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Read: Nudge - Improving Decisions about Health, Wealth, and Happiness

The current public interest in behavioral economics is inspired by a number of popular science books on the topic. Or the other way round, I don’t know. Nudge is one of these books. It is coauthored by one of the pioneers of the field, Dick Thaler, professor and director of the Center for Decision Research at the University of Chicago. His coauthor Cass Sunstein, a legal scholar taught at Chicago, too, before he moved to Harvard Law School.

Both authors plead for a philosophy of governmental minimalism. Yet, they recognize that humans make mistakes, take shortcuts in their decision making and are easily directed to certain actions by simple and seemingly innocent changes in the decision environment. The latter is exactly what they argue for: To nudge people in the right direction. Offer people freedom of choice, reasonable defaults if necessary, and structured information to avoid overwhelming the decision maker. Since all this nudging is supposed to improve the well being of the decision maker and the welfare of society they call their policy of gently guided freedom of choice libertarian paternalism.

I do not want to start another discussion about the benefits and perils of such paternalism. Thaler and Sunstein address some of the opposing arguments at the end of their book. This is not where they make their strongest points.

The main text, however, gives a very nice overview of some of the observed regularities in decision making and the resulting applications of behavioral economics during the last decade. Some more controversial topics are discussed in the last third of the book. Here they cover two themes where many people will have strong prior opinions. First, they argue that the government should allow anyone to waive his right to sue for negligence. As a consequence health insurance fees would decrease and better coverage would result. Second, they argue government should privatize marriage and instead introduce civil partnerships. Marriage is mainly a religious concept. The religious rules concerning marriage may sometimes lead to a retrenchment of personal freedom, e. g. in the choice of (approved) partners. Therefore, the state should not link additional privileges or responsibilities to this institution. Instead, the state should recognize a more modern concept of family, a caretaker–dependent relationship. Current privileges, social and economic subsidies for married couples should be transferred to this new entity.

I cannot say that I am not sympathetic to these proposals. I just do not see the nudge…

Read: On being Certain - Believing You Are Right Even When You're Not

Earlier this year I read about cognitive dissonance, the denial of one’s own mistakes, and the resulting bad decision making. Now I have read something related, yet completely different. On being certain is about knowledge and meta-knowledge, the feeling of knowing something, to be certain about something and more general about cognition. Since the author, Robert Burton, is a neuroscientist explanations for the what and why seem, at least to me, more objective than some related work by more traditional psychologists. However, one of the main points the author wishes to convey is about such objectivity, or rather unjustified certainty about the underlying truth. As all reasoning is influenced by the decision maker’s, let’s call it, “wiring” there is no absolute objectivity.

The book is quite compelling and the author offers well-balanced arguments. The underlying cognitive processes are nicely illustrated and their implications discussed from different viewpoints. Since most deliberations are subconscious the book ultimately boils down to the question “How do we know what we know?”

As a side effect, at the end of the book it is once more perfectly clear: There is no perfect rational (economic) man.

Read: Nerds - Who they are and why we need more of them

Despite the luring title “Nerds - Who they are and why we need more of them” I would not have bought the book – it was a gift. The author David Anderegg, PhD has his academic degree printed on the book’s cover. I am always a bit suspicious of people insisting on the public use of their degree. At least as a means to promote their work, to lend credibility to their expertise. Nevertheless, I mostly enjoyed reading the book.

The author gives an assessment of the nerd and geek stereotype in American culture. He pays special attention to children and adolescents and how the nerd label may affect their personal attitude towards academic achievements. I think his observations are quite to the point. Even though the book is rather American-centric the same observation can be made in Germany. There is a general aura of anti-intellectualism in Germany as well. People are actually proud of their lack of math skills and little understanding of science at large.

This is a serious problem for society as people (children) who do not want to be labeled as nerds or geeks may choose not to reach their full potential. This is a loss for society. Technological and scientific advancement could be improved if only it was not hip to be dumb or just mediocre.

Read: Mistakes were made (but not by me)

Cognitive dissonance may lead to some very bad outcomes. With “Mistakes were made” Travis and Aronson try to make the reader aware of the possible social and material consequences of cognitive dissonance, confirmation bias, and lack of awareness. They make some strong and illustrative points citing several cases in different contexts.

