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Cognitive explanation of why beta blockers are effective for anxiety
Beta blockers essentially reduce physical effects of anxiety and panic disorder, but there is no proof that there is a direct effect on anxiety. Some scientists believe there is an indirect effect.
What is the cognitive explanation of the fact that a reduction in symptoms causes a reduction in anxiety?

"What is the cognitive explanation of the reduction in symptoms?" or should that be "What is the cognitive explanation of the fact that a reduction in symptoms causes a reduction in anxiety?"

@OfriRaviv I wasn't sure, I'm not familiar with abnormal psych so I wasn't 100% sure of the intent/situation. Your sentence is probably better.

One possibility is related to the Two-Factor theory of emotion. The theory describes how emotion is a product of both cognitive and physiological factors. Essentially, the mind tries to determine what emotion it is feeling by analyzing the body. By antagonizing epinephrine, they kind of inhibit the sympathetic nervous system. So, when a person would otherwise feel anxiety it would be associated with the effect of epinephrine. Without that cue, they would possibly interpret their feelings differently, as feeling less anxious.
http://psycnet.apa.org/journals/rev/69/5/379/

[Just chiming in...]
Beta blockers like Propranolol are effective for social and performance anxiety in particular. In dampening/mitigating physical symptoms of anxiety like uncontrollable shaking, pounding heartbeat, sweating, stuttering, etc.

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Why are mind maps recommended for study and recap?
In both my last year of high school and my freshmen year at the university, I got strong recommendations to study using mind maps - especially because this is apparently better to cope with large amounts of new information.

Is mind mapping effective in learning and reflecting on information?
If so, how does mind mapping help in learning and reflecting on information?

Concept mapping is a way of reviewing the material, depending on the study it may be significantly better than other forms of review, though not all studies I read found that superiority.  The most popular theory for its claimed superiority is that it also organizes the information better for recall; most of the papers that found concept mapping better than the other forms of review tested had the subjects create their own concept maps.
Most of the reading I did was several months ago, and I don't have references readily available; but I was Googling metacognition recently and found a paper, that says concept maps work by improving metacognition, though they are only marginally better for that than rereading.
Joshua S. Redford, Keith W. Thiede, Jennifer Wiley, Thomas D. Griffin.  Concept mapping improves metacomprehension accuracy among 7th graders.  Learning and Instruction (2011), doi:10.1016/j.learninstruc.2011.10.007

An excellent question! A 2011 paper in Science by Karpicke and Blunt in the Cognition and Learning Lab at Purdue University gets at this issue. They offer that:

"Concept mapping is considered an active learning task, and it serves
  as an elaborative study activity when students construct concept maps
  in the presence of the materials they are learning. Under these
  conditions, concept mapping bears the defining characteristics of an
  elaborative study method: It requires students to enrich the material
  they are studying and encode meaningful relationships among concepts
  within an organized knowledge structure."

They go on in their paper, however, to demonstrate that concept mapping is far less efficient than an even simpler technique: repeated retrieval (e.g., self-testing). Practicing retrieval, they argue, "enhances learning by retrieval-specific mechanisms rather than by elaborative study processes."
Reference:
Karpicke, J.D., & Blunt, J.R. (2011). Retrieval practice produces more learning than elaborative studying with concept mapping. Science, 331, 772-775.

I think it's important to keep in mind the different effects that one might achieve using mind mapping, with regard to the way mind maps are being evaluated in the literature mentioned so far.  While retrieval ability is easy to measure and certainly a useful metric that approximates one important aspect of learning in an academic setting, retrieval isn't everything.
My own experience (n=1) is that mind mapping is probably not a great use of time when preparing for the kinds of evaluations usually required of one in college.  Mind mapping has, however, proved remarkably beneficial to my ability to index information, and to see relationships between different things.  This is crucially different from the retrieval model described earlier: I am not trying to prepare myself to reproduce some given body of facts; rather, I want a tool to help integrate new information with what I already know, or else help explore the connections between disparate elements in my knowledge store.  For these pursuits mind mapping has been a superb tool.
I suspect that the benefits of mind mapping may be related to the benefits of the Creative Uses Task described by Chrysikou (2006), for the same reasons I described in my answer to this question, namely, the elaboration and schematic connection between far-flung semantic contents.  How is the industrial revolution like an old-fashioned donut?  I have no idea, but framing a context that meaningfully interprets both things can elicit a more profound understanding of the logical path between them.  Further, this process has more than once been the cause of an insight, or reorganization of conceptual knowledge, a la Durso et al. (1994); less personally, it's a flavor of combinatorial activity that features heavily in many models of creativity (c.f. Thagard & Stewart, 2011).
References:
Chrysikou, E. G. (2006). When Shoes Become Hammers: Goal-Derived Categorization Training Enhances Problem-Solving Performance. Journal of Experimental Psychology: Learning, Memory, and Cognition, 32(4), 935–942.
Durso, F. T., Rea, C. B., & Dayton, T. (1994). Graph-Theoretic Confirmation of Restructuring during Insight. Psychological science, 5(2), 94–98. Association for Psychological Science.
Thagard, P. (2011). The Aha! experience: Creativity through emergent binding in neural networks. Cognitive Science 35, 1-33.

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Defining shyness towards strangers in confrontational situations
First of all, I would like to stress that I am not a cogsci person and I have almost no background in those areas of science.
The question is whether there exists a definition of a phenomenon I recently encoutered: A person is shy, but only in confrontational situations - has no social phobia regarding making friends and so on. Furthermore, this "shyness" is only demonstrated towards strangers, i.e. the person in question has no problem confronting somebody they know. Lastly, the problem occurs only in person, not over the Internet or telephone.
All in all, the question is - is this phenomenon described somewhere? And most importantly - does it have a name? Maybe it has already been defined and studied by someone.

Meaning of confrontational
By 'confrontational' I mean 'having different opinions' or 'having to sort out a disagreement'. To provide an example illustrating the problem:

After being ripped off at a restaurant (food bad, late, cold, etc), the person prefers to let the whole thing go and pay rather than argue with the waiter (thus avoiding an in-person confrontation). But,

If the person were ordering a pizza over a phone and it did not arrive for an hour, they would have no problem calling the restaurant and discussing the problem.

I'm not a native speaker :) Hope the above description clarifies the problem a little bit.

@dare2be what sources have you already consulted in formulating and trying to answer your own question?

@ArtemKaznatcheev - wikipedia, mostly (the social phobia phenomenon). And my reasoning :) As I said, I have little to no expertise in this field so I don't really know where to start. Pointing me in any direction is welcome.

That sort of non-confrontational attitude has been researched as an aspect of interpersonal conflict-resolution style/mode/behaviour. The bulk of the research seems to have been conducted in the field of organisational psychology (which is not my field) since it's particularly relevant to how business is conducted.
From what I've been able to glean from Google Scholar, Blake and Mouton were the first to publish on this topic, defining five interpersonal conflict-handling styles: competing, collaborating, compromising, avoiding, and accommodating. Avoiding is simply defined as withdrawing from the conflict situation. Since then other researchers have developed a number of alternatives. The Thomas-Kilmann version dropped one style, compromising, and placed the rest along two dimensions, assertiveness and cooperativeness. This is the result:

Based on your description, your friend could be described as having an avoidant conflict-resolution style when dealing with strangers.
This is an interesting topic for me because I'm somewhat like your friend. I'm quite introverted and I suspect your friend is too to some degree, since there is a link between introversion and having an avoidant interpersonal conflict-resolution style.
In business contexts it's not surprising to find that people who show a high need for dominance are averse to using an avoidant conflict-resolution style.
I'm not sure what the research says about why your friend might choose a different style of conflict-resolution with friends. I'll see what else I can find.
References

Blake, R.R & Mouton, J.S. (1964). The Managerial Grid: The Key to Leadership Excellence. Houston: Gulf Publishing Co.
Thomas, K.W. & Kilmann, R.H. (1974). The Thomas–Kilmann mode instrument. Tuxedo Park, NY: Xicom
Schneer, J.A. & Chanin, M.N. (1987). Manifest Needs as Personality Predispositions to Conflict-Handling Behavior. Human Relations, 40, 575-590
Wood, V. F., & Bell, P. A. (2008). Predicting interpersonal conflict resolution styles from personality characteristics. Personality and Individual Differences, 45(2), 126-131.

