books – Page 2 – Pertinent Observations

Gamification and finite and infinite games

Ok here I’m integrating a few concepts that I learnt via Venkatesh Guru Rao. The first is that of Finite and Infinite games, a classic if hard to read book written by philosopher James Carse (which I initially discovered thanks to his Breaking Smart Season 1 compilation). The second is of “playflow”, which again I discovered through a recent edition of his newsletter.

A lot of companies try to “gamify” the experiences for their employees in order to make work more fun, and to possibly make them more efficient.

For example, sales organisations offer complicated incentives (one of my historically favourite work assignments has been to help a large client optimise these incentives). These incentives are offered at multiple “slabs”, and used to drive multiple objectives (customer acquisition, retention, cross-sell, etc.). And by offering employees incentives for achieving some combination of these objectives, the experience is being “gamified”. It’s like the employee is gaining points by achieving each of these objectives, and the points together lead to some “reward”.

This is just one example. There are several other ways in which organisations try to gamify the experience for their employees. All of them involve some sort of award of “points” for things that people do, and then a combination of points leading to some “reward”.

The problem with gamification is that the games organisations design are usually finite games. “Sell 10 more widgets in the next month”. “Limit your emails to a maximum of 200 words in the next fifteen days”. “Visit at least one client each day”. And so on.

Running an organisation, however, is an infinite game. At the basic level, the objective of an organisation is to remain a going concern, and keep on running. Growth and dividends and shareholder returns are secondary to that – if the organisation is not a going concern, none of that matters.

And there is the contradiction – the organisation is fundamentally playing an infinite game. The employees, thanks to the gamified experience, are playing finite games. And they aren’t always compatible.

Of course, there are situations where finite games can be designed in a way that their objectives align with the objectives of the overarching infinite game. This, however, is not always possible. Hence, gamification is not always a good strategy for organisations.

Organisations have figured out the solution to this, of course. There is a simple way to make employees play the same infinite game as the organisation – by offering employees equity in the company. Except that employees have the option of converting that to a finite game by selling the said equity.

Whoever said incentive alignment is an easy task..

Marginalised communities and success

Yesterday I was listening to this podcast where Tyler Cowen interviews Neal Stephenson, who is perhaps the only Science Fiction author whose books I’ve read. Cowen talks about the characters in Stephenson’s The Baroque Cycle, a masterful 3000-page work which I polished off in a month in 2014.

The key part of the conversation for me is this:

COWEN: Given your focus on the Puritans and the Baroque Cycle, do you think Christianity was a fundamental driver of the Industrial Revolution and the Scientific Revolution, and that’s why it occurred in northwestern Europe? Or not?

STEPHENSON: One of the things that comes up in the books you’re talking about is the existence of a certain kind of out-communities that were weirdly overrepresented among people who created new economic systems, opened up new trade routes, and so on.

I’m talking about Huguenots, who were the Protestants in France who suffered a lot of oppression. I’m talking about the Puritans in England, who were not part of the established church and so also came in for a lot of oppression. Armenians, Jews, Parsis, various other minority communities that, precisely because of their outsider minority status, were forced to form long-range networks and go about things in an unconventional, innovative way.

So when we think about communities such as Jews or Parsis, and think about their outsized contribution to business or culture, it is this point that Stephenson makes that we should keep in mind. Because Jews and Parsis and Armenians were outsiders, they were “forced to form long-range networks”.

In most cases, for most people of these communities, these long-range networks and unconventional way of doing things didn’t pay off, and they ended up being worse off compared to comparable people from the majority communities in wherever they lived.

However, in the few cases where these long-range networks and innovative ways of doing things succeeded, they succeeded spectacularly. And these incidents are cases that we have in mind when we think about the spectacular success or outsized contributions of these communities.

Another way to think of this is – denied “normal life”, people from marginalised communities were forced to take on much more risk in life. The expected value of this risk might have been negative, but this higher risk meant that these communities had a much better “upper tail” than the majority communities that suppressed and oppressed them.

