Do you take rational decisions?

Here's an interesting article by David Brooks that talks about that question (as applied to the current economic environment)

"In this new body of thought, you get a very different picture of human nature. Reason is not like a rider atop a horse. Instead, each person’s mind contains a panoply of instincts, strategies, intuitions, emotions, memories and habits, which vie for supremacy. An irregular, idiosyncratic and largely unconscious process determines which of these internal players gets to control behavior at any instant. Context — which stimulus triggers which response — matters a lot."

VaR

Here's an excellent article by Joe Nocera on the role Value at Risk (VaR) played in the current financial crisis. It is like a story on VaR.

"In peacetime, you think about other people’s intentions. In wartime, only their capabilities matter. VaR is a peacetime statistic.

The big problem was that it turned out that VaR could be gamed....To motivate managers, the banks began to compensate them not just for making big profits but also for making profits with low risks. That sounds good in principle, but managers began to manipulate the VaR by loading up on what Guldimann calls “asymmetric risk positions.” These are products or contracts that, in general, generate small gains and very rarely have losses. But when they do have losses, they are huge. These positions made a manager’s VaR look good because VaR ignored the slim likelihood of giant losses, which could only come about in the event of a true catastrophe."

Satyam Scandal

Here's a pretty comprehensive article that appeared on Knowledge@Wharton on Satyam

My Genome, My Self - NYT Article

Here's Steven Pinker's article that appeared in the NYT on Personal genomics. And here's a direct-to-consumer company that interprets you genetic information for about $100.

And below are some interesting excerpts from the article

"The very fact that I had to think so hard brought home what scholars of autobiography and memoir have long recognized. None of us know what made us what we are, and when we have to say something, we make up a good story.

An obvious candidate for the real answer is that we are shaped by our genes in ways that none of us can directly know. Of course genes can’t pull the levers of our behavior directly. But they affect the wiring and workings of the brain, and the brain is the seat of our drives, temperaments and patterns of thought. Each of us is dealt a unique hand of tastes and aptitudes, like curiosity, ambition, empathy, a thirst for novelty or for security, a comfort level with the social or the mechanical or the abstract. Some opportunities we come across click with our constitutions and set us along a path in life.

This genetic roulette must be even more significant in an organism as complex as a human, and it tells us that the two traditional shapers of a person, nature and nurture, must be augmented by a third one, brute chance.

Direct-to-consumer companies are sometimes accused of peddling “recreational genetics,” and there’s no denying the horoscopelike fascination of learning about genes that predict your traits. Who wouldn’t be flattered to learn that he has two genes associated with higher I.Q. and one linked to a taste for novelty?

It is a question of the most perspicuous level of analysis at which to understand a complex phenomenon. You can’t understand the stock market by studying a single trader, or a movie by putting a DVD under a microscope.The fallacy is not in thinking that the entire genome matters, but in thinking that an individual gene will matter, at least in a way that is large and intelligible enough for us to care about."

The social logic of Ivy League admissions

Here's a very interesting article by Malcolm Gladwell on some surreptitious history in Ivy league admissions

A culture of enough

Here's a good article by Rohini Nilekani that appeared on Live Mint.