Wow, quite a post! However, this still does not answer the in-person and strangers part (the most iteresting one), i.e. that the phenomenon occurs only when talking to a stranger in person, not with a friend (in person) or a stranger (via other means of communication). I guess that still leaves the question unanswered. However, many thanks for providing some references --- will read up on the topic as soon as I can find some spare time and share my findings, of course :)

Indeed, given how many publications there are on the phenomena of interpersonal conflict-resolution styles, there's bound to be something out there to address the integral parts of your question. I just haven't had the time to delve that deeply, and I won't be upset if someone scoops me on a complete answer. ;)

Although user330 is not around anymore he's talking about a mixture of conflict avoidance and (mild) social phobia. The latter is usually intensified when strangers are involved. Also most people posting here unfortunately expect there to be a precise name for their symptoms, but psychiatry is not there yet. Someone's symptoms may overlap multiple disorders but not even fully qualify for any of them. And avoiding conflict with a stranger is not necessarily maladaptive, as one has less information about whom [s]he's dealing with.

(caveat: I am not a trained psychologist, so talk to one before taking any advice from people online!)
This isn't really a definition that I know of for this (beyond social phobia, or confrontational anxiety), though that's not a bad thing.  Something that exists does not need a label to exist, and labels often shortcut and/or constrain our mental processing of a thing.
So, from a psychology perspective (not a CogSci one; just being explicit), there's probably a good chance the person has had multiple negative experiences with regards to confrontation and in-person communication.
The brain has a remarkable ability to create discrete boundaries around fuzzy relational systems, so I suspect that whomever this person is, there is a perceived threat (most likely subliminally processed) which stimulates the anxiety.  In-Person communication is very different from vocal-only communication, and would include a lot more visual and social processing, which in turn can bring up mental links to past experiences that match what's being processed in the moment.  If there are negative associations with those visuosocial links, you'll experience anxiety due to the possiblity of a repetition.
Is the person from a restrictive, socially conservative culture?  Is there a history of controlling and/or fickle parents?  Or a long time spent in/around aggressive, insecure people who personalize everything?  These (and a lot more!) are all things that can create the sort of anxiety you're describing.
But really, a trained psychologist is whom this person should be talking with.  A trend like this can result in intense social isolationism unless addressed early.

I don't think this answers the question. The question asks for the name of this phenomena and if it has been studied. An answer should provide a name and reference to literature not attempts at diagnoses, 'alleviating', or guessing the source of the phenomena in a particular individual. This is not a self-help site.


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Are autonomy, mastery, and purpose the most important motivators?
I've watched the amazing TED talk where Daniel Pink lays out the contrarian notion that greater extrinsic motivators are unimportant (and sometimes detrimental) in comparison to three intrinsic motivators: Autonomy, Mastery, and Purpose.
But is he wrong? I've only found some criticisms of the study he based the former on (that greater material rewards do not work for "cognitive" tasks) on a similar discussion board. That's not what I'm really concerned about, though.
My main question is: Are the three motivators of autonomy, mastery, and purpose the most important aspects to motivation?

Also see this related question inspired by Dan Pink's claim that rewards do not improve performance on cognitive tasks.

That was an interesting TED Talk, I enjoyed it. Motivation is a very complex, but fascinating thing to think of. You're asking if those three things he listed are the most important aspects to motivation, but I'm not sure the answer can be straightforward. So let's talk about what motivation is first, before talking about how those three things relate to motivation.
We can think of motivation as simply the urge for an organism to do something. But what determines what things the organism wants to do? Activities are done in the pursuit of value. Value itself is an internal thing; determined by the individual and the context the individual finds himself in. Actually defining "value" is a can of worms we don't need to open here. The point is, when a person finds an activity or object valuable, they will pursue it. I think of it from the perspective of neurobiology, and if you're curious you can look into Samejima et al. (2005), and Kawagoe et al. (1998).
So, let's think of the two types of motivators he listed, extrinsic or intrinsic. In the context of value, an extrinsic motivator is when value is placed on an external object. The motivation is to acquire the reward, and the actual activity is made into an obstacle to obtaining it. With intrinsic motivators, value is placed on the activity itself, so the behavior is to perform that activity. An excellent demonstration of this is in what's called the over-justification effect. Lepper et al. (1973) tested children under different reward situations, and found a significant drop in a coloring activity when a big prize was promised beforehand.
So, to get back to this guys three criteria. Autonomy makes sense right away; when a person can choose their own activity they will choose one they find valuable. Additionally, because they chose it, they will likely value it further. This was shown in a kind of funny/sad study by Brehm (1956), where housewives were allowed to choose an item they would supposedly get for free. Their ratings of the value of each item swung significantly towards the item they chose, when compared to their initial ratings. They were never actually given the item, causing one woman to cry.
Mastery is a little more complex. The amount of effort a person is willing to spend on a task is proportional to the magnitude of the reward. By mastery, Pink is actually talking about progress. Consider those little window file transfer boxes, and how they estimate the total time something will take. They look at the current rate of progress, and use that to estimate the total. People do the same thing. If they are making no progress on a topic, they calculate the amount of effort required to complete it to be monumental. If they are making rapid progress, the amount of effort seems far less. Expectancy-value theory has some interesting things to say on this topic, read Wigfield and Eccles (2000).
Purpose is probably the most esoteric, but it is still perfectly possible to understand. Purpose is a feeling that the activity has value in a larger context. Again, value is an internal thing. It is something we construct. Part of the value we assign to an activity is based on the results that activity will have. Feeling that our actions have absolutely no value in a larger context could destroy the value we place in that activity itself.
I like his three criteria, but there are many ways to understand thing like motivation. Like I said in another thread, these psychological constructs are not absolute. They are just ways of thinking of how we work. There are no laws, and no right way to deconstruct them. These three criteria is just one way to deconstruct motivation.
References
Brehm, J.W. (1956) Postdecision changes in the desirability of alternatives.
The Journal of Abnormal and Social Psychology, 52(3),384-389. [DOI]
Kawagoe, R., Takikawa, Y. & Hikosaka, O. (1998).  Expectation of reward modulates
cognitive signals in the basal ganglia.  Nat Neurosci. 1(5), 411-6. [PDF] [DOI]
Lepper, M.R., Greene, D. Nisbett, R.E. (1973) Undermining children's intrinsic interest with extrinsic reward: A test of the "overjustification" hypothesis. Journal of Personality and Social Psychology, 28(1),129-137. [DOI]
Samejima,K., Ueda, Y., Doya, K., Kimura,M. (2005). Representation of action-specific reward values in the Striatum.  Science 310(5752), 1337-1340. [DOI]
Wigfield, A.,Eccles, J.S. (2000).  Expectancy–Value Theory of Achievement Motivation.  Contemporary Educational Psychology, 25(1),68–81. [DOI]

Motivation has sometimes been defined as ‘the willingness to put effort into achieving goals’-if we dissect this statement- goals are important (clear, well-defined, achievable, SMART, inspiring , valuable etc) , efforts are important (Can I put the needed efforts -self-efficacy; can the efforts lead to outcome- outcome expectancy; are the efforts themselves enjoyable-enjoying the journey ) and the willingness is paramount (do I really want to invest in this goal, what is my goal commitment given the expectancy X value).
If we follow the above, then clearly many things are important for remaining motivated- from clearly defining and setting appropriate goals to getting appropriate and timely feedback- are efforts leading to outcome- to confidence in ones ability to Pull this off.
Viewed another way many of the above things can act as motivators- or at least the absence of them prove demotivating. We may pause here and reflect on Herzberg's differentiation between hygiene factors (like pay) the absence of which demotivates people and Motivators (like achievement and recognition) the presence of which pulls you towards your work and make you productivity, happy and engaged - or rightly motivated
Dan Pink extends and modifies the Self determination theory of Deci and Ryan  which explores motivation as applied to workplace.
The original SDT focuses on factors of Autonomy, competence and relatedness that lead to more engaged and motivated workforce. Daniel Pink replaces relatedness (a factor assessing whether your work provides opportunity to build relationships and connect with people) with purpose (the ability to find higher meaning behind daily work by connecting the dots).
I like both the original SDT framework and how Dan Pink puts it and believe that all the four factors of Autonomy, Mastery, Relatedness and Purpose are required to motivate your workforce (pull factors); while the presence of hygiene factors like good pay etc are required to prevent them from being demotivated (push factors).
In my own experimentation as a senior manager in Cisco, I have found that these factors do drive performance a notch high.

This answer can be improved with more citations.