Unfortunately, sometimes their point gets a little bit too strong. While reading some of the sections I had the feeling the authors were on a personal vendetta. Psychotherapists (kind of an academically less sophisticated competition to the social psychologists who authored the book), the police and politicians definitely get their (just) deserts.

“Mistakes were made” is an interesting and illuminating book. It was certainly not a mistake to read it.


Gelesen: Predictably Irrational

Dan Ariely reiht sich mit seinem Predictably Irrational in die Gruppe der Wirtschafts- und Sozialwissenschaftler ein, die sich bemühren, ihr Forschungsfeld und ihre Forschungarbeiten in allgemein verständlicher Form an den Mann zu bringen. Häufig ist dabei auffallend, dass die persönliche Meinung, das persönliche Forschungziel stärker zu Tage tritt als bei ihren wissenschaftlichen Publikationen. Arielys Werk ist so ein Fall.

Dan Ariely beschreibt anhand vieler Fallbeispiele, die allesamt seinen eigenen Forschungsarbeiten in der experimentellen Ökonomie entspringen, dass der Mensch bei seinem Entscheidungen oft nicht zu nutzenmaximierendem Verhalten neigt. Wenigstens scheint dies so, wenn man annehmen möchte, dass der individuelle Nutzen auf zumindest kurzfristig stabilen Präferenzen beruht und unabhängig vom Kontext der entscheidung ist. Als Folge der – für den so formalisierten individuellen Nutzen – schädlichen Abweichungen schlägt Arielz ein sanftes Gegensteuern vor. Eine Form des Paternalismus, den man auch bei anderen Autoren findet.

Mit zwei Dingen kann ich mich trotz des sehr angenehmen geschriebenen, zum Teil jedoch auch ein wenig didaktisch wiederholenden, Text nicht anfreunden.

Die meisten Menschen, auch die in Arielys Experimenten, sind nicht irrational. Sie haben vielleicht bei ihren Entscheidungen noch andere Variablen berücksichtig, die Ariely als irrlevant abtut und so zu anderen zielführenden Aktionen kommt als seine Probanden. Sie sind vielleicht nicht Nutzenmaximierer sondern „nur“ Nutzenbefriediger. Auch hier ist keine Irrationalität zu postulieren. Beschränkte Rationalität oder rationalle Beschränkheit sind eben keine Irrationalität.

Der zweite mich störende Punkt ist der eher unkritische Umgang mit den sich ergebenen Eingriffsmöglichkeiten, um die Akteure in die „richtige“ Richtung zu schubsen. Hier fehlt wenigstens ein Verweis auf die akdemische Diskussion zum Soft Paternalismus. Den Vor- und Nachteilen, den Gefahren eines solchen Eingriffs.

Gelesen: The Paradox of Choice

The Long Tail beschreibt, wie mehr Auswahl zu umfangreicheren Verdienstmöglichkeiten und der besseren Befriedigung unterschiedlicher, individueller Wünsche führt und damit auch zu einer größeren Wohlfahrt. Mit The Paradox of Choice versucht Barry Schwartz vom Gegenteil zu überzeugen.

Hauptursache für einen Nutzenverlust durch mehr Auswahl stellen die psychologischen Kosten der Wahlentscheidung dar. Mehr Auswahl bedeutet eine umfangreichere Informationsaggregation und Verarbeitung. Mehr Auswahl bedeutet auch mehr Möglichkeiten, sich „falsch“ zu entscheiden und die eigene Entscheidung zu bereuen, auch bereits in Antizipation der Entscheidung und nicht nur hinterher. Kurz, eine größere Auswahl bringt uns figurativ um den Schlaf.

Schwartz argumentiert logisch, bringt viele Beispiele aus dem täglichen Leben und verweist auf anerkannte Forschungsergebnisse seiner eigenen Forschungstätigkeit und der vieler anderer aus dem Bereich der Psychologie und der Ökonomie. Zusammen mit seinem lebendigem Schreibstil ergibt dies ein recht überzeugendes Werk.

Ich kann ihm trotzdem nicht gänzlich zustimmen. Intuitiv. Verneinen möchte ich seine Thesen allerdings auch nicht.