Bastian and Loughnan (2017) on Eating Animals and Morally Troublesome Behavior

Brock Bastian and Steve Loughnan, “Resolving the Meat-Paradox: A Motivational Account of Morally Troublesome Behavior and its Maintenance.” Personality and Social Psychology Review 21(3): 278–299, 2017.

• The “meat paradox”: meat eating is widespread (about 97% of Americans), but so is revulsion at harming animals.

• How can morally troubling behavior be ignored, normalized, and longstanding?

• Cognitive dissonance is a term that refers to the discomfort people feel by holding beliefs that are inconsistent with their actions. Eating meat is inconsistent with an interest in not harming or killing innocent sensitive beings; so, meat eating is a source of cognitive dissonance.

• Cognitive dissonance leads to negative affect, and this condition motivates the search for ways of reducing or eliminating the dissonance.

• “When people take responsibility, acknowledge harm, and accept the identity relevant consequences of their actions, they will experience dissonance and cease their immoral behavior [p. 280].” So, people try not to take responsibility, not acknowledge harm, and not accept the identity implications of meat eating.

• How to reduce dissonance while still eating meat? We can deny that animals suffer; we can do this selectively: we can categorize some animals as “food animals” and act as if that label means that they don’t count or don’t suffer – even as we would never hurt a puppy. The food animal category makes salient the food dimensions (such as taste), and the other dimensions (sentience) become less salient.

• Another approach to fight dissonance is to act as if we are not responsible for our choice to eat meat, that we effectively have no choice, as with the "3 N’s": eating meet is natural, normal, and necessary. People who abstain from meat then appear deviant, their opinions are suspect.

• Further, we can downplay the amount of meat we eat or suggest that we only consume ethical meat. We emphasize that we are relatively responsible!

• Our approaches to dissonance reduction can increase the commitment to meat eating. Indeed, doubling down on meat eating and believing that it is the proper course to take (and that the alternative is weird or unwise) reduces dissonance and negative affect. 

• The ritual and symbolism then, in meat eating (turkey for Thanksgiving, ham for Christmas!), is not surprising. Not eating meat looks almost infeasible and anti-social.

• The habitual, automatic nature of meat eating renders it no longer a decision, reducing dissonance – and this is in part why meat eating becomes habitual.

• Habits can spread throughout a population – seeing someone eating meat suggests that the eater is not experiencing dissonance, that such behavior is consistent with morality.

• The whole culture, then, can shroud the immorality of meat eating (and reduce or eliminate dissonance): look at how nations build identities around morally questionable acts of war. Meat production is hidden away, meat purchasers and eaters don't have to face harms to animals directly.

• But social contagion can work both ways. The positive feedback (sorry) loop could reverse, and meat eating could quickly fall out of favor.

• The theoretical points built up around the discussion of meat eating are then applied by the authors to the treatment of refugees and to prejudice. The authors see their contribution, I believe, mainly in indicating how methods employed to reduce dissonance can strengthen the commitment to the morally-troublesome behavior. 

Exley and Kessler (2021) on Information Avoidance

Christine L. Exley and Judd B. Kessler, “Information Avoidance and Image Concerns.” NBER Working Paper 28376, January 2021 (revised May 2021).

• Contrary to what a standard economic view would suggest, people often avoid receiving information that is pertinent and seemingly free. A plethora of potential reasons can be offered as explanations for information avoidance.

• People want to think well of themselves, so they might like to muddy the waters around selfish acts, by remaining ignorant (thereby possessing plausible deniability) of the actual extent of their selfishness. This article asks how much information avoidance is driven by concerns with maintaining one’s self-image.

• More specifically, people often avoid learning about how their choices affect the outcomes for other people – even if the information would not affect their decision. When I intend to act selfishly, I might not want to know how much others are harmed by my choice. The opportunity to avoid information about harms to others promotes more selfish behavior. 

• The approach here is to look at information avoidance with respect to two decisions that differ only in that one decision has no prospect of involving a selfish motive (as the chooser's own payoff is not implicated in the decision).  

• A person is asked to choose either option A or option B. The "Self/Other condition" is one in which the chooser will receive a higher payoff from A than for B. Their choice between A or B, however, will also affect the payoff of someone else ("Other"), and it is possible that the other person will receive a much higher payoff with B. At the start, the chooser does no know what option is best for the other person, but does know that A is best for the chooser him or her self. The chooser (sometimes) has the option of just making the choice between A or B, or, learning the Other's payoffs associated with A or B. Will the chooser seek to learn this information?

• If Self and Other turn out to both do better with A, that is termed the "aligned" state; if it turns out that Other prefers option B, that is the "unaligned" state, the preferences of the two folks do not match. (So choosing to get the info means that the chooser learns whether the preferences are aligned or unaligned – if they are aligned, then there is no conflict, the selfish choice is also good for the Other.)

• In the Other/Other condition, alternatively, the chooser is again making a choice in the Self/Other circumstances, except what used to be the chooser's payoffs now go to someone else, a third party – the chooser has no skin in the game, no selfish interest, but the interests of the two Others might conflict. Will the chooser elect to learn whether the interest are aligned or unaligned?

