Tag Archives: Behavioral Economics

The Elephant in the Brain – Robin Hanson and Kevin Simler

November 11, 2018 By in Books Tags: , , , 3 Comments

The book is here and you should read it, although I think most people don’t actually want to know its contents. Most of us, I suspect, prefer to lie to ourselves and each other. Consider some of the evidence Hanson and Simler present:

Why do patients spend so much on medical care? To get healthier: That’s their one and only goal, right?

Maybe not. Consider some of the puzzling data points Robin discovered. To start with, people in developed countries consumer way too much medicine—doctor visits, drugs, diagnostic tests, and so forth—well beyond what’s useful for staying healthy. Large randomized studies, for example, find that people given free healthcare consume a lot more medicine (relative to the unsubsidized control group), yet don’t end up noticeably healthier.

So why doesn’t anyone know about this? I think we don’t want to know. For that reason, I’m not sure this book will be popular. Most people write, and maybe think, based on slogans: we see this all the time, everywhere, online.* I doubt that the fact that people over-consume free healthcare will have any effect at all on most people, but arguing that healthcare is a basic human right will—that activates people’s caring moral foundation. This book is likely to be read by weirdos who may not have much effect on the rest of society.

The first page of chapter four has one of the great footnotes of all time.

Let me pull one section that amuses me; I occasionally make an argument that friends think is harmlessly eccentric at best and outright offensive at worst: TV and movies are better than live theater because their range of possible expression is so much greater. Good video uses a range of scenes, actors, and sounds; it isn’t inhibited by the limitations of the stage. Most people I’ve said this to have said that I miss the point (maybe they’re right) and that live theater is beautiful for its own sake. Usually I’m just looked at like I’m weird (again, the lookers may be right).

Enter Hanson and Simler:

Artists routinely sacrifice expressive power and manufacturing precision in order to make something more “impressive” as a fitness display.

One place we find this sacrifice is in the performing arts. For example, by almost any any measure of technical control, film exceeds live theater. Film directors can fuss endlessly over lighting, set design, and camera angles […] And the results are frequently sublime, which is one reason film has become the most popular dramatic and comedic medium of our time. And yet consumers continue to relish live performances, shelling out even for back-row seats at many times the price of a movie ticket. Why? In part, because performing live is a handicap. With such little margin for error, the results are that much more impressive. A similar trade-off arises for musicians (e.g., lip syncing is anathema) and standup comics, and for the improve versus sketch-comedy troupes. A live performance, or even more so an improvised one, won’t be as technically perfect as a prerecorded one, but it succeeds by putting the artists’ talents on full display.

To be fair, too, in the case of music and standup, the artists are often trying out material and experimenting with audience reaction, before turning the final result into a video or similar product. In some cases, like improv, the audience becomes part of the product. We’re trying to be impressive, and the harder it is to be impressive, the more one is impressed.

But consciously saying, “I’m an artist to increase my reproductive fitness” is not impressive and no one says it. Hanson and Simler offer some mechanisms:

We, human beings, are a species that’s not only capable of acting on hidden motives—we’re designed to do it. Our brains are built to act in our self-interest while at the same time trying hard not to appear selfish in front of other people. And in order to throw them off the trail, our brains often keep ‘us,’ our conscious minds, in the dark. The less we know of our own ugly motives, the easier it is to hide them from others.

Self-deception is therefore strategic, a ploy our brains use to look good while behaving badly.

It’s interesting too, in light of their chapter on art, to think about what counts as art. Writing a novel? Yes. Painting a picture? Yes. Writing or designing an operating system? Not much, and not to most people. “Writing an operating system” may have occurred too recently in our evolutionary history to make doing so an attractive sexual display. But if we know we’re making art as a mating display should we then take that knowledge and direct our time and resources into other fields?

It’s a question that should be more seriously considered. And I write this as someone who has written novels and is working on one now.

One short question we might want to ask ourselves in many endeavors is, “Am I doing this to be maximally effective at the thing I am doing, or am I doing this thing to signal some other trait or achieve some other goal?”

