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Read: Are Markets Moral?

A complete waste of time.

“Are Markets Moral?” is a transcript of a one day inter-disciplinary workshop on the question that is this book’s title.

Presenters regurgitate ideas that they have presented much more eloquently and convincingly earlier, often in other, much longer books of their own, or they speculate about issues, social phenomena that they have absolutely no clue about. The discussions are shallow; the discussants talk at cross-purposes, don’t try to synthesize, or if they respond they resort to cheap attacks, free from empirical facts with the sole purpose to discredit an opposing (and reasonable, evidence-driven) opinion.

The composition of the group of participants is seriously biased. Everyone seems to have (just) their own pet peeve and no genuine interest in answering the workshop’s big question. I pity the poor souls who attended in the hope of gaining new insight.

Much more enjoyable, instructive, and insightful are Daniel Friedman’s “Morals and Markets” and Paul Zak’s “Moral Markets.”

Read: The Sense of Style

Pinker’s The Sense of Style is a unique writing guide in the sense of its foundation in psychology, its acknowledgement of the nonsense of a strict prescriptive–descriptive dichotomy, and its reference and discussion of other well known guides and popular texts on writing. I like that. It unfortunately also contains a chapter with a very common list of good and wrong usage of terms that could be found on any blog on writing as well. I did not like that.

Hence, the first five chapters are easy to recommend. They instruct, explain, and entertain. It was interesting and enlightening to learn that many “rules”, that need to be broken, are based on the misconception that English is Latin. It is not. Latin grammar does not apply to the English language.

There are a couple of other things I noticed and learned.

Pinker’s Sense of Style is political. Pinker takes clear positions. (On, for instance, feminism and the gender neutral singular)

Every sentence requires a writer to grapple with tradeoffs between clarity, concision, tone, cadence, accuracy, and other values. Why should the value of not excluding women be the only one whose weight is set to zero?

Typographical conventions that support the reader, the ease of reading, and hence facilitate the understanding of a text may be at odds with grammatical structure that also clarifies the meaning and facilitates the understanding of a text.

No discussion of the illogic of punctuation would be complete without the infamous case of the ordering of a quotation mark with respect to a comma or period. The rule in American publications (the British are more sensible about this) is that when quoted material appears at the end of a phrase or sentence, the closing quotation mark goes outside the comma or period, “like this,” rather than inside, “like this”. The practice is patently illogical: the quotation marks enclose a part of the phrase or sentence, and the comma or period signals the end of that entire phrase or sentence, so putting the comma or period inside the quotation marks is like Superman’s famous wardrobe malfunction of wearing his underwear outside his pants. But long ago some American printer decided that the page looks prettier without all that unsightly white space above and to the left of a naked period or comma, and we have been living with the consequences ever since.

I would usually prefer the typographers’ approach. Though Pinker (and Pullum) makes a valid point when it comes to the discussion of the structure of a text, its sentences.

The American punctuation rule sticks in the craw of every computer scientist, logician, and linguist, because any ordering of typographical delimiters that fails to reflect the logical nesting of the content makes a shambles of their work. On top of its galling irrationality, the American rule prevents a writer from expressing certain thoughts. In his semi-serious 1984 essay “Punctuation and Human Freedom,” Geoffrey Pullum discusses the commonly misquoted first two lines of Shakespeare’s King Richard III: “Now is the winter of our discontent / Made glorious summer by this sun of York.”68 Many people misremember it as “Now is the winter of our discontent”, full stop. Now suppose one wanted to comment on the error by writing:
Shakespeare’s King Richard III contains the line “Now is the winter of our discontent”.
This is a true sentence. But an American copy editor would change it to:
Shakespeare’s King Richard III contains the line “Now is the winter of our discontent.”
But this is a false sentence, or at least there’s no way for the writer to make it unambiguously true or false.

Hence, yes, the typographer’s rule needs to be broken if necessary.

Read: The power of fifty bits

The Praise. What happens when a practitioner writes about behavioral sciences’ insights and their applications? You get a refreshingly different perspective, refreshingly new examples for behavior change strategies that work, and in this particular case a refreshingly balanced discussion of the underlying ethical principles.