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Is there a psychological model or theory that describes strangers in the vicinity unknowingly causing discomfort?
The closest thing I found to this is social anxiety or agoraphobia, which is a fear of socializing or a fear of public places, respectively.  However, I think the idea that strangers can cause discomfort by default is more a symptom of avoidance personality disorder.  What is the difference between agoraphobia and avoidance personality I wonder.
Agoraphobia seems more like avoidance personality disorder than social anxiety disorder, and yet more often agoraphobia is confused with social anxiety disorder than vice versa.  At least, if you go to Wikipedia, more information is found about social anxiety disorder than avoidance personality disorder.
My curiosity stems from the fact that a huge part of having avoidance personality disorder must involve seeking treatment, yet I read in a lot of places that people who suffer from it fail to seek treatment.  Since treatment of avoidance personality disorder seems to be so ubiquitous, it would be very easy for somebody with the disease to find somebody to help.  So what's the reason that it's not diagnosed more and if perhaps it is diagnosed more often and I just don't know about it, what explains why there is no widely understood treatment?

I think the answer to that question can be teased out if one knows the reason why the presence of or noticing strangers in the vicinity leads to feelings of discomfort.
What do you mean by "in the vicinity"?
Social psychologists have studied what is called proxemics. If we simplify it, one can say that they study the concept of "personal space". Mostly focused on two people interacting with each other, but there is also research on what is called cognitive spatial mapping.
I can think of multiple "diagnoses" that can be tossed around and played with. Schizoid personality disorder. Schizotypal personality disorder. A mild form or some pervasive developmental disorder (Asperger syndrome, for example). If the discomfort is not rooted in a fear of embarrassment or feelings of social ineptitude, it is harder to proximate the root of the discomfort, harder to put a label on it.
On a tangential note, going back to the topic of proxemics, people tend to have social conventions on what the appropriate distances away from others are; given the environment, closeness of the relationship, distance between or amongst people and yourself, etc. It is interesting to note that the same phenomenon (uh, exaggerated word) occurs in social interaction in a virtual world sort of setting. A well-known example is the study of proxemics in Social Life. When someone does not follow convention or simply violates another's personal space, even in Social Life, it generates discomfort. But I digress. Sorry, tangential ramble.

The technical term for having a fear of strangers is Xenophobia (this term also applies to having a fear of foreigners or immigrants).
The DSM lists Social Anxiety as one of three types of phobias. Social phobia, DSM 300.23, is an irrational anxiety elicited by exposure to certain types of social or performance situations; it can lead to avoidant behavior.
Agoraphobia with a history of panic disorder, DSM 300.21 and agoraphobia without a history of panic disorder, DSM 300.22, is an irrational anxiety toward being in places from which escape might be difficult or embarrassing. Note: the DSM is moving away from having agoraphobia as a diagnosable psychiatric disorder.
For those interested, the third phobia the DSM lists is called a Specific Phobia, DSM 300.29. A specific phobia is a persistent and irrational fear in the presence of a specific stimulus, which commonly elicits avoidance of that stimulus, i.e., withdrawal. There are five subtypes for specific phobias:

animal type - cued by animals or insects
natural environment type - cued by objects in the environment, such
as storms, heights, or water
blood-injection-injury type - cued by witnessing some invasive
medical procedure
situational type - cued by a specific situation, such as public
transportation, tunnels, bridges, elevators, flying, driving, or
enclosed spaces
other type - cued by other stimuli than the above, such as of
choking, vomiting, or contracting an illness

Thank you to The Phobia List and The Anxiety Pit for the above information on agoraphobia, social anxiety, and specific phobias.
Although agoraphobia is not considered a codable disorder anymore -- I believe it is slated to be removed from the DSM V -- here is the diagnostic criteria for agoraphobia from the DSM IV (current version):

AGORAPHOBIA
1. anxiety about being in places or situations from which escape might be difficult (or embarrassing) or in which help may not be available in the event of having an unexpected or situationally predisposed Panic Attack or panic-like symptoms.
2. The situations are avoided (e.g., travel is restricted) or else are endured with marked distress or with anxiety about having a Panic Attack or panic-like symptoms, or require the presence of a companion.
3. The anxiety or phobic avoidance is not better accounted for by another mental disorder, such as Social Phobia, Specific Phobia, Obsessive-Compulsive Disorder, Posttraumatic Stress Disorder, or Separation Anxiety Disorder.

Here is the diagnostic criteria for Avoidant Personality Disorder:

AVOIDANT PERSONALITY DISORDER
Individuals with this Cluster C Personality Disorder, DSM 301.82, are socially inhibited, usually feel inadequate and are overly sensitive to criticism. A pervasive pattern of social inhibition, feelings of inadequacy, and hypersensitivity to negative evaluation are present, beginning by early adulthood and manifest in a variety of contexts, as indicated by four (or more) of the following:
1. Avoids occupational activities that involve significant interpersonal contact, because of fears of criticism, disapproval, or rejection.
2. Is unwilling to get involved with people unless certain of being liked.
3. Shows restraint within intimate relationships because of a fear of being shamed or ridiculed.
4. Is preoccupied with being criticized or rejected in social situations.
5. Is inhibited in new interpersonal situations because of feelings of inadequacy.
6. Views self as socially inept, personally unappealing, or inferior to others.
7. Is unusually reluctant to take personal risks or to engage in any new activities because they may prove embarrassing.

If I were to compare agoraphobia to avoidant personality disorder, I would say agoraphobia is about the perceived physical safety of the person with agoraphobia, which when threatened causes intense emotional distress. With avoidant personality disorder I would postulate that the disorder revolves around the individual's perception of how they are perceived, rather than on their physical safety. A person with agoraphobia might be anxious and frightened to leave the house because they might be involved in a car accident. A person with avoidant personality disorder may be reluctant to leave the house and go to a new social situation for the fear of personal rejection.


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Why does the human visual system produce a bright patch after staring at a bright light source and looking away?
If a person looks at a bright light source, such as a light bulb or perhaps the sun for a period of time, and then looks away and closes their eyes, they typically see a bright patch in the shape of the light source for a period of time. The amount of time varies, but can last for many seconds. What explanation can be provided for this effect?

isn't it a dark patch, not a bright patch?

The persistence that you observe when you look at a bright light for a short period of time is called flash blindness. The phenomenon is related to your retina's response to the burst of light. Quoting from the Wikipedia article:

Flash blindness is caused by bleaching (oversaturation) of the retinal pigment. As the pigment returns to normal, so too does sight. In daylight the eye's pupil constricts, thus reducing the amount of light entering after a flash. At night, the dark-adapted pupil is wide open so flash blindness has a greater effect and lasts longer.

I removed references to signal processing. They are no longer relevant after the merge to CogSci. You can still read them in the original post.

The human eye is an interesting device. One of the most amazing things it does is to adjust for the brightness, and it can do so over 10 orders of magnitude.
From a signal processing perspective it can be explained as follows:
There are a few different ways that this is done, but the most basic way is a high pass filter, with a cutoff of about .25-.3 Hz. So, if you look at a bright source of light for a period of time, then you will see the signal as too bright, until the filter can reset back to a zero mean signal. After that, the image will go away.
There are of course many subtleties, but that is the primary effect.
To illustrate this, I've included 2 plots, the first of a signal changing over a long period of time between 2 extreme values, the second of one changing quickly over time. These plots came from a class which I took and learned how to model the neuron of a fly's eye, which behaves very similar to a human eye. The signal at 0.5 corresponds to a gray type signal value, it's an artifact of some of the other processing steps. This is a complex model, but the crux of it is a high pass filter with a time step of 3 seconds. Time prior to 40 is to allow the filter to normalize prior to injecting a signal, it prevents having to know the initial conditions very well of the system.

The second figure shows what happens with a more typical transient time, on the order of 10 Hz. Note that the signal is passed through almost without any delay.

If that is the case (time step of 3 sec) how do we watch movies on a screen or on a TV ?

The behavior you describe is more like a low-pass filter, not a high-pass.

It passes everything with a frequency higher than 1/3rd of a Hz. How is that a low pass filter? The DC is filtered out, which is also indicative of a high pass filter... I've tried to clear a point or two up, hopefully it's a bit clearer.

@Rajesh: It is a high pass filter. Thus any signal with a frequency of higher than 1/3 seconds will let signal through. TV is at 24 Hz or higher, much higher than 1/3rd of a second:-)

I think your "filter" analogy is a bit simplistic. The phenomenon that you describe (i.e. the average value of a burst of bright light persisting over a period of time after the light goes away) is a lowpass effect. Pupil control is really more analogous to a control system, where the brain reacts to the light saturation by adding loss to the light path. This isn't the phenomenon that the question asker was looking for, though; that is due to temporary memory in the retina itself.

@Jason: The average value doesn't persist. I'll put a plot in that illustrates this.

