Re: Imperfect Reasoning
Bryan Caplan wrote: People talk a lot about various irrationalities that they might fall into and ways they try to compensate for that. People talk about realizing that each person tends to think highly of him/herself, and trying to compensate for that. People "talk a lot" about this?! Maybe in a few odd sub-cultures. I can't recall any family member every talking this way, for example. Maybe you're meta-rational, but I can't think of anyone else who resembles you in this way. :-) How about this example. People seem to believe that they tend "stereotype" groups of people based on small possibly non- representative sets of examples, and consciously try to overcome this tendency. Overall, I'd say they do a reasonable job of correcting for this possible cognitive bias. Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Imperfect Reasoning (was: reading recommendation)
Bryan Caplan wrote: At least on my reading, a lot of cognitive psychologists want to say more than "People occasionally reason imperfectly, and policy might improve on that." Rather, they are saying "We now know that human judgment is quite poor, and economic models that presume otherwise are kind of stupid." Of course, it depends on who you read, but I think this triumphalist message appears in Nisbett and Ross, Kahneman and Tversky, Thaler, Rabin, and others. These guys rarely stray into policy, but they clearly think their work is cosmically important. Bryan calls attention to the issue of how large or frequent are cognitive errors, suggesting that standard economic analysis is reasonable when they are rare or small. To me the central issue is instead human meta-rationality. If cognitive errors make workers sometimes miss-estimate the safety of a job, but workers realize that they might make such errors, then wiser-than-thou academics just need to *tell* workers that their particular job is more or less safe than they realize, and that should fix the problem. If people have time-inconsistent preferences, but realize this fact, then it can be enough to give them means to commit to future choices. If people can neglect possible ways a contract can go bad, but realize this fact, they can give arbitrators discretion to deal with this when settling contract disputes. In contrast, those who see large policy implications from imperfect reasoning tend to assume that people are not meta-rational. This may be true, but most of the evidence presented just show cognitive errors, and is silent on the issue of meta-rationality. Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Imperfect Reasoning (was: reading recommendation)
Robin Hanson wrote: To me the central issue is instead human meta-rationality. If cognitive errors make workers sometimes miss-estimate the safety of a job, but workers realize that they might make such errors, then wiser-than-thou academics just need to *tell* workers that their particular job is more or less safe than they realize, and that should fix the problem. If people have time-inconsistent preferences, but realize this fact, then it can be enough to give them means to commit to future choices. If people can neglect possible ways a contract can go bad, but realize this fact, they can give arbitrators discretion to deal with this when settling contract disputes. In contrast, those who see large policy implications from imperfect reasoning tend to assume that people are not meta-rational. This may be true, but most of the evidence presented just show cognitive errors, and is silent on the issue of meta-rationality. I think the reason they ignore it is that they think it is too far-fetched to be worthwhile studying. Have you got any empirical evidence to overcome that burden of proof? One thing that interests me: You might call my notion of "rational irrationality" a form of meta-rationality. But my model doesn't imply that you can make people compensate for their irrationality by pointing it out to them; the only thing that works is raising price of error. -- Prof. Bryan Caplan [EMAIL PROTECTED] http://www.gmu.edu/departments/economics/bcaplan "We may be dissatisfied with television for two quite different reasons: because our set does not work, or because we dislike the program we are receiving. Similarly, we may be dissatisfied with ourselves for two quite different reasons: because our body does not work (bodily illness), or because we dislike our conduct (mental illness)." --Thomas Szasz, *The Untamed Tongue*
Re: Imperfect Reasoning (was: reading recommendation)
Bryan Caplan wrote: ... If people have time-inconsistent preferences, but realize this fact, then it can be enough to give them means to commit to future choices. If people can neglect possible ways a contract can go bad, but realize this fact, they can give arbitrators discretion to deal with this when settling contract disputes. I think the reason they ignore it is that they think it is too far-fetched to be worthwhile studying. Have you got any empirical evidence to overcome that burden of proof? People talk a lot about their difficulty in committing to long term plans. They choose savings plans that they can't get out of. They take efforts to avoid being around tempting candy bars. People choose contracts that give arbitrators discretion. People talk a lot about various irrationalities that they might fall into and ways they try to compensate for that. People talk about realizing that each person tends to think highly of him/herself, and trying to compensate for that. How is this so far-fetched? Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Imperfect Reasoning (was: reading recommendation)
Robin Hanson wrote: People talk a lot about their difficulty in committing to long term plans. They choose savings plans that they can't get out of. They take efforts to avoid being around tempting candy bars. These look more like conflicting preferences to me than "meta-rationality." But I'll agree that we see a fair amount of this. People talk a lot about various irrationalities that they might fall into and ways they try to compensate for that. People talk about realizing that each person tends to think highly of him/herself, and trying to compensate for that. People "talk a lot" about this?! Maybe in a few odd sub-cultures. I can't recall any family member every talking this way, for example. Maybe you're meta-rational, but I can't think of anyone else who resembles you in this way. :-) -- Prof. Bryan Caplan [EMAIL PROTECTED] http://www.gmu.edu/departments/economics/bcaplan "[W]hen we attempt to prove by direct argument, what is really self-evident, the reasoning will always be inconclusive; for it will either take for granted the thing to be proved, or something not more evident; and so, instead of giving strength to the conclusion, will rather tempt those to doubt of it, who never did so before." -- Thomas Reid, _Essays on the Active Powers of the Human Mind_
