The High-Speed Trading Behind Your Amazon Purchase

[Note: This item comes from reader Randall Head. DLH]

The High-Speed Trading Behind Your Amazon Purchase
Beneath the placid surface of product pages lies an unseen world of bots, algorithms, flash crashes and fierce competition.
Mar 26 2017

I wanted to buy some mini marshmallows recently, so I went on Amazon. Perhaps because of their resemblance to packing material—light, bulky, ubiquitous—I figured they’d be cheap. But when I found the most popular brand, not only did the marshmallows cost twice what I’d pay at my local store, but the price had skyrocketed overnight.

Just beneath the placid surface of a typical product page on Amazon lies an unseen world, a system where third-party vendors can sell products alongside Amazon’s own goods. It’s like a stock market, complete with day traders, code-slinging quants, artificial-intelligence algorithms and, yes, flash crashes.

Amazon gave people and companies the ability to sell on in 2000, and it has since grown into a juggernaut, representing 49% of the goods Amazon ships. Amazon doesn’t break out numbers for the portion of its business driven by independent sellers, but that translates to tens of billions in revenue a year. Out of more than 2 million registered sellers, 100,000 each sold more than $100,000 in goods in the past year, Peter Faricy, Amazon’s vice president in charge of the division that includes outside sellers, said at a conference last week.

It’s clear, after talking to sellers and the software companies that empower them, that the biggest of these vendors are growing into sophisticated retailers in their own right. The top few hundred use pricing algorithms to battle with one another for the coveted “Buy Box,” which designates the default seller of an item. It’s the Amazon equivalent of a No. 1 ranking on Google search, and a tremendous driver of sales.

Amazon’s retail business “is like this massive slowed-down stock exchange,” says Juozas Kaziukėnas, founder and chief executive of Marketplace Pulse, a business-intelligence firm focused on e-commerce. The usual market dynamics are at work: Sellers entering and leaving the market, temporary scarcity when someone runs out of stock or a manufacturer falls behind, and sellers testing consumers and each other with high and low prices.

The vendor of the marshmallows I wanted told me his high price was an attempt to bait competitors into raising their own asking prices for the item. This works because sellers of commodity items on Amazon are constantly monitoring and updating their prices, sometimes hundreds of thousands of times a day across thousands of items, says Mr. Kaziukėnas. Most use “rules-based” pricing systems, which simply seek to match competitors’ prices or beat them by some small fraction. If those systems get into bidding wars, items offered by only a few sellers can suffer sudden price collapses—“flash crashes.”

More sophisticated systems for pricing are offered by companies like New York City-based Feedvisor, which claims to use artificial intelligence to learn the market dynamics behind every item in a catalog. This system is “set it and forget it,” says Barry Lampert, one of Feedvisor’s customers and a top-500 seller on Amazon. The algorithm will often raise the price on items in a seller’s catalog, to see if other sellers will follow suit. The goal is to maximize sales while avoiding bidding wars that can be a race to the bottom.

The result, said my marshmallow merchant, is that the customer isn’t always getting the absolute best price, especially compared with in-store retail. But the point of Amazon, he adds, isn’t to offer a consumer the absolute lowest price possible; it’s to offer the lowest price possible given the convenience that Amazon offers. “Free shipping,” after all, isn’t free for the seller.


Pumping Life Into the Equal Rights Amendment

Pumping Life Into the Equal Rights Amendment
Mar 25 2017

The progress of women’s equality has not exactly been swift in American history. The endorsement of the Equal Rights Amendment on Wednesday by the Nevada Legislature — 35 years after the congressional deadline for passage — is being read by supporters as an encouraging sign, however slow-paced.

The E.R.A., which would enshrine in the Constitution the guarantee that a woman’s rights are equal to a man’s and “shall not be denied or abridged,” at first moved quickly toward passage in the 1970s. But it fell three states short of the 38 needed for final approval by 1982, the deadline set by Congress. Opponents in Southern and Western states had dug in with richly fantasized warnings of the legal and cultural chaos that would ensue from a broad mandate of gender equality.