@Jason, this has nothing to do with pupil dilation and contraction. Flash blindness affects photoreceptors before the pupil can contract, hence the blindness

I agree that the original question has nothing to do with pupil dilation. I was trying to understand what context this answer fit into. With the additional context, it seems to make more sense.

In your eye there are light receptors of two types: rods and cones. Rods are sensitive to the level of brightness, but cannot discern color, while cones are not very light sensitive, but they allow for color perception. Both of these are types of photoreceptors which transduct physical light.
The physical response of rods and cones to light isn't immediate, and therefore there's a certain transient response of each photoreceptor to light. When the light you're looking at is too bright, some of your photoreceptor cells go into a kind of "saturated" state, and it takes a long time, because of that transient behavior, for them to stabilize back to "seeing" darkness again.


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Is performance reducible to brain activity in an unambiguous way?
As a preface, let me assume that the entirety of mental states and their corresponding behaviors in a person are entirely reducible to the physical activity of neurons sending a variety of chemicals across synaptic clefts at appointed times. There's no extra-logical, metaphysical sense of being that guides our actions e.g. spirits, soul stuff, etc.
Beyond this provision, which is obvious, is the overarching question of how particular networks in the brain control various structural and behavioral faculties in the mind. For example, if we place a person in an MRI and ask them to count to three, we expect to find activation in a portion of the parietal lobe. Just how fine-grained is this activation? If we ask the same person to do the same counting at a different time, will a different network in the same area of the brain be used?
The first question has a corollary to it; a kind of role reversal: given a sufficiently detailed picture of a person's brain, is it possible to more or less describe what the person is doing or thinking?

I gave it another attempt. @ArtemKaznatcheev guilted me into doing it!

If we stick them in an MRI, the activation will not be very fine-grained. There are roughly 630,000 neurons in a 3x3x3 mm voxel recorded during fMRI. However even this coarse detail is sufficient to perform many impressive mind-reading tasks (e.g. Mitchell et al., 2008)
But what if we were able to record every single neuron in the brain simultaneously, could we then find a unique 1-to-1 mapping between neuronal firing and behavior? Not really. Consider what happens when you count to three-- and let's ignore everything going on in your brain that's not contributing towards this task (e.g. autonomic functions, mind wandering, etc.) Do your tongue, jaw, and lips move in exactly the same way every time? Does the acoustic signal sound the same every time? No; there is some variability in neuronal firing that causes behavioral variability.
OK, well what if your muscles did move in exactly the same pattern. Then, would the neuronal signature be identical between trials? Not necessarily. Let's assume there are 100 billion neurons in the human brain. We can't observe that many degrees of freedom in our behavior. It's likely that if we removed a single neuron, our behavior might remain 'identical'. There's a massive amount of dimension reduction to go from an array from 100 billion neurons to human behavior. But overall, the answer to your question depends on how you characterize 'performance'. If you define performance to be sufficiently complex such that performance is equivalent to the pattern of neuronal firing, then the question becomes a tautology.
The answer to the reverse question is slightly different. It is likely that if we observe the exact same pattern of neuronal firing twice, then the behavior will be exactly the same. However, even then, there is the possibility of noise in the peripheral nervous system once signals leave our brain that leads to some variability.
In a broader sense, cognitive neuroscience is aimed at answering this exact question: How does the activity of the brain correspond with our cognition and behavior? I like to think we've made some decent progress in this area, but we're still nowhere near a complete answer to this question.

Mitchell, T. M., Shinkareva, S. V., Carlson, A., Chang, K. M., Malave,
  V. L., Mason, R. A., & Just, M. A. (2008). Predicting human brain
  activity associated with the meanings of nouns. Science, 320(5880),
  1191-1195. PDF


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Game-theory strategies to overcome holdout problem?
The hold-out problem often occurs in debt-restructuring or in urban development.
The hold-out problem is defined where an agent, for example a land developer, must negotiate with many lot owners and each lot owner must provide their consent in order for a project to proceed. However, since the agents know that their consent is required they can extract a portion of the producer surplus in excess of their opportunity costs. The net effect is that such large-scale projects are underproduced.
There are legal remedies to address this underproduction. Eminent domain is a legal tool to overcome hold-out problems, however, it does not consider pareto-efficiency. It's not at all clear whether developers that exercise eminent domain are increasing social welfare or simply have better influence over a political process to transfer resources from one group to another.
Ideally, we would like a voluntary bargaining solution that all (or most) parties agree to that produces a socially efficient amount. A bargaining solution should always be arrived at when the social utility of the production exceeds the opportunity costs of each individual and the producer cost.
What bargaining "game" could be designed (and enforced or enabled by a legal process) so that such a procedure could be applied to hold-out problems?

Very good question.  I think there's something in some of the more esoteric auction models that may be useful.  I'll have a hunt...

@Turkuawa - that would make sense... To your point, there are various auctions designed for bidders to bid their true reservation price

I can give you an answer, but I'm afraid it'll be a little speculative.  There is a good body of research, but it simply repeats the quandaries you mention in your question (Eminent domain, with all the moral hazard involved). The consequences are also interesting...

I've updated my answer to include a recent paper by Miceli published in Public Choice. He models a noncooperative strategic game with an eye toward applicability for housing development. You might want to check it out.

The hold-out problem is much studied and has even been associated with IP disputes (especially relevant in an age where a complex device like a mobile phone can involve license agreements between hundreds of companies).
Some of the consequences being identified as a result of the hold-out problem include urban sprawl (easier to develop green-fields sites), urban decay (hold-outs prevent urban renewal), and even disruption of the innovation and investment cycle (hold-outs over-value their IP contribution and innovators then refuse to invest).
In Imminently Eminent: A Game Theoretic Analysis of Takings Since Kelo v. City of New London, Alex Hornaday proposes the following game:

Game participants include a Developer and an Owner;
Developer values Owner's property at $x$;
Owner values property in a range $p_1$ to $p_2$ such that $p_1 < x < p_2$;
Basic play:

Developer offers price $x_1$;
Owner either accepts or rejects $x_1$;
if Owner rejects $x_1$, Developer may quit bargaining or offer price $x_2$;
if Developer offers price $x_2$, Owner either accepts or rejects $p_2$;
if Owner rejects $x_2$ and the Developer has the power of eminent domain, Developer may then choose either to do nothing or to condemn;

Hornaday also includes a penalty which the Owner would incur during round 2.  He acknowledges that much of this is Pareto-inefficient as either (or both) parties are forced into a loss following an unsatisfactory conclusion.
The oversimplification here is that hold-outs tend to occur when multiple parties need to negotiate.  In that case the last part to negotiate a deal is able to exert a monopoly pricing power over the other parties.
Eminent domain certainly offers the eventuality of a result (from the Developer's perspective) but can be distortionary (since either party may have insufficient negotiating power to secure an ideal result).
My answer, at this point, becomes speculative and I offer this untested as a potential model for achieving a "better" response amongst multiple parties.  It is based on the concept of optimal reservation prices in auctions.
Supplementing Hornaday's game as follows:

Developer makes a sealed reserve offer, $r_1$, for all properties from all Owners;
All Owners make a sealed pooled reserve request, $r_2$, for all properties;
Negotiator establishes whether $r_1$ and $r_2$ are aligned;
If not, then an assessment (legal and social) must take place (at Developer's expense) if the Developer wishes to continue to assess whether eminent domain is even possible (not a decision, however, so pertaining to a negotiation only);
If negotiation is possible, or if eminent domain is a viable solution to negotiation, then price negotiation can continue with all parties knowing where they stand.

We can now continue with the original game.  I believe that there need to be sufficient inducements and penalties for the Owners (inducements for early settlement, penalties for holding out) to balance the Developer's costs in the process.
Obviously, if the reserve prices make a settlement unlikely and eminent domain would not be possible, then the Developer must walk away and pocket the costs of the process to that point.

Nice analysis. You would need some mechanism in step #2 so that the owners optimal bid is their reservation price (and is robust to potential collusion). Obviously this is beyond the scope of a post like this so I appreciate your outlining a solution here!

The Negotiator would have to be some mutually-approved legally mandated third-party (lawyer, notary, etc.) who would act in good faith for both sides.  Receive the bids / reserve prices / ... this way an audit trail is created.  I figure the only way to prevent harmful collusion is to make sure everything is recorded.