Hanson’s previous book is The Age of Em: Work, Love, and Life when Robots Rule the Earth, which is very interesting for the right person—of whom there are not many, including me. It applies economic analysis to a world in which human brains can be emulated can thus intelligence is almost freed from pesky material constraints like birth, senescence, and death. As a book it’s a bit like science fiction without a story. Post-singularity SF often works poorly to baseline humans because humans are bad at conceiving what non-human intelligence or consciousness might be like. The Age of Em is very good at what it is, but it’s notable that almost no one tries to write in its genre.

Here is a review of Elephant in an unexpected venue. Others may be found. I have not found any good rebuttals of it; it may be a book easier to ignore than rebut. I’m going to re-read it. It’s not the kind of book one absorbs the first time.

* “Most people write, and maybe think, based on slogans” may itself be a slogan: I’m not immune!

Risks, Realizations, and Barry Schwartz’s The Paradox of Choice

April 3, 2010 By in Books Tags: , , , , , , Leave a comment

People mistook the pervasiveness of newspaper stories about homicides, accidents, or fires—vivid, salient, and easily available to memory—as a sign of the frequency of the events these stories profiled. This distortion causes us to miscalculate dramatically the various risks we face in life, and thus contributes to some very bad choices.

That’s from Barry Schwartz’s The Paradox of Choice: Why More is Less, a book that’s probably easy to misinterpret as arguing that more choices are always bad or always make us unhappy. But it does provide a lot of useful explanation of why many people disproportionately fear crime, which is falling (that link is merely one of the first found in an Internet search; the general trend is well-known), as opposed to, say, car crashes or heart disease, neither of which are as memorable.

Still, I don’t think all choices are bad ones, but the cognitive effort necessary to make a choice should probably make us more wary of doing things like shopping than we, as a society, appear to be. Mental investments in one field (i.e. deciphering features, costs, etc.) might take away from those in another, as cognitive load theory implies. Overall, I think The Paradox of Choice can be usefully combined with a couple of other sources, most notably Paul Graham’s essay Stuff, about the perils of possessiveness in an age of abundance, and The Myth of the Rational Voter, which the New Yorker discusses here. Our (collective) beliefs aren’t very rational, whether you call them a mistake of “pervasiveness,” as Schwartz does, or something else. It’s unfortunate that Schwartz doesn’t go in more depth about the “very bad choices” we might make as a result of availability heuristics.

Spent: Sex, Evolution, and Consumer Behavior — Geoffrey Miller

May 20, 2009 By in Books, Culture, Reviews Tags: , , , , , , , , , , 9 Comments

Spent: Sex, Evolution, and Consumer Behavior is worth reading, but only with a skeptical eye that will keep you from passively imbibe ideas like, “In a complex, media-rich society, perhaps only people with very good mental health can tolerate a high degree of openness without losing their equilibrium” (emphasis added). I suspect many if not most people would ignore “perhaps” and take away the larger message without questioning whether it has real backing. Like Malcolm Gladwell’s Outliers, Spent should be read but read with a doubter’s wariness of the false or ridiculous. Both Outliers and Spent tend to overstate their cases and exaggerate the power of the ideas they impart, and knowing that makes the books a better (and less misleading) read.

If I were in marketing or public relations, I would make sure to read Spent, if for no other reason than its unusual erudition relative to other pop science books and its delivery of a widely ignored framework for understanding products, branding and the like—including how individuals are turned off by branding and advertising as a reaction to it. I would like to imagine myself in the latter category but probably am not to the extent I would prefer. Spent might make me more so by acting as an inoculation against marketing.

One other structure note: Spent is probably three books: one about marketing, one about evolutionary mating theory, and one about consumerism. They’re not always integrated, but three good discrete books jumbled together definitely beat one indifferent standalone book.

I’ll begin with some of Spent’s problems:

1) Ignore the hokey dialog in Spent’s opening pages.

If I had read the first few pages of Spent in a book store, that might have turned me off it. The gimmick is annoying, yes, but don’t discard the book for that reason.