Given that in terms of long-term contributions and impact and public visibility it is only the tails of the distribution that matter (mediocrity doesn’t make news), we think of these communities as having been extraordinary, and wonder if they have “better genes” and so on.

It’s a simple case of risk, and oppression. This, of course, is no justification for oppressing swathes of people and forcing them to take more risks than necessary. People need to decide on their own risk preferences.

Gruffaloes and Finite Games

One story that my daughter knows well, rather too well, is the story of the Gruffalo. This is a story of a mouse told in two parts.

In the first part, the mouse fools a fox, an owl and a snake from eating him by convincing them that he’s having lunch, tea and dinner respectively with a supposedly imaginary creature named “Gruffalo”. And when they each ask him what the Gruffalo is like, he makes up stuff fantastically (terrible teeth in terrible jaws, turned out paws, etc.).

Except that midway through the story there is a kahaani mein twist, and the mouse actually encounters the gruffalo. In the second part of the story, the mouse tells the gruffalo that he is going to have lunch, tea and dinner with the fox, owl and snake, and prevents the gruffalo from eating him. And the mouse lives another day.

It is evidently a nice story, and the rhyme means that the daughter had mugged up the entire story enough when she was barely two years old that she could “read” it when shown the book (she can’t read a word yet). However, I don’t like it because I don’t like the plot.

One of the most influential books I’ve read is James Carse’s Finite and Infinite Games. Finite Games are artificial games where we play to “win”. There is a defined finish, and there is a set of tasks that we need to achieve that constitutes “victory”. Most real-life games are on the other hand are “infinite games” where the objective is to simply ensure that the game simply goes on.

From the point of stories, the best stories are ones which represent finite games, where there is a clear objective, and the story ends in “victory” or “lack of victory” (in the case of a tragedy). The Good, The Bad and the Ugly has the finite aim of finding the treasure buried in the graveyard. Ganeshana Maduve has the finite aim of YG Rao marrying “Shruti”. Gangs of Wasseypur has the finite aim of the Khan family taking revenge on Ramadhir Singh. Odyssey has the finite aim of Odysseus returning home to Penelope. And so forth.

Putting it another way, finite games make for nice stories, since stories are themselves finite, with a beginning and an end. A story that represents an infinite game is necessarily left incomplete, and you don’t know what happens just outside the slice of action that the story covers. So infinite games, which is how life is lived, make for lousy stories.

And the gruffalo story is an infinite game, since the “game” that the mouse is playing in the story is survival – by definition an infinite game. There is no “victory” by being alive at the end of the day the story covers – like there is no she-mouse to marry, or a baby mouse to see for the first time, or a party to go to. It is just another day in the life of the mouse, and the events of the day are unlikely to be that much more spectacular than the days not covered by the story.

That is what makes the gruffalo story so unsatisfying. Yes, the mouse played off the fox, owl and snake against the gruffalo to ensure his survival, but what about the next day? Would he have to invent another creature to ensure his survival? Would the predators buy the same story another time?

I don’t know, and so the story rings hollow. But the rhyme is good, and so my daughter loves the story!

Telling stories with data

I’m about 20% through with The Verdict by Prannoy Roy and Dorab Sopariwala. It’s a fascinating book, except for one annoyance – it is full of tables that serve no purpose but to break the flow of text.

I must mention that I’m reading the book on the Kindle, which means that the tables can pose a major annoyance. Text breaks off midway through one page, and the next couple of pages involve a table or two, with several lines of text explaining what’s in the table. And then the text continues. It makes for a rather disruptive reading experience. And some of the tables have just one data point – making one wonder why it has been inserted there at all.

This is not the first book that I’ve noticed that makes this mistake. Some of the sports analytics books I’ve read in recent times, such as The Numbers Game also make the same error (I read that in print, and still had the same disruption). Bhagwati and Panagariya’s Why Growth Matters is similarly unreadable. Tables abruptly inserted into the middle of text, leading to the reader losing flow in the reading.

Telling a data story in book length is a completely different challenge to telling one in article length. And telling a story with data is a complete art form. When you’re putting a table there, you need to be able to explain why that table is important to the story – rather than putting it there just because it seems more rigorous.