• Four studies, overall n > 4,600.

• In Self/Other, if choosers know (no choice) the info and it is unaligned, about 1/3 make the selfish choice. If the state information is not revealed unless requested, 2/3 of subjects in Self/Other choose not to acquire the information. If the choosers elect not to know, more than half choose the selfish option. That is, people who avoid the info behave in a more selfish way, on average, than if their choice fully revealed their selfishness because of their knowledge of unalignment.

• In the Other/Other condition, where there is no selfish option, information avoidance falls – but only by about 20%; that is, more than half the participants still choose to avoid the information. 

• The Other/Other results suggest that most of the information avoidance is not about self-image concerns, because there are no such concerns in the Other/Other condition.

• If you make info provision an active choice (as opposed to opt-in), information avoidance falls by about half: it sort of seems like participants just aren’t paying much attention without the need to make an active choice?

Newall, Walasek, Hassanniakalager, et al. (2023) on Gambling Risk Warnings

Philip W.S. Newall, Lukasz Walasek, Arman Hassanniakalager, et al., “Statistical Risk Warnings in Gambling.” Behavioural Public Policy 7(2), 219-239, 2023 [pdf available here].

• Warning messages in the gambling arena, when they are provided, tend to be generic and do not facilitate comparison across various betting options.

• Theoretical loss = (house edge) times (total amount bet), or, the expected price of a bet or bets; for instance, in European roulette, the house edge is 2.7%, so the theoretical loss of betting $100 is $2.70.

• Theoretical loss is a long-run concept and not salient for bettors, while their recent gambling experience is quite salient. But given that most of the social harm from gambling is tied to bettor losses, theoretical loss is a decent metric for the social risks of alternative wagers. 

• Expected prices (or theoretical loss) of gambling tends to be hidden from gamblers – but it would be possible to provide (sometimes approximate) theoretical loss information, or other related metrics such as house edge. (For games where player behavior affects the odds, the risk could even be personalized based on player characteristics.) Presumably gamblers (all else equal) would be dissuaded from forms of gambling with high theoretical losses. 

• Should gambling warnings also note volatility and the slow convergence to theoretical loss levels?

• Gamblers cannot identify vast differences in expected price on seemingly identical games.

• Some jurisdictions mandate “return to player”-style info; but players often do not understand it. And sometimes the info is hard to find and to see.

• Should the automatic reinvestment of small wins into a player's available gambling account be banned?

• In sports betting, longshots and “exact score” or other prop bets tend to have higher house edges – and these are heavily advertised.

de Ridder, Kroese, and van Gestel (2022) on Nudgeability

Denise de Ridder, Floor Kroese, and Laurens van Gestel, “Nudgeability: Mapping Conditions of Susceptibility to Nudge Influence.” Perspectives on Psychological Science 17(2): 346–359, 2022.

• What conditions might influence the extent to which people are susceptible to a nudge? The authors look (primarily) at three issues: (1) awareness of the nudge and/or its purpose; (2) pre-existing preferences; and, (3) are the subjects employing System 1 or System 2 thinking?

• In this article, transparency involves making subjects aware of the presence and purpose of a nudge; this is a stricter condition than Thaler and Sunstein’s publicity principle, that asks if nudges, were they publicly known, would garner public support.

• Default nudges tend to maintain their effectiveness under transparent conditions; further, when nudged opaquely, people informed after the fact don’t seem to view those nudges as an affront to their autonomy. (Though when an ex ante inquiry is made, people often indicate that they will feel their autonomy threatened by an opaque nudge; that is, they forecast a higher level of concern than they will actually experience.) 

• Nudges will be “ineffective” at altering choices if the nudge counsels behavior to which they hold a negative view, or if the nudge counsels behavior to which they already are strongly attached! That is, we needn't be too concerned with nudging people into behaviors that their pre-existing preferences do not endorse.

• If people lack clear preferences, a nudge might “impose” preferences – though starting with a request that people discuss their preferences (a plus!) might undermine any perceived manipulation.

• There is not much evidence suggesting that people are nudged more when they are employing System 1 thinking (through ego depletion, say). That is, the effectiveness of a nudge is not tied to the extent that it prompts unthinking responses.

• People with lower cognitive capacity do not appear to be more susceptible to nudges.

• The final sentence of the text succinctly summarizes the article: "Nudges do allow people to act in line with their overall preferences, nudges allow for making autonomous decisions insofar as nudge effects do not depend on being in a System 1 mode of thinking, and making the nudge transparent does not compromise nudge effects [p. 355]."

Banerjee and John (2021) on Nudge Plus

Sanchayan Banerjee and Peter John, “Nudge Plus: Incorporating Reflection into Behavioral Public Policy.” Behavioural Public Policy, 1-16, 2021, available at https://doi.org/10.1017/bpp.2021.6.

• Should we embed a prod for people “to reflect” into System 1 nudges? Such a prod is the “plus.” [The authors themselves seem to equate nudges (or perhaps "classic nudges" with System 1 nudges; the "plus" activates a System 2 element in conjunction with a System 1 nudge.]