If you're looking for a simple game, for example to teach the holdout problem to students just beginning game theory, you could do worse than start with a general prisoner's dilemma (PD) game. The 30-second explanation is that it only makes (rational) sense for one player to act if the other person is acting as well.
The holdout problem is a motivation for voluntary contribution mechanism experiments (VCMs) or "public goods" games, which is an example of a PD game in public context.
These games only speak to the private optimum of holding out (the unilateral optimum) as compared to the social optimum of cooperating (the multilateral optimum), and doesn't speak to extracting surplus. Cooperation can be ensured with contracts and other extra-game mechanisms, usually relying on the possibility of negotaition and requiring enforcement of contracts. Starting with a simple PD, including side-payments explicitly in the game structure should be sufficient for capturing the flavor of surplus extraction.
Update: Miceli has recently published a noncooperative game model for the holdout problem in Public Choice as "Free riders, holdouts, and public use: a tale of two externalities".

all_licenses: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
What are the key algorithms for learning optimal behavior of economic agents?
I'm playing around with social learning of near-optimal behavioral rules on a set of agents. The idea is roughly that given an income process (or technology process, depending on the question) an optimal nonlinear, intertemporal policy rule exists. Assume this rule can be approximated closely by a linear function. Agents would like to learn this policy rule, and a first pass is to have them learn the rule simply by experimentation. "In autarky," i.e. without any information exchange with other agents, an agent would try a rule for some time, use some metric to determine how well it does against other rules he/she has tried, and perhaps reassess, perhaps try an entirely different rule via experimentation. This agent only observes his/her own history.
A second pass is to allow the agent access to all other agents' histories. Presumably this would speed up learning. A third pass might be to put these agents on an information network of some sort.
I've been perusing literature on social learning, but am not entirely sure the frameworks I am looking at are exactly what I want. Many of them appear to be Bayesian learning about a hidden state of nature, for which everyone has a private signal. I'm actively reviewing literature right now, but as I do, does anyone have any thoughts/suggestions?

You might look into the AI literature.

Agree on the AI. Bayesian networks and genetic algorithms come into this as well.

Any particular references?

Take a look at POMDP's - partially observable markov decision processes.
If you have a value function (income) that is known for agents in various states, and you are trying to identify the optimal policy then Bellman's equation which is at the heart of POMDP's will help you identify this policy.
These tools are part of a class of re-inforcement learning algorithms (in fact, they are used quite often for robotics). So they map very neatly to the framework you have identified (agents, a reward function, and a state/action space)
Another angle of attack would be using genetic algorithms in your optimization procedure.

+1 reinforcement learning algorithms are really something that the OP should consider. Keywords to find references: Q-learning, kearns algorithm, planning problem, approximation for markov decision processes. For instance you can look at G. Tesauro papers for a start.

Thanks, I will be looking further into this. After perusing the literature for a while (there are a lot of nice things in the Handbook of Computational Economics, Vol. 2, that I missed the first time I read through it a long time ago), I think I've settled on an approach. Thanks everybody!

Here are two computational approaches which might work:
I. Artificial neural network
A neural network consists of an interconnected group of artificial neurons, and it processes information using a connectionist approach to computation. In most cases an ANN is an adaptive system that changes its structure based on external or internal information that flows through the network during the learning phase. Modern neural networks are non-linear statistical data modelling tools. They are usually used to model complex relationships between inputs and outputs or to find patterns in data.
Perhaps the greatest advantage of ANNs is their ability to be used as an arbitrary function approximation mechanism which 'learns' from observed data. However, using them is not so straightforward and a relatively good understanding of the underlying theory is essential.

Choice of model: This will depend on the data representation and the application. Overly complex models tend to lead to problems with learning.
Learning algorithm: There are numerous trade-offs between learning algorithms. Almost any algorithm will work well with the correct hyper-parameters for training on a particular fixed dataset. However selecting and tuning an algorithm for training on unseen data requires a significant amount of experimentation.
Robustness: If the model, cost function and learning algorithm are selected appropriately the resulting ANN can be extremely robust.

II. Support vector machine
A set of related supervised learning methods that analyse data and recognize patterns, used for classification and regression analysis. The standard SVM takes a set of input data, and predicts, for each given input, which of two possible classes the input is a member of, which makes the SVM a non-probabilistic binary linear classifier. Since an SVM is a classifier, then given a set of training examples, each marked as belonging to one of two categories, an SVM training algorithm builds a model that predicts whether a new example falls into one category or the other. Intuitively, an SVM model is a representation of the examples as points in space, mapped so that the examples of the separate categories are divided by a clear gap that is as wide as possible. New examples are then mapped into that same space and predicted to belong to a category based on which side of the gap they fall on.
Neural Networks have been used to create highly competitive computer-players for the open-source FreeCiv.  There, Neural Networks are used with Monte Carlo Methods which I've also used in simulating economic interactions in games.
Not sure if this is entirely what you're looking for but might be a start?

Thanks for your reply. This isn't exactly what I'm looking for -- at this stage, I'm more looking for examples of simpler learning mechanisms, ideally in some published economics papers. I appreciate the pointers, however; thanks!

@Nathan - do you mean actual working algorithms with papers showing proof, or just general economics using these types of models?

at the end of the day I'm looking for papers that used mechanisms I could use; ideally papers I could cite in a literature review.

Just wanted to say again -- thanks for the above pointers! The article on FreeCiv is particularly interesting -- especially because I had a tough time beating the most recent version of it :)  Thanks again for the time and effort you put into your response! I think I'll be using these down the road a bit.

Many key algorithms are summarized on the ACE Research Area: Learning and the Embodied Mind website.
ACE = Agent-based Computational Economics

Leigh Tesfatsion's website is one everyone should peruse from time to time -- absolutely fantastic resource. I spent a bit of time there myself as I was looking into this.

Yes, it is a great website for behavioral  economics and understanding agent based motivation. @Sylvain Peyronnet there is a great deal of material on this website, are there particular entries that you could mention in your answer, and why?

This paper by Glazer and Rubinstein, while not strictly relevant to your research, uses a particular algorithmic model of agent behaviour and analyses its effect on the implementability of different mechanisms. The algorithm itself might be of interest to you - I think variants of it could be both realistic and easy to use in applied models.


text:
Do safety features cause drivers to engage in more risky behavior than they otherwise would?
It seems to be generally assumed that making cars safer for the occupants will reduce death, injury, and damage from traffic accidents.
What are some examples of significant empirical research on this topic? Specifically, do safety features cause drivers to engage in more risky behavior than they otherwise would? If so, what is the net effect of additional safety mechanisms?

"damage from traffic accidents. "  I do not think this is part of it at all.  My cynical view is the drive is to keep the drivers alive so that there is someone to sue after the accident.  But if you look at the safety designs most of them actually increase the damage to the vehicle (crumple zones, one time deployment airbags at 2k a pop) in order to reduce the energy transfer to the occupants.  That said this is probably a better question for Skeptics SE

@Chad Interestingly, the increased cost of vehicle repair due to crumple zones and air bags has been proposed as a possible cause of reduced accident rates.  I don't have the article in my database, but if I recall correctly, the idea was that the fear of costly repairs induced safe driving (and possibly offset the moral hazard effects of having the technology).

@JasonB - I find that unlikely with mandatory insurance.  You either have insurance because you do not want to lose what you have or you do not because you have nothing to lose.

Any review in this area should start with Peltzman's 1975 JPE article.  Peltzman was writing a few years after the 1968 Motor Vehicle Safety Act (U.S.) went into effect.  The act required, among other things, padded dash boards and seat belts.  He says (p. 717):

The  one result of this study that can  be put  forward most
  confidently is  that  auto  safety  regulation  has  not  affected
  the  highway  death  rate.  Neither the time-series nor cross-section
  data permit any other conclusion.  However,  these data are not as
  decisive about what underlies this result.  On  one interpretation,
  safety regulation has decreased the  risk of death  from an accident
  by more than an unregulated market would  have,  but  drivers have
  offset this by taking greater accident risk.

In general, the idea is that seat belts and other safety devices may save lives if the accident rate is held constant, but that in reality, wearing a seat belt may induce more risk taking and thus more accidents overall (moral hazard, or Peltzman's "compensating behavior").  Then, it is not obvious whether more accidents which are, on average, less fatal will result in more deaths overall.
Of course, Peltzman didn't settle the matter.  More recently, Cohen and Eniav (2003) found the opposite--that safety devices unambiguously save lives and that there is no evidence of additional risk-taking by seat belt wearers.  Levitt and Porter (2001) came to a similar conclusion (this later paper is worth reading because it brings to light the issue of sample selection problems (à la Heckman), and a way of correcting for it).  It seems, at least for seat belts, that the matter has been settled by these later papers.  But, these lines of research highlight that, in general, we cannot say for certain what the net effect of safety regulations will be a priori.
Interestingly, the Cohen paper focuses on primary enforcement, that is, providing incentives to use safety devices (or, rather, disincentives for not using them) beyond the live-saving benefits.  This would tend to cause people who wouldn't ordinarily use safety devices to use them.  If it is true that drivers are compensating for their unsafe behavior by using safety devices, then more safe drivers would be induced to use the devices and the moral hazard may be somewhat offset.  This tends to indicate that non-optional safety improvements may have a larger impact on deaths per mile than optional safety improvements.
Oh, and here is the spiked steering wheel comic you are looking for.

