much of each candidate’s campaign expenditure co-opts the Obama theme of “change”, how much focuses on the candidate’s individual brand, how much on party affiliation, how much on the economy, etc.

From data on each candidate’s media expenditure - along a breakdown similar to that implied above - we can find regression coefficients that essentially mimic the market price for each “meme”. These market prices could be aggregated regionally or nationally or through district segmentation (”hard red”, “leans blue”, etc.). Extrapolating based on such prices at the state level should provide a better forecast of the electoral dominos than opinion survey-based polling.

An illustrative instance comes from the following ad released by Senator Gordon Smith (R-OR). He is not only allocating dollars to the “bipartisanship” meme, he is explicitly attempting to leverage the Obama brand.

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March 4, 2008 by Sanjay.

As a sort of a last-minute save, I recently agreed to give a talk on “practice development” at an upcoming INFORMS conference. After some discussion, the primary organizer agreed to extend my submission deadline by five days. The slides for the printed conference proceedings are now due four days hence. After some late night work, I have was able to pull out a title and a generic-enough abstract. But fleshing out a talk from the ideas fluttering around one’s brain - all the while not contradicting either the title or abstract - is a challenge. There is not a lot of time.

To promote authorial peristalsis, I took tough steps! I flew to Davis to discuss my presentation plan with my colleague and friend, Professor Hemant Bhargava of the University of Calfornia at Davis. Unfortunately, we spent most of the time discussing Hemant’s fascinating new research on complex pricing, e.g., multi-attribute pricing as used by mobile phone providers. On most cell phone plans, you pay a flat monthly fee f, for which you get a quota of q minutes, and if you exceed your quota, you pay p cents per additional minute. This triple-attribute pricing can be labeled “fqp pricing”. In contrast, airline pricing is single-attribute: you pay a flat fee. Airlines exploit the price elasticity curve by offering multiple options, like items on a menu, at different price-points. Hemant can show that done right, multi-attribute pricing allows a vendor to drastically reduce the number of items on a service menu. It is, in an economic sense, much more efficient.

I did get the chance to get Hemant’s views on “what is to be done” in OR practice. This discussion during a lovely, if short, hike around Lake Beryessa convinced me that I have something new to say about the state and trajectory of the art. No progress on the talk itself, though!

My “concrete step” today focused on reading Sociological theory on what defines a practice. Using scholar.google.com as my primary “library”, I read up on the historical development of professions. (Did you, for instance, know that medicine, the law, and divinity are the original “status” professions?) Sadly, my all-too-necessary investigation, by some non-replicable clickstream, deposited me at an article by Professor Amartya Sen, titled Imperial Illusions. At that point I abandoned all hope of progress on my talk and began reading the long article sans fig leaf.

In the essay, originally published in The National Review, Sen purports to use the British imperial adventure in India to illuminate today’s American empire-except-in-name:

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It has been suggested that the annals of the British empire are relevant to significant policy issues in the world today. The British empire is invoked persistently these days to discuss the demands of successful global governance. It is used to persuade the United States to acknowledge its new role as the unique imperial power today,… “Should the United States seek to shed or to shoulder the imperial load it has inherited?”

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To release the cat up-front: Sen does nothing of the sort. Instead, he digresses, most enjoyably I confess, into describing the susage-making of eigtheenth century colonialism. For instance, here is his description of the endemic corruption spawned by the East India Company:

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If Americans are to be inspired by the disciplined regularity of early British rule in India, they would do well to avoid reading Adam Smith’s The Wealth of Nations, particularly Smith’s discussion of the abuse of state power by a “mercantile company that oppresses and domineers in the East Indies. ” While most of the loot accrued to British company officials in Bengal, there was widespread participation in all this by the political and business leadership in Britain. Indeed, nearly a quarter of the members of Parliament in London owned stock in the East India Company in the 1760s, the decade that followed Plassey (as Robert Travers discusses in his illuminating book Ideology and Empire in Eighteenth-Century India: The British in Bengal). The commercial interests at the beginning of the empire in India reached far into the British establishment.

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(Italics mine.) Hm… Halliburton, anyone?

Sen underlines (for the primarily American audience of TNR) the rapaciousness of British colonial policy. In the process, he applies his formidable intellect to the rather workmanlike task of illuminating the received dialectic of British rule in the West: at its core, the British empire was moral. (And the corollary, that “British morality” was the key factor in Gandhi’s success with non-violence.)

History, they say, is written by the victors. Post-WWII Britain emerged from losing the jewel in its crown with remarkably clean skirts. And due to the subsequent ascendence of its cultural progeny - the USA - the “essentially moral-hearted colonizer” narrative is distressingly alive in the Western public discourse on colonialism. It’s good to have someone of Sen’s stature helping re-assemble history.

None of this helps me prepare my talk. Nevertheless, it’s good to read the original argumentative Indian.

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April 20, 2006 by Sanjay.

I learnt today that Amitava, a high school classmate, has gained some repute as a critic and litterateur. And since punditry impels fame, he has a blog, wherein he talks about the playwright David Hare and his love of public speaking. Hare is perhaps most well-known for Blue Room, which starred Nicole Kidman’s bare behind on Broadway in 1998-99.

It amazes me that as that coolly analytical actress was acknowledging her sold out audiences’ fervent, albeit single-handed, applause, down the street in the Booth Theater, Hare was himself “starring” in another one of his plays - Via Dolorosa. (The same year another play, Amy’s View, also had  a successful Broadway run. It was quite the year for Sir Hare! And if polemic turns you on - I mean that in a good way! - check out Hare’s latest, Stuff Happens, currently running in New York.)

Via Dolorosa is a clever, yet empathically humane report of the Arab-Israel conflict. I hesitate to say anything more about it, for two reasons. First, it’s been extensively and more competently critiqued elsewhere. And second, because it is one of those dense monologues that is better experienced than talked about. (Confession: Plus, it’s also been 7 years since I saw it. Unless I cheat by renting the filmed version, I know I have forgetten many important bits.) One of the funnier bits in the play is where Hare says:

“[In England,] people lead shallow lives because they don’t believe in anything anymore. [In Israel,] in a single day I experience events and emotions that would keep a Swede going for a year.”

I thought of Hare’s quip when I spoke this morning with Ron, an Israeli colleague.  After we were done discussing the technical stuff, I asked in my best bedside manner what people around him were saying about last week’s suicide bombing of a falafel restaurant. The bombing was significant in being the first major attack in Tel Aviv after Hamas assumed power of the PA, and because it took place the day the new Kadima coalition was to be sworn in. Ron’s response? “Nothing. People are not talking about it.” Even being used to, as I am, Ron’s phlegmatic affect, I was taken aback and wondered, “Have the Israelis been incorporated into the Borg Collective?”

After more thought I decided that it was just Ron being a Tel Aviv-ian. Tel Aviv is a remarkable city, and perhaps the most remarkable thing about it are its denizens. They’re busy but friendly and surprisingly easygoing, seemingly adjusted to living in interesting times. Entering the opera house for an 8 PM performance (of what turned out to be a somewhat lacklustre but still entertaining Don Carlo) the guard asked me casually if I was carrying a gun! When I stammered back, “ggggun? nnooo! no gun!”, he let me carry on without another glance. A far cry from the TSA!

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