Also the exact placement of the table (something that can’t be controlled well in Kindle, but is easy to fix in either HTML or print) matters – the table should be relevant to the piece of text immediately preceding and succeeding it, in a way that it doesn’t disrupt the reader’s flow. More importantly, the table should be able to add value at that particular point – perhaps building on something that has been described in the previous paragraph.

Book length makes it harder because people don’t normally expect tables and figures to disturb their reading flow when reading something of book length. Also, the book format means that it is not always possible to insert a table at a precise point (even in print, where pagination is an issue).

So how do you tell a book length story with data? Firstly, be very stingy about the data that you want to show – anything that doesn’t immediately add value should be banished to the appendix. Even the rigour, which academics might be particular about, can be pushed to the end notes (not footnotes, since those can be disruptive to flow as well, turning pages into half pages).

Then, once you know that showing a particular table or graph is inevitable to telling the story, put it either in the beginning or the end of a chapter. This way, it doesn’t break the reader’s flow. Then, refer to individual numbers in the middle of the text without having to put the entire table in there. Unless each and every data point in the table is important, banish it to the endnotes.

One other common mistake (I did it in my piece in Forbes published yesterday) is to put a big table and not talk about it. It only seeks to confuse the reader, who starts looking for explanations for everything in the table in later parts.

I guess authors and analysts tend to get possessive. If you have worked hard to produce insights from data, you seek to share as much of it as possible. And this can mean simply dumping data all the data in the piece without a regard for what the reader will do with it.

I’m making a note to myself to not repeat this mistake in future.

Tigers and Bullwhips

Over three years ago, well before our daughter was born, my wife’s cousin had told us that she likes to watch her daughter’s TV shows because they contained “morals”, which were often useful to her at work. While we never took to the “moral” TV show she mentioned (Daniel Tiger – it is bloody boring), I have begun to notice that there are important management lessons in other popular children’s stories.

So I hereby begin this blog series on what I call the “Kiddie MBA” – basically business lessons from kids’s stories. And we will start with that all-time classic, The Tiger Who Came To Tea, by Judith Kerr.

The basic premise of this story that remains a classic fifty years after being published is what operations managers call the “bullwhip effect“. Sometimes a business, possibly in trading, can be subject to a sudden demand, which the business will not be able to fulfil given its current inventories.

As a result of this sudden one-time spurt in demand, the business increases its future forecasts of demand, and starts keeping more inventory. This business’s supplier sees this increased demand and increases its own forecasts upward, and increases its own inventory. Thus, this one-time demand “shock” percolates up the supply chain, giving the illusion of higher demand and with each layer in the chain keeping higher and higher inventory.

And then one day the retailer will realise that this demand shock is not replicable and moves forecasts downwards, and this triggers a downward edge in the forecasts up the value chain, and demand at the source comes crashing down.

Being a children’s book, The Tiger Who Came To Tea eschews the complexity of the supply chain and instead keeps the story at one level – at the level of the household of the protagonist Sophie (not to be confused with Sophie the Giraffe).

The premise of the story is the demand shock for supplies in Sophie’s home – a tiger comes home for tea and eats up everything that’s at home, drinks up all that’s there to be drunk (including “all the water in the tap”) and leaves, leaving nothing for Sophie and her family.

Assuming that the tiger will return the next day, Sophie’s family stocks up heavily, including “lots of tiger food”. And the tiger never arrives.

My guess is that the rest of the supply chain is left as an exercise to the reader – how the retailer who sold Sophie the tiger food will react to the suddenly higher demand for food (and for tiger food), how this retailer’s supplier will react, whether the tiger visits some other household for tea the next day (making this demand “regular” at the retailer’s level), and so forth.

Perhaps this is what makes this such as great book, and an all-time classic!

Podcasts to replace books

Yesterday I listened to an excellent podcast episode with Steven Pinker at Amit Varma’s Seen and Unseen podcast. In this, they discuss concepts from Pinker’s latest book Enlightenment Now.