• Bundling a nudge with a plus makes nudges more salient.

• People need actual reflection, not just “the potential for reflection [p. 2].”

• Thaler and Sunstein consider that a legitimate nudge must be one that would receive wide assent if everyone were informed about its aim and operation. This restriction would rule out manipulating people in ways that harm them. Nonetheless, such a legitimate nudge might, when it is affecting choice, remain hidden, invoking an automatic, System 1 response.

• Nudge plus wants to extend the transparency, so that just about everyone understands what is going on in the choice moment. Actors maintain their autonomy, though without being required to pay extremely close attention or to engage in strenuous cognitive processing. 

• Commitment devices are a nudge plus, because the need to consider whether to sign up for the device spurs the requisite reflection; likewise with cooling-off periods.

• People often choose not to use GPS on familiar routes – they are thinking, they are not being “tricked into using the device heuristically once again [p. 7].” For them, GPS is a nudge plus.

• Adding a regular prompt to set a future fitness goal turns an otherwise ordinary fitness tracker into a nudge plus.

• But… do people really desire this “experiential learning environment [p. 10],” this near necessity to reflect regularly, at least to some extent?

Sunstein (2020), “Behavioral Welfare Economics"

Cass R. Sunstein, “Behavioral Welfare Economics.” Journal of Benefit-Cost Analysis 11(2):196–220, 2020. 

• Economist Douglas Bernheim (2016) lists three premises when discussing individual welfare: (1) a person is the best judge of her wellbeing; (2) judgments are governed by our coherent, stable preferences; and, (3) preferences are what guides our choices. 

• None of these premises is self-evident; indeed, they might all be incorrect. 

• If people lack stable, consistent preferences, or if their choices are skewed by bias, how can we judge how well off they are, how good a job they are doing at serving their own interests? Further, their preferences might be shaped by rules and laws, so crafting rules to promote current interests might be a mistaken (or arbitrary) approach. 

• Behavioral science makes us suspicious of consumer sovereignty, or the claim that people are the preferred judges of their own situation, best positioned to make desirable self-regarding choices. 

• The behavioral evidence rightly undermines our unquestioned respect for consumer sovereignty, but we should be loath to turn it into general disrespect. It might make sense to start with deference to consumer sovereignty, but be willing to look to alternatives if evidence suggests welfare might otherwise be compromised. [Respecting consumer sovereignty as a default...!] 

• A standard description of rationality is that it consists of taking optimal (or, less stringently, reasonable) means of achieving your goals. 

• Nudges or other interventions that are designed to make choices more navigable, to make it easier for people to achieve their goals, are paternalistic with respect to means. 

• Economists generally are not in the business of questioning people’s goals, the ends they have in mind – but Professor Sunstein suggests that there can be strong evidence, in some settings, that (self-regarding) ends should be questioned: “The ends that people choose might make their lives go less well [p. 196].” 

• So, Sunstein starts from a position of alignment with Bernheim, where individual self-regarding choices are respected – but only if those choices are informed and free from behavioral biases. Further, Sunstein will not make a means/ends distinction: the ends could be problematic, just like the means can be. Nonetheless, “means” issues are generally what Behavioral Economics takes on. Tread carefully with “ends” stuff. 

• Bernheim thinks outsiders essentially lack standing to coerce the “direct” choices of others; the outsiders’ preferences are mere opinions and only one opinion, that of the individual involved, counts. Sunstein disagrees. [Benheim refers to choices that matter in themselves as "direct," whereas choices that only matter instrumentally in serving some larger purpose are "indirect."]

• People might be bad at forecasting the welfare they will receive from a choice, and prospective and experienced welfare needn’t match. (We might add retrospective welfare into the confusing mix, too.) 

• The three main contenders for what identifies “welfare” are: (1) preferences; (2) Subjective Well-Being; and (3) (the obtainment of) specified "objective" goods. All of these approaches to welfare are inadequate. 

• There are many circumstances in which people’s choices are wrong, with serious welfare consequences. And what is a direct choice? Perhaps “direct” issues only come in such high levels of abstraction – enjoy a good life – that choice architects in practice are unconstrained by respect for such issues. 

• Given the increased scope for intervention provided by behavioral considerations, how can they be held within reasonable bounds? Guideposts we can use for increasing our respect for individual choices are that the choices be informed, active, free of biases, and the product of a broad perspective.

Golman, Gurney, and Loewenstein (2020) on Information Gaps

Russell Golman, Nikolos Gurney, and George Loewenstein, “Information Gaps for Risk and Ambiguity.” Psychological Review 128(1): 86–103, 2021; http://dx.doi.org/10.1037/rev0000252 

• The authors argue that risk and ambiguity aversion arise from the desire to avoid unpleasant thinking about unanswered questions. (Risk and ambiguity loving, alternatively, is associated with the prospect of being spurred to think about pleasant matters.) 

• If you have a question with an unknown answer, you have an information gap. The attention that this gap attracts from you depends on salience (contextual factors which highlight the gap) and importance. 

• Gambling raises the importance of certain information gaps – which team will win? – and hence, directs our attention towards them. We therefore like to gamble when we welcome the increased attention, and are dissuaded from gambling on topics we don’t like to think about. 

