
Unless You Are Spock, Irrelevant Things Matter in Economic Behavior - joshrotenberg
http://www.nytimes.com/2015/05/10/upshot/unless-you-are-spock-irrelevant-things-matter-in-economic-behavior.html
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bko
The idea of "nudging" is growing in popularity in the popular culture. The
idea is that the right government policy can nudge the individual to perform
the obviously rational self-interested choice. The policies are innocuous
enough that many reasonable people do not oppose them directly. Who thinks
getting their fellow denizens to invest more of their savings or eat a little
more healthfully is a bad idea?

But when you think about it more, you can see some troubling trends of petty
bureaucrats trying to control your life through nudging. The most offensive
example that comes to mind is politicians in the UK trying to convince ISPs to
(by default) block adult content because, you know, think of the children [0].
Of course you could call your ISP and remove the block so what's the concern,
right?

Be ready to give up ever more and more autonomy through slight manipulation
all backed up by intellectuals tearing down Homo economicus straw-men.

[0]
[http://en.wikipedia.org/wiki/Internet_censorship_in_the_Unit...](http://en.wikipedia.org/wiki/Internet_censorship_in_the_United_Kingdom)

~~~
ageek123
More generally, the entire field of "behavior economics" has a very strong
paternalistic, authoritarian subcurrent to it. The message is: people can't be
allowed to make decisions for themselves because they aren't capable of acting
rationally or in their own self-interest. Of course the idea that the
government is more likely to act in people's best interest than people
themselves is laughable, yet is actually being advocated as a policy
rationale.

~~~
RockyMcNuts
The whole field of UX has a strong paternalistic feel to it, guiding people
toward 'defaults' and making it as easy as possible to make 'correct' choices
as if they can't act rationally or in their own self-interest.

~~~
sethhochberg
I think there is some merit to the practice from a product design standpoint,
though - the commonly cited example of a door with such ambiguous design that
it needs a "push" or "pull" sign seems to apply here. Sure, we could leave the
door as a blank surface with no hints (design or signs or otherwise) and let
people decide whether to try and push or pull on their own, but doesn't that
just waste everyone's time?

A paternalistic approach isn't necessarily a bad thing if you're being guided
through decisions with the benefit of someone else's experience. It helps
avoid spending mental effort on decisions which don't matter as much, so
utmost attention can be given to those which do.

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baddox
> Economists discount any factors that would not influence the thinking of a
> rational person. These things are supposedly irrelevant.

I realize this is the setup for No True Scotsman, but are there any "serious"
economists who actually believe the things this article criticizes? I hear
these criticisms a lot, and I'm sure there are plenty of people who appeal to
these simplifications to support a particular political belief, but from what
I have read of modern economics (including some heterodox schools), economists
don't operate under these assumptions. The criticisms get more bizarre
throughout the article:

> Economists create this problem with their insistence on studying mythical
> creatures often known as Homo economicus. ... An Econ would not expect a
> gift on the day of the year in which she happened to get married, or be
> born.

That example doesn't even make sense in the context of the Homo economicus
criticisms. A perfectly rational person who is aware of the custom of giving
gifts for important anniversaries absolutely would expect a gift on those
days. They'd probably give gifts as well. There's nothing irrational about
that.

~~~
dragonwriter
> Economists discount any factors that would not influence the thinking of a
> rational person.

This is meaningless. Insofar as many models in economics are based on the
rational choice model, the definition of a rational actor is one who acts to
maximize their experienced utility with perfect knowledge of how their actions
will affect their experience utility.

Anything that will affect a persons happiness would affect the decisions of a
rational actor.

Now, its true that, even so, reality is known not to comply with the rational
actor model, but this article misses most of them and attacks a giant
strawman. And I wonder why, because as a professor of economics, the author
has to know that, its not plausibly a mistake of ignorance.

~~~
baddox
To be fair, the author does say that modern economists don't claim to believe
the simplistic Homo economicus model:

> Of course, most economists know that the people with whom they interact do
> not resemble Econs. In fact, in private moments, economists are often happy
> to admit that most of the people they know are clueless about economic
> matters. But for decades, this realization did not affect the way most
> economists did their work. They had a justification: markets. To defenders
> of economics orthodoxy, markets are thought to have magic powers.

But I think this criticism is invalid as well, based on what I have read of
economics. It seems like few economists believe markets solve _all_ societal
problems, even among the notoriously pro-market schools, like Chicago and the
very heterodox Austrian.

~~~
coldtea
> _But I think this criticism is invalid as well, based on what I have read of
> economics. It seems like few economists believe markets solve all societal
> problems, even among the notoriously pro-market schools, like Chicago and
> the very heterodox Austrian._

They might not think they solve "all societal problems" but they still think
they solve too many of them.

Plus, if you take away those crude models, most of the edifice of modern
economics crumbles, and what's left is a dismal science that's no more
scientific than astrology.

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analog31
Playing devils advocate, maybe the students were being rational, but based
their reaction on the information at their disposal. I taught college once,
and observed that students make rational and sophisticated decisions based on
what grades they expect to receive from their courses. They are also
justifiably insecure about their math skills.

They have to decide under time pressure whether this is a good teacher or a
bad one, easy grader or hard, fair or unfair, etc. The students have to
combine what they know about the mechanics of the grading scale, with their
own internal information about whether they trust this guy -- especially if
it's before the deadline for dropping the class. Introducing an unorthodox or
weird grading scale could influence this judgment. The students may have a
rational interest in nudging teachers towards a more favorable grading system.

I have a couple of major misgivings about psycho-economics. First, any
empirical failure of theory could be blamed on irrational behavior, when the
theory itself is wrong for other reasons. We might just not be considering all
of the information that people have at their disposal. Likewise, psychology
could be blamed for any failure of economic policy, or of entire economies.

Second, deciding who is capable of rational decision making, based on sex,
race, or social class, has a long and sorry history. I'd rather let economics
be the study of that which can be understood based on the behavior of rational
actors, and put bigger error bars around the predictive ability of economic
models.

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stegosaurus
The idea of a 'suboptimal' decision is a core tenet that keeps capitalism's
wheels spinning.

If you are poor, you must have just bought too many gifts, or refused to live
in a house share with 5 other people, or took the bus instead of cycling to
work, and so on.

You didn't act entirely rationally, and so you 'deserve' to be poor.

It seems hilarious when phrased in those terms but this sort of thing happens
_all the time_. Especially because some people are capable, either by
repression of emotion (stoicism) or by deference to authority (it's always
been this way...) of jumping through these hoops.

If we modeled the world in a reasonable way we'd discover how horrible it
really is. The fact we don't is part of the cognitive dissonance that
surrounds us.

(Nudging has been mentioned lower down here - yet another example of a
statistical calculation that completely overlooks individual plight, one that
treats the populace as a flock to be herded...)

------
eevilspock
What if you are Eevil Spock?

