This is the official Perth blog site for posts, comments, and other contributions about leadership, behavioral finance and economics, and about management generally, as well as other related topics that take our fancy.

Do AI’s Believe in God?

  I’m expecting AIs to come up with an answer, because that should tell us if we humans have free will or not. That translates into whether humans will ever be able to answer the really interesting questions, or just keep on endlessly playing old (vinyl) records, even if we persuade ourselves that there is, or isn’t, a God. Do We Even Matter? This ...

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It looks like AI is not only not improving business and political leadership; it’s actually making it worse. Man of the Year: Person to Fear? I’m sure you took notice of Sam Altman. the CEO of OpenAI, who has just been fired. As it turns out, he was one of  Time Magazine’s Persons of the Year for 2023 that called him “perhaps the most powerful pers...

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Are the UFOs Trying to Tell Us Something?

You’d expect politicians to miss important stuff when they discussed UFOs. They did. Did Oumuamua Bring them? So, Congress just had hearings on UFOs (what they call UAPs – unexplained aerial phenomena). What does that all mean? That aliens exist?? For the record I’m going to assume that the UFOs Congress discussed are not of Earthly origin, coz oth...

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Is the JWT (James Webb Space Telescope) a Sitting Duck for ETs?

Through a Glass Darkly We’ve all been seeing the press releases about the recent launch of the JWST. Its something else again. It can peer 46 billion light-years, to the edge of our known universe. That’s a really long way. Actually the longest except for the diameter of the universe which is, of course, around 93 billion light years. How in heaven...

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Does Pandemic Response Predict Military Performance?

Did you see that recently, Qingdao a large city in northern China found 13 new cases of coronavirus? So they immediately swung into action and tested all of their 9 million people. Say what? That’s something we couldn’t imagine in the US or Europe, nor even Russia or other authoritarian regimes. Out-Curing the US In China right now almost no-one is...

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Is somatic cognition (come again?) being transformed by videogames?

OMG somatic cognition! What the *** is this guy talking about? And what has it got to do with me anyways? I’ve already written on this broad topic (19 September 2015  “What have Octopuses got to do with Leadership?”). The basis is embodied cognition, the idea that much of our thinking goes on in parts of our body other than the brain. Just like an ...

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How many post-history exoplanets are there anyway?

Mars is cool right now. Soon we will launch its inevitable colonization. And then what? Prior human settlements (here on Earth) have usually been economically successful but socially a shambles. Will Mars be any different? The reigning Mars thesis du jour is that it used to be inhabited by intelligent beings – maybe an earlier form of human – who t...

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AI creates weapons of mass deception!

Voice control is hot. Amazon announced a voice-controlled microwave late last year, in fact it actually works with Alexa, the belle that everyone wants to take to the ball. But voice stuff even now is getting to be passé. Sure, Alexa can take orders and give you replies to everyday questions. But what if Alexa knew if you were angry, skeptical or e...

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Are Big Data and happiness incompatible?

I don’t have to tell you that Big Data is hot. Almost Godly really. And happiness is a perennial as old as mankind itself. Wouldn’t it be nice if they both played nice together? Why shouldn’t they anyway? These thoughts come from after reading a book by Mo Gawdat, Solve for Happy: Engineer Your Path to Joy. The author is a Google executive and the ...

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The California wildfires - Stay in your car in a wildfire – don’t get out of it!

The fires in California are tragic with a huge loss of life. I grew up in Australia in the bush and we used to get a lot of bushfires. They are very scary of course but the Australians have built up a hard core of safety knowledge based on bitter experience. I am doing this blog as a public service because I am surprised that none of that experienc...

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Will AIs Commit Suicide?

There’s been a spate of news about suicides by some well-known celebrities. That got me to thinking about suicide itself. I’ve done a lot of thinking about AIs so I wondered what this all means for AIs in the future. From there on I meandered into thinking about free will, as in, will AIs have it? Esoteric, yes, but nothing is more immediate than s...

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Shouldn’t behavioral finance be a part of fintech?

Fintech is hot; as I’m sure I don’t need to remind you. I just went online to find the top 10 opportunities. Here they are. I can’t argue with any of the topics on the list.

  1. Mobile Banking and Financial Inclusion for Underserved
  2. Smart Personal Finance Management
  3. Affordable and Easy Accounting for Small Businesses
  4. Innovative Payment and Money Transfer Processing
  5. Peer to Peer Lending and Microfinancing
  6. Accessible Investing and Online Trading
  7. Simplified Crowdfunding
  8. Big Data and Predictive Analytics for Fintech
  9. Digitized Insurance Experience
  10. Blockchain and Digital Currency

But here’s the thing. When you check them all out there’s no mention of behavioral finance. And here’s me thinking this is all about FIN- Tech. Get it? Am I missing something?