Someone asks a related question of a Nobel Prize Winner in Economics in a public forum (who was speaking off the record).
His opinion was yes, because the fundamental issue was that human beings had a certain tolerance level for "accidents," so that if you make cars safer, people would drive more recklessly with the safer vehicles, until the accident rate reached the old, tolerated levels.
At least this was the example he used to illustrate his point. The original question was did financial reforms over the past century/decade/year make the financial system safer.

I think it varies by safety equipment, and that you'll get different results for anti-lock brakes (like the famous Munich taxi cab study) or air-bags.


text:
Is learning to do a task automatically an example of intuition?
I'm looking for some examples to understand what people call their intuition at work when making their decisions.
For example:

We learn to type and then after some time we begin to type
by automatically knowing position of alphabet on the
keyboard.
We learn to ride a vehicle and then after some time we ride it without
having to think.

Are these the examples of what we call our intuition? If not, how do they happen?

No, these are not examples of intuition, but examples of procedural memory (or automaticity). Procedural memory is the ability to perform certain tasks without conscious awareness.

Does procedural memory also work at unconscious level of mind same as intuition? or could it be stored in sub-conscious mind?

I do not understand the difference between "work at unconscious level of mind" and "stored in sub-conscious mind". Furthermore, please note that "sub-conscious" is not a construct you would use in cognitive psychology.

Can also be described in terms of automaticity : http://en.wikipedia.org/wiki/Automaticity

authors: Ηλεκτρολόγος Μηχανικός


text:
How can you limit excessive risk-taking at the institutional level?
Some firms have a compensation structure that encourages risk-taking while insulating employees from the bad consequences of their decisions.  This creates the potential for moral hazard.
I started thinking about this because of what happened at AIG.  For those unfamiliar with the situation, a small division (AIG Financial Products) in a huge insurance company was able to bankrupt the entire company.  Incentives were very lop-sided for division management relative to the risks they were taking.  Even though management was making millions, they were taking risks an order of magnitude larger than that.  If they lost billions, they would only lose their future income (assuming they would be fired).
My question is, how do you align management/employee incentives at the institutional level in order to prevent this types of moral hazard?
Two things to note:

The situation at AIG is just an example.  I'm not asking for solutions specific
to AIG (e.g. limiting leverage) or financial firms in general.  Many firms
face this type of moral hazard with the CEO (i.e. a "golden parachute").
Aside from not being "at the institutional level", I doubt
regulation is the answer.  While there's a place for regulation,
regulators seem to — at least initially — react to crises instead of
prevent them (though there's no counter-factual for crises
regulators may have prevented).

Optimal contracting under moral hazard is an incredibly rich field. Any answer to your question would rely more on the assumptions being made about risk preferences, effort sets, etc. than any "universal solution" to moral hazard.
That being said, there are a couple of interesting pieces of the literature to note:

Optimal contracts often have a fixed component (the opposite of your "alignment" premise),  with the variable component offered only insofar as it is required to induce more effort from the agent.
Optimal contracts use any information relevant to determining the effort expended by the agent, not just the result.

So I would think an answer would be to reduce (not increase) the amount of compensation variable upon the result and to condition compensation relative to other benchmarks that would indicate whether someone is just benefiting from tailwind.

I assume you meant to ask "can you align management/employee incentives to prevent these types of events from the institutional level?" Well in the simplest possible model which you seem to be familiar with, of course you can. But things are not so simple as they may seem at first, because incentivising exactly the right behaviour is hard.
For example, suppose that an employee has two tasks, A and B. A is observable but B is not. If you provide incentives to do job A well, the optimal response for the employee is to do as little of B as he can get away with. The moral is that unless all the contributions of an employee can be monitored, incentives can induce lopsided priorities for employees. If the aspect they are ignoring is crucial to the functioning of the organisation, the incentives will end up being counterproductive.

Investing is all about returns. Increasing returns in the short term is easy to do through taking on risk. Many institutions reward short term profits without considering any risks taken. This encourages irresponsible risk taking since the risk takers have nothing to loose.
One solution is to provide risk adjusted compensation instead of purely (short term) profit based compensation.
Another safeguard (that was put in place after the Great Depression in the USA) is to limit the size of financial institutions. Smaller institutions cannot take as large risks as larger ones. Unfortunately that legislated safeguard was removed back in 1997.


text:
How are autistic savants able to perform certain mathematical computations so quickly?

How do autistic savants (or other people with these abilities) compute equations like $81^{100}$ in 2.5 minutes?
Which algorithms do they use? Is it an efficient one, or do they just have a lot of memory?
Can non-autistic savants use these algorithms to solve equations just as quickly?

Not $81^{100}$ but have a look at Arthur Benjamin does "Mathemagic" in TED where he tries to show his thought processes.

Due to the number $81^{100}$ involved, I think he's referring question: Mathematical Discoveries that were made or supported by Savants

Related question about child prodigies and math.

Memorising a few hundred digits is not difficult. Anyone who is interested in memorising powers of numbers and has too much free time would know what $3^{400}$ is. Also, I don't think that Rudiger Gamm is an autistic savant.

Here's the Wikipedia page on that:

Savant syndrome is poorly understood. No widely accepted cognitive theory explains the combination of talent and deficit found in savants.
  It has been suggested that individuals with autism are biased towards detail-focused processing and that this cognitive style predisposes both individuals with and without autism to savant talents.
Another hypothesis is that hyper-systemizing predisposes people to show talent, where hyper-systemizing is an extreme state in the empathizing–systemizing theory that classifies people based on their skills in empathizing with others versus systemizing facts about the external world, and that the attention to detail shown by many savants is a consequence of enhanced perception or sensory hypersensitivity in individuals with autism.
It has also been suggested that savants operate by directly accessing low-level, less-processed information that exists in all human brains but is normally not available to conscious awareness.

How one performs quick mental calculations through tricks and shortcuts can easily be looked up on the internet.  How some Savant's do it cannot because we don't know.  There is some argument that some do those same tricks but others seem not to do so.
Consider that a substantial amount of computational power goes into immediately recognizing that your friend is deeply unhappy when you first see them but puts on a brave face for you and is avoiding talking about something deeply troubling them.  You see that immediately while the typical savant sees nothing, or confusion.  That same Savant can do amazing mathematical, or spatial computations with tremendous facility. So, perhaps the reason we don't understand it is because it's actually a different kind of a mind.

Savants apparently don't compute consciously; from what I've seen, they see numbers as shapes. When savants multiply numbers together, they see two shapes. The image starts to change and evolve, and a third shape emerges. That's the answer.
Humans can have synesthesia. It is a process in the brain which can associate numbers or names to certain shapes. For example, consider the two shapes:

(source: sciencebuddies.org)

Tests like this demonstrate that people do not attach sounds to visual shapes arbitrarily. Which shape would you call "Bouba" and which "Kiki"?
I would call the one on the left "kiki" and the one on the right "Bouba".
You can see this interesting video on the wonderful savant Daniel Tammet. Start from 32:16 if you want to see how a neurology team administered various tests to him to make sure he's not using some techniques. See also how he uses "Kiki-Bouba"-like shapes to do complex computations at 40:35.

can you present reference on the statement that savant-like capabilities are always associated to synesthesia? Tammet is an example, not necessarily a rule


text:
Is it possible for certain people to perceive colors differently?
What if someone perceives a color as 'red' when it is actually 'green'?
Since different people have preferences for different colors, and colors are perhaps constructed in the mind, is it possible that the entire space of colors can be experienced quite differently for some people?

I assume you mean without taking into account colorblindness/deficiencies in individuals? Those with defective color vision most certainly see different color spaces

Would it matter if people see colors differently as long as the relative difference between all colors is the same? An analogy: Bob hears "cat" every time someone says "dog" and vise versa, but cats and dogs appear as different to each other as any other normal person perceives them.

