Chris Peterson

Readers of this blog will recall Saving With Shoeboxes: An Open Letter To My Bank, in which I reviewed some research from behavioral economics and suggested that banks might leverage the bracketing effect to help people visualize their budget. The general idea is that if you provide some structure which breaks up a pool of money into discrete chunks, people can actually budget better, because once you break down that $1000 of “free” money in your checking account into constitutive categories (groceries, utilities, etc), you’re much less tempted to blow it on an iPod.

I suggested that consumers could benefit if their banks allows users to create these ad-hoc, constitutive categories within a checking or savings account, and then allocate their total funds within these categories. Basically, if you could build your budget structure into the architecture of your online banking, you’d be able to bank better.

The post drew a fair response, in part because it was linked on Cass Sunstein and Richard Thaler’s NudgeBlog. And in the comments, a fair number of readers shared their stories, saying they’d been doing similar things for years with multiple checking accounts, or suggesting software packages like Mvelopes and BucketWise. And while these software packages have their perks – BucketWise, in particular, is almost exactly what I think the final solution should look like – they suffer from the disadvantages of disintegration from one’s actual online banking. Saving with shoeboxes should be simple and integrated into the process – it shouldn’t be disassociated and living on your desktop.

So I did the next best thing – I opened up about 8 checking accounts with Bank of America, and moved my money around within them. It wasn’t the simplest thing in the world, and getting 8 bank statements a month was sort of annoying, but it allowed me to improvise a crude shoebox system. Plus, checking accounts were free and easy to open online. And all was well for a time.

Note the past tense. Last week, Bank of America announced new monthly maintenance fees for checking and savings accounts that did not meet certain prerequisites (direct deposit, or a minimum balance of $1500 for the former and $300 for the latter). They launched a painfully kitschy “Facts About Fees” page, with a tiny talking woman named “Janet” strolling confidently onto my screen, explaining in a vaguely condescending tone stuff that was, in fact, unrelated to why these fees were suddenly necessary.

For most people, I admit, this probably isn’t an issue, as they most likely meet the minimum balance or direct deposit requirements on their one or two accounts. For me, obviously, it was unsustainable – I’d be paying upwards of $80 a month just for my budgeting system!

I tried calling Bank of America to see if they’d waive the fees. No dice. So I began looking around for other options.

I returned to the comments from that original post and found some promoting ING Direct, the online-only counterpart of banking giant ING. ING Direct, it seems, allows you to open up to 25 savings accounts for free, with no fees or minimums. Plus, they have “Automatic Savings Plans”, so one could say (for example) “Transfer $100 from my paycheck to my ‘Holiday Savings’ fund every month”.

Now, is this a perfect shoebox solution? Not at all. You still have to open several accounts, and you can’t easily allocate everyday expenditures within those accounts – you can only transfer money from “groceries” to “checking” to cover the expense.

(One of the keys to BucketWise is that you can allocate directly. Suppose you have $500 in your checking account, and $175 of that is devoted to grocery budget. You spend $50 at the grocery store on your debit card. When you enter that $50 into BucketWise, you can allocate it to your grocery budget. Now, your total account total goes down to $450, and your total grocery budget goes down to $125. This integrated allocation would be a killer feature to a true “shoebox” system in any online banking environment. I’ve been advocating a true design to anyone who will listen – and many who won’t. I’m still pushing for it as hard as I can. But I digress.)

However, ING Direct is much better at this sort of stuff than any other organization I’ve seen, including, unfortunately, MITFCU (I wanted to go Credit Union because of my distaste for banks, but apparently federal law does not allow individuals to open more than one checking/savings account per person, and MITFCU hasn’t gotten around to implemented a shoebox system as SDCCU has). So, for the last 24 hours, I’ve been transferring everything over to them.

While some aspects of the transition to an online-only bank aren’t easy – the two-day ACH waiting period, the comparable lack of ATMs, etc – so far I’ve been very satisfied. Their online banking portal is excellent, their rates are great, and the service is fantastic. It’s weird how weird it is to pick up a phone, call customer support, and be connected to an actual human being in two rings or less. I can’t even remember the last time I was on hold with Bank of America for less than 15 minutes.

When you include the fact that ING Direct will allow me to continue my (admittedly imperfect) implementation of the shoebox system, it’s really a no-brainer.