• A key information gap concerns uncertain outcomes. Risk aversion (even with minimal stakes) can arise from our desire to avoid thinking about the uncertainty. Compound lotteries, er, compound the uncertainty, and the aversion. 

• The previous two bullet points offer new explanations for (1) betting on your favorite team and (2) low-stakes risk aversion. (A risk averse person presumably would want to bet against their favorite team, as a way of buying insurance against the bad outcome that arises if the preferred team loses.) 

• When shown risky prospects one-at-a-time, people seem to respond similarly to more and less ambiguous situations. When there is a choice between prospects, however, ambiguity aversion emerges. The comparison among alternatives presumably makes the information gaps (not knowing the precise probabilities) more salient. 

• People with relevant expertise enjoy ambiguity, as in racetrack betting. But those who feel uninformed find the ambiguity unsettling. 

• Study 1: Pittsburgh Pirates fans choose how much to bet on either their team’s hits or the number of strikeouts suffered by batters on their team. These bets involve no ambiguity – once the fans choose a bet size, their probability of being assigned the “winning” side of the bet is .5. Nevertheless, the fans bet more when hits are the relevant subject. Presumably they do not enjoy having to think about the strikeouts that the players on their team will suffer. 

• Study 2: Carnegie Mellon University alumni are given the opportunity to bet on the future relative rankings of two excellent CMU computer science departments – or on the relative future prospects of two not-so-good natural science departments. In this case, objective probabilities are not known, there is ambiguity in the prospects. The alumni display aversion to the ambiguity; however, they show a lot less aversion to that ambiguity when betting on the great departments. It seems that thinking about the future success of CMU star departments is a happy thought that they, to some extent, welcome.

Le Grand (2018) on Government Paternalism

Julian Le Grand, “Future Imperfect: Behavioral Economics and Government Paternalism.” Review of Behavioral Economics 5: 281–290, 2018.

• Nudges and even stronger government interventions are often justified on the grounds of allowing long-run, more considered or "truer" individual preferences to assert themselves. But there are problems with identifying and privileging any one set of preferences. This article offers two justifications for paternalistic interventions that do not rely on identifying true or long-run preferences. 

• The defense of paternalism offered here applies (as is usually the case in economics) to means-related paternalism, not ends-related. People's goals are taken as given (and, implicitly, rational); can policies be designed to empower people to better achieve those goals?

 • What if the government sees people engaging in an activity like smoking that the government believes will have future costs for smokers that with a high probability will more than compensate (in terms of the smokers' own values) for the increased value they enjoy from smoking now? 

• The government might reasonably want to dissuade such smoking, but why would smokers make such a mistake? Maybe they lack information, so there is much to be said for ensuring that accurate information is readily available – but this is not the same as justifying a smoking tax or ban. Maybe smokers use a different discount rate than does the government in comparing current with future costs and benefits – again, this difference should not license coercive interventions by the government.

• But maybe (drawing upon Le Grand's 2015 book with Bill New) the problem is that smokers suffer from one or more "reasoning failures": "limited technical ability, limited experience or imagination, limited willpower and limited objectivity [p. 286]." In particular, can a young smoker imagine a realistic portrayal of herself as a 65-year old? The failure of imagination is not a problem of too little information about the health risks of smoking; rather, it is a lack of knowledge of how the well-being of future selves will be affected by current smoking. A paternalistic policy can be justified not only on the basis of better knowledge of true or more-considered preferences, but on a better understanding of health effects on well-being. 

• A second defense of paternalistic interventions might be to consider how a person's future selves might contract with current selves to influence current decision making. Government could serve as a stand-in for those underrepresented future selves. Now the justification for a paternalistic intervention is market failure, in that future selves generally are unable to participate in market transactions that nevertheless implicate their interests.

• Le Grand adapts an example from a 2018 book by Robert Sugden. A young person inherits from an uncle a wine collection, though she has little interest in wine, and does not place much value on her inheritance. But her father suspects that in a few years the young person will feel differently. So he could offer her a low price for the wine today (which she will accept), and after a few years, offer to sell it back to her at a higher price. If the father was right, she will agree to both transactions, and everyone is happy. 

• For goods which, unlike wine, cannot be transferred, the government could arrange a similar (though not voluntary?) deal, by subsidizing smoking avoidance today, with the subsidy repaid by taxes in the future on the now older non-smokers. But does this "contractarian approach" avoid the identification of a true or long-term preference? Le Grand thinks that it does not, as the (imposed) subsidy is designed to override the young person's current preferences.

Sax and Doran (2019) on Ambiguity and Biotechnology

J. K. Sax and N. Doran, “Ambiguity and Consumer Perceptions of Risk in Various Areas of Biotechnology.” Journal of Consumer Policy 42(1): 47-58, March 2019 [gated copy here].

• Biotechnology-driven consumer goods such as vaccines, fluoridated water, and foods produced with GMOs seem particularly susceptible to exaggerated views of health and safety risks. Does ambiguity aversion drive these risk misperceptions?