Yes, this scenario is possible, occurring with certain cases of brain lesions in specific areas of the visual cortex, the fusiform, lingual and posterior parahippocampal gyri.  These areas are analogous to what is referred to in primates as V4, or the 4th visual cortex, and are known to be involved (at least partly) in the perception of color (though see this commentary).

 Courtesy wikipedia
In this study, subjects with brain lesions were asked to identify colors in a blue ambient light (meant to mimic the outdoors) and under a reddish light (meant to mimic indoor lighting).

... the three patients...with abnormal matches on the blue, green and red chips made different matches than control subjects for pink, violet, turquoise and green targets... Their matches for these chips were shifted towards orange-red for the pink and violet
  targets and towards green for the turqoise target. One patient displayed a shift toward turquois[e] for the green target.

So, the level at which this "signal" is getting crossed can only be inferred from the level of the lesion, but presumably, the transduction of color by the cones and the processing of the colors in the P and K cells of the Lateral Geniculate is all still intact.

Clarke, S., Walsh, V.,Schoppig, A.,Assal, G., Cowey, A. (1998) Colour constancy impairments in patients with lesions of the prestriate cortex. Exp Brain Res 123:154-158.

As @Gray mentioned, the philosophical problem you are interested in is known as the inverted spectrum. Unfortunately, @Gray's claim about no empirical difference is not exactly true. As @ChuckSherrington pointed out, we can have differences in color perception due to brain lesions, but this is cheating in way. We don't have to go this far, we already have differences in color perception between neurotypical people based on their culture/language. More dramatically, we can observe this difference within a single individual!
As I explained in a previous answer: physics does not have colour, it just has a continuous spectrum of wavelengths. Even when you look at the sensitivity of the 3 types of cones in the retina it is not discrete, but continuous. The categories of colours (i.e. "that's red", "that's blue") are produced by perception and these discrete-ish categories form the basis of colour qualia. Scientists can study these categories by asking participants if various stimuli feel like the same colour. The arbitrary boundaries of the categories people draw between colours is language dependent (Regier & Kay, 2009)! In other words, we have support for the Whorf hypothesis: language effects your subjective conscious experience.
But the buck doesn't stop there. Gilbert et al. (2006) showed that the Whorf hypothesis is supported in the right visual field but not the left. In other words, when I present colours in one part of your visual field, you experience them one way and when I present them to the other then you experience them in a fundamentally different way.
Thus different colours can be experienced differently by different neurotypical people, and in fact they can be experienced differently by the same person based on which visual field the stimuli is presented in. Further, this difference is empirically measurable! Of course this doesn't resolve the inverted spectrum problem completely, but that is to be expected since philosophy always has a way to  run away from science.

I see colors differently through my two eyes, but the effect is slight. I think the actual question is not whether color perception differences can be measured, but whether people can actually see them differently. This is an undecidable question. How could we know?

Inverse spectrum can have applications for telepathy, if it is ever possible. It's not hard to conceive a thought experiment where a painting is seen in one way, but the telepathic message containing other person's view of that painting is completely different. But we know perception preceeds abstraction, so, I'm not sure this answer actually solves the problem of perception (it points to mental shortcuts).

I would point you towards the debate on qualia in cognitive science.  It has been argued by some philosophers such as David Chalmers that there are internal qualitative states separate from their physical realization.  http://en.wikipedia.org/wiki/Inverted_spectrum
With the exception of color-blindness and other differences in visual circuitry such as Tetrachromacy there would be no empirical difference in the response of such a person with differences in their qualitative experience of color.  So its an interesting question whether such differences in qualia exist or are even meaningful to talk about.

Your first paragraph is very accurate, but you second is misleading. See my answer for details.

According to this (non-peer reviewed, but references peer review) the second paragraph is not just misleading, it's blatantly wrong


text:
What causes gender differences in responses to farting?
Background: By casual observation, I have noticed that males tend to react differently to the sound of a fart. It seems that men are more likely to laugh whereas women are more likely to show signs of disgust.
I thought that perhaps there might be some evolutionary basis for this.
Questions

Is there any serious psychological research on the causes of our responses to farting?
Are there any systematic gender differences?
What are the posited causes of such gender differences?

I think you could reframe this into something very interesting, but as of now it's a bit open ended.  See if you can locate some information online about it being "evolutionary" and use that as a framework to build upon.

@ChuckSherrington I've tried to edit the question into a legitimate question that I would find interesting to answer. I've tried to remove the assumptions. Prof. Nick Haslam has a whole scientific book on Toilet Psychology http://www.thepsychologist.org.uk/archive/archive_home.cfm/volumeID_25-editionID_214-ArticleID_2076-getfile_getPDF/thepsychologist%5C0612hasl.pdf . So I imagine that there will be a legitimate answer to the question as now phrased.

I was shocked at how difficult it was to find systematic scientific research on the psychology of flatulence. The main empirical paper appears to be one by Lippman (1980). It seems to be hard to get a copy of the original. However, the author of the Neurotic Physiology blog discusses the paper at length.
Lippman study
Lippman asked participants to rank various hypothetical farters based on various factors. With regards to sex differences the blogger writes:

The sex differences were a little surprising. It turns out that women
  are more forgiving of loud, accidental farts (girls, we've all been
  there I'm sure), and don't ding the farter so much on "politeness"

However, when you think about the problem there are different kinds of sex differences in fart ratings: Men rating male farters; men rating female farters; women rating male farters; and women rating female farters.  This question really only addresses how women rate others in general.
Toilet psychology
Recently, a book was released by Professor Nick Haslam called "Psychology in the Bathroom". There's a good summary in The Psychologist (2012, PDF).
The book specifically aims to redress the lack of psychological research devoted to excretion and related matters.
One particular passage from the book summary in The Psychologist may provide a potential explanation for gender differences in perceptions of farting:

A common thread running through these differences is that women’s
  excretion is more hidden, emotionally fraught and suppressed than
  men’s. The incompatibility of femininity and excretion is nicely
  expressed in Jonathan Swift’s poem ‘The lady’s dressing room’, in
  which a suitor sneaks into his beloved’s room only to  find evidence
  of her dirty corporeality, including sweaty garments, beslimed towels
  and encrusted combs. Upon discovering her chamber-pot he slinks away
  in horror, lamenting ‘Oh! Celia, Celia, Celia shits!’ The same
  sentiment is expressed less poetically by an American undergraduate:
  ‘women are supposed to  be non-poopers’ (Weinberg & Williams, 2005,
  p.327). Despite our enlightened modern attitudes to gender equality,
  women are still judged more severely for violations of this ideal of
  untaintedness than men.  In one study (Goldenberg & Roberts, 2004), a
  female experimenter who excused herself to use the bathroom was
  evaluated more negatively than one who excused herself to get some
  paperwork: no such difference was found for a male experimenter.

General thoughts
So in summary, research on farting has generally been neglected by the psychological literature.
There is some evidence to suggest that women who fart are judged more negatively than men who fart. However, presumably this would vary a lot with context, who is farting, and who is recognising the farting.
It would also presumably be a cultural phenomena.
One theory to explain gender differences is that a lack of purity is often associated with activities related to excreting, such as farting. Farting loudly or openly may symbolise a lack of control over excretion or remind others that a person is an excreting being. Purity is sometimes  associated with a feminine ideal. Thus, farting may be socially more detrimental for a female than a male. Anyway, the preceding statements are largely based on theory; I'd like to see a lot more empirical evidence before I take them too seriously.
References

Lippman, LG. "Toward a social psychology of flatulence: The interpersonal regulation of natural gas". Psychology: a Quarterly Journal of Human Behavior, 1980.
Goldenberg, J.L. & Roberts, T. (2004). The beast within the beauty: An
existential perspective on the objectification and condemnation of women. In J. Greenberg, S.L. Koole & T. Pyszczynski (Eds.) Handbook of experimental existential psychology (pp.71–85). New York: Guilford.
Haslam, N. (2012). Psychology in the Bathroom. Palgrave Macmillan.
Haslam, N. (2012), Toilet psychology. The Psychologist. 25, 6, 430-433. PDF

What is more interesting is that little boys (about 6 years old) find farting sounds simulation (verbal) funny, while girls do not. I don't think the answer explains it.


text:
How does body temperature and oxygenation affect thinking ability?
I'm interested if the brain works better when the temperature is higher than usual and the amount of oxygen in the air is a bit lower than in fresh mountain air.  This has been my personal experience.

Can you account for other factors like being less stressed due to being away from work?  Also, how do you gauge your thinking ability?

