Weinstein: Assignment #2 (Fudging)
October 2nd, 2009 at 21:00This week’s materials either validated much of my thinking re: human behavior, or opened doors – enabling leaps of thought – that I didn’t think existed.
To an extent some of my work focuses on corruption (particularly in gov’t) and another strand has always been about media/technology/innovation. In a sense I was an ideal audience member, if not subject, for Dan Ariely’s discussion on cheating. [Even if I didn't quite grasp the Wikipedia discussion of Prospect Theory - I'd love further coaching.]
I found it surprising that the honor code at Princeton made no difference compared to MIT’s lack of one (that said, the community there is one of the most ethical of populations I’ve ever met).
If I had been in the audience, I’d have asked Ariely a few things: Could we run an experiment that compared the “truthiness” (Colbert Report term, for those unfamiliar) between white-collar and blue-collar folks? (Also: What are the implications here for Digital Piracy? Are any behavioral economists studying the emerging gift economy? Virtual goods? eBay and other auction models? When I was an e-commerce mediator for eBay, the expression “As Is” was fraught. To some, it was license to omit that a good was non-working… )
On a related note: In fall I tend to watch many of the TV pilots – in the sitcom Community the lead character finds himself back at school because he’s been disbarred for lying about his credentials. When queried on how he could take such a wrong turn as a smart person, he volunteered: “that’s the problem with being smart, you don’t have to DO anything.” Getting by on cleverness, possessing a keen intellect, does that amplify or undermine our moral compass? Of course, smarts and ethics may be unrelated.
While this lecture was compelling in its totality, I came across a more recent Ariely clip on BigThink on how buying fake designer goods (those sunglasses on NYC’s Canal Street, fake Vuitton bags, etc) leads to an outlook where lying is in a sense normed. I was not entirely swayed. Here’s the link to the brief discussion (10 minutes or so): http://bigthink.com/bigthinkeditor/do-prada-knockoffs-make-you-evil What does everyone think?
A second question is based on the recognition that Ariely worked for the Fed in Boston. He must’ve had an insider perspective to the financial crisis. One that was not evident in this summer, 2008 lecture.
Reflecting back on the essays for Assignment #1 -
First of all, I commented on each of my group’s responses within their essays.
Overall, I was surprised on what seemed like a stigma to admit being an econ. If I could, I wouldn’t mind a bit more econ in my decision-making. My character – aspirationally, and to a lessor extent, in reality – is very open to new ideas, doing things at the drop of a hat. I’ve built my life as a freelancer as one who prizes flexibility and randomness. My apartment allows me to walk most places in Manhattan and I can do so usually within 20 minutes. As a “culture worker” I love not planning the day and letting events take me. That said, I am rigorous about my work – I give my clients 110% and am quite pragmatic in whether or not my silly brainstorms can take flight.
But like my fellow classmates, I am self-aware that I am vulnerable in a number of areas: Until a year ago, I also was easily seduced by “economy-sized” offerings, “pay one price” deals for amusement parks. I then adopted greater restraint. Even though Michael Pollan has little focus on economics in his books (The Omnivore’s Dilemma) I can now re-read him as a BE practitioner. As an antidote to overconsumption in the age of Supersize Me Pollan makes a case for portion control – specifically cutting back 20% on the size of your meals. He argues that it won’t be noticeable from the point of view of appetite… and he was right. One takeaway from the lecture is that I’m now noticing opportunities where a behaviorial economics wouldn’t have produced a better outcome. My gym – new to me since it opened this summer – is still trying to find members – and I’m amazed at how unsophisticated their approach is.
How the global recession forced us to be more Econ? Or am I giving too much credit to people – that they can so easily re-pattern their behavioral thrust?
I’m not sure if I completely agree with Ariely’s premise on how we don’t actually have well-defined preferences. In making long lists or having numerous choices, I think he’s really confirming Prof. Barry Schwartz’s thesis in The Paradox of Choice, that after too many choices (more than 5 colors, 3 or 4 choices) we shut down. Which brings me to ask: For those familiar with his book -can we graph it against our understanding of behavioral economics? Schwartz speaks of “maximizers” and “sufficers.” I think it would be cool to compare/contrast these personality types against econs and humans. [Sidebar: Who believes that polling in depth is deliberately undermining our preferences? When I saw a recent Obama poll on healthcare and Afghanistan I was struck by how dissimilar the issues were and wondered how this might affect responses.]