In contrast to many other authors in the popular behavioral science genre Bob Nease does not write about human irrationality. That is already a reason to recommend his book: The term irrationality is often misunderstood as stupidity, and some authors seem to emphasize this interpretation, pushing the need for paternalistic advice and guidance. Nease, on the other hand, is focusing on bounded rationality – limited cognitive ability, limited willpower, (and limited self-interest) – as the result of a long evolutionary process. People are not (that) inherently stupid and do not need to be guided by a better-knowing and well-meaning paternalistic entity, our decision processes and the resulting (in)actions are just maladaptive as a consequence of a rapidly changed environment. As a result, there is an intention—action gap. A gap that can be closed with the right choice architecture, or rather action-taking architecture. Since the intentions are already there it just needs to get easier to follow through with them.

Nease offers a small set of strategies that have this goal in mind: Making it easier to follow through (when the inaction is caused by inattention and inertia). The strategies are, of course, not new or unique to Nease’s insight. Default options, mandated choice, and framing are discussed at length in the academic and the popular behavioral science literature. Yet, the examples from his personal work experience and the reminders (for the action-taking-environment engineer) for the constant need to experiment make his book entertaining, instructive, and hence worthwhile to read.

Fifty bits is a rather short, concise, and focused book. There is no padding. Indeed, some parts could have been slightly more detailed. As a result, there is no excessive hurdle for picking up the book and reading it. I guess this feature of the book, making it easier to pick it up and read it in full, is intentional.

The critique. While Nease is very careful to present a balanced discussion, to consider the ethics of behavior changing interventions, and to call for intellectual honesty, avoidance of deception, and generally being “nice” there is an inconsistency in one of his arguments. At least, I cannot agree with his rationale for choosing between mandated choice and defaults with opt-out.

First Nease recommends requiring an active choice (chapter 3), what is sometimes also called “mandated choice.” Then, however, in chapter 5 (“Let it Ride”) he also recommends setting defaults with opt-outs and tries to establish a rule when to ask for an active decision vs when to rely on the default.

It is all linked to the “Effort [cost] of Active Choice”, “Effort [cost] of Opting out”, and the “Fraction who would Opt out.” Setting a default with opt-out leads to a larger behavioral effect at the population level. If the expected cost of opting out is lower (at the population level) than the cost of active choice the choice architect should implement a default with opt-out.

This may sound reasonable. So, let me add one of Nease’s insights that he offers in chapter 9 “Simplify wisely” under the heading “Why is easy so good?”

The bottom line is that what logically looks like a small bump on the road to better behavior psychologically looks more like a wall. (p. 135)

Seemingly small obstacles can be associated with high psychological costs. Looking only at the physical cost to opt out, let’s say looking only at the time it would take, neglects these psychological costs (to overcome inertia). Naively applied – as in Nease’s example –, the rule would too often recommend setting a default with opt-out instead of mandated choice.

Yet, there is another reason why I do not like this advice and cannot agree with the presented rationale for it.

The rule is based on a cost to society argument and the, at least, theoretical possibility to compensate the losers (i. e. aiming at a Kaldor-Hicks improvement). However, since compensation never occurs it remains unclear whether there is indeed an increase in society’s welfare. Further, this requires that the disutilities and utilities caused to the individual members of society can be compared across individuals and aggregated in a meaningful way. I would contest this assumption. (For more and more eloquent critiques on this kind of social welfare improvements see the works of Arrow, Baumol, Bergson, Little, … ) Mandated choice, on the other hand, does not require any of these interpersonal utility comparisons.

Obviously, if my critique is on such a technicality, a point that is often dismissed and ignored in practice it cannot be that bad. Let’s just say I would prefer active choice on principle. It seems more honest, more autonomy preserving, maybe even autonomy enhancing (if the action-taking-environment engineer does not add peer pressure).

Disclosure: The author, Bob Nease, sent me a copy of his book for free. Thank you, Bob! I enjoyed it.

Read The checklist manifesto

A small, low cost, autonomy-preserving intervention that yields dramatic improvements in a desired outcome. Where have I heard this before?

Gawande describes his discovery of the checklist, its benefits, and the difficulties to design a good one so that it is actually used. With Gawande being a general surgeon the book is rather focused on his medical work. Though his narrative also adds insights from airline pilots – who has not heard of the pre-flight checklist? – and construction, and, superficially, finance.