• A survey with 14 scenarios is administered to 318 American adults with at least a high school education. Four questions attempt to measure the respondent's underlying ambiguity aversion. These questions are followed up with a series of items concerning views on vaccines, organic foods, bottled water, and embryonic stem cells, where at least one response to each item is (treated as) inconsistent with the consensus scientific view. 

• These preliminaries are succeeded by vignettes about fluoridated water, GMO foods, and so on, where the information presented is either conflicting or less-than-complete. The respondents rate the scenarios on the basis of risks and benefits, where the most positive response would view the scenario as one holding great benefit at low risk. 

• The idea is that scientists often are willing to assign low risk/high benefit status to various innovations even in the absence of complete information, or in the presence of some conflicting information. Do the respondents behave similarly, and does being more ambiguity averse in general lead to more pessimistic assessments of such innovations? 

• People view ambiguity concerning food to be particularly off-putting. Nonetheless, respondents who prefer bottled water to fluoridated tap water tend in other domains to go with the scientific consensus.

• The bottom line, from the Abstract (p. 47): "Participants who reported greater aversion to ambiguity tended to respond in a way that signals the assignment of high risk, and low benefit, when presented with some unknown or uncertain risk."

Dai and Luca (2018) on Restaurant Hygiene Scores

Weijia (Daisy) Dai and Michael Luca, “Digitizing Disclosure: The Case of Restaurant Hygiene Scores.” Harvard Business School, Working Paper 18-088, 2018 [pdf of 2019 version here].

• San Francisco does not mandate that restaurants post their hygiene scores – which are public information generated by unannounced inspections – but is willing to facilitate the posting of the scores on Yelp. (The scores already are available on the City's Department of Public Health website -- but people don't usually go there to order food online!) The (common) reluctance to require disclosure by the restaurants themselves might draw in part from restaurant industry opposition.

• Two interventions are examined: (1) Yelp posts the hygiene scores on its restaurant webpages; and (2) Yelp makes low scores salient via a “hygiene alert” box (which covers the customer reviews part of the Yelp listing)

• A “Poor” restaurant hygiene score (70 or below) results from multiple high-risk violations

• The hygiene alert box informs the webpage visitor that food safety is the point of the hygiene score, and that the score is based on government inspection; further, the alert reveals that the restaurant received a Poor rating in its most recent review, which puts it in the bottom 5% of hygiene ratings.

• Prior to the Yelp interventions, less hygienic restaurants see slightly lower consumer purchasing intentions than do their more hygienic counterparts. Those purchasing intentions are measured via Yelp page visits, “leads,” and the number of Yelp reviews. A "lead" is tallied through various behaviors by online shoppers, such as calling the restaurant, seeking directions to the restaurant, or checking out the restaurant's own webpage (as opposed to its Yelp listing).

• Leads and Yelp reviews respond in the expected direction to Yelp posting of the hygiene scores; Yelp (star) ratings do not

• “Poor” restaurants see a 12% decline in leads compared to the non-Poor

• The salience intervention enhances the posting effect: take-out orders for Poor restaurants fall 12.8%. That is, how information is disclosed seems to matter, along with the disclosure itself.

• Poor restaurants seem to be (somewhat) motivated to clean up their act after Yelp posts the alert

Bar-Gill, Schkade, and Sunstein (2018) on Mistaken Inferences

Oren Bar-Gill, David Schkade, and Cass R. Sunstein, “Drawing False Inferences from Mandated Disclosures.” Behavioural Public Policy, published online 15 February 2018.

• When the government mandates that sellers (of food products, say) reveal some information to potential purchasers, the message that the consumers take away from the disclosure might not be what the government intended to convey.

• The perceived motivation(s) behind the government's requirement could affect consumer responses. Some mandates are aimed to convey a verified health risk; others might satisfy a somewhat nebulous consumer "right to know," even if no health risk is involved. Interest group pressures or social values of some sort (e.g., supporting domestic employment) are other motivations for disclosure mandates.

• People are more disposed to be influenced by the information relayed in a mandated disclosure if they believe the motive behind the mandate is new research findings (as opposed to political pressures). Problems arise when consumers are misled by mandated information; such misleading is likely when consumers misperceive the motives behind the mandate.

• The Bar-Gill, Schkade, and Sunstein article itself seems motivated by proposed and sometimes enacted government mandates that require firsm that sell foods including GMOs to indicate that fact. The potential issue is that there seems to be no evidence that GMO-containing foods possess higher health risks than do other foods; nonetheless, the mandated information could lead consumers to believe that GMOs are known to be unsafe.

• The authors’ Mturk survey (n=1675) concerns either GMOs or a fictitious synthetic food preservative, Z25.

• The government could: (1) let voluntary disclosure do all the work (that is, take no action); (2) mandate disclosure; or (3) mandate a warning. Government motives are either: (1) right-to-know; (2) political pressure; or (3) new research.

• After learning the government action, some subjects are told the government motive, while others are asked what they think the motive is.

• Subjects rate perceived risk (ex post and, for GMOs, ex ante, too) on a 0 to 100 scale, and indicate their intentions to purchase.

