Should we study neuroscience to explain market bubbles?

This is virtually unrelated to the world of content, but I had a moment of potential inspiration in the final 10 minutes of my walk to the train station after the podcast I was listening to ended.

The show in question was Planet Money's "What's a Bubble" about the latest Nobel prize in economics given to both Robert Shiller and Eugene Fama.  Both won for their studies of markets, but they have diametrically opposed viewpoints on how markets work, and specifically whether market bubbles exist. In short, Fama believes people are rational and therefore prices always reflect current information and markets respond when information changes, which means there are no bubbles.  His evidence is that you cannot predict when there will be a fall in prices.  On the other hand, Shiller believes people do not act rationally and that market prices can be like a symptom of a mental illness.  He identified the 90s stock market and the 00s housing market as bubbles before they crashed.  (Listen to the podcast for better explanations in their own words.)

My knee jerk reaction was to expect that the truth is somewhere in the middle.  But they appear mutually exclusive?

I'm not an economist, I only played one in college and grad school where I read both Shiller and Fama. The idea of behavioral economics is still a rather new take on the field, using psychology and other social sciences to explain why people make economic decisions.  But has it been taken further into human development studies that look into how people can be fundamentally and scientifically different?

I ask because my second reaction to the podcast was that Fama is probably right. I feel that I am generally a rational person and tend to over-analyze more than make impulse decisions.  (Checkout candy lines are powerless against me to the detriment of my kids.)  But then my third reaction was that someone in my life I know very well surely would argue that Shiller is right, because she doesn't believe people are rational but rather are more emotional.  I would go out on a limb and say that she is more of an emotional person than I am in general and we make decisions very differently, often with different conclusions.

So if there are really two people whose natural tendencies on individual decision making are different, then the aggregate market is composed of a portfolio of people who range from classic "economic man" to unpredictable crazy person.  So the next step to better understand the market is in fact to understand how people develop these characteristics.  This sounds like the nature vs nurture studies.  Role of society and family. Evolution and genetic research.  Is anyone going as far yet as trying to connect the stock market and neuroscience?

I would read that.


(I didn't know how to fit in this reference, but our hardwired fear of snakes must provide a clue to solving a financial crisis.)

Changing My Content Habits

I am one of the many Google Reader power users changing long-held habits cold turkey.  But while most of the noise has been about the loss of Reader, I am hit with a double whammy: I still used iGoogle, too.

A personalized iGoogle
has been my home page
dashboard

Yes, part of me is still living in Internet 2006.

While Google gave ample warning of the impending executions product changes for alternatives to emerge, I took the opportunity to re-examine some of my content consumption habits and see if it is time to change, not just substitute. While I am a creature of habit, I do have different needs than I did even just a few years ago, and with smart phones, tablets, and social media, there are likely much better habits for me to adopt.  I'm not the only one, which may have played into the services' demise.

So as I look at replacement for the two Google services, this is what I now value:

1. Dashboard
   This was the best benefit of iGoogle.  With widgets and feeds showing just the top news or information from topics and sources I could quickly scroll down the page scanning for the latest relevant information.  I kept this my browser home page and would glance at it several times throughout a day.
    
2. Organization 
   Both iGoogle and Reader allowed me to collect relevant information sources and organize them in a single location to find later.  I also loved grouping content from competing perspectives to create more balanced view.
    
3. Immersion
   When I need to learn about a new topic, after initial research I loved gathering a collection of feeds together that I could scan every day to continue the education process to quickly build up new knowledge and expertise. (Or at least quickly learn some vernacular to sound like I have some expertise.)
    
4. Discovery
   This is something neither service could do effectively.  I always want to find new voices, perspectives, and sources.
    
5. Efficiency
   I have less dedicated time to read and browse than ever before, yet the amount of content and great sources grows every day.  Years ago it was a huge breakthrough to simply have everything available on the web and in one place.  But now I need content available for whenever I have a free minute to consume, and I need help pulling out the most important and relevant content to me.
    
6. Targeted Sharing
   I have always loved sharing content, but I grew up in the golden age of email, so that is my default way of thinking.  The targeting of an email is great--it matching specific content to a specific audience.  But the process is still usually clunky, and it doesn't integrate with others' content habits as much any more.

At the end of the day no single service meets all of my needs, including the two going away.  I find myself using more content platforms than ever before.  That seems inefficient, but it is actually is okay, as each excels in different experiences and situations.

I am always experimenting and trying new content and products.  There are different paradigms of how to find the best content for someone--algorithms, human editors, social voting.  Each has its advantages so like most I find myself using a mix. I still religiously read a few publications directly, such as my great local newspaper.  But here are the services and platforms that I find myself increasingly using that are candidates to be locked into my new habits.

