Broken Symmetry

Balance-Sheet Networks

From Robert M. May, Simon A. Levin and George Sugihara:

although the study of payment flows is of immediate interest to central bankers, it may miss an essential aspect of systemic risk, namely the ‘contagion dynamics’ of public perceptions and asset valuation associated with the interaction of balance-sheets (the mutual financial obligations and exposures that link companies). For example, how contagious are inflated valuations of Internet stocks? Are there hidden, mutually dependent risks associated with such high valuations? It could be useful to examine the dynamic network of balance-sheets, and if possible to quantify the inter active effects of valuations, credit policies, hedging and so on among financial institutions, especially investment banks. Such balance-sheet networks could be helpful in studying the effects of asset- pricing bubbles, credit crises and the poorly understood but potentially worrying effects of the current widespread use of derivatives (futures and options) and dynamic hedging by investment banks to manage risk on the fly.

Just discovered Sugihara through a link in an interesting post on O'Reilly Radar.

Bookstaber Smooths Out Complexity

Interesting as usual:

Finance is often regarded as a game, but by the conventional von Neumann definition it is not. Granted it is ostensibly circumscribed by the rules of law, but so is war circumscribed by the rules of the Geneva Convention (at least conventional war). Adversaries at war do not have to play by the same rules or even play the same game. Indeed, what more is the strategy of war than playing the game that works to your advantage, and doing so while keeping your adversary unaware of that game? What more is the charge of “asymmetric warfare” than having an adversary that is not playing by your rules or your game – and is winning the war in the process?

Tech Transfer "Professional"?

I wish I could say that the author means the whole thing tongue in cheek, but he appears to actually mean it:

It is super easy to spot the overtly "bad" academic inventors: no funding, no data, surly disposition, body odor, etc. Even a brand new technology commercialization professional can spot these jokers their first week on the job.

The overtly bad inventor is also great because no one blames you for not working with him/her. Their chairperson things that he/she is a mediocre scientist --- a true "hiring mistake" --- and wishes they would go away. And, you don't have to worry about them complaining to the upper university administration because they hate the guy/gal too.

...

Even though you won't have any creative control, you should protect their idea because (a) it is a good idea and (b) a technology commercialization person has never lost their job for patenting inventions from well-regarded faculty members who publish is great journals.

One could not fabricate a better piece of evidence that we are wrongly managing the disclosures, patenting, and marketing of university technology. Supreme Court, are you listening?

Mechanisms for Cultural Evolution

From Lesley Newson and Peter J. Richerson:

The basic cultural evolutionary mechanism is a “teaching bias” in the terms of Boyd and Richerson (1985). Most people normally espouse values, norms, and behaviors similar to those held by others in their community. Thus, younger people’s values, norms, and behaviors substantially refl ect those of the previous generation, and culture includes an inertial effect simply by consequence of people learning from each other. However, the same people when communicating with a close relative are slightly more likely to express variants of conventional norms that favor reproductive success, while those communicating with a friend, coworker, or other non-relative are slightly more likely to emphasize other goals. Newson et al. (2007) report role-play experiments that show this effect and also present a theoretical model that indicates how a decrease in the ratio of relatives to non-relatives in a social network can lead to the decline of norms favoring inclusive fi tness derived from the biased teaching effect. The rate of decline depends upon the strength of the teaching bias and on the ratio of kin to non-kin in social networks. But, even if the change in network structure is rapid and the teaching bias is quite strong, it is still likely to take several generations for a population to approximate a new equilibrium in norms related to reproduction.

Via @GarrettJones on Twitter. The paper is interesting throughout.

This Day in History: University Research and the Internet

From the Computer History Museum:

March 16, 1990

Internet Extends Beyond U.S. to Europe

The National Science Foundation announces it will extend its network with a high-speed data link to Europe. Five years earlier, the Internet in its modern form had started to develop rapidly thanks to the formation of the NSFNET, which linked five supercomputer centers in the United States. Later in 1990, Europe contributed to the growth of the Internet when CERN's Tim Berners-Lee developed HTML, the language used for the World Wide Web.

Has any technological development done more to change the world in the same period of time? Why do some folks seem to have forgotten how the Internet got started? There were lots of venture capital funds around in 1990. How many were ponying up to fund a transatlantic link between NSFNET and Europe?

FTC issues Report on the Patent System

From the FTC press release:

A new Federal Trade Commission report recommends improvements to two areas of patent law policies affecting how well a patent gives notice to the public of what technology is protected and remedies for patent infringement. The report, The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition, emphasizes that the patent system and competition policy share the goal of promoting innovation that benefits consumers.

Available here. My letter comment posted here was cited in a few places in the report. In general, I like what I'm reading. I'm disappointed that the report wasn't issued sooner given the imminent passage of reform legislation. Kudos to the authors for completing such a formidable task.

The Future of Technology Transfer in the United States

-- hanging in the balance. From yesterday's transcript in Stanford v. Roche:

JUSTICE BREYER: My point is that it's somewhat remarkable because of this new statute, now that happens to only to inventions in those areas that are inventions of the contractor who, by the way, invents nothing. Human beings invent things, not entities like universities.

MR. FLEMING: That's quite so.

Based on the transcript, I am hopeful that the Supreme Court gets what is so important about this case. So much hangs in the balance.

For a good background on the case, see this note by Ronald Mann on the Scotusblog.

Pam Karlan taught me Constitutional Law at Stanford Law School. I spent an uncomfortable amount of time arguing with her in front of the class. I have the highest respect for her advocacy, but evenhandedness was not one of her strengths, at least when I took her class.