Goji Berries---Blindness



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Goji Berries
Where the optic nerve passes the retina, there are no photoreceptors. In each upside down image of the world that forms on our retina, there is a hole. But we never see that hole. It is because our brain does the seeing, smoothing over the hole. More generally, we see what we expect to see— expectation structures cognition. So much of our world is invisible to us because of it. To shed light on our incapacity, I would like to share two puzzles and a paper on stereotypes.

Price Dispersion on Amazon
Amazon makes price discovery easy, controls some aspects of quality by kicking out sellers who don’t adhere to its policies and provides reasonable indicators of quality of service with its user ratings. But still, on nearly all items that I looked at, there was substantial price dispersion. Take, for instance, the market for a bottle of Nature Made B12 vitamins. Prices go from $8.40 to nearly $30! With taxes, the dispersion is yet greater. If the listing costs are non-zero, it is not immediately clear why sellers selling the product at $30 are in the market. It could be that the expected service quality for the $30 seller is higher except that between the highest price seller and the next highest price seller, the ratings of the highest price seller are lower (take a look at shipping speed as well). And I would imagine that the ratings (and the quality) of Amazon, which comes in with the lowest price, are the highest. More generally, I have a tough time thinking about aspects of service and quality that are worth so much that the range of prices goes from 1x to 4x for a branded bottle of vitamin pills.
The Puzzle of Stock Trading
“… It is not unusual for more than 100M shares of a single stock to change hands in one day. Most of the buyers and sellers know that they have the same information; they exchange the stocks primarily because they have different opinions. The buyers think the price is too low and likely to rise, while the sellers think the price is high and likely to drop.”
Thinking Fast and Slow. Daniel Kahneman.
Stereotypically Blind
In a recent paper, Doug and I find that stereotypes affect what people see. When asked to count the number of men and people of color in a set of avatars with same composition, labeling the avatars as Democrats (Republicans) changed what numbers people reported. People reported seeing more women, people of color among Democratic avatars than among Republican avatars.
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Gaurav @soodoku

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