The obvious benefits of catching small oversights with a checklist that even, no, especially trained and experienced professionals often commit seem surprisingly dramatic in medicine. Yet, I was more impressed with a, for a lack of better expression, nudge that was/is implemented with the help of a checklist and not with the direct impact of the checklist itself: Actors (i. e. the surgical team, the different specialist builders) are made to talk to each other (and learn each others’ names) and share responsibility. Indeed, responsibility and therefore decision power is redistributed from the top to the bottom. That, I believe, is a major driver for the success of groups.

Bottom line: The checklist manifesto is not a gripping thriller, it is not intended to entertain. Similar to a checklist it may seem a bit dry. And maybe there is even too much detail when Gawanda writes about his personal experiences with patients. It is interesting, though. Eye-opening even. And yes, I would like to have more checklists (or reliable, written rules and procedures that would serve as checklists) for my own work – sometimes, for the administrative parts.

Read: Busy

I may have read just too much of similar themed texts recently. Crabbe’s Busy seem utterly un-original. There is the usual mix of second hand research reporting and personal anecdotes to fill the gaps in support of an argument.

The list of references is impressive, admitted. Yet, mixing articles from highly respected authors in highly respected academic journals with pop-science books is less than inspiring confidence. The reliance on personal anecdotes adds to that impression.

On the other hand, the book’s thesis seems to be pretty much common wisdom nowadays. Many of the cited articles are ten or twenty years old. And thus, the gaps in the support of an argument may be not important at all. The conclusions are all accepted, there is nothing controversial.

This still leaves the entertainment value of the book. It reads quite nicely.

Read: Happy Money

So, after Stuffocation I wanted to get a bit more on (and closer to) the original research. Dunn and Norton’s Happy Money was supposed to fill that role as “Better Spending” is at the core of their research.

I had too high expectations.

The book is rather small, but not brief. There is a lot of unnecessary padding, irrelevant anecdotes, and personal back story. Hence, they say a lot less than they actually write.

Since most of the results presented in their book I already knew, Happy Money has added very little. Out of the 5 chapters that discuss the research only two offered something new. Articles on “Buy Experiences”, “Make It a Treat”, and “Buy Time” had already made it to my desk. And, unfortunately, the book did not offer anything worthwhile compared to these articles.

The chapters on the ideas that one should rather “Pay Now, Consume Later” and “Invest in Others” were more interesting. “Pay Now, Consume Later” follows directly from the concept of “pain of paying” and the peak-end effect. If there is no “pain (of paying)” at the end of the consumption experience the experience is more enjoyable, makes one happier. Getting happier by “Invest(ing) in Others” seems a bit like conventional wisdom. There is, however, a substantial amount of research on this. It took me a while to make the connection to the altruism and warm glow literature. They do not refer to any of the relevant economics artciles in this area (like James Andreoni’s A Theory of Warm-Glow Giving from the 1990) but only cite very recent articles in psychology. They do, however, refer to the Waldfogel paper on the Deadweight Loss of Christmas, the economic inefficiency of gift giving to show how myopic, narrow-minded, and thus incomplete the economic analysis of gift giving is. Consequently, they neglect all, almost all, the relevant research in (behavioral) economics, published in economics journals, and thus irrelevant to psychologists. While, of course, perfectly justifiable, I perceived this rather mono-disciplinary approach as annoying. Given the title Happy Money I expected rather a fusion of the different fields of economics and psychology.

What else annoyed me?

The authors feel it is necessary to explicitly tell their readers that they are professors at highly reputed universities and that they publish in highly reputed academic journals and that their friends are also professors at universities of the highest reputation. They were the rising stars, they were the people who will change the world. They are the authority on the book’s topic. You do not need to look any further.

And finally, in the last chapter they explain how government should make the world a better place by just applying all the principles discussed in the book, to cast them into a law and make them a guide for government action. Their recommendations are plain paternalistic policies. Given the heated debate about freedom preserving libertarian paternalism, nudging, these restricting, purely paternalistic policies that would force happiness upon the feeble-minded citizen who does not know what is good for him were a big surprise.