• False inferences may be a problem: posterior risk changes as much from new research as from right-to-know motivations; perhaps consumers do not trust that right-to-know motives are pure.

• A political pressure motive seems to lower the perceived risk of GMOs after disclosure (relative to no action).

• Subjects with strong prior beliefs about GMOs do not appreciably alter their beliefs based on government actions and motives.

• Can counter-advertising fix the false inference problem?

Sunstein (2018) on "Misconceptions About Nudges"

Cass R. Sunstein, “Misconceptions about Nudges.” Journal of Behavioral Economics for Policy 2(1): 61-67, 2018.

• Professor Sunstein examines seven mistaken or misleading – but frequently voiced – complaints about nudges. 

• (1) “Nudges are an insult to human agency” But…compared to what?; how can the provision of information, for example, be such an insult?; try active choosing if defaults make you nervous – but people often prefer a default!

• (2) “Nudges are based on excessive trust in government” But…compared to what?; governments must nudge; nudges, by definition, have low “error” costs; the private sector engages in lots of nefarious nudging; nudges can (and should) be made transparent.

• (3) “Nudges are covert” But…aren’t GPS devices and warning labels transparent?; is this misconception based on concerns about randomized field experiments?; transparency doesn’t seem to undermine the effectiveness of nudges.

• (4) “Nudges are manipulative” But…how is a reminder manipulative?; maybe a graphic warning is a little manipulative, ok?; but in general, manipulation should be made of sterner stuff. 

• (5) “Nudges exploit behavioral biases” But…do GPS and other technologies that improve navigability exploit a bias in a nefarious way?; many nudges counteract behavioral biases, such as inertia; nonetheless, defaults might indeed work because of inertia.

• (6) “Nudges wrongly assume that people are irrational” But…well, let’s say boundedly rational; nudging is inevitable; we needn’t resolve every philosophical issue to make pragmatic progress. 

• (7) “Nudges work only at the margins; they cannot achieve a whole lot” But…millions of additional school meals consumed?; billions in increased savings?; sigh.

Golman, Hagmann, and Loewenstein (2017) on Information Avoidance

Russell Golman, David Hagmann, and George Loewenstein, “Information Avoidance.” Journal of Economic Literature 55(1): 96-135, March 2017 [pdf].

• Why do you not want to see my outline of this article?

• Rational people in an individual decision-making situation – that is, situations where information possession holds no implications for inter-personal strategic concerns – should always be happy to receive accurate information if it is freely available. But people often actively avoid acquiring such information.

• Patients avoid medical information, teachers don’t read their evaluations, and, in down markets, investors don’t check the value of their portfolios. Golman et al. refer to “active information avoidance” as involving the avoidance of information even if the info is free and the person knows it is available.

• A studied ignorance might lend us moral wiggle room: for instance, if we “don’t know” the conditions on factory farms, we can live with our dining choices. (OK, that example is mine, not in the article.) We might want to maintain plausible deniability as a way to avoid unwelcome responsibilities.

• Even if you learn information, you might (strangely?) choose to ignore it.

• We might have protected beliefs, so we actively avoid information that might challenge those beliefs. We could go so far as to seek to silence dissenters from our views.

• Surely some information avoidance is good: if you will eat dessert anyway, perhaps it is best not to know its caloric load. Perhaps you can live a more pleasant life by not knowing of some looming medical problem, or about your partner’s infidelity.

• When new information becomes universally available, confirmation biases can lead to further polarization of opinions. New (controverting) information might even remind you of (and sustain) the reasons that you held your initial beliefs in the first place.

• Intelligence does not protect people against biased beliefs; rather, it might make it easier to justify one’s preferred beliefs.

• People can self-sabotage – undertake actions not fitted to their abilities, for instance – to avoid learning the quality of their talents.

• People might avoid information because they prefer that compound lotteries (that resolve over time) might best be enjoyed by only learning the final, overall outcome. (Do I want to know the score of the White Sox game in the third inning? If the Sox are behind, I will be sad, and if they are ahead, then the only new “news” I can get later occurs if they lose, and the loss will then be extra painful.)

• Sometimes people are just plain curious, they seek out information that is of no instrumental value to them.

• Humans often are mistaken in thinking that the receipt of bad news will unleash anxiety – and therefore they might be mistaken in trying to shield themselves from bad news. Sometimes the elimination of uncertainty can begin the process of adaptation to the new normal.

• Bad news attracts our attention, and so we might try to avoid potentially bad news as a method to prevent this “distraction” from occurring.

• Regret aversion might lead people to avoid information on how things would have turned out if they had taken a different path.

• People tend to be overly optimistic, and such optimism appears to hold benefits. Information might be avoided or ignored for the sake of sustaining optimism – within individuals as well as groups. 

• One reason people might try to maintain existing beliefs is that they are serviceable, even if flawed – you can only rebuild a leaky boat at sea piecemeal, you can’t tear it down and start fresh. 

• If you are committed to a belief, you will not want to acquire information challenging it. The belief might even be part of your self-image, your identity.  

• Information avoidance might help with self-control issues, such as side-stepping temptations or maintaining motivation. 

