foodforthought

Hold your breath for a second, and think about your chances of winning the big one in the sweepstakes. About one in a million, right? That's not very much, but hey, I can spare a few bucks for a one in a million chance of winning the good life.

Now, consider the same one in a million chance in a different scenario.

Based on the frequency of previous asteroid impacts, the probability of an extinction-level (≥10 km) asteroid impact in this century is around one in 1 million. Jason G. Matheny, Reducing the Risk of Human Extinction

Surprisingly effective explanations for the current financial meltdown emerge from the natural sciences. A growing body of work translates insights from biology, physics and mathematics into powerful models for economic interactions.

The key element that binds these narratives together is: emergent complexity. These models skimp on explaining individual behavior. They lack a 'theory of the firm' and 'bounded rationality' concepts. Indeed, such models feature the coarsest imaginable agents, with only very rude binary (positive/negative) relationships to other agents and very rude binary (alive/dead) state.

Stringing such simplex agents together in networks that obey equally simple rules, modeling outcomes are achieved that show an uncanny resemblance to actual, historical, economic data time series. The implications are profound: individual decisions don't matter very much, the actual outcomes are determined by structural properties, i.e. by the network of interactions.

Even more mind-boggling is the cross-disciplinary reach of these effects: a stock market crash very much resembles a traffic jam very much resembles species extinction events: the mathematics is much the same in each of these very different problem domains.

This points to an underlying regularity in the laws governing complex systems, of which the economic system is but a specific manifestation. To paraphrase McLuhan: the network is the effect. It is the structure of a network, rather than the actions of network participants, that determines the eventual outcome.

The crisis on Wall Street is like a Rorschach test: it seduces people into making statements that primarily reflect their own state of mind. Everybody finds something to his liking that he latches onto.

Fast-growing tech companies need fast-growing web applications. This promotes a quick-fix programming culture. The original application is twisted and morphed to serve purposes (and load levels) that are way beyond the original design scope.

The result is a monster of Frankenstein, that everybody is afraid of. Any change can have catastrophic consequences. The system can't be remedied. It can't be missed. It can break down any minute now. So it has to be replaced. Fast.

Such is the irrefutable logic that invites disaster.

TomTom CEO Goddijn reportedly said:

The end of the era of paper maps is near.

Which is a perfectly sensible thing to say, if you're selling GPS devices. Apart from that, this statement offers a tantalizing bit of insight into the impact of ubiquitous computing on our culture.

the end of the era of paper maps

Could it be true? Are large groups of people happy to ditch those cumbersome folds of paper, navigating their way to their holiday destinations with a small computer sucked to their windscreens?

A new green ethos is flowering on the ruins of the "old" environmental movement that buried itself in eighties-style gloom-and-doom sermons.

Note the ingenious change of spin. No more: you shouldn't do harm. Rather: you can and should do good. The message has become far more attractive and empowering.

NL online trends

OECD broadband penetration

This is probably a harbinger of a worldwide trend: The Netherlands has one of the highest broadband penetration rates worldwide (second only to Denmark). Expect everyone, everywhere to be online more (and watch less TV), as internet connections become faster, cheaper and more widely available worldwide.

Such a surge in internet usage cannot but translate directly in a surge in demand for internet services. The web development business is booming here. Now we know why

The war on spam is mostly waged between spammers and ISP's, invisible to the public.

Earlier I wrote about greylisting. That's a fairly minimal change in handling email, that reduces the spam volume on our mail servers disproportionately. How can this be? Let's take a look at the economics involved.

Green IT is all the rage.

60 percent of global executives view climate change as important to consider within their companies' overall strategy McKinsey report on ITstrategyblog.com

A sudden outbreak of tree-hugging planet-conciousness? Nah.

I think the real reason that most IT shops should be looking at going green is the sheer cost savings component of it SUN CIO Bob Worrell on Biz-tech 3.0

First and foremost, this new trend is powered by record oil prices. Second: green has become a magical marketing word. A green spin covers any sin.

Hot air has become big business.

In Why most things fail, Paul Ormerod gleefully attacks economic orthodoxy. Traditional economic theory fails to explain the complexity and dynamics of the real world. Much more promising is an artificial life approach. Here, unpredictable interactions between simple agents give rise to complex behavior of the system as a whole.

Creating a simple computer model of a software market in which some firms pursue an open source strategy turns out to be very instructive, and funny.

See the group of ooo.......> agents up top? That's the open sourcers, competing with the closed source xxxxx.........> firms. You can click on the image to see an animation, or download the model and run your own simulations.

Chris Anderson is a smart guy, but his Wired article on the zero dollar economy has some major flaws.

• Convoluting the fixed costs of filling a server rack, with the marginal cost of serving additional customers, with economies of scale, is rather confusing. The fact that serving an extra customer is free, does nothing to explain how you'll reach return on investment and pay for depreciation. Nor does scaling, which does explain a tendency to monopolization, but that isn't mentioned.
• Narrowing externalities down to the non-monetary values of reputation and attention is rather unhelpful. There's enough monetary externalities that merit attention. Network effects, anyone?
• A glaring deficiency is any treatment of transaction costs. It's transaction costs diving to zero, far more than marginal costs diving to zero, that powers the surge in networked business today. The two are highly complementary.

In 2001, Manuel Castells published an instant classic: The Internet Galaxy, Reflections on the Internet, Business, and Society. Re-reading it strikes you full force with the enormity of changes we've seen already, in the few years since 2001.

Here your are, in the age of World of Warcraft and Facebook, reading a text that analyzes role-playing chat environments and The Well as premier instances of social behaviour on the internet. Meet The Flintstones.

However, in other respects, Castells turns out to be a powerful visionary.

Not every project can succeed. Now Mitch Kapor leaves OSAF, the chances for Chandler to fulfill it's vision have become very slim indeed.

Externalities, asymmetric information, game theory, network effects, innovation diffusion: understanding the countermeasures arrayed against spam, involves a venerable catalog of analysis tools in the economics of information.

Since this is just a blog post, not a book, I'll try and keep it short and sweet.

Rolling Stone features an interview with William Gibson

My assumption has always been that at some point we would lock on to a literally exponential increase in human knowledge. That was my best guess, somewhere back in the Seventies.

Gibson invented the word cyberspace. As in transcyberia....