2) Miller puts too much stock into IQ testing and ignores or belittles the vast (and justifiably so) controversy around it.

In All Brains Are the Same Color, Richard E. Nisbett discusses some knowledge regarding the mutability of IQ tests in a racial context, but that context can be generalized to a broader domain. Malcolm Gladwell wrote about similar issues in None of the above: What I.Q. doesn’t tell you about race in The New Yorker, where he discusses the many problems of tests used to ascertain intelligence. He also wrote Outliers, which popularizes the “10,000 hours to mastery” idea. If the path to mastery is practice, people who conscientiously work toward improving IQ-like skills through schooling will in turn improve their scores. That most people don’t might more indicative of motivation or of institutional problems than of genetic intelligence, especially since we still can’t get much beyond correlation in measurements of it. If you want more support for Miller’s perspective, William Saletan’s Created Equal offers some in Slate. Miller says:

Human intelligence has two aspects that make it a bit confusing at first. There is a universal aspect: intelligence as a set of psychological adaptations common to all normal humans… Then there is an individual-differences aspect: intelligence as a set of correlated differences in the speed and efficiency of those natural human capacities…

But he again leaves out intelligence as a function of skill and training.

In any event, this post isn’t meant to be a rehashing or literature review of knowledge on intelligence testing; to perceive the arguments in full is practically a Ph.D. in itself given the history, breadth, and depth of such arguments. The evidence for absolute IQ heritability and genetic intelligence is far weaker than Miller presents it, and it’s frustrating that he doesn’t recognize this.

3) Some statements are vacuous (if interesting).

Miller writes:

Like most reasonable people, I feel deep ambivalence about marketing and consumerism. Their power is awe-inspiring. Like gods, they inspire both worshipful submission and mortal terror

That’s more than a little contrived, and whatever power marketing and consumerism have is power that we give them. Most people probably never or seldom consider either, at least not in the academic terms Miller uses. Still, he uses the section to comic effect, as when he notes the things “exciting and appalling” about consumerism and marketing, including “frappuccinos, business schools, In Style magazine, Glock handguns, Jerry Bruckheimer movies, Dubai airport duty-free shops… the contemporary art market, and Bangkok.”

4) Elitism runs through the book, even when it’s disguised.

This is in part a continuation of the second point. Take, for example, this:

If we do choose to ignore the marketing revolution, we do so because we are terrified of a world in which our elite ideals lose their power to control the fruits of technology. (If you have the leisure time, education, and inclination to read this book, you are obviously a member of the elite.)

The marketing revolution is only as important as we let it be. Much of marketing comes to us through TV and the Internet, but not owning a TV (preferably without being this guy) and Firefox’s Adblock Plus plugin go a long way toward neutering marketing.

I am reminded of a comment from Asher Lev’s uncle in My Name is Asher Lev: “I read. A watchmaker does not necessarily have to be an ignoramus.” So too with people in general.

Sometimes I’m susceptible to nodding through the elitist comments when they flatter my preconceived ideas, as with this statement:

People indoctrinated in hedonistic individualism, religious fundamentalism, or patriarchal nationalism—that is, 99 percent of humanity—are not accustomed to thinking imaginatively about how to change society through changing its behavioral norms and institutional habits.

That might be true, but might there also be a less snide way of stating it?

5) Maybe, maybe not.

I’m not convinced that “Marketing is central to culture,” which is the title of Spent’s third chapter, or at least not unless we’re to stretch marketing beyond a useful definition. I do like the way Miller calls marketing “… ideally, a systematic attempt to fulfill human desires by producing goods and services that people will buy.” Not that the actual marketing often lives up to that, but it’s impressive that Miller is willing to concede that given his ambivalence about the subject and his knowledge of how prone marketing and consumerism are to abuse.

Nations aren’t exactly marketing or signaling in all the examples Miller gives in his chapter “Flaunting Fitness,” like when he says that they “compete to show off their socioeconomic strength through wasteful public ‘investments’ in Olympic facilities, aircraft carriers, manned space flight, or skyscrapers.” Some of that is their for humorous effect, but aircraft carriers and manned space flight both improve their associated technologies enormously, giving us modern day marvels like GPS and massive cruise ships, while skyscrapers allow denser human interactions of the sort that my perhaps favorite economist, Edward Glaeser, describes in his many papers on the subject.