• Spoiler alert! People might avoid information to maintain pleasant suspense.

Chen and Schonger (2016) on Ambiguity Aversion

Daniel L. Chen and Martin Schonger, “Is Ambiguity Aversion a Preference?” TSE Working Paper No. 16-703, December 2016.

• Ambiguity aversion has been implicated in many real world phenomena, including the equity premium puzzle: the stock market operates under Knightian uncertainty (ambiguity), not risk, and so ambiguity-averse investors need compensation to buy stocks. Overly punitive plea bargains are acceptable to ambiguity-averse defendants…

• But perhaps the sort of behavior exhibited by the Ellsberg paradox is not really indicative of underlying preferences – perhaps it is mistake, the use of a decision heuristic in inappropriate circumstances. Perhaps people are not actually ambiguity averse.

• Maybe people (rightly) shy away from unfamiliar offers, especially when the person making the offer possesses superior information – and this is the situation when experimental participants are presented with the Ellsberg game. Subjects suspect that the experimenter actually knows how many red and blue balls are in the urn.

• Chen and Schonger set up an Ellsberg experiment where the experimenter is not the party responsible for the contents of the ambiguous urn; rather, the choices of other subjects determine the contents. 

• Every subject decides which of two symbols to send to the others. In experiment 1, the symbol that gets the most “votes” is the symbol that will appear in the “ambiguous” urn for other participants (which need not be the same for all participants, incidentally). 

• All experiments involve a toss of a fair coin, where the subjects can choose to bet on either heads or tails, along with the two ambiguous options. A correct outcome yields 4€. The choice of the bet is determined by taking the maximum of the valuations provided by each participant for each of the four bets. 

• People turn out to prefer the ambiguous bets! “For each of the 16 sessions, individuals were more likely to bet on a symbol with subjective uncertainty, and in all but 2 of the 16 sessions, both bets with subjective uncertainty were more popular than the bets with objective uncertainty [p. 15].” This remains true in design 2, where there is a full-on urn and not just a specific symbol chosen by others.

Golman, Loewenstein, Moene, and Zarri (2016) on Belief Consonance

Russell Golman, George Loewenstein, Karl Ove Moene, and Luca Zarri, “The Preference for Belief Consonance.” Journal of Economic Perspectives 30(3): 165-188, Summer 2016 [pdf].

• People like to have beliefs that accord with the beliefs of others. Sharing beliefs enhances our connection to our group. 

• Much of world conflict is about beliefs – often about rather subtle differences in beliefs. Recall that people protect beliefs in which they have invested heavily. 

• Conflict over small differences in beliefs might arise because our beliefs are most threatened by those who are otherwise similar to us. 

• People do not like to have their beliefs challenged, so media have incentives not to challenge beliefs.

• Beliefs might come first, and only then do we develop the “rational” reasons that we hold them; see Jonathan Haidt, The Righteous Mind: Why Good People Are Divided by Politics and Religion, Pantheon, 2012. 

• Belief consonance can be self-reinforcing: when someone stubbornly refuses to agree with me, I can attribute her stubbornness to her own interest in protecting her initial beliefs – and therefore I do not have to reconsider my own beliefs. 

• In the interest of possessing consonant beliefs, all people might believe X, but believe that everyone else believes “not X”: “pluralistic ignorance”. See Timur Kuran, Private Truths, Public Lies: The Social Consequences of Preference Falsification, Harvard, 1998. 

• In trust and dictator games, people are more generous when paired with members of their own political party.

• Two (complementary?) approaches to the enticements  of belief consonance: (1) desire to match beliefs with a group that you are in, or want to join; and (2) desire to maintain desirable beliefs about yourself. 

• On the whole, belief consonance probably is detrimental to society.

Bénabou and Tirole (2016) on Motivated Beliefs

Roland Bénabou and Jean Tirole, “Mindful Economics: The Production, Consumption, and Value of Beliefs.” Journal of Economic Perspectives 30(3): 141-164, Summer 2016.

• People value their beliefs, both directly and for instrumental reasons; therefore, beliefs can withstand counter-evidence, and people may prefer to steer clear of evidence.

• Positive beliefs can be nurtured by responding asymmetrically to good and bad news.

• Shared beliefs also can be resistant to evidence, possibly with dreadful consequences.

• Bénabou et Tirole treat beliefs as if they were standard economic goods or assets, which people consume, invest in, produce, and so on.

• Optimism can serve as a sort of commitment device to stick with long-term projects and to avoid temptation. False beliefs can also influence other people in a way that might serve your interests. Religious beliefs might contribute both to self-discipline and to improve your view of yourself and your future. 

• Methods to protect valued beliefs include “strategic ignorance, reality denial, and self-signaling [p. 144].” More educated people are not better shielded from employing these methods. 

• Confirmation bias allows people to believe that their previous views have been corroborated. They anticipate this future corroboration, and this allows them to take on risky projects. 

• Emotional responses to a challenge to your beliefs are a signal that your beliefs are something you are trying to protect. Standard rationality suggests that challenges should be welcomed -- shades of  J. S. Mill.