Echoes of the same misogyny were heard from Republicans in debate before Nevada’s Democrat-controlled Legislature approved the amendment after decades of earlier failures. Proponents insisted the victory was more than hypothetical — pointing to Congress’s extension of an earlier E.R.A. deadline as evidence that Congress could do so again if two more states approved the measure. The National Organization for Women is already taking aim at Virginia and Illinois, where the amendment has had considerable support but has been defeated in recent years.

Even some liberals snickered at the news from Nevada about the revival of the amendment. But the equality movement pointed to a new galvanizing force: the outrage of women and men at President Trump’s sexism and vulgarity that resulted in millions of Americans marching in protest after his inauguration.

The legislative losers in Nevada tended to be Republican men complaining rather antiquely that the E.R.A. would harm family life, advance abortions and force women into military combat roles. Their other argument was that women, having achieved equality in many spheres since the 1970s, no longer need the amendment for protection. They’re wrong on that score.

“This bill is about equality, period,” said State Senator Pat Spearman, pointing to a raft of well-documented studies of continuing inequality. For example, the gap in earnings between women and men will not close until the year 2058, according to the Institute for Women’s Policy Research. The percentage of impoverished women has increased in recent years, while only 5.8 percent of chief executives on the list of the Fortune 500 companies are women. Women account for just 19.4 percent of congressional seats now; it might take another century to raise that to 50 percent. The United States is ranked 45th in the 2016 Global Gender Gap of nations, below European nations, Belarus and Namibia, among others.


Amazon’s Ambitions Unboxed: Stores for Furniture, Appliances and More

Amazon’s Ambitions Unboxed: Stores for Furniture, Appliances and More
Mar 25 2017

SEATTLE — Last Sunday in Palm Springs, Calif., Jeffrey P. Bezos, the chief executive of Amazon, climbed into the cockpit of a 13-foot robot and began flailing his arms as though warming up for a workout, causing the robot’s enormous appendages to mimic his movements.

“Why do I feel so much like Sigourney Weaver?” Mr. Bezos said, referring to the actress who wore a mechanical suit in a climactic battle in the 1986 movie “Aliens.”

The intimate audience of entrepreneurs and academics, attending an Amazon conference on robotics and artificial intelligence, chuckled. Later, Mr. Bezos posted a photo on Twitter of himself in the suit with a more menacing air, the robot’s arms raised as if about to deliver a bone-crushing bear hug.

For years, retailers have been haunted by the thought of Amazon using its technological prowess to squeeze them into powder. That battle has mostly played out on Amazon’s home turf, the world of online shopping.

Now the fight is coming directly to retailers on actual streets around the globe, where Amazon is slowly building a fleet of physical stores. And while most of the attention has been focused on Amazon’s grocery store dreams, the company has a more ambitious collection of experiments underway.

If those experiments work — and there is no guarantee of that — they could have a profound influence on how other stores operate. Over time, they could also introduce new forms of automation, putting traditional retail jobs in jeopardy. At the same time, locating those stores close to customers’ homes could also help Amazon further its ambitions of delivering internet orders within hours.

The company is exploring the idea of creating stores to sell furniture and home appliances, like refrigerators — the kinds of products that shoppers are reluctant to buy over the internet sight unseen, said one of several people with knowledge of the discussions who, in conversations with The New York Times, spoke on condition of anonymity because the plans were confidential. The stores would serve as showcases where people could view the items in person, with orders being delivered to their homes.

These would not be your average Home Depots: Amazon has considered using forms of augmented or virtual reality to allow people to see how couches, stoves and credenzas will look in their homes, the person briefed on the discussions said.

Amazon is also kicking around an electronics-store concept similar to Apple’s retail emporiums, according to two of the people familiar with the discussions. These shops would have a heavy emphasis on Amazon devices and services such as the company’s Echo smart home speaker and Prime Video streaming service.

And in groceries — a giant category in which Amazon has struggled — the company has opened a convenience store that does not need cashiers, and it is close to opening two stores where drivers can quickly pick up groceries without leaving their cars, all in Seattle. It has explored another grocery store concept that could serve walk-in customers and act as a hub for home deliveries.

