Terence C. Burnham

Disfluent fonts don't help people solve math problems

Prior research suggests that reducing font clarity can cause people to consider printed information more carefully. The most famous demonstration showed that participants were more likely to solve counterintuitive math problems when they were printed in hard-to-read font. However, after pooling data from that experiment with 16 attempts to replicate it, we find no effect on solution rates. We examine potential moderating variables, including cognitive ability, presentation format, and experimental setting, but we find no evidence of a disfluent font benefit under any conditions. More generally, though disfluent fonts slightly increase response times, we find little evidence that they activate analytic reasoning.

Experimental Evolution and Economics

This is a theory paper that advocates experimental evolution as a novel approach to study economic preferences. Economics could benefit because preferences are exogenous, axiomatic, and contentious. Experimental evolution allows the empirical study of preferences by placing organisms in designed environments and studying their genotype and phenotype over multiple generations. We describe a number of empirical studies on different aspects of preferences. We argue that experimental evolution has the potential to improve economics.

Four steps toward the control of aging: following the example of infectious disease

The biotechnological task of controlling human aging will evidently be complex, given the failure of all simple strategies for accomplishing this task to date. In view of this complexity, a multi-step approach will be necessary. One precedent for a multi-step biotechnological success is the burgeoning control of human infectious diseases from 1840 to 2000. Here we break down progress toward the control of infectious disease into four key steps, each of which have analogs for the control of aging. (1) Agreement about the fundamental nature of the medical problem. (2) Public health measures to mitigate some of the factors that exacerbate the medical problem. (3) Early biotechnological interventions that ward off the more tractable disease etiologies. (4) Deep understanding of the underlying biology of the diseases involved, leading in turn to comprehensive control of the medical problems that they pose. Achievement of all four of these steps has allowed most people who live in Western countries to live largely free of imminent death due to infectious disease. Accomplishing the equivalent feat for aging over this century should lead to a similar outcome for aging-associated disease. Neither infection nor aging will ever be entirely abolished, but they can both be rendered minor causes of death and disability.

Optimal Tilts: Combining Persistent Characteristic Portfolios

We examine the optimal weighting of four tilts in US equity markets over 1968–2014. We define a “tilt” as a characteristics-based portfolio strategy that requires relatively low annual turnover. This definition forms a continuum, with small size, a very persistent characteristic, at one end of the spectrum and high-frequency reversal at the other. Unlike with low-turnover tilts, a full history of transaction costs is essential for determining the expected return of, and thus the optimal allocation to, less persistent, more turnover-intensive characteristics. The mean–variance-optimal tilts toward value, size, and profitability are roughly equal to each other and to the optimal low-beta tilt. Notably, the low-beta tilt is not subsumed by the other three. Disclosure: Ryan Taliaferro is a senior vice president at Acadian Asset Management. Malcolm Baker serves as a consultant to Acadian Asset Management and also acknowledges support from the Division of Research at Harvard Business School. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research or Acadian Asset Management. The views expressed herein should not be considered investment advice and do not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or to purchase, shares, units, or other interest in any particular investments. Editor’s Note Submitted 2 May 2016 Accepted 14 March 2017 by Stephen J. Brown

Gender, Punishment, and Cooperation: Men hurt others to advance their interests

A laboratory experiment reports on gender, cooperation, and punishment in two public goods games using high-powered punishment. In a public goods games with punishment, no statistically significant differences between men and women are reported. In a modified game that includes an explicit payoff for relative performance, men punish more than women, men obtain higher rank, and punishment by males decreases payoffs for both men and women. These results contribute to the debate about the origins and maintenance of cooperation.

Public Goods with Punishment & Payment for Relative Rank

We examine the optimal weighting of four characteristic tilts in US equity markets over the period from 1968 through 2014. We define a “tilt” as a positive-Sharpe-ratio, characteristicbased portfolio strategy that requires relatively low annual turnover and a “trade” as a characteristic-based portfolio strategy that requires relatively high annual turnover and liquidity demands. Size is a tilt, because of its very low turnover; high frequency reversal is a trade. This dichotomy is necessary to make practical use of Fama-French style factor regressions. Unlike low-turnover tilts, a full history of transaction costs and an estimate of capacity is critical to determine the expected return, and hence the optimal allocation and explanatory power of trades. The mean-variance optimal tilts toward value (20%), size (26%), and profitability (23%) are roughly equal to each other and to the optimal low beta tilt (24%). The remaining 7% is allocated to bond market factors. Notably, in an apples-to-apples comparison, the low beta tilt is not subsumed by other tilts. Rather, it is the second highest of the four.

The Darwin Economy: Liberty, Competition, and the Common Good, by Robert H. Frank

In the valley of the blind, the one-eyed man is king. Robert Frank is a pioneering two-eyed economist working to lead economics out of the valley. He discards the silly, atheoretic, Homo economicus, who skillfully maximizes utility while making the world a better place. In the Frankian world, we are Darwinian survival machines, whose selfish efforts redound to the greater good only if channeled by social engineering. Economics is a lost field because its assumptions about human nature are wrong. We are not selfish, rational maximizers. Over the years, in papers and books such as Passions within Reasons, and Luxury Fever, Robert Frank has argued eloquently that economics needs to start over with a version of human nature based in evolutionary biology. In The Darwin Economy, Professor Frank argues that Charles Darwin will eventually be recognized as a more important economist than Adam Smith. What difference does the Darwinian perspective make? A central organizing concept of The Darwin Economy is the notion of ‘positional arms races,’ situations where organisms expend effort and resources to attain relative, not absolute, outcomes. Because people care about relative outcomes, we engage in wasteful competition and consumption. Consider, for example, car speed. Professor Frank’s first sports car was a ’55 Thunderbird, which gave him great enjoyment. Now he drives a Mazda Miata that is actually faster than the old T-bird, but does not feel good. Why? Because all cars have gotten faster, and pleasure is derived, in some areas, from relative not absolute