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Does supply and demand determine markets?

Question: Do supply and demand dictate the market?

\r\n

Dan Ariely: Yeah. So the standard economic approach is that demand . . . or aggregated demand is the aggregation of what people willing to pay for a product . And the supply has to do with the production cost, and they meet at equilibrium. And this meeting point is being used as a standard starting point for any welfare analysis. And from that you can calculate what would happen if we increased tax, decreased tax, and so on. But these two forces are independent. Now what our experiments show – in particular the experiment in social security numbers and the influence of external forces on decisions – that supply and demand are not independent, but they are dependent. So imagine the following. Imagine that tomorrow they double the price of milk and half the price of alcohol. I would argue that people would start going to work happier and with less calcium, okay? The prices from yesterday would be settled in our mind and we’d change our shopping behavior. But imagine that this change in pricing would also be accompanied by complete amnesia – so any prices you ever paid for milk and for alcohol. Under those conditions I don’t think there would be much change in how we consume milk versus . . . versus alcohol. You know milk is kind of a good deal now at $4.00 per gallon. I think it would still be a good deal at $8.00 per gallon. And wine is a good deal at $20.00 per bottle. I’d say it would be good at $10.00 per bottle. What this suggests – but we have a lot of research to show; it’s not just an anecdote – is that what we based on decision is not just what we . . . the benefit and cost and hedonic pleasure; but also what we did in the past, and the past prices that we encountered. So what does it say about supply and demand? It says that demand depends on supply. If I was born into a world where the MSRP or the suggested price for milk was $4.00, that would be fine. If I was born into a world where it was $8.00, it would be fine. And those are not unique demand curves. They are demand curves that move as a function of what the supply curve is and what the prices are. Now if that’s the case, it means that welfare analysis should be thought of very, very differently. Because it means that when the prices change, people would react vigorously to those. So again if price of gasoline jumped from $1.00 to $4.00 per gallon, people would react vigorously in the beginning. But if it was $4.00 from the start of it, it wouldn’t have even close to the magnitude of effect of the day after the change.

\r\n

Recorded on: Feb 19 2008

Imagine if tomorrow the price of milk doubled and the price of alcohol was cut in half. Would we change our behavior accordingly?

Does conscious AI deserve rights?

If machines develop consciousness, or if we manage to give it to them, the human-robot dynamic will forever be different.

Videos
  • Does AI—and, more specifically, conscious AI—deserve moral rights? In this thought exploration, evolutionary biologist Richard Dawkins, ethics and tech professor Joanna Bryson, philosopher and cognitive scientist Susan Schneider, physicist Max Tegmark, philosopher Peter Singer, and bioethicist Glenn Cohen all weigh in on the question of AI rights.
  • Given the grave tragedy of slavery throughout human history, philosophers and technologists must answer this question ahead of technological development to avoid humanity creating a slave class of conscious beings.
  • One potential safeguard against that? Regulation. Once we define the context in which AI requires rights, the simplest solution may be to not build that thing.

A new hydrogel might be strong enough for knee replacements

Duke University researchers might have solved a half-century old problem.

Photo by Alexander Hassenstein/Getty Images
Technology & Innovation
  • Duke University researchers created a hydrogel that appears to be as strong and flexible as human cartilage.
  • The blend of three polymers provides enough flexibility and durability to mimic the knee.
  • The next step is to test this hydrogel in sheep; human use can take at least three years.
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Hints of the 4th dimension have been detected by physicists

What would it be like to experience the 4th dimension?

Two different experiments show hints of a 4th spatial dimension. Credit: Zilberberg Group / ETH Zürich
Technology & Innovation

Physicists have understood at least theoretically, that there may be higher dimensions, besides our normal three. The first clue came in 1905 when Einstein developed his theory of special relativity. Of course, by dimensions we’re talking about length, width, and height. Generally speaking, when we talk about a fourth dimension, it’s considered space-time. But here, physicists mean a spatial dimension beyond the normal three, not a parallel universe, as such dimensions are mistaken for in popular sci-fi shows.

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Predicting PTSD symptoms becomes possible with a new test

An algorithm may allow doctors to assess PTSD candidates for early intervention after traumatic ER visits.

Image source: camillo jimenez/Unsplash
Technology & Innovation
  • 10-15% of people visiting emergency rooms eventually develop symptoms of long-lasting PTSD.
  • Early treatment is available but there's been no way to tell who needs it.
  • Using clinical data already being collected, machine learning can identify who's at risk.

The psychological scars a traumatic experience can leave behind may have a more profound effect on a person than the original traumatic experience. Long after an acute emergency is resolved, victims of post-traumatic stress disorder (PTSD) continue to suffer its consequences.

In the U.S. some 30 million patients are annually treated in emergency departments (EDs) for a range of traumatic injuries. Add to that urgent admissions to the ED with the onset of COVID-19 symptoms. Health experts predict that some 10 percent to 15 percent of these people will develop long-lasting PTSD within a year of the initial incident. While there are interventions that can help individuals avoid PTSD, there's been no reliable way to identify those most likely to need it.

That may now have changed. A multi-disciplinary team of researchers has developed a method for predicting who is most likely to develop PTSD after a traumatic emergency-room experience. Their study is published in the journal Nature Medicine.

70 data points and machine learning

nurse wrapping patient's arm

Image source: Creators Collective/Unsplash

Study lead author Katharina Schultebraucks of Columbia University's Department Vagelos College of Physicians and Surgeons says:

"For many trauma patients, the ED visit is often their sole contact with the health care system. The time immediately after a traumatic injury is a critical window for identifying people at risk for PTSD and arranging appropriate follow-up treatment. The earlier we can treat those at risk, the better the likely outcomes."

The new PTSD test uses machine learning and 70 clinical data points plus a clinical stress-level assessment to develop a PTSD score for an individual that identifies their risk of acquiring the condition.

Among the 70 data points are stress hormone levels, inflammatory signals, high blood pressure, and an anxiety-level assessment. Says Schultebraucks, "We selected measures that are routinely collected in the ED and logged in the electronic medical record, plus answers to a few short questions about the psychological stress response. The idea was to create a tool that would be universally available and would add little burden to ED personnel."

Researchers used data from adult trauma survivors in Atlanta, Georgia (377 individuals) and New York City (221 individuals) to test their system.

Of this cohort, 90 percent of those predicted to be at high risk developed long-lasting PTSD symptoms within a year of the initial traumatic event — just 5 percent of people who never developed PTSD symptoms had been erroneously identified as being at risk.

On the other side of the coin, 29 percent of individuals were 'false negatives," tagged by the algorithm as not being at risk of PTSD, but then developing symptoms.

Going forward

person leaning their head on another's shoulder

Image source: Külli Kittus/Unsplash

Schultebraucks looks forward to more testing as the researchers continue to refine their algorithm and to instill confidence in the approach among ED clinicians: "Because previous models for predicting PTSD risk have not been validated in independent samples like our model, they haven't been adopted in clinical practice." She expects that, "Testing and validation of our model in larger samples will be necessary for the algorithm to be ready-to-use in the general population."

"Currently only 7% of level-1 trauma centers routinely screen for PTSD," notes Schultebraucks. "We hope that the algorithm will provide ED clinicians with a rapid, automatic readout that they could use for discharge planning and the prevention of PTSD." She envisions the algorithm being implemented in the future as a feature of electronic medical records.

The researchers also plan to test their algorithm at predicting PTSD in people whose traumatic experiences come in the form of health events such as heart attacks and strokes, as opposed to visits to the emergency department.

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