Overseas, Amazon is quietly targeting India for new brick-and-mortar grocery stores. It is a vast market, and one still largely dominated by traditional street bazaars where shoppers must wander from stall to stall haggling over prices and deliberating over unrefrigerated meat sitting in the dusty open air. Amazon’s internal code name for its India grocery ambitions: Project Everest.


Going Under the Knife, With Eyes and Ears Wide Open

Going Under the Knife, With Eyes and Ears Wide Open
Mar 25 2017

Choosing to watch your own surgery is one more manifestation of the patient autonomy movement, in which patients, pushing back against physician paternalism, are eager to involve themselves more deeply in their own medical treatment.

But Dr. Alexander Langerman, the senior author of the communication study and a head and neck surgeon on the faculty of Vanderbilt University Medical Center in Nashville, said that a patient’s decision to remain awake during an operation also reflects a growing suspicion, generally, of authority figures. Noting how pedestrians pull out smartphones to capture police activity, he said, “There’s an element in that for patients, too. The occasional scandals that emerge while patients are sedated continue to erode their trust in us.”

But patients are also intrigued by what is being done to them while they are asleep. In choosing to stay awake, added Dr. Langerman, “there’s a curiosity and desire to have control over your experience.”

Indeed, a few studies suggest that some patients feel less anxious about staying awake during surgery, despite possible gruesome sights, than they do about being sedated. Other patients, studies show, are very anxious about general anesthesia, particularly right before an operation, afraid they will not be able to wake up afterward.

Some operations, including deep brain stimulations, require the patient to be awake for critical communication. But as anesthesia alternatives like regional nerve blocks and site injections become increasingly sophisticated, many more procedures are possible with the patient fully alert or moderately sedated. Orthopedics is the chief specialty for such procedures, but surgery in breast, colorectal, thoracic, vascular, otolaryngological, urological, ophthalmological and cosmetic specialties is also moving in this direction.

Studies show that regional anesthesia has fewer complications than general anesthesia and is less expensive. Recovery time is swifter and side effects are fewer, which can reduce the need for postoperative opioids.

Proponents like Dr. Ilyas, who operates at the Rothman Orthopaedic Specialty Hospital in Bensalem, praise awake surgery as a step forward in transparency. “It’s all about communication, comfort and experience,” he said. “It is definitely catching on and creating a different kind of surgeon-patient relationship.”

But many doctors view awake surgery with apprehension. What happens if the patient becomes too anxious? Distracts the surgeon with too many questions? Or objects vigorously when a trainee scrubs in — a mainstay of surgical education?

Dr. Langerman said that many surgeons do not like being observed for other reasons, too. “They often have a fear of litigation, or a fear of disappointing the patient.”

Patient satisfaction, however, tends to be high. Ms. Voynow did not need a preoperative physical exam, blood work, an I.V. drip or even an attending anesthesiologist. As nurses wheeled her on a gurney out of the O.R., she looked pleasantly surprised. “I’ve had root canals that were worse,” she said.

Scarcely a half-hour after the surgery, she drove herself home, using her right hand, which had just been operated on. By contrast, if she had been given general anesthesia, she would most likely have needed several hours to recover, possibly had side effects like dizziness and nausea, and required someone to drive her. An anesthesiologist would have been necessary throughout the operation. And billed accordingly.

“If I want sedation, I’ll have a beer,” said David S. Howes, who has had several awake procedures (and who is himself a doctor, an emergency physician in Chicago). During his awake colonoscopy, he discussed fly-fishing with the gastroenterologist. He had two total knee replacements with only regional nerve blocks.

“It’s not for the faint of heart,” he said. “They have to cut the capsule of the knee, which is quite thick. I could feel the vibration of the saw cutting through the leg bones. Then they hammer, and it sends a shock wave slamming into your knee. It doesn’t hurt, but you feel the pressure. And you smell burning flesh.”

Knowing that the knee replacement would take several hours, Dr. Howes came prepared. While surgeons put in the new joint, he read The Economist.