To be candid – and shallow – I’ve found myself distracted in the past by Ariely’s appearance. Learning that he was a burn victim – and how it was a poignant entree into his specialty – hasn’t erased what he looks like, but now it’s irrelevant and not a stopping point. Not only was I pondering the implications of his work on doctor-patient relationships (I *just* wrote a piece on this) but I began considering how secondary factors (such as his scarred face) can inhibit both learning and action. Sometimes in fact, they’re at odds. Five years ago I went to see a play, The Vagina Monologues. In this play about female empowerment, the actress Loretta Swit from M*A*S*H*) showed off some seriously bad plastic surgery; it was a cognitive disconnect.
I LOVE Ariely’s statement that Scale Designers have an unrealized influence in how choices are made. I understood this innately, yet had never pondered the implications across topics and disciplines.
Riffing of “Rome Without Coffee”: Did anyone see Saturday Night Live two weeks ago? There was a skit where a man is presented with two women as possible brides. One is gorgeous and $50, the other is cast member Fred Armison in drag (not so stunning) and “she” is $49. The groom-to-be has a difficult time deciding because of the price discrepancy. Thanks to Ariely, I was able to see – and enjoy even more – the skit in a behavioral economic context: http://www.hulu.com/watch/98327/saturday-night-live-russian-brides
Other thoughts: Is the resistance to healthcare reform based on the endowment effect? A sizeable % of the US population has health insurance. It may be eroding, it may be insecure, but are they overvaluing it versus the risk of a public option? I’d love to discuss this. (Related: in the discussion of Framing, I couldn’t help but think of a recent observation by Nate Silver of the blog fivethirtyeight.com (a polling savant) who tried to plot the dollar inflection cost that an elected official could be “bought” by the healthcare industry. That came down to just $50,000.)
Have there been any “debates” between classical and behavioral economists? I’d love to see these. Also: How would a BE have handled the bank crash?
Cheers,
Jerry
October 3rd, 2009 at 3:54 pm
I enjoyed reading your post. On the human versus econ thing, I don’t know that there is a stigma, but then whether you perceive one or not probably depends on which circles you run in. I don’t feel it. But then I also readily fess up when I am the odd woman out, so it wouldn’t make a difference in the end. Still, as far as individual preference goes, I’d much rather be an econ. If there is a stigma I would think it would be in the direction of admitting to being human–that is to say admitting I make decisions based on pettiness, emotion, laziness or whatever other ugly thing that is uniquely human–who really wants to admit to that? But since I just can’t say I believe that people run through a cost-benefit analysis each time they make a decision, I believe we are all humans rather than econs.
Of course, I am still back at square one in all of this, struggling with the whole definition of “rational” in the economic sense versus the common vernacular and where other self-interest factors (kinship, morals, non-economic psychological benefits, etc.) tangled up in there fit in. I just don’t understand yet what gets included in B.E. and what doesn’t and where to draw the line between economic versus “regular” decision making. Not to mention that if all of these cognitive biases and perceptual problems exist that lead to various inaccuracies, couldn’t it still be true that people are also still making reasoned (rational) decisions–they are just basing them on the faulty data they have to work with? I think I need to stop and figure out what it is that the B.E.s actually think before I try to form my opinions about the validity of their opinions!
It might be interesting to know about truthiness and smarts, SES, occupation, and the like but it would also be dangerous and I’m not sure what it would be right to do with the information if it were available. Where you stand depends on where you sit (Miles’ Law) and it will always be that way. I doubt that that we could get to The Truth (capital T) or that one even exists, and there would be several lifetimes of arguments about how to interpret the data if it were available (like the ongoing debates about race and IQ that have big flareups every now and then). Anyway, it is pretty fascinating to learn that a lot of people are comfortable cheating “just a little” and how stealing pencils or soda or a larger replacement tv is okay while stealing money is not.