So if you’re out there, and want to try better budgeting, or about to get hit with ridiculous fees by comically money-grubbing financial institutions, I recommend ING Direct. I only wish I’d followed the advice of those comments before.

I’ve been pretty haggard with work lately, so I’m a bit late on this, but James Grimmelmann has written a great paper called “Privacy as Product Safety”, to be published in the Widener Law Journal. It’s an adaptation of his “Myths of Privacy on Facebook”, and it’s quite good.

In his “Saving Facebook”, Grimmelmann explained the “social dynamics” of privacy problems on Facebook. He canvassed the social science literature to explain how and why people used Facebook, and what their behavior could tell us about proper regulation and privacy protections.

But in this article, he’s honing in on what I’ll call the “design dynamics” that he explored in his first article – that is, how the design of Facebook (or other such services) relates to its privacy problems. This idea isn’t new – he calls them “privacy lurches” in Saving Facebook, and they’re somewhat the focus of my “Losing Face” – but what is really great about this article is how Grimmelmann maps product liability law onto the scaffold of social network sites.

For example, on Google Buzz:

“Buzz as a whole is a powerful, possibly revolutionary product—but it also launched with a serious design defect. Just as an otherwise-useful buzzsaw is still unreasonably dangerous to life and limb if it sports a flimsy handle, the auto-add feature made the otherwise-useful Buzz unreasonably dangerous to privacy.”

In “Losing Face”, I mostly gave up on law as a tool to fix the defective designs of social network sites. I’m interested, and excited, by Grimmelmann’s effort to adapt liability law to achieve an admirable end.

I can’t stand a lot of popular (and, sadly, sometimes scholarly) writing about cyberspace. So much of it is breathless hype, superficial snapshots, and baseless theoretical wankery.

For example, when Second Life was booming, a lot of people were writing a lot of things about its business and investment potential, without ever having once walked around in it. That’s a critical difference, because you stop thinking about Second Life as next international marketplace the first time you’re caged and accosted by an anthropomorphic fox, endowed in a diverse, imaginative, and physically impossible manner. The data tell a different story.

Now, people like Eszter Hargittai have been diving deep into the data for years. But the great thing is that now everyone is doing it.

Take, for example, ChatRoulette. ChatRoulette is a service whereby any two users with webcams can be randomly assigned to one another. You log in, you click go, boom, you’re chatting with another random user.

Now, just from that, I might imagine all sorts of things about ChatRoulette. I might characterize ChatRoulette as the next wave in deliberative discourse, allowing individuals from different backgrounds and cultures to talk face to face in a totally unscripted and unforced fashion. I might prophesize an even smaller global village, where people could simply reach out to one another, connect, say hello, and find out that hey, someone cares. I could create all manner of handwaving, hypothetical bullshit.

Luckily, we have data. Not drawn from any peer-reviewed journal. This is ChatRoulette, as documented by one intrepid, devoted, and bored reddit user, who spent 12 hours on the site and posted the results:

1276 cams viewed

• Conversations 34
• Avg. Conversation Duration: 23.7 sec
• Long: 5 min 56 sec
• 298 naked masturbating men
• 678 non masturbating males
• 152 fake cams
• 148 females or mixed m/f
• boobs shown you ask? 0.0
• Cum shots: 2
• man having sex with racoon viewed 23 times
• not counted: repeats, no cam, empty rooms people with dolls and signs.

Edit: I generally waited untill the other person switched the cam, although for fake vids I switched the cam Edit: Logged on and saw my first legit real girl with exposed breasts. Final Edit: will log 12 more hrs. after my show to get a complete 24 hr sample.

This, ladies and gents, is what good Internet research and analysis looks like. So thank you to the brave few on the front lines.

On SSRN now. Here’s my profile, and here’s Losing Face on SSRN.

Speaking of which, I’m considering pointing all the links to Losing Face on this site to the SSRN version (rather than to where it is stored on bepress or my server).

On the one hand, I’m thinking that this might be worth it as a sort of publicity thing: if I suddenly get a bunch of downloads, it would be better to have them all on one version for the purposes of it getting noticed, rather than have it spread out across several versions. (The version of Saving Face linked to by the NYT got several thousand downloads, and would’ve made it one of the most downloaded articles on SSRN of all time!)

On the other hand, I’m not sure if it’s worth the effort, and I sort of like having easy control any time I want to make an incremental change and not have to worry about sitting through the SSRN review process.