Pinker is an author I’ve found difficult to read. Based on glowing recommendations, I bought his books The Stuff of Thought and The Language Instinct a decade ago, but couldn’t get beyond the first ten pages of both, despite trying several times. As a consequence, I’ve declared that his writing style is not suited for me, and I won’t bother reading his books any more.

However, since I’ve heard good things about the book, listening to a podcast episode which covered the major concepts in the book was damn useful.

It is similar with poker player and author of Thinking in Bets Annie Duke. She’s highly regarded by the “finance twitter circlejerk” that I follow (I follow her as well), and she appears on several podcasts with members of this circlejerk. However, a friend whose opinions I trust told me that the book itself isn’t particularly great, and that there wasn’t that much in the book about thinking in bets per se.

A quick reading of the Kindle sample confirmed this hypothesis, so I didn’t bother with the rest of the book. Instead, I substituted for it by listening to a couple of podcasts that Duke has recorded, to get the best of her insights. This combined with following her on twitter, I don’t think I’ve done too badly.

I’ve found this “podcast trumping book” concept work in other cases and other ways as well. Beyond the first chapter, I found Ray Dalio’s Principles unreadable, but then I realised that I had got most of the concepts in the book from his podcast recording with Shane Parrish of Farnam Street.

Jordan Peterson’s 12 rules for life again is extremely insightful, but a very boring read. So for someone who doesn’t have the patience to plough through all his philosophy and religion stuff (which are weak compared to his psychology stuff which is incredible), I would just recommend that they listen to his podcast recording with Russ Roberts.

In some ways this takes me back to my old concept of how a lot of non-fiction books simply don’t have that much information content and just keep repeating the same points over and over. The antidote to this, I’ve argued, is to pack the book with a sufficient number of “side stories” so that there is more information packed in it. I think, and hope, that I’ve done this with my own book.

When an author records a podcast to promote a book, the intent is to get a potential reader to be attracted to the book, and hence the best concepts in the book get put out there. Also, as long as the podcast interviewer is good (Amit Varma, Russ Roberts and Shane Parrish are all very good podcast hosts), the podcast will never be boring and you’ll be able to get the information content in an easy way. So unless you want depth (I’m glad I ploughed through Jordan Peterson’s book since I found it has some depth, but not everyone would feel the same), just listening to the book-related podcasts should serve you well.

Oh, and I’ve recorded some five or six podcast episodes with Amit Varma’s seen and unseen podcast to discuss the book. I guess a lot of those listeners thought like me, so they didn’t bother buying my book!

Ticking all the boxes

Last month my Kindle gave up. It refused to take charge, only heating up the charging cable (and possibly destroying an Android charger) in the process. This wasn’t the first time this was happening.

In 2012, my first Kindle had given up a few months after I started using it, with its home button refusing to work. Amazon had sent me a new one then (I’d been amazed at the no-questions-asked customer-centric replacement process). My second Kindle (the replacement) developed problems in 2016, which I made worse by trying to pry it open with a knife. After I had sufficiently damaged it, there was no way I could ask Amazon to do anything about it.

Over the last year, I’ve discovered that I read much faster on my Kindle than in print – possibly because it allows me to read in the dark, it’s easy to hold, I can read without distractions (unlike phone/iPad) and it’s easy on the eye. I possibly take half the time to read on a Kindle what I take to read in print. Moreover, I find the note-taking and highlighting feature invaluable (I never made a habit of taking notes on physical books).

So when the kindle stopped working I started wondering if I might have to go back to print books (there was no way I would invest in a new Kindle). Customer care confirmed that my Kindle was out of warranty, and after putting me on hold for a long time, gave me two options. I could either take a voucher that would give me 15% off on a new Kindle, or the customer care executive could “talk to the software engineers” to see if they could send me a replacement (but there was no guarantee).

Since I had no plans of buying a new Kindle, I decided to take a chance. The customer care executive told me he would get back to me “within 24 hours”. It took barely an hour for him to call me back, and a replacement was in my hands in 2 days.

It got me wondering what “software engineers” had to do with the decision to give me a replacement (refurbished) Kindle. Shortly I realised that Amazon possibly has an algorithm to determine whether to give a replacement Kindle for those that have gone kaput out of warranty. I started trying to guess what such an algorithm might look like.

