SFI Professor and behavioral scientist, Samuel Bowles, has recently been studying performance-related pay. His research shows that performance-related pay does not encourage employers to work harder. In fact, Bowles’ research shows the opposite: many employees have a loss of motivation and a diminishing capacity for fairness and other workplace ethics. Behavioral economists will be studying the effectiveness of workplace performance incentives more in the coming years as the economy continues to change.
SFI Business Network Member, Steelcase’s vice president for global design, James Ludwig, reflects on the fragile state of the contract furniture industry. Ludwig states how he is setting up strategic plans for the future. Steelcase is using research scientists at the Santa Fe Institute in order to help forecast future developments.
Dr. Jeremy Sabloff will join the Institute August 1 to lead SFI’s cutting-edge research community as it celebrates its 25th Anniversary. “We are delighted Jerry has accepted our offer,” says Bill Miller, Chairman and Chief Investment Officer of Legg Mason Capital Management and Chairman of SFI’s Board of Trustees. “We need a broad and deep intellectual to build SFI’s scientific footprint and Jerry uniquely combines an understanding of our multidisciplinary science with executive level administrative and fundraising experience."
William C. Enloe, Chairman and Chief Executive Officer of Los Alamos National Bank in Santa Fe and SFI Board of Trustee is the recipient of the 2009 NeighborWorks@Business Leadership Award. “Through his volunteerism and demonstrated commitment to affordable home-ownership opportunities and economic development, Bill Enloe has made significant contributions that have strengthened Santa Fe’s communities,” said Ken Wade, CEO of NeighborWorks@America. “His efforts serve as an inspiration to others.” Mr. Enloe is dedicated to his community and to creating more affordable housing solutions in northern New Mexico. Mr. Enloe was directly involved in the development of an affordable housing subdivision in Santa Fe by assisting in establishing the necessary bond and by approving Los Alamos National Bank (LANB) loans for developers within the subdivision. Mr. Enloe was instrumental in enabling Homewise, a member of the NeighborWorks network to provide second mortgages to clients so that they may reduce the down payments required for affordable home purchases. As a member of the Downtown Master Plan Committee and the Los Alamos Housing Authority Board, Mr. Enloe worked to establish goals and policies for affordable housing in Los Alamos and provide affordable housing for teachers, police and public servants. Most recently, Mr. Enloe partnered with Homewise to develop a homebuyer program for LANB employees through Homewise’s employer-assisted housing campaign.
Cyber phenom feels home with the ‘smart crazies’ — ‘Disruptive technologist’ drawn to Santa Fe Institute
Virgil Griffith, the creator of WikiScanner, has spent the past four summers as an undergraduate researcher at SFI. WikiScanner is a program that lets you see who is editing content in Wikipedia. Griffith began his work on WikiScanner while at SFI. This WikiScanner program has busted Wal-Mart and several other major corporations editing and removing content from the Wikipedia entry of their companies. Griffith has been drawn to SFI since he was in high school. He always wanted to be “where all the really smart crazies are.” And as SFI President Geoffrey West said, “He’s certainly one of our crazy smart people. He’s very interesting and he’s very SFI-ish.” Griffith will spend all of September at SFI continuing work on his plethora of projects.
Mobile phones are being used to collect data for a variety of different disciplines and SFI Omidyar Fellow, Nathan Eagle, is studying human movement and behavior through mobile phones. In an experiment at MIT, Eagle studied call logs of 100 students and staff and found he could sort the business students from other majors with 96% accuracy. Eagle is going to experiment on a larger scale next by studying millions of mobile phone users throughout Europe and parts of East Africa. Part of his study is to see if certain phone behaviors can help alert public health officials in the early stages of disease outbreaks.
SFI researcher, Virgil Griffith, created a program called WikiScanner, which tracks computers used to make changes and edits to Wikipedia entries. WikiScanner revealed CIA and FBI computers were used to edit topics on the Iraq War and the Guantanamo prison. WikiScanner also found computers at other organizations were used to edit topics related to them.
Mortgage investors mostly agree that the government’s plan to reverse the housing slump is doing more harm than good. The government’s actions will increase borrowing costs because creditors would demand higher returns. Capital is going to cost more. Economist and SFI external professor John Geanakoplos has stated that “Obama’s plan will mostly be ineffective in cutting losses because it focuses on lowering payments rather than reducing homeowner debt.” Geanakoplos has advocated breaking contracts by putting the power to modify loan terms into the hands of independent arbiters.