Strengths

The book is filled with ideas, which ought to be evident even from the weaknesses. Brilliant summations occur in places, as when Miller writes, “… plausible deniability and adaptive self-deception allow human social life to zip along like a maglev monorail above the ravines and crevasses of tactical selfishness, by allowing the most important things to go unsaid—but not unimagined.” The metaphor is overwrought, yes, but the sentiment reinforces the “Games People Play” chapter of Steven Pinker’s The Stuff of Thought. One can see ideas from his book reaching into others and vice-versa, which I consider a strength.

Humor

In talking about “Narcissism and Capitalism,” Miller says that the “core symptoms” of narcissism “lead narcissists to view themselves as stars in their own life stories, protagonists in their own epics, with everyone else a minor character. (They’re like bloggers in that way.)” The dig about bloggers too frequently rings true, even when given in jest.

Some of the funny parts of Spent might not be intended as such, as when Miller deadpans, “The typical Vogue magazine ad shows just two things: a brand name, and an attractive person.” Someone must think this is effective, and I wonder if those ads are part of the fifty percent of one’s advertising budget that’s wasted.

Another Brick

Nonfiction books like this one, most of Gladwell’s (questionable) work, Pinker’s, Ariely’s, and Zimbardo’s, along with the other recent pop professor books, are bricks in the road to greater understanding. They remind us of and help us correct our foibles, and even those of us who consider ourselves virtuous would do well to remember that “the renouncers [of materialism] remain awesomely self-deceived in believing that they have left behind the whole castle of self-display just by escaping the dungeon of runaway consumerism.” Instead, they take to other displays of taste, of artistic creation, of intellectual prowess, and the like, perhaps by writing book/literary blogs. Nonetheless, those activities are probably more socially productive than, say, McMansions, yachts, and SUVs. Spent helps us engage and grapple with those phenomena and our society as a whole, and even some of the weaknesses I enumerate above aren’t as weak as I imply, or else I wouldn’t spend as much time as I do.

(See also my earlier post about Spent and vacuous movies.)

(The New York Times also has a vacuous article about the book in the Times’ Science section. If I were one of those irritating triumphalist bloggers, I might point to this as an example of the superiority of Internet reporting.)

Stumbling on Happiness — Daniel Gilbert

April 23, 2009 By in Books, Reviews Tags: , , , , , , , 10 Comments

The major takeaway from many of the recent behavioral economics and psychology books that have come out, like Predictably Irrational, The Logic of Life, The Time Paradox, and now Daniel Gilbert’s Stumbling on Happiness, is that we don’t understand ourselves nearly as well as we think we do and simultaneously misinterpret how we should act. The rational actor imagined in the Enlightenment doesn’t seem to be as real as he or she once did.

Stumbling on Happiness is an excellent contribution to this major idea, and the book is better written and better researched than virtually anything else that might be nominally placed in the “self-help” category; indeed, his might be better considered a book about psychology for laymen, and, like Philip Zimbardo, Gilbert manages the transition from research paper to popular book well. Sometimes minor factual issues get in the way of his point, which he often likes to make in a way that can seem glib but is really essential for the “zing” of transmission discussed elsewhere. For example, in the afterward Gilbert writes that “Calculating such odds [regarding future actions based on present conditions] is relatively straightforward stuff, which is why insurance companies get rich by doing little more than estimating the likelihood that your house will burn down, your car will be stolen, and your life will end early.” Except that insurance companies don’t make money primarily for that reason: they make money because they give individuals an out from losses they couldn’t afford to bear alone and because while individual variation is enormous, collective variation is less so. The casino knows nothing about one spin of the roulette wheel, but they know everything about ten million spins.