Anyone out there have any advice? Does it really matter?

I haven’t had the chance to play with Google Buzz yet. I’m usually an ultra-early-adopter, but I’ve been too swamped with work these last few days to do so.

But frankly, after reading the panicked privacy reactions from early adopters, I’m pretty glad I didn’t.

Email address publishing? Autofollowing? “Terrifyingly accurate” Android location awareness publishing and posting photos from cellphones that were never before uploaded?

And everything’s opt-out?

It’s like Google carefully studied every complaint, real or imagined, about the privacy practices of Facebook, Twitter, etc…and then rolled all the rollicking horrors into one service.

No, thanks.

edit: Grimmelmann agrees.

Not to belabor the point, but the “bracketing effect” / “envelope model” for banking is still really, really important. The problem is that no banks will build it into their software (maybe they make too much money off overdraft fees?)

BucketWise is a free, simple, locally-hosted application that allows you to do it yourself. Take your general fund, allocate it among constituent funds, and budgeting becomes comprehensible. Watch the demo video.

Is it as convenient as having it built right into your online banking? No. But it’s better than nothing, and maybe it will finally convince someone that harnessing the bracketing effect for better budgeting is the killer app of online banking.

I attended a Berkman Center luncheon the other day where the keynote speaker was Jeremy Bailenson. Bailenson runs the Virtual Human Interaction Lab at Stanford. From their page:

The mission of the Virtual Human Interaction Lab is to understand the dynamics and implications of interactions among people in immersive virtual reality simulations (VR), and other forms of human digital representations in media, communication systems, and games. Researchers in the lab are most concerned with understanding the social interaction that occurs within the confines of VR, and the majority of our work is centered on using empirical, behavioral science methodologies to explore people as they interact in these digital worlds.

The talk (video, audio at link) was really great:

Unlike telephone conversations and videoconferences, avatars – representations of people in virtual environments – have the ability to control their physical appearance and behavioral actions in the eyes of their conversational partners, strategically enhancing or hiding features and nonverbal signals in real-time. Jeremy Bailenson – founding director of Stanford University’s Virtual Human Interaction Lab – explores the manners in which avatars change the nature of remote communication, and how these transformations can impact the ability to influence others in social and professional contexts.

A lot has been written about cyberspace law and policy, but not a lot of people (to my knowledge, at least) have done the heavy-lifting on exploring how people actually behave in these environments. Even the HCI literature, or that to which I have been exposed, tends to focus on usability, rather than framing effects and so forth.

I was very much impressed by the talk Bailenson gave, and by the work his lab is doing. While I’m not sold on the merits of all of it – I have a deep and ineradicable bias against anything that takes Second Life seriously – the point is that this is the sort of research that needs to be pursued if we are to understand how digital environments affected human communications and interaction.

Read their papers. Or, at least, check out the talk. It’s good stuff.

From the “How Did I Survive Without This” Dept: PadMapper.com.

Simple enough. PadMapper extracts Craiglists/etc listings, allows you to filter down by parameters (e.g. minimum bedrooms, bathrooms, wood floors, granite countertops, etc), and places them on a map, so you can easily visualize location as well.

Great way for me to make sure my next place is sufficiently close to the Charles River Bike Trail. Now if they’d only overlay it with a map of the MBTA…

In the old days of print journalism, syndication was the sign you’d made it. A symbol of prestige and influence that meant one had a breadth of voice worth reckoning with.

Web syndication? Not so much. But I decided to syndicate with myself today, which feels vaguely dirty, but nonetheless oddly appropriate.

If you see posts from now on posted by the user chris@mitblogs and/or falling under the category mitblogs, those are posts that I have made to MITAdmissions.org. Like today’s entry about FIRST Robotics, for instance. The link in the title also goes there, not here.

I don’t blog for MIT terribly often – our student bloggers are much more interesting – but when I do it’ll be here too!

No, this entry is not about Kelly Clarkson. It's about FIRST Robotics. This past weekend, I attended the Founder's Reception and Kickoff Event on behalf of MIT Admissions. I'll explain how FIRST and KC are connected in a moment. But first, let me explain...FIRST.

FIRST (which stands for For Inspiration and Recognition of Science and Technology) was founded by inventor Dean Kamen and MIT professor Woodie Flowers back in 1989, before most students now applying to MIT were even born. The goal of FIRST, broadly speaking, is to inspire students towards a lifelong devotion to science, technology, and engineering.