@ChuckSherrington 1) I'm not usually much stressed at work, as it is more a challenge to me than a hardship, but after a long day, sure I'm less stressed when I'm home or on vacation. 2) I either can come up with an elegant solution to a problem, or a blunt, but working one, or I can't work at all due to lack of concentration caused by uncomfortability of surroundings (wrong temperature, excessive oxygenation or noise).

@ChuckSherrington: Infact, after thinking about it and adding the edit, am  sure, this question can work in biology.stackexchange too.

@AnandJeyahar I think that's what we're trying to tease out from the OP.  I think you made a good effort with the edit, but it was changing too much of the original intent.  Certainly comment with your additions and see if the OP is interested in them.  It could work on Biology, but it was really not receiving any attention over there.

@ChuckSherrington: Yeah, i had the same feeling too.(too much change in the way the question was phrased.) How can i see the edit history? and add it as a comment?

From Anand's suggested edit:EDIT: How does oxygen distribution within the brain happen? Is there a priority? Or as this question points to, what happens when there's low oxygen level? which areas of the brain are most affected? How are blood vessels in the brain distributed and more importantly when and where do they branch, if we follow circulation from the heart? I think these should throw more light on what cognitive functions might be affected.

@AnandJeyahar I fished it out for you

@ChuckSherrington: Thanks. I still need to get used to the site's Admin interfaces.

I just want my question answered :D

@user1306322 Well, I think we're trying to tease out some of the details because, as it stands it seems to be anecdotal and potentially confounded by other factors, unfortunately.

Warmer temperature are shown to raise aggression level (Anderson, et al., 1995).  Citing this study, DeWall & Bushman, 2009 found a similar correlation between words associated with high temperatures and hostile behavior.  This could be perceived as a threat to clear thinking.
Moss & Scholey, 1996 shows oxygen administration increases memory. However, intermittent hypoxia on developing children led to adverse effects (both mental and physical), according to Bass, et al., 2004.  Though, I must say, you can't really determine the oxygen content indoor vs. outdoors without sensors, even if you raise in elevation and who's to say what competing particulates there are between the two environments?
It's known that kinetic motion itself increases neurogenesis, mostly in studies with exercise, like this one.  There's been a lot of papers and laymen articles on the subject of exercise and neurogenesis lately.  The act of walking or climbing the mountain might contribute a lot to the subjective experience of thinking.


text:
Can we smell in dreams?
I'm interested in whether people can smell in their dreams.
Do people really experience smell in their dreams?
For example, if I dream of smelling a flower, will I feel the smell, too?
Is there any research on whether people can smell in dreams?

On it's face this is an interesting question (with a great answer) I think the problem with the question is the lack of (apparent) prior research. I haven't downvoted but I'm sure that's why others have

on 7/14/2013 i was sleeping during the day[I work at night] i know i was still sleeping
and could smell a cake being baked almost like pound cake smell.It filled my bedroom and then i woke up and could still smell this baking cake.I Thought to myself who could be here
baking?[I live alone] I went into the Kitchen and the smell was gone and no one was in the house but me.

I have awoken twice in the last week and i can smell stewed tea in my bedroom, wife had left for work 2 hours previous and does not like hot drinks!freaking me out...........no ketle warm,or windows open etc..cant work it out.....Sean

Antonio, Nielsen and Doneri (1998) provide one assessment of self-reported  prevalence of smell in dreams. To quote the abstract (my bolding):

Although numerous studies have investigated the content of
  laboratory  and home dream reports, surprisingly little  is  known
  about the prevalence of various sensory modes in  dreams. 49 men and
  115 women completed a battery of questionnaires and kept a home dream
  diary for two to three consecutive weeks. Retrospective responses to
  the questionnaire indicate that  approximately  33 %  of  men and 40%
  of  women recalled having experienced sensations of  smell  or taste in
  their dreams. A  total  of  3372 dream reports were collected and
  scored for  unambiguous references to  auditory,  olfactory,  and
  gustatory experiences. Auditory  experiences were reported in
  approximately  53%  of  all  dream reports. Olfactory  and gustatory
  sensations occurred in  approximatdy 1 % of all dream reports. A
  significantly greater percentage of women than men reported one or
  more dreams containing references to olfactory sensations. The results
  lend support to  previous studies which have shown that a variety of
  sensory experiences, although relatively  rare, can occur in dreams.

There is still the question about whether self-reports are trustworthy, and how you define a smell experience in a dream that is most likely not generated by external stimuli. Antonio and colleagues go on to discuss some of these issues:

That  the more infrequent modalities of  smell and taste occur at all
  in dream reports is an important indication of the representational
  capacities of dreaming-and  probably of  imagery more generally. The
  finding  is consistent with  recent research showing the existence of
  imagery in both olfactory (Carrasco &  Ridout, 1997; Lyman & McDaniel,
  1986) and gustatory (Drummond,  1995) modalities. Although  some
  researchers take the position that olfactory imagery is not possible
  (Herz & Engen, 1996), the spontaneous occurrence of olfactory imagery
  in  dreams may differ  from "willful"  olfactory imagery that may
  occur upon instruction during  the waking state. For  instance, limbic
  structures which  might  yield  such spontaneous occurrences during
  dreams may not be operational during the waking state. Nevertheless,
  it  is  likely  that  the  relatively rare occurrence of  these
  modalities during dreaming is not  because their  representation is
  beyond imaginal capacity. Rather, either such sensations are not
  usually spontaneously  generated during dreaming, i.e., are not a
  necessary component of dreaming's supposed memory/adaptational
  functions, or they depend upon external sensory stimuli to trigger
  them. However, sensory triggers may be selectively blocked at  the
  thalamic level by the raised afferent thresholds of REM sleep (e.g.,
  Steriade, 1994). Of  course, both  of  these inhibiting  conditions
  may be true, thereby seriously disfavoring appearance of gustatory or
  olfactory sensations during dreaming

References

ANTONIO, L.Z. and Nielsen, T.A. and Donderi, DC. (1998). Prevalence of auditory, olfactory, and gustatory experiences in home dreams. Perceptual and motor skills, 87, 3, 819-826.PDF
Carrasco,  M.,  & Ridout,  J. B. (1997)  Olfactory perception and olfactory imagery: a multidimensional analysis. Journal  0f Experimental Psychology: Human Perception &  Performance,
19,287-30l.
Drummond,  P. D. (1995)  Effect of imagining and actually tasting a sour taste on one side of the tongue. Physiology & Behavior, 57, 373-376.
Herz, R. S, & Engen,  T. (1996)  Odor memory: review and analysis. Psychonomic Bulletin & Review, 3, 300-313
Lyman, B. J., & McDaniel. M. A. (1986)  Effects  of  encoding  strategy  on  long-term  memory  for
odours. Human memory. Quarterly Journal of Experimental  Psychology: A-Human  Experimental Psychology, 38(4-A), 753-765.
Steriade,  M.  (1994)  Brain electrical  activity and sensory processing during waking and sleep states. In  M.  H. Kryger, T. Roth, &  W. C. Dement (Eds.), Principles and practice of sleep medicine. (2nd ed.) Philadelphia, FA: Saunders. pp.  105-124.

Also, in Oliver Sack's The Man Who Mistook His For His Wife, the author and famous neurologist reports a case about a man who dreamed he had the olfactory powers of a dog; however, when he awoke, he still retained his heightened sense of smell and furthermore could prove it to the nurses.
Any experience that one has in waking life can be recapitulated during a dream. In addition, Anthony Wagner has a line of research investigating how rehearsal and learning mechanisms operate during sleep. It is unclear at this point how much novel learning can occur during sleep, as no paradigm has demonstrated this very successfully.

I had a novel dreaming experience last night that led me to this website.  I was having a dream revolving around plastic waste!  I think this was recapitulating a discussion my wife and I had recently had about the problems of coping with the changing rules and options for dealing with domestic recycling of plastic. The content of the dream seems trivial and disorganized now, but one component was vivid and unusual.
In the dream, I set fire to some plastic waste and smelled an acrid, unpleasant odor of burning plastic.  The odor sensation was VERY vivid, almost overpowering. Immediately upon registering this odor sensation, I began to be aware of the rousing of my "conscious", rational mind, which was immediately gripped by the thought of "FIRE!".
I awoke with a start and with the thought that something was burning in the house.  However, after a breath two of air passed through my nose, I calmed down, as the air in my bedroom was clear and odor free.  The sensation had been so vivid, however, that I could not get back to sleep until I had roused myself and walked around a bit to assure myself that nothing was burning, and that there was no lingering scent of burning plastic in my house.
I can't say that I can recall ever experiencing such a vivid odor, indeed ANY vivid odor, in a dream before this.