The Nash Equilibrium of Silicon Valley

A "Nash equilibrium" solution is one where, when both parties have considered all available moves, minimizes damage to themselves under the assumption the other player is a selfish dickhead. In a capitalist environment like America's, with no social controls or other factors besides ruthless logic, this is the default behavior. And it should be, if games are strictly competitive and humans are built like computers.

A "Pareto optimal" solution is one which, given all the possibilities of action, produces the best outcome for both parties (with some negotiable surplus).

The Prisoner's Dilemma demonstrates that a Nash equilibrium solution is not always Pareto optimal. The "confess-confess" solution is the Nash equilibrium. You will always be better off screwing the other person over, whether they are honest or dishonest. The "deny-deny" solution is Pareto optimal. If both parties can somehow trust each other, they will both be better off selecting this solution.

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When someone like Elon Musk comes along, someone who is clearly is working very hard toward Pareto optimal outcomes (watch or read about his personal history), we simply cannot fathom that his actions can't be explained outside a traditional Nash-equilibrium, dog-eat-dog model of capitalism.

Of course, this applies way beyond Tesla. I believe the current skepticism around Silicon Valley's "Make The World a Better Place" mentality is deeply rooted in historical anxiety about institutional capitalism. I don't think this anxiety is misplaced. Rather, I think that technology, specifically the World Wide Web presents a "way out" of this dilemma. It will take time, but ultimately, the Web's power is that it can mimic the "accountability" aspect of local transactions, but on a global scale.
 

From Chris Johnson, whose blog I just stumbled across for the first time.

The unfortunate part of the Game of Thrones between the tech titans in Silicon Valley (Amazon, Apple, Google, Facebook, Twitter) is that the industry as a whole has tended towards Nash Equilibriums. 

In general, healthy competition is good for consumers, and I'm of that camp, especially when there is one dominant entity. In many areas, though, we have companies devoting precious resources to building out a near clone of another's company's services just for defensive purposes. It's not just an issue with patents. Is it critical that we have yet another streaming music service? Another mapping app for mobile devices? Is it good for consumers when services for one company are kept off another company's hardware/software ecosystem just for competitive reasons? So many of our best and brightest are building repeated work because of tribal (company) affiliation.

Personal statistician

Another sign of the gradual ascent of statistical analysis within sports: some NBA players now employ a personal statistician.

Justin Zormelo, a 30-year-old Georgetown graduate, is at the forefront of a growing industry, his services a must-have accessory for the playoffs. Zormelo, who spends hours every day hunkered over a laptop in his home office, has become the go-to source for players who want a private guide through the emerging world of advanced analytics.

Let others conduct wind sprints and weight-room sessions. Zormelo, who works for individual players and not their teams studies film, pores over metrics, and feeds his clients a mix of information and instruction that is as much informed by Excel spreadsheets as it is by coaches’ playbooks. He gives players data and advice on obscure points of the game — something many coaches may not appreciate — like their offensive production when they take two dribbles instead of four and their shooting percentages when coming off screens at the left elbow of the court.

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Zormelo’s career took off three years ago when he began working for Kevin Durant, the league’s leading scorer and most valuable player. Zormelo spent last season living out of two suitcases in Oklahoma City as Durant’s full-time stats guru. He attended Thunder games with his iPad in tow, watched film with Durant at night and even slept on Durant’s couch. Zormelo ended their season together by presenting Durant with a five-page report full of pie charts and bar graphs.

This season, Zormelo worked with All-Stars like Paul George of the Indiana Pacers, John Wall of the Washington Wizards and Rajon Rondo of the Boston Celtics. At least three of his clients are still in the playoffs. When they require hands-on involvement, he heads to the airport.
 

One of the chief challenges for teams that employ quantitative analysts is getting the coach and players to embrace the recommendations that come from the analysis. It's a good sign for those teams when players themselves are turning to the numbers for self-improvement, though the conflict between recommendations from a player's own statistician and the team's analysts can be troubling.

Fluid team sports like basketball are trickier from a strategic standpoint than a sport of individual confrontations like baseball. In baseball, individual statistical achievement and team achievement are usually highly correlated. In basketball, one player may pad their scoring stats by shooting a lot, but that may not be best for the team.

Atul Gawande once wrote a great article about how most of us could benefit from more coaching. It seems that one of the greatest investments for someone with wealth would be coaching, and yet I don't observe that happening.