By dismantling domestic privacy laws, the US will lose control of the global internet

By dismantling domestic privacy laws, the US will lose control of the global internet
If Donald Trump signs off changes, he weakens America’s ‘global village’ role
By Evgeny Morozov

The numerous paradoxes that will haunt Donald Trump in the coming months were on full display during the recent Senate vote to undo privacy legislation that was passed in the last few years of the Obama administration.

As part of a broader effort to treat internet service providers and telecoms operators as utility companies, Obama imposed restrictions on what these companies could do with all the user data from browsers and apps. Emboldened by Trump, the Republicans have just allowed these businesses to collect, sell and manipulate such data without user permission.

From the short-sighted domestic perspective, it seems like a boon to the likes of Verizon and AT&T, especially as they increasingly find themselves confronting their data-rich counterparts in Silicon Valley.

Telecoms companies have been complaining (not entirely without reason) that the Obama administration favoured the interests of Google and Facebook which, invoking the lofty rhetoric of “keeping the internet free” only to defend their own business agenda, have traditionally faced somewhat lighter regulation.

The Democrats, always happy to attack Trump, have jumped on the issue, warning that the Senate vote would foster ubiquitous and extensive surveillance by the telecoms industry – and Silicon Valley, of course, would never commit such sins.

Under the new rules, complained Bill Nelson, a senator from Florida, “your broadband provider may know more about your health – and your reaction to illness – than you are willing to share with your doctor”. Never mind that Google and Facebook already know all this – and much more – and generate little outrage from the Democrats.

The Democrats, of course, only have themselves to blame for such ineptitude. From the early 1980s onwards, centre-left movements on both sides of the Atlantic no longer discussed technology policy in terms of justice, fairness or inequality. Instead, they preferred to emulate their neoliberal opponents and frame choices – about technology policy, but also about many other domains – in terms of just one goal that rules supreme above all other: innovation.

The problem with building a political programme on such flimsy economistic foundations is that it immediately opens the door to competing narratives of just what kind of policy produces more innovation.

Within this debate, the entire history of the internet – a fluid and borderless object that can include everything from mainframe computers to software that powers servers – becomes an extremely contentious theme that, depending on how one slices and dices this very “internet”, can bolster demands for both greater regulation and greater deregulation of digital technologies.

Whatever Trump’s proclaimed departures from the deadening orthodoxy of the Republican party, he shares its bizarre view – endorsed and promoted by Fox News and a new breed of savvy media enterprises, such as Breitbart – that the Democrats are just a bunch of closeted socialists who invoke the highfalutin rhetoric of “human rights” or “humanitarianism” to disguise their real radical agenda.

This piercing insight doesn’t prevent Trump from also attacking Hillary Clinton and her lieutenants as being in the pay of Wall Street and Goldman Sachs: apparently, this is where ardent socialists plan the revolution these days.


The U.S. will be hit worse by job automation than other major economies

[Note: This item comes from reader Randall Head. DLH]

The U.S. will be hit worse by job automation than other major economies
A new study from PwC estimates that 38 percent of U.S. jobs could be lost to automation in the next 15 years.
Mar 25 2017

Nearly 40 percent of jobs in the U.S. may be vulnerable to replacement by robots in the next fifteen years, according to a new study by the research firm PwC.

Other major advanced economies have fewer jobs at risk. The study estimates that 30 percent of jobs in the United Kingdom could be threatened by technical advancements in automation from AI and robotics, compared to 35 percent in Germany and 21 percent in Japan.

The U.S. has a higher percentage of jobs under threat by automation because more workers in the U.S. are employed in positions that require routinized tasks, like filling out paperwork.

Jobs most at risk of being done by new technologies are in industries related to transportation, manufacturing and retail.

To arrive at these estimates, PwC broke down the types of tasks of various jobs in different industries. The researchers then applied an algorithm that took into account the “automatability” of those tasks and characteristics of the workers employed to do them.

One example of how jobs in the U.S. may be more susceptible to automation than jobs in the U.K., according to the study, is in the financial services sector. Although both countries have similarly service-dominated economies, financial services jobs in the U.S. are more retail oriented and routinized. Jobs in financial services in the U.K., however, are mostly occupied by professionals working in international banking, whose jobs are harder to automate and require more education.

