The secret of income inequality in the US.

This first chart shows the relationship between income inequality and test performance on prose literacy. In the US, people who are bad at written and verbal communication skills are at a huge disadvantage. The second chart shows that in the US and China family plays the most important role in educational achievement and, as a consequence, in future earnings. 

Source: http://www.jstor.org/stable/27647039. The role of cognitive skills in economic development.

... is power

Remarkably, the Forbes' list of most powerful women tops Michelle Obama, a woman who married the right guy, rather than, let's say, Lady Gaga, who rose to power, whatever the Forbiates think it is, through her own efforts.

tags: selection, niche construction, information, control

An article about further research into the Long Tail theory:

The Wharton researchers find that the Long Tail effect holds true in some cases, but when factoring in expanding product variety and consumer demand, mass appeal products retain their importance. The researchers argue that new movies appear so fast that consumers do not have time to discover them, and that niche movies are not any more well-liked than hits.

I think the key issue here is the difference between the type of content and delivery option used in the studies. The original Long Tail hypothesis was tested on a large online digital audio collection, while the new research uses Netflix data on movies ordered via mail. In the first case, the risk to consumer to waste valuable leisure time is essentially non-existent. Audio download takes very little time and it's easy to try a song and dump it after a few seconds.
It's different with Netflix movies, though. The waiting time for a movie is at least one day, and if the user plans for a having a good time, a risky bet on an unproven movie may not be worth it. Since we know that people, in general, are risk averse, choice of a better known movie is justified from a behavioral point of view.

In any case, the Long Tail theory seems to work best when "total consumption costs", including access and trial time, are close to zero.

tags: control, scale, selection, risk, payload, distribution, entertainment

Patent Value: the haves and have-nots

     In search of data on patent values, I've found a survey of German inventors by Dietmar Harhoff and Karin Hoisl(2006). The paper studies the impact of the German Employees' Invention Act(GEIA), a German law that regulates how employees are paid for their patents.
Check out the payment distribution chart: only 1% of patents results in a payout above 20% of salary; the remaining 99% barely make a dent in the inventors' income. Since patent awards are calculated as a percentage of value to the company, most likely, patent values vary as dramatically.

Interestingly enough, planned inventions are more valuable than spontaneous ones:

"Somewhat unexpectedly, two other R&D process variables turn out to have a significant impact. First, patented inventions that are the planned product of R&D projects are more valuable than unplanned results or mere by-products of R&D.
The surprise lies in the second R&D process variable with a positive coefficient – inventions made during the inventor’s leisure time are considerably more valuable than other types of inventions."

References:
Dietmar Harhoff and Karin Hoisl. 2006. Institutionalized incentives for Ingenuity. Discussion Paper.

As a result, some sites are turning to a new strategy to keep their services "sticky" and their users satisfied: They're not just encouraging them to network online, but to attend offline events and parties in the real world as well. Yelp now regularly hosts parties in big cities around the country.

Now smaller start-ups are trying use the offline-online hybrid model to gain momentum against community heavyweights like Yelp and Meetup.

Recently relaunched Going, for example, is a "social-event calendar" that aggregates announcements, encourages members to network with each other online beforehand, and lets them maintain profiles with favorite events and photo galleries.

"The secret to Yelp bridging the online-offline gap is the reviews," Yelp user Adrian said. "Someone's writing can reveal a lot about that person, so before I meet a reviewer in real life, I have a general idea of who they are and what they are like. With Facebook, I might get an idea of what a person looks like, what movies and music they enjoy, but reading something (that) someone has put a piece of themselves into makes a complete difference."

http://news.com.com/Social+networks+geared+for+offline+success+-+page+2/2100-1038_3-6192780-2.html?tag=st.num

For social networking web is becoming an orchestration layer that allows people to identify potential friends and control the flow of social events in their lives. Very similar to what Dell, for example, did to PC manufacturing, Amazon to book shopping, and etc. Also, very relevant to the emerging click-to-brick model.

The association is urging locals to come up with their own ideas for the area's gardens and post them in the online world of Second Life, where people create virtual doubles of themselves called avatars.

Accomplir will shortlist five of the best projects, which will then be displayed on an island in Second Life.

The winner will be announced at the end of June and receive a reward of 275,000 linden dollars (785 euros, £530), the currency used in Second Life.

Accomplir will then go to the town hall with the winning idea, aiming to put pressure on officials to speed up the redevelopment process.
http://news.bbc.co.uk/2/hi/europe/6544377.stm

The alternative universe provides more opportunities for influencing the so-called real life. Blogging was just the beginning of the evolution. With regard to ideas, virutal world is a lot more productive than the material one. The selection process is also very scalable.