Maybe it’s unfair to focus on the negative at the front of this essay regarding a throwaway economic observation because Gilbert does so many things right. He helps us think about the way we think about ourselves thinking, consider how we might respond to experiments, and know the potholes in our own mental functioning—like the gap between how we anticipate we’ll feel upon achieving something and how we tend to actually feel. We’re always constructing images of ourselves and anticipating a future that seldom happens as we think it will:

We insist on steering our boats because we think we have a pretty good idea of where we should go, but the truth is that much of our steering is in vain—not because the boat won’t respond, and not because we can’t find our destination, but because the future is fundamentally different than it appears through the prospectiscope.

Given how much humans are good at, the question becomes why we chronically make mistake that we ought to have the cognitive power to realize. But it’s taken until the last few decades for that cognitive power to be applied in ways that do make us realize those mistakes, and it will no doubt take much, much longer for such ideas to diffuse throughout society and the media. Then again, even Gilbert might be making a bias mistake, because it’s not clear how much of his research applies to all humans, or just to humans raised in Western cultures; there might be a bias in that general direction, which he acknowledges in a few places. Still, his big ideas fascinate, as when he says that “… human beings come into the world with a passion for control, they go out of the world the same way, and research suggests that if they lose their ability to control things at any point between their entrance and their exit, they become unhappy, helpless, hopeless, and depressed.” We need control but don’t always exercise it well.

For example, maybe we need to gork how the hedonic treadmill can make us crazed, how unlikely we are to understand what we’ll enjoy (like children (and the double meaning of this is intentional)), and how important it is to stop worrying about what’s outside our ken and start focusing on things that matter to us—and how to expand that ken. Of course, the big problem is that understanding what matters to us isn’t something we’re very good at, just as understanding that we’ll not be as devastated by not getting the job, lover, or acceptance letter we want probably won’t be as important as we imagine it to be. I’m mimicking a Gilbertian habit in the preceding sentence, because he likes cataloging items. At one point, he says that “people often value things more after they own them than before, they often value things more when they are imminent than distant, they are often hurt more by small losses than by large ones, they often imagine that the pain of losing something is greater than the pleasure of getting it, and so on.” Some of those lists are more entertaining than this one because he’ll slip something unexpected in, and the technique itself is useful because he often then goes on to innumerate what exactly he means by each item, given each paragraph, section, and chapter the best of academic structure without the irritating nattering that academic writing often entails.

One such flaw stood out because I might suffer from it. Gilbert says that “committed owned attend to a car’s virtues and overlook its flaws, thus cooking to the facts to produce a banquet of satisfaction…”, making me wonder if I do the same regarding computers, since I’ve mentioned mine, along with their peripherals, several times on this blog. Naturally, I think I’ve made a sound decision and continually evaluate it based on new information, but Gilbert makes me doubt myself—which is a compliment to him—and puts the endless OS X vs Windows vs Linux flamewars in a new context of people tending to talk past one another more than engage in a Platonic or journalistic ideal of objectivity.

It’s useful to note that most of Gilbert’s recommendations are implicit, like the one above; he isn’t necessarily outright demanding anything, except knowledge, which is what most good teachers seem to do; he lets readers figure out what it means to implement advice, and the closing of Stumbling on Happiness fits its theme:

There is no simple formula for finding happiness. But if our great big brains do not allow us to go surefootedly into our futures, they at least allow us to understand what makes us stumble.

The quest to see the obstacles might itself make us stumble at times: we can make ourselves happy by believing that we should be happy, wherever we are and in whatever circumstances we’re in. The question is, why don’t we? Or, rather, why don’t we more often than we do, since dissatisfaction can be a keen motivator for working toward change. But many of us who live in the western world and are beset by existential malaise despite living with material circumstances unparalleled in human history. Now we need guides like this one because the formulas we imagine for success, like wealth, status symbols, and the like, don’t seem to work. Gilbert says that “The greatest achievement of the human brain is its ability to imagine objects and episodes that do not exist in the realm of the real, and it is this ability that allows us to think about the future.” The downside is that we have no surefooted path into the future, and Stumbling on Happiness tells us that’s okay, provided we have the tools to confront that future.

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