Could it be that the fintech crowd doesn’t think behavior matters? That it is not an important variable? Or that psychology is just too soft and squishy a subject to be worthy of serious scientific endeavor, or too new to be taken seriously….? Hmm, that’s worth exploring further.

I wonder what could be going on here? This brings back some sensitive memories, like when it was topical to talk about the hard and the soft sciences, with the soft sciences receiving a small but discernible curl of the lip. Like, they’re not worth exploring if you are into the real hard stuff.

Now of course there would be many who don’t consider economics to be a hard science, its (pseudo?) math focus notwithstanding. But you would think that finance would just about make the cut, Black-Scholes falling from grace notwithstanding. But in this telling, finance is the hard science and behavioral finance the soft-science underbelly.

Here’s what I think is going on. The economics guys have teamed up with the MBAs, both of whom are actually closet positivists who think that psychology, behavioral and neuroscience are too imprecise to be worthy of their attention. What is worthy are Big Data, math with rigor (which excludes pure math of course) and algorithmic ways of doing things, souped up with AI as necessary. But behavior just doesn’t make the cut.

So the cultural divide still persists, almost 60 years after CP Snow coined the term The Two Cultures. Before, the dichotomy du jour was hard vs soft science. Now it’s fintech vs behavioral strategy and neuroscience. Plus ca change etc. etc.

What all of this seems to mean is that the fintech types see behavior as a step too far and they really are not going to go there, no matter what. They were never taught about behavioral finance because the academics largely have ignored it, 3 Nobel Prizes notwithstanding. Until it’s shoved in their face by dark reality, it’s going to remain in the shadows, at least for them.

Why would the fintechnorati feel this way? Could it be because behavioral finance takes formal account of irrationality and they still remember all the lessons which drummed into them that homo economicus always makes rational decisions, reality to the contrary? Or could it be that it just makes the math too hard? Who knows? In 20 years people will be writing books on this, just like the books that hundreds of years later excoriated the inquisition for being so crassly stupid about heliocentrism.

Ironically the popular writers have picked up the cudgels on this one even though the academics and fintech types haven’t. Authors such as Malcom Gladwell and Nouriel Roubini are writing for the people who have to use this stuff and that’s why they’re so popular. But the professionals are missing this boat in a really big and splendiferous way.

My sense is that more aggressive and innovative types of going to run with this ball and outwit the fintech traditionalists. The Chinese maybe? Anthropologists, God forbid?

Science has a nasty way of going in the right direction anyway and making hitherto sceptics look like know-nothings. Watch for it to happen with fintech too.




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Is blockchain primarily a medical breakthrough?

   Now we know that blockchain is revolutionizing not just digital currencies but also accounting and increasingly other areas of finance. So blockchain is fundamentally a financial technology right? I’m not so sure.   Check out my Sanctus Sanctorum, Wikipedia, and it will tell you that blockchain is a distributed ledger. As such it can give you a ...

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Could China be North Korea’s True Nuclear Target?

It looks like North Korea really has it in for the US. But what if the Dear Leader’s real target is China? Now that sounds crazy right? China is North Korea’s closest ally. Moreover it is North Korea’s main trade partner. As the media constantly remind us, China will never move against North Korea because it needs the Hermit Kingdom to keep the Kor...

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Quantum is the new digital

If you’re a regular reader of this blog you might have noticed I have a disproportionate number of posts about quantum stuff. Case in point my recent post of “Social Science is the study of entangled brains: Discuss”. Not to mention “High Frequency Trading Trashed by Quantum Computers?” And so on. Yep, it’s very nerdy. But isn’t it a little bit or ...

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Is reading bad for you?

As a book writer myself I’m always interested to see who might want to read my books, or for that matter, any books. The bad news is that the book market is essentially flat, so doesn’t look like I’m going to make out with my book, even if it were a best-seller, which it’s not. The slightly better news is that e-books are growing a little faster bu...

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Was Darwin wrong? Why it matters

Hmmm, this sounds like a stretch, even for me. Surely natural selection is gold-plated, like the Bible, maybe even better? Nope, it’s starting to look like Darwin was barking up the wrong (evolutionary?) tree. But just so you know, I’m just the messenger, using info from the big guns, in this case a widely-published professor of biology Kevin Lalan...

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