Harvard Medical School professor and SFI external professor, Walter Fontana and colleagues have created Cellucidate, a new tool to help biologists uncover general principles about cellular signaling. Cellucidate would turn network diagrams of signaling pathways into living and breathing systems. Fontana mixed Kappa, a computer language “tuned to express basic interactions between proteins,” with a method called “coarse-graining” into computational models. By coarse-graining under Kappa’s rules, an automated compression is formed, filtering out permutations that have no bearing on the current model. The goals of Cellucidate include modeling and simulation to speed drug discovery and cure cancer. Fontana also helped found a company called Plectix BioSystems which provides a shared online space for scientists to use Cellucidate. Fontana adds, “Plectix wants to be the Facebook of proteins…where scientists will make models collaboratively.”
Warfare was sufficiently common and lethal among our ancestors to favor the evolution of what Sam Bowles, SFI Professor, calls parochial altruism, a predisposition to be cooperative towards group members and hostile towards outsiders. Biologists and economists have doubted that a genetic predisposition to behave altruistically (help others at a cost to oneself) could evolve (excepting the help extended to close genetic relatives). Skepticism among biologists arose primarily because most think that groups are not sufficiently different genetically to favor group selection (the most obvious evolutionary mechanism promoting altruism beyond the family). But both observation in natural settings and experiments (some of them by Bowles and his co authors) show that altruism is quite common among humans (much more so than in most other animals). In a series of recent papers Bowles shows that altruism could have evolved among humans as a result of the advantages that altruistic groups have in military and other competition with other groups.
During a recent German Physical Society meeting Stefan Thurner, SFI External Professor and director of complex systems research group at the Medical Univeristy of Vienna, reported that leverage--the practice by hedge funds and other investors of borrowing money to buy investments--is the root of many nettlesome properties of financial markets that classical economics cannot explain, including a propensity to crash. The model shows that many of the distinctive statistical properties of financial markets emerge together as rates of leverage climb.
We live in a post-Darwinian world, and it is no longer possible to conceive of life without some reference to Darwin's theories. But the world is more complex than Darwin supposed. Whereas an evolutionary perspective pervades all of biology, economics and politics, we are confronted by a range of post-Darwinian complexities and challenges that require a new and expanded set of ideas. Five short presentations by SFI faculty explore both the influence and the limitations of Darwin's thought on modern science, and introduce several of the ways the Santa Fe Institute has responded to and built upon Darwin's legacy.
Many people are regarding this current economic collapse as a “black swan” or an unpredictable sudden shift. But physicists and other scientists say it is predictable and they can prove it through science and technology. These scientists can create a computer model of our entire economy to study complex systems such as the financial markets. Yale economist and SFI External Professor John Geanakoplos is currently working with physicists in examining hedge funds and how their competition to win investors shifted the market. Economists need to partner with scientists to get a complete holistic view of the situation and work toward predicting the same situation early enough to stop in and make the necessary changes in time.
John Geanakoplos, SFI External Professor, and Susan Koniak write that the plan announced by the White House will not stop foreclosures because it concentrates on reducing interest payments, not reducing principal for those who owe more than their homes are worth. The plan wastes taxpayer money and won’t fix the problem.
January 5, 2009 / SFI President Geoffrey West is researching the similarities between biology and human organizations such as cities. West began by researching biological networks which led him to compare his findings on natural systems to the social systems of cities. To illustrate his findings, West uses examples of an elephant versus a mouse to show how in biology, the bigger an individual is, the slower the pace of its life. However, the opposite shows true in social organizations such as cities, where the bigger the organization, the faster their actions. West attributes the difference to wealth creation of our societies. This creates an unsustainable way of life.
January 4, 2009 / SFI External Professor Duncan Watts explains the two main reasons why predicting outcomes is difficult. For one, individuals are hard to predict because we can change our behavior based on subtle details such as background music or a writer’s font selection. Secondly, individuals decide many things based on popularity with others. To demonstrate this, Watts and collaborators conducted online experiments to see how certain songs become hits while other songs don’t make it. When you have people making decisions based on what other people are doing, prediction becomes impossible due to the errors of social influence.
January 2, 2009 / Researchers at SFI have created complex mathematical algorithms to show how urban settings lead to higher levels of innovation. This is partly due to many strangers interacting in unpredictable ways. These researchers refer to it as “concentration of social interactions.” Other research has shown that city life impairs our memory and self-control but that nature, even a walk through a park, helps your mind. So then we need to find a way to balance the intellectual innovations while still being able to cope with stressors in densely populated urban areas.