More of Germany’s workforce is employed in manufacturing than the U.K., which are the types of jobs that could one day be done by robots, according to the report, accounting for its higher percentage of jobs that may potentially be automated.

In Japan, the low percentage of jobs at risk to automation compared to the other major economies examined in the study may, in part, have to do with the fact that jobs that are highly “automatable” in other countries are historically less so in Japan. Retail, for example, requires more training and skills in Japan, where workers have more management and organizing tasks, than similar jobs in the other countries studied, the report notes. (Japan also already utilizes a significant amount of automation, such as vending machines at fast-food restaurants that often handle the job of a cashier.)


I am Indian American, and it’s 2017. But I still get asked ‘What are you?’

I am Indian American, and it’s 2017. But I still get asked ‘What are you?’
The more brown America gets, the more mutable ethnicity — mine, others — is becoming.
By Lavanya Ramanathan
Mar 9 2017

As I walked past them in a restaurant, a couple, on what must have been a first or second date, flagged me down from their table. From their broad, eager smiles, I already knew what they wanted.

“We have a bet,” the woman explained. “He thinks you’re from South America,” she said, gesturing to her date. Her money was on Pakistan.

I am a dulce de leche-colored woman, browner still in the summer. Tallish, with large eyes the color of Coca-Cola. My hair winds into curls at the hint of rain clouds. My lips are brown. “Like the president’s,” someone noted once, trying somehow to square Barack Obama’s multiculti look with my own.

My ancestors hail from the southern part of India, on the Bay of Bengal, which I mention only because the sea once had a way of washing up all varieties of conquerors and marauders on our shores. Lineage is messy.

But in 2017 America, my particular jambalaya of “features” frequently has me mistaken for Ethiopian. Trinidadian. Colombian. African American. It depends on which city I’m in, what I am wearing and, more often than not, who is doing the asking.

Now here was this couple, both white, asking the question I increasingly stumble over.

What am I?

Just another dark-featured, dark-haired woman in a vast sea of immigrants’ kids, I want to tell them.

Or more simply, I am brown. Because the more brown America gets, the more mutable ethnicity — mine, others — is becoming.

In “Between the World and Me,” Ta-Nehisi Coates describes defining oneself as black as like joining “a tribe — on one hand, invented, and on the other, no less real.”

As the number of brown-skinned Americans grows, will we forge our own tribe?

That would be just as much an invention, an embrace among disparate people whose common ground is mostly being a generation or two removed from an immigration story. But in finding bits of shared experience, there could be a feeling of unsiloing oneself, of belonging to something larger.

I’m not, of course, the only one aware of a change in the winds, away from the notion of a post-racial America, toward understanding that Americans are acutely aware of race and also content defying its cold categorizations. Asked at his last news conference whether there would be another black president, Obama joked, “I suspect we’ll have a whole bunch of mixed-up presidents at some point that nobody really knows what to call them.”

That future may not be far off. Whatever forces are working to erect walls and negate travel documents may be too late to change what is underway: Immigration and birthrate trends suggest that by 2046, the United States will be made up of more non-whites than whites. And the change will be fueled in part by immigrants from Latin and South America, from Asia and Mideast nations, but also by their American-born children and grandchildren.

Together, recent immigrants and their children will account for a third of the U.S. population by 2050, according to projections from the Pew Research Center. Already more babies of color are being born in America each year than white babies.

What am I? When my parents filled out my birth certificate more than 35 years ago, the county didn’t bother asking. My mother recently dusted off my paperwork and gave it a once-over to be sure. “There’s no blank for race,” she marveled. If there had been a box to check, we joked, the choices probably would have been just black or white.

No box, no easy categorization even then.

Instead, I’ve spent much of my life awkwardly knocking around the middle, dancing to Bell Biv DeVoe’s “Poison” with the black girls in middle school, banging my body into white boys in the mosh pit at Lollapalooza, reading books by biracial British author Zadie Smith and Dominican American writer Junot Díaz, and holding hands with a Vietnamese man who I was sure understood me.