The interesting thing is that among all the factors that I could list out based on which Amazon might make a decision to send me a new Kindle, there was not one that would suggest that I shouldn’t be given a replacement. In no particular order:

I have been an Amazon Prime customer for three years now
I buy a lot of books on the Kindle store. I suspect I’ve purchased books worth more than the cost of the Kindle in the last year.
I read heavily on the Kindle
I don’t read Kindle books on other apps (phone / iPad / computer)
I haven’t bought too many print books from Amazon. Most of the print books I’ve bought have been gifts (I’ve got them wrapped)
My Goodreads activity suggests that I don’t read much outside of what I’ve bought from the Kindle store

In hindsight, I guess I made the correct decision of letting the “software engineers” determine whether I qualify for a new Kindle. I guess Amazon figured that had they not sent me a new Kindle, there was a significant amount of low-marginal-cost sales that they were going to lose!

I duly rewarded them with two book purchases on the Kindle store in the course of the following week!

Showing off

So like good Indian parents we’ve started showing off the daughter in front of guests. And today she showed us that she’s equal to the task.

A couple of weeks back, after seeing the photo of a physicist friend’s son with the book Quantum Physics for babies, I decided to get a copy. Like with all new things the daughter gets, she “read” the book dutifully for the rest of the day it arrived. She learnt to recognised the balls in the book, but wasn’t patient enough for me to teach her about atoms.

The next day the book got put away into her shelf, never to appear again, until today that is. Some friends were visiting and we were all having lunch. As I was feeding the daughter she suddenly decided to run off towards her bookshelf, and with great difficulty pulled out a book – this one. As you might expect, our guests were mighty impressed.

Then they started looking at her bookshelf and were surprised to find a “children’s illustrated atlas” there. We told them that the daughter can identify countries as well. Soon enough, she had pulled out the atlas from the shelf (she calls it the “Australia book”) and started pointing out continents an d countries in that.

To me the high point was the fact that she was looking at the maps upside down (or northside-down – the book was on the table facing the guests), and still identified all the countries and continents she knows correctly. And once again, I must point out that she hadn’t seen the atlas for at least two or three weeks now.

Promise is showing, but we need to be careful and make sure we don’t turn her into a performing monkey.

PS: Those of you who follow me on Instagram can look at this video of Berry identifying countries.

PS2: Berry can identify continents on a world map, but got damn disoriented the other day when I was showing her a map that didn’t contain Antarctica.

Carbon taxes and mental health

The beautiful thing about mid-term elections in the USA is that apart from the “main elections” for senators, congresspersons and governors, there were also votes on “auxiliary issues” – referenda, basically, on issues such as legalisation of marijuana.

One such issue that went to the polls was in Washington State, where there was a proposal for imposition of carbon taxes, which sought to tax carbon dioxide emissions at $15 a tonne. The voters rejected the proposal, with the proposal getting only 44% of the polled votes in favour.

The defeat meant that another attempt at pricing in environmental costs, which could have offered significant benefits to ordinary people in terms of superior mental health, went down the drain.

Chapter 11 of Jordan Peterson’s 12 Rules for Life is both the best and the worst chapter of the book. It is the best for the reasons I’ve mentioned in this blog post earlier – about its discussions of risk, and about relationships and marriage in the United States. It is the worst because Peterson unnecessarily lengthens the chapter by using it to put forward his own views on several controversial issues – such as political correctness and masculinity – issues which only have a tenuous relationship with the meat of the chapter, and which only give an opportunity for Peterson’s zillion critics to downplay the book.

Among all these unnecessary digressions in Chapter Eleven, one stood out, possibly because of the strength of the argument and my own relationship with it – Peterson bullshits climate change and environmentalism, claiming that it only seeks to worsen the mental health of ordinary people. As a clinical psychologist, he can be trusted to tell us what affects people’s mental health. However, dismissing something just because it affects people negatively is wrong.

