Dyadic friendships

Previous literature on friendship suggests that there are prominent differences between boys’ and girls’ networks. One study showed that, in general, girls’ same-sex dyadic friendships tend to be more exclusive than those of boys (Eder and Hallinan, 1978). There is also evidence that compared to males, females maintain stronger relationships and share higher levels of disclosure (Billy and Udry, 1985). The development of exclusive and stronger relationships among girls may make friendships between girls more conversationally intimate than friendships between boys. On the other hand, compared to girls, boys tend to have a more open network that is less intimate, more volatile, and more likely to include new friends over time (Belle, 1989). In a study of early adolescents, Phillipsen finds that girls report more support in their friendships and have less conflict than do boys (Phillipsen, 1999). A recent qualitative study reports that, although its effects are not totally oppressive, boys’ peer group culture poses obstacles in the development of close friendships because boys feel “the need to protect their vulnerability, prove their masculinity, and preserve their integrity when among their male peers” (Chu, 2005:12). The evidence does not imply that young males do not want to have intimate friendships; rather, they struggle more than girls in their efforts to achieve them.

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Having a best friend has been linked to desirable developmental outcomes (e.g. Hartup, 1993). However, does not only having a perceived friendship, but an actual reciprocated one have further consequences on the well-being of the adolescent? The answer to the question is yes, and in a consistently positive manner. Consistent with Hypothesis 7a, we found strong and consistent effects of reciprocity on feelings of school belonging. Moreover, and in support of Hypothesis 7b, we find strong evidence that adolescents with reciprocated friendships enjoy higher levels of educational outcomes than those whose friendships are not reciprocated. We find that reciprocal friendships as well as those friendships that share more activities have independent and significant effects on students’ GPA. Although a direct effect of reciprocity and grades may be spurious, this suggests that youth who are isolated from peers can suffer dire consequences not only through the lack of peer support, but also through weak ties to their school.

From a study on friendship reciprocity among adolescents and its effect on social outcomes. Click through and scroll down for the conclusions of the study.

Here's hoping Justin Bieber and Taylor Swift have at least one true reciprocated friend, if we learned anything from Entourage it was the value of an intimate posse.

The economics of Christmas

A holiday satire, one that does a good job personifying some of our more prominent online economic commentators:

Open Borders: Why should they stop at Christmas?

By Tyler Cowen, Marginal Revolution

Every year the American government briefly relaxes its stranglehold on our borders to permit the entrance of Santa Claus and his team of reindeer. If this is a good thing on Christmas, imagine how much better it would be if we made this our year round policy? Have you ever eaten in an Elven restaurant? The candy canes are sublime.

While there are some who think that competition with elf workers would impoverish American workers, there is not a lot of evidence to support this. In fact, the toy making of the elves would likely be complimentary to native production. What's more, the wealth generated by elven labor would add to economic growth.

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Is Christmas Deflationary or not?

By Izabella Kaminska, FT Alphaville

As we pointed out quite some time ago, there are serious questions to be raised about the deflationary possibilities of Christmas. 

[The rest of this article is free but you must register with the Financial Times. And later, if you want to read this again, you will have to register again. And again.]

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I rode on Santa's sleigh and it was surprisingly comfortable

By Henry Blodget, Business Insider

I have very long legs. The seats are made for jolly old elves. Take a look at all these pictures I took.

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Here's what you need to know about this year's big Christmas econ-war

By Joe Weisenthal, Business Insider

[Click to view this 28 page slide show on one page]

Makes a great companion to this list of the 10 least successful holiday specials of all time.

Bob & Carol & Ted & Santa (1973)

This ABC Christmas special featured Santa as a happy-go-lucky swinger who comically wades into the marital bed of two neurotic 70s couples, and also the music of the Carpenters. It was screened for television critics but shelved by the network when the critics, assembled at ABC’s New York offices, rose as one to strangle the producers at the post-viewing interview. Joel Siegel would later write, “When Santa did his striptease for Carol while Karen Carpenter sang ‘Top of the World’ and peered through an open window, we all looked at each other and knew that we television critics, of all people, had been called upon to defend Western Civilization. We dared not fail.”

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Noam Chomsky: Deconstructing Christmas (1998)

This PBS/WGBH special featured linguist and social commentator Chomsky sitting at a desk, explaining how the development of the commercial Christmas season directly relates to the loss of individual freedoms in the United States and the subjugation of indigenous people in southeast Asia. Despite a rave review by Z magazine, musical guest Zach de la Rocha and the concession by Chomsky to wear a seasonal hat for a younger demographic appeal, this is known to be the least requested Christmas special ever made.