• Feedly.  I tried out several of the much-discussed Google Reader alternatives, and I am settling on Feedly for now.  It's still a good experience for that once-a-day immersion, although with the amount of content flowing in now from my collected feeds, it is becoming a chore to surface the most relevant stuff.
    
• Tweetdeck/Social Media.  While I am not particularly active in social media, I now follow a critical mass of relevant people and the throughout-the-day dashboard experience is pretty good with columns for custom searches and lists, and it is great for discovering new people.  Social media does filter out some of the better content, but it still has an "A1 problem."
   
• Tablet Aggregators.  I am increasingly using Flipboard now that they are adding more content sources to add directly, but I am a bigger fan of Zite.  While the presentation and user experience is beautiful, the former repeats too much content I have previously seen.  However, after investing some time to personalize my interests, Zite has become an excellent tool to discover content from new sources that is very relevant to me. This has become my end-of-day read.
   
• Apps.  I like where some of the upstart news apps are going with efficient storytelling, like Circa, Digg's News.me, and pre-Google Wavii, but I haven't locked into any yet.  Newspaper and social media apps are still the main go-to's when I have a spare moment. GoComics app has just taken my morning comics routine mobile. I also enjoy apps like NextDraft's daily curated links, which has just the right amount of context and content for a bus ride.  For longer free moments, I always have several ebooks and other documents loaded up on my Kindle app.
   
• Bookmarking / Sharing Spaces.  They are fundamentally different products, but I group together Evernote, Google Plus, and Flipboard magazines because I use them for saving and organizing content for myself and others.  

I loved Google Reader, but I also love the growing stack of unread National Geographics next to my bed that I really do plan to read some day.  Maybe some day I will change that habit, too.

My Perspective in One Graphic (the most egocentric post ever)

As a visual thinker, I have always loved sketching charts and graphs and trying to draw pictures to illustrate ideas.  My whiteboard habits are well known to those who have worked with me.  And now that infographics are all the rage, here is one graphic representing... me.

Looking through sketches and thoughts in old notebooks, at articles I have shared online, what books I have read, classes I have taken, RSS feeds in my Google Reader, tags I use in Evernote and other sites, I have been compiling a list of topics that interest me and influence how I think.  Naturally I was tempted to see if I could connect all of them together in a diagram.  The result is this graphic, an overly simple illustration of my perspective on life.  In theory this is a key for understanding me.  Although the fact that I even did it is the most important point.  

Don't Interrupt the On Demand Generation

We are like most families with young children.  Our televisions have finger prints from curious hands expecting touch screens.  Our kids mostly watch reruns from PBS on Netflix.  iTunes and Spotify allow us to have spontaneous dance parties to any Disney princess song.  We could join the countless other blog posts and YouTube videos about little kids trying to launch apps with a print magazines, illustrating that the next generation is growing up with different expectations of media.  

Of course they are.  Just as kids who grew up with the Internet expect to always be able to call up any answer with a simple search, my girls (ages 5 and 2) already expect instant, on demand satisfaction.  But now with mobile devices, there are no limits on expectations.  As a father I am held accountable to every question they have.  ("How many types of snow are there?" "I don't know." "Daddy! Look it up on your phone!")  And heaven forbid the times when our cell phones aren't charged and we have to rely on the car radio.  ("I don't like this song. Play Call Me Maybe again.")

But I am realizing there is even more to this expectation of on demand media.  Right before Christmas I was shopping with my older daughter at a toy store to purchase a gift for her friend.  As we perused the aisles she was acting like, well, a kid in a toy store.  One particular doll caught her eye and she eagerly ran up to it.  As she excitedly pointed it out to me, she said, "This is the one from the commercial when we watched TV!"  With years of experience being a kid and knowing the expertise of marketing to children I knew this was the likely leading to a plea for a purchase.  But then she said the last thing in the world I would expect.

"I don't like it."  Why not?  "Because it was on the commercial."  As I became more and more curious and probed into her reasoning, the best I could surmise is that she was offended by the concept of a commercial interrupting her show and was penalizing the product for participating.

As I have thought about this, and really paid attention to how much of her world truly is on demand and from commercial-free services, it is not unreasonable to see how little tolerance she could have for anything that disrupts her consumption.  We were indoctrinated to be patient and tolerant with our media--waiting for a favorite show or song to come on the air and then sitting through commercials every ten minutes.  So if this is true, that the newest generation will not grow up as accepting of interruptions, there will be serious implications for advertisers.  I would expect there will be increasing focus on more embedded ways to embed messages as we are seeing today with the trends toward native advertising, product placements, and other types of content marketing.  And it will continue to get more extreme as these kids become targeted demographics.

But then again, that is a lot to extrapolate from a conversation with a five-year-old.  There is an equal probability she simply didn't like the doll's dress color.