FIRST works something like this: every year, in January, a star-studded team of engineers on the Game Design Committee unveil that year's game to the 37,000+ students on 3,000+ teams in 12 countries worldwide. The games change every year, but always certain things remain the same: two alliances of three robots each compete against each other on a small, enclosed field, roughly the size of a small basketball court. The robots are based off of common kits to which teams add their own modifications and designs (subject to a sort of "salary cap" meant to mitigate economic, rather than engineering, advantages). Teams then have six weeks to conceive, design, and build their robots, which are then sent out to at least one of 57 Regionals across the world. Then, at Regionals, they'll compete against a field of dozens for the chance to qualify for the Championship Event in Atlanta.

But the competition isn't the point of FIRST, or rather, it's a means, not an end. The point of FIRST is, in the words of Wikipedia, to "promote a philosophy of teamwork and collaboration among engineers and encourages competing teams to remain friendly, helping each other out when necessary", in addition to getting students excited about science and technology.

And boy, do they get excited. Trust me, you haven't seen excited until you've seen 6,000 students in an arena, dressed and painted in their team colors, banging away on noisemakers, screaming themselves hoarse with chants, with every emotion they have riding on the backs of the robots they've built. I'm not posting a competition video here because a grainy 480x360 video can't do it justice - you need to go to a regional event and see for yourself.

FIRST might just be the best opportunity for aspiring techies to learn not just how to wield a soldering iron but how to interact with others in the spirit of "gracious professionalism." The spirit of "coopertition" that FIRST inculcates among its participants characterizes the MIT campus spirit too - students working hard, working smart, collaborating well, and tempering their technical, interpersonal, and leadership skills under a healthy, educational, and beneficent duress.

Perhaps that's why - as Woodie said at Kickoff - 1 in 9 MIT students participated in FIRST in high school. That's not to say that FIRST is a prerequisite for admission, or that it gives you a dispositive advantage in admissions (after all, invert that statistic and you'll see that 8 of 9 MIT students didn't participate in FIRST). What FIRST does is help inspire students to pursue careers in engineering, science, and technology; to endow them with the time-management and prioritization skills that will make them successful competitors in any field; and to develop in them the collaborative spirit that will make them a success in any interpersonal endeavor.

These characteristics are shared by many great students, and thus many great MIT applicants, and so the subset of students who participate in FIRST and those who enroll at MIT intersect comparatively often. To use the language of formal logic, FIRST is not a necessary condition for admission to MIT, but excellence in FIRST (as demonstrated best by letters of recommendation from mentors and/or examples of engineering work) may be sufficient to show us some of what you've got to offer.

So what does FIRST have to do with this Kelly Clarkson song?

First, when it dropped in 2004, I was a subteam captain and the spirit leader (which is sort of like cheerleader, only much geekier) of Team 1073 during my personal favorite FIRST game. After graduating, I continued to mentor the team throughout college. Now, I am, to the best of my knowledge, the first FIRST alumnus to be an MIT Admissions Officer. So the date on this song makes me more than a little nostalgic. I did a lot in high school - football, newspaper, theater, skiing - but all these years later FIRST remains the best thing I ever did, because it taught me all the skills I outlined above. I didn't even pursue science or engineering in college, but I am far and away the better for my FIRST experience.

Second, and more importantly, the song shares the title of this year's game: Breakaway. Here's the animation describing the game, created by NASA's Dave Lavery, posted to YouTube by Team 801:

To read more about the game, you can read this great article in Popular Mechanics about FIRST, this year's game, what went into its design (sneak preview: the lead engineer of Cirque de Soleil was brought in to help this year!), etc.

For those of you who are seniors, I know the excitement and stress of applications season has been inexorably followed by the excitement and stress of FIRST season. Let me give you some advice, bad news first. Bad: your college application season will not go perfectly. No matter how good of a student you are, no matter how polished your application, some irreconcilable tension will remain. Good: your FIRST season CAN go perfectly, because the point of FIRST is not to win or lose, the point of FIRST is to develop all the skills I mentioned above, because they will help you be successful no matter where you go and no matter what you do.

Come to think of it - why are you still reading this blog? Isn't there a robot that needs building? That crate won't pack itself! Good luck, and see you at the championship!