Some thoughts about Globalization
Nov
10
Some thoughts about Globalization
9 Comments to “Some thoughts about Globalization”
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Hi, I’m Dan Ariely. I do research in behavioral economics and try to describe it in plain language. These findings have enriched my life, and my hope is that they will do the same for you.
My latest book, The Upside of Irrationality, explores some positive and some negative ways that irrationality plays out in our lives.
When we make decisions we think we're in control. But are we?
Excerpts and Videos
Drinkin’ the Macintosh cool-aid! (Don’t believe everything Steve Jobs tells you)
Very true, and very relevant to our current economic collapse. It is such globalization that makes us more vulnerable to Black Swans as described by Nassim Taleb in his book of the same title.
Globalization is in itself not bad, it is the creation of conglomerates. Many small entities as opposed to large merged institutions could take advantage of the opportunity with less risk.
This seems like a feature, not a bug. If all parts of the network are linked, then it is much more difficult for one part of the network to exploit, destroy, destabilize or otherwise harm another part of the network because the effects aren’t isolated. In fact, they will often work together to avoid harm because their fates are interlinked.
Interesting videos and topics, just thought to let you know that you have a script error in your site that need to be solved, it keep the site loading even after it’s fully opened…cheers
Dan, I understand your point on globalization. ALSOMIKE I understand your point as well. However, from a different perspective I think it would be easier to exploit, destroy, and destabalize a network simply based on the fact that the entire network is controlled by only a few in power at the top. For example, our current US government and the lack of checks and balances that was designed for checks and balances. That being said, Dan, the comment on page 48 of your book surprised me “…government should play a larger role in regulating market activities”. As this is happening now I tend to not hold this opinion. Great book though and I loved the experiments.
I was surprised at the global effect that our markets mistakes had on the rest of the world. It showed me NO one did their homework on the investments they were buying. I had originally thought the risk being spread out and with more eyes on the products involved would have reduced the risk. But, No one looked at what they were buying. If the greatest minds in the Worlds financial fields didn’t spot the problems with those products the Government definately wouldn’t and didn’t. In the US our regulators, SEC and others, are the least funded entities that don’t attract the most talent for the most important job and we have paid that price. In 10 years or less we will see it all again. Derivatives are still large profit makers and they will be merely repackaged or renamed and come around again. Heck, what are currently called CDO’s, collateralized debt obligations used to be called CMO’s, collateralized mortgage obligations.
just one comment in response to Mark’s — “more eyes on the products involved would have reduced the risk” … The fact that risk was multiplied rather than reduced should not come as a surprise to anyone who has ever sent an email with 10 people in the subject line and asked that something be done. With nine other people to blame for not doing it, no one person not specifically delegated with a task is going to do anything. And it doesn’t help if you “specifically delegate” people with overlapping authority (ahem, SEC, Fed, Treasury, OFHEO, OTS, FDIC, S&P, Moody’s, Fitch, Fair Isaac, Ernst & Young, Deloitte, PWC, KPMG, … and not one gov’t of these seems to track debt service as a percentage of income on a non-aggregate basis).
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Perhaps it is not globalization per se that is dangerous, but rather homogeneity — variety is a useful prophylactic against “slate wipers”.