I suspect that the people hire coaches when the marginal value of the coaching is very clear, and that tends to be in areas where the price or market signals are explicit and efficient. Athletes have very public contracts, their statistics are tracked at an increasingly fine resolution, the correlation between improved play from coaching and both team success and personal financial wealth is visible and clear.

Many people hire fitness coaches because they can see the results on the scale each morning, or in the bathroom mirror, and in society's well-documented preference for people who are fit.

Hiring a coach for your professional career may have greater returns, but the signals may not be as consistently reinforced or even as measurable as for an athlete, and where do you find a good coach anyhow when the labor market is so tight? Given that the practice is not common in many disciplines (take product management as one example) there is real inertia that means most practitioners have to own their own development.

Knausgaard

Karl Ove Knausgaard visited Brooklyn for a conversation with novelist Nicole Krauss this past Wednesday.

Ms. Krauss said she read the first book in the series without expectations, and was “absolutely stunned” by its candor and pacing, which both felt “reckless.”

“In order to be free, I needed to write very quickly and get rid of the notion of quality,” Mr. Knausgaard said. At first he was writing five pages a day, then 10 and eventually 20.

He chalked up the interest in the quotidian concerns of “My Struggle” to the transformative power of literature. “If I told you my life story here and now, in this bookstore, you might leave me after 10 or 15 minutes,” he told Ms. Krauss. “It would be unbearable.”

Ms. Krauss said she was “sick of plot and characters and dialogue and scenes and climax and resolution” in traditional novels, and that Mr. Knausgaard had “reinvented and surpassed the form of the novel” through “radical attentiveness.” Mr. Knausgaard said he shared her fatigue with more conventional stories. “Form is, in a way, death,” he said. “A novelist’s obligation is to break free from the form, even though he knows that this will also be seen as artificial and distanced from life.”
 

Two things stand out to me in this passage. The quote about speeding up his writing to shed his inner censor or editor (my interpretation). Krauss's discussion of how My Struggle is different from other novels, how it sheds form.

I've grown weary of fiction in recent years, and most of the dozen or two dozen books I'm reading at various paces now are almost entirely non-fiction. Of course I've heard much about Knausgaard, who hasn't? But that passage pushed me over the edge and I purchased Book 1 of My Struggle last night.

I'm 11 pages in so far, and while that is close to a precise definition of small sample size, I'm already hooked.

Detroit's urban decay as seen on Google Street View

A Tumblr dedicated to showing the decay of Detroit over just a short period of time, from 2009 to 2013, through a series of Google Street View photos of the same address. 

James Griffioen refers to houses that have been reclaimed by nature as feral houses.

I love Google Street View's Time Machine capability, though this is a more poignant view through its eyes. We only have a handful of years with which to look back now, but future generations will have such a precise visual and textual record of so much that it may change their understanding of human history. Think about how much of history we're taught today feels just like narrative. Think of how differently we conceive of historical figures whom we can see in video and photos as compared to those who we only see in paintings.

There's a version of Wall-E to be made in which the robot is replaced by a self-driving Google Maps Street View car,  still cruising up and down streets of abandoned streets documenting the slow decay of civilization, humanity having long since fled to outer space.

[via Web Urbanist]

The presumption of human error

Naturally, we respect and admire doctors. We believe that health care is scientific. We think of hospitals as places of safety. For all these reasons, it comes as something of a shock to realise that errors still play such a significant role in whether we leave a hospital better or worse, alive or dead.

The National Audit Office estimates that there may be 34,000 deaths annually as a result of patient safety incidents. When he was medical director, Liam Donaldson warned that the chances of dying as a result of a clinical error in hospital are 33,000 times higher than dying in an air crash. This isn’t a problem peculiar to our health-care system. In the United States, errors are estimated to be the third most common cause of deaths in health care, after cancer and heart disease. Globally, there is a one-in-ten chance that, owing to preventable mistakes or oversights, a patient will leave a hospital in a worse state than when she entered it.

There are other industries where mistakes carry grave consequences, but the mistakes of doctors carry a particular moral charge because their job is to make us better, and we place infinite trust in the expectation they
will do so. When you think about it, it’s extraordinary we’re prepared to give a virtual stranger permission to cut us open with a knife and rearrange our insides as we sleep.

Perhaps because of the almost superstitious faith we need to place in surgeons, we hate to think of them as fallible; to think that they perform worse when they are tired, or that some are much better at the job than others, or that hands can slip because of nerves, or that bad decisions get taken because of overconfidence, or stress, or poor communication. But all of these things happen, because doctors are human.
 