The reason environmentalism and climate change play a negative impact on people’s mental health, in my opinion, is that there is no market based pricing in these aspects. From childhood, we are told that we should “not waste water” or “not cut trees”, because activities like this will have an adverse effect on the environment.

Such arguments are always moral, about telling people to think of their descendants and the impact it will have. The reason these arguments are hard to make is because they need to persuade people to act contrary to their self-interest. For example, one may ask me to forego my self-interest of the enjoyment in bursting fireworks in favour of better air quality (which I may not necessarily care about). Someone else might ask me to forego my self-interest of a long shower, because of “water shortages”.

And this imposition of moral arguments that make us undertake activities that violate our self-interset is what imposes a mental cost. We are fundamentally selfish creatures, only indulging in activities that benefit us (either immediately or much later). And when people force us to think outside this self-interest, it comes with the cost of increased mental strain, which is reason enough for Jordan Peterson to bullshit environmentalism itself.

If you think about this, the reason we need to use moral arguments and make people act against their self-interest for environmental causes is because the market system fails in these cases. If we were able to put a price on environmental costs of activities, and make entities that indulge in such activities pay these costs, then the moral argument could be replaced by a price argument, and our natural self-interest maximising selves would get aligned with what is good for the world.

And while narrowly concerned with the issue of climate change and global warming, carbon taxes are one way to internalise the externality of environmental damage of our activities. And by putting a price on it, it means that we don’t need to think in terms of our everyday activities and thus saves us a “mental cost”. And this can lead to superior overall mental health.

In that sense, the rejection of the carbon tax proposal in Washington State is a regressive move.

Book challenge update

At the beginning of this year, I took a break from Twitter (which lasted three months), and set myself a target to read at least 50 books during the calendar year. As things stand now, the number stands at 28, and it’s unlikely that I’ll hit my target, unless I count Berry’s story books in the list.

While I’m not particularly worried about my target, what I am worried about is that the target has made me see books differently. For example, I’m now less liable to abandon books midway – the sunk cost fallacy means that I try harder to finish so that I can add to my annual count. Sometimes I literally flip through the pages of the book looking for interesting things, in an attempt to finish it one way or the other (I did this for Ray Dalio’s Principles and Randall Munroe’s What If, both of which I rated lowly).

Then, the target being in terms of number of books per year means that I get annoyed with long books. Like it’s been nearly a month since I started Jonathan Wilson’s Angels with dirty faces , but I’m still barely 30% of the way there – a figure I know because I’m reading it on my Kindle.

Even worse are large books that I struggle to finish. I spent about a month on Bill Bryson’s At Home, but it’s too verbose and badly written and so I gave it up halfway through. I don’t know if I should put this in my reading challenge. A similar story is with Siddhartha Mukherjee’s The Emperor of All Maladies – this morning, I put it down for maybe the fourth time (I bought it whenever it was first published) after failing to make progress – it’s simply too dry for someone not passionate about the subject.

Oh, and this has been the big insight from this reading challenge – that I read significantly faster on Kindle than I do on physical books. Firstly, it’s easier to carry around. Secondly, I can read in the dark since I got myself a Kindle Paperwhite last year. One of the times when I read from my kindle is in the evening when I’m putting Berry to sleep, and that means I need to read in the dark with a device that doesn’t produce so much light. Then, the ability to control font size and easy page turns means that I progress so much faster – even when I stop to highlight and make notes (a feature I miss dearly when reading physical books; searchable notes are a game changer).

I also find that when I’m reading on Kindle, it’s easier to “put fight” to get through a book that is difficult to read but is insightful. That’s how managed to get through Diana Eck’s India: A Sacred Geography, and that’s the reason I made it a point to buy Jordan Peterson’s book on Kindle – I knew it would be a tough read and I would never be able to get through it if I were to read the physical version.

Finally, the time taken to finish a book follows a bimodal distribution. I either finish off the book in a day or two, or I take a month to finish it. For example, I went to Copenhagen for a holiday in August, and found a copy of Michael Lewis’s The Big Short in my AirBnB. I was there for three days but finished off in that time. On the other hand, 12 rules for life took over a month.