I'm likely the exception, but I'd watch some of these if they were made.

A holiday tech support masterpiece

Every holiday season, many techies complain vociferously about going home and having to play tech support for all their relatives, especially their parents. Whenever I read the exasperated tweets, I think of this comic masterpiece in McSweeneys: In which I fix my girlfriend's grandparents' wifi and am hailed as a conquering hero by Mike Lacher.

Lo, in the twilight days of the second year of the second decade of the third millennium did a great darkness descend over the wireless internet connectivity of the people of 276 Ferndale Street in the North-Central lands of Iowa. For many years, the gentlefolk of these lands basked in a wireless network overflowing with speed and ample internet, flowing like a river into their Compaq Presario. Many happy days did the people spend checking Hotmail and reading USAToday.com.

But then one gray morning did Internet Explorer 6 no longer load The Google. Refresh was clicked, again and again, but still did Internet Explorer 6 not load The Google. Perhaps The Google was broken, the people thought, but then The Yahoo too did not load. Nor did Hotmail. Nor USAToday.com. The land was thrown into panic. Internet Explorer 6 was minimized then maximized. The Compaq Presario was unplugged then plugged back in. The old mouse was brought out and plugged in beside the new mouse. Still, The Google did not load.

Some in the kingdom thought the cause of the darkness must be the Router. Little was known of the Router, legend told it had been installed behind the recliner long ago by a shadowy organization known as Comcast. Others in the kingdom believed it was brought by a distant cousin many feasts ago. Concluding the trouble must lie deep within the microchips, the people of 276 Ferndale Street did despair and resign themselves to defeat.

So rather than grumble, remember this: your relatives will regard your ability to fix their gadgets and doodads as some sort of fucking sorcery. Rejoice in your power.

David Walsh

A key feature of the markets Walsh and his partners invest in is that they are characterised by randomly “independent events”. Specifically, the occurrence of one event does not influence the chance of the other and they therefore have “finite variance”, or limited downside risk.

“Gambling has the huge benefit of having independent events – I cannot get blown up by the black swans that plague financial markets.”

He says deploying mathematics in “equities markets that may have infinite variance outcomes makes working out probabilities much harder”.

“You don’t know whether you are summing a sequence of fractions that add to one or if they add to infinity, because financial markets have non-independent [or potentially related] events,” he says.

The bankable independence of results in gambling markets is the “component of our strategy that gives me the most security”, Walsh says.

“It is even better in games like black jack, where the events are not only independent but also negatively correlated – your chance of winning goes up if you lost the previous hand because there are an excess of cards remaining that are advantageous to you.”

He is critical of the billionaires printed in financial markets who “often make money in the low-probability, high-opportunity outcomes that are essentially exhibiting ‘correlated parlays’ [where one event significantly influences the probability of another].

“Correlated parlays make people look smart and can create a whole bunch of rich folks, but there was probably nothing but pathologies in the financial data.”

From a profile of David Walsh, a guy who made a fortune using quantitative models to gamble professionally. Walsh seems to have a healthy appreciation for the role luck has played in his success and is redeploying much of his fortune to build an eccentric art museum in Tasmania.

It's his explanation of his success that is worth studying.

Asked about exactly what his team’s “edge” has been over the years, Walsh distils [sic] it down to embracing the wisdom of crowds.

“You can work out some complex algorithm to predict horse racing odds using multinominal logistic regression,” Walsh says. “But the result would significantly underperform the public odds.

“The key is that the public odds must be included in your model. The best models are not predictive models per se, but ‘perturbation’ models that start with the assumption that the public is right and then work out what small errors they might make.

“The public odds are not just an important signal – they are a remarkably efficient signal.”

He cites the example of the former Russian chess grandmaster Boris Spassky, who played and lost to the Russian public in a game of chess.

He describes the public’s ability to make accurate collective decisions as an “emergent strategy”, like birds flocking or democracies (which form not in the mind of one individual, but through the interactions of many).

“I am saying there is wisdom in crowds beyond the point you can model without explicitly incorporating it.”

How does this system work in practice? “Let’s talk about Sydney race night on Saturday,” Walsh explains.

“We might have a model of what we think the probabilities should be that includes the public odds.

“We essentially wager on those events that have better chances than the public thinks, which gives us a positive return expectation.”