What the medical profession can learn from the airline industry about how to protect against human error. A riveting story about how we must build around the assumption of inevitable human error.

The passage above mirrors my own journey towards realizing that not all doctors are infallible. It may seem silly now, but as a child, I had a learned reverence of the medical profession. All the training, all the accreditation, the requirement to address them by a title all their own—“Doctor”—was blinding.

In 1997 I was back in the Bay Area and went to play pickup basketball with some old Stanford classmates at a local gym. A scrimmage game against a group of older Greeks turned heated, as such games are wont to be with the physical release of so much pent up testosterone. On one drive to the basket, I took a hard shove and went flying sideways. I landed on my left food and my left knee flew sideways an opponent's leg that was planted on the ground.

I felt a searing pain immediately and collapsed. Some teammates carried me to the sideline, and my knee immediately started swelling. I'd never felt anything like this before. Something had happened, but I didn't know what.

I crutched my way back to Seattle, stayed on crutches for a few days, and eventually got in to see an ortho. He laid me down, tugged on my leg a bit this way and that, moved my leg around, and gave me a comforting diagnosis. It was a mild sprain, I could resume light physical activity after the swelling subsided.

At the gym, on an elliptical trainer, something didn't feel right. But the doctor had done some tests, who was I to question him? The web existed, but it was much sparser than it is now. WebMD and sites like that didn't exist.

Back then, Amazon's unofficial official company sport was broomball. The popular stereotypes of technology companies being populated with a bunch of meek, gaunt, sun-deprived software developers neglect the army of MBA's with their world-conquering ambitions, the ex college jocks in business development, the crazy endurance athletes whose motor played on the field or in the office. We played at company functions, and the games felt like some form of trial by combat.

My knee still felt off, but I wasn't about to miss out on our team's broomball contest. We played on a muddy field, it was like some form of field hockey minus pads. You just had to accept that you'd leave battered, your shins a mess of bruises. We taped tennis balls to the ends of our broomsticks so as not to take out anyone's eyes.

From the start I couldn't move that well, so I hung back to play defense. And then an opponent broke loose, a herd of people chasing him, and I moved to intercept the ball. At best, with all the momentum he'd built up, I hoped to deflect the ball horizontally to give the rest of my team a chance to catch up and reset.

As I moved diagonally to meet the path of the ball, he tried to make a sharp cut, but on the muddy field, he couldn't turn enough, and both ball and opponent came sideways and collided with me.

My left leg experienced what the doctor would later call a pivot shift, where the top and lower leg came out of alignment. I fell to the ground screaming. My day was over, and I don't remember now how I drove myself home considering it was a manual transmission.

I found myself back in that same ortho's office a day later, and I told him something wasn't right, to check me again. This time, he consented to perform an MRI.

When the results came back, he was almost sheepish in sharing the news. Though he'd performed the standard Lachman Test and some other tests the last time I'd come in, in fact I did have a torn ACL. I'd been running around for weeks without my left ACL.

Needless to say, I didn't let that ortho perform my ACL reconstruction.

The first time I visited, was the ortho hesitant to order an MRI because of the expense, because I was on an HMO? Or did he just not perform the Lachman test properly? It still haunts me, but the lasting consequence was the shattering of my belief in the infallibility of doctors. I still have deep respect for the medical profession, my brother and his wife are both doctors whom I turn to again and again for advice, but nothing about medical training magically removes human error from day to day life.

 

If the severity of Elaine’s condition in those crucial minutes wasn’t registered by the doctors, it was noticed by others in the room. The nurses saw Elaine’s erratic breathing; the blueness of her face; the swings in her blood pressure; the lowness of her oxygen levels and the convulsions of her body. They later said that they had been surprised when the doctors didn’t attempt to gain access to the trachea, but felt unable to broach the subject. Not directly, anyway: one nurse located a tracheotomy set and presented it to the doctors, who didn’t even acknowledge her. Another nurse phoned the intensive-care unit and told them to prepare a bed immediately. When she informed the doctors of her action they looked at her, she said later, as if she was overreacting.

Reading this, you may be incredulous and angry that the doctors could have been so stupid, or so careless. But when the person closest to this event, Martin Bromiley, read Harmer’s report, he responded very differently. His main sensation wasn’t shock, or fury. It was recognition.
 

RELATED: Atul Gawande's great book A Checklist Manifesto.