• There’s a trade-off between accepting bad news and optimizing decisions given reality versus living in blissful ignorance for awhile before the piper must be paid. 

• Because it is easier to recall our actions than it is to recall our motives, we might try to self-signal, by choosing actions that will allow us to later have a good (but distorted) view of ourselves. 

• In laboratory experiments, subjects have a harder time remembering (accurately) their past failures.

• Self-deception rises with the size of the sunk costs. People persuade themselves of the future value of these investments. 

• People are quite good at believing they had sound reasons for their bad behaviors. 

• Blind persistence in social projects in the face of bad news might make the situation more tolerable. But if persistence can lead to bigger losses, watch out for “Mutually Assured Delusion.” Unfortunately, it is in this situation that denial becomes contagious. 

• Organizational failures might be a result of bad beliefs as much as bad incentives. 

• “Just-world” beliefs and the extent of the welfare state are negatively correlated. 

• Constitutional guarantees of free speech and a free press might serve as a commitment device to allow dissent even in the future bad states – and reduce the protection of current beliefs, because of the increased likelihood that they will be challenged, anyway.

Popkin and Hawkes (2016) on Sweetening of Diets

Barry M. Popkin and Corinna Hawkes, “Sweetening of the Global Diet, Particularly Beverages: Patterns, Trends, and Policy Responses.” The Lancet Diabetes & Endocrinology 4(2): 174–186, February 2016.

• Added caloric sweeteners in beverages seem to involve special health risks, such as diabetes. (The jury is still out on low-calorie sweeteners and 100% fruit juices.) Chile, Mexico, and the US lead the league table.

• Most food and most beverage calories consumed in the US come from items with added sweeteners. In recent years, the US has seen some movement away from beverages with added caloric sweeteners. 
 
• As incomes rise, much of the rest of the world is adopting US-style added-caloric-sweetener habits. 

• Early studies of sweet taxes suggest that they do dissuade consumption, and possibly even lead to changes in the composition of food items. 

• Sustained public information campaigns employing multiple channels of dissemination can dissuade unhealthy behaviors. The precise right approach (or approaches) to label information and warnings remains unresolved.

• Many jurisdictions have imposed restrictions on sugar marketing and in-school availability, as well as promoting public awareness and requiring nutritional information and warnings on packaging.

Downs and Loewenstein (2011) on Obesity

Julie S. Downs and George Loewenstein, “Behavioral Economics and Obesity.” In The Oxford Handbook of the Social Science of Obesity, John Cawley, editor, 2011.

• The rise in obesity is hard to explain via rational choice: think of the huge expenditures on failed diets and exercise programs, for instance. “Informational” interventions, such as better calorie information, might be fairly limited in terms of combatting obesity, then. 

• One cannot take a zero tolerance approach towards food; also, people have a habit of understating their consumption, or simply forgetting about snacks. 

• It doesn’t seem as if an increase in discount rates spurred the obesity rise, because discount rates have not risen, even though obesity is concentrated among those with higher discount rates. And present bias seems more applicable to food than it does to other types of decisions. 

• The future health costs of a bad diet are intangible, and for a single meal, negligible. Any one dietary indiscretion is (metaphorically) peanuts, but routinely neglecting these indiscretions – the “peanuts effect” – can lead to obesity and serious harm. 

• Field studies don’t show much improvement in calorie reduction from posting calorie counts. A decrease in consumption in one meal can be offset by later meals. 

• The rise in obesity tracks the rise in restaurant serving sizes fairly closely.

Schall, Doll, and Mohnen (2017) on Useless Warnings

Dominik L. Schall, Dominik Doll, and Alwine Mohnen, “Caution! Warnings as a Useless Countermeasure to Reduce Overconfidence? An Experimental Evaluation in Light of Enhanced and Dynamic Warning Designs.” Journal of Behavioral Decision Making 30(2): 347-358, April 2017.

• Two experiments look at over-precision in guessing the answers to factual questions. People tend to choose 90% confidence intervals that are much, much too narrow: people are overly optimistic about their precision. 

• Warning people to be wary of over-precision in itself (even when the warning takes a fairly fancy form) seems useless, but… 

• …a dynamic (pop-up) warning significantly reduces over-precision. Effective warning content and the dynamic element seem to both be required. 

• Effective warning content is rather involved: it consists of a highlighted signal word ("Caution"); an explanation of the hazard (overconfidence); the consequence of the hazard (the truth lying outside of the chosen confidence interval excessively); and instructions (widen your intervals) about how to overcome the hazard.

Arad and Rubinstein (2015) on the People’s Perspective on Nudges

Ayala Arad and Ariel Rubinstein, “The People’s Perspective on Libertarian-Paternalistic Policies,” July 2015. This outline draws on the July, 2015 version of the paper, but a later version (October, 2017) of the paper is available here, as a pdf.

• Two online studies (each n>1000) are conducted with university students in Israel, Germany, and the US.

• In Study 1, subjects either are presented with an opt-in employee savings plan, or a government-mandated opt-out version with an 8% savings default. 

• A large percentage (28-53% across the three countries) of subjects have a negative view of the opt-out version (especially if they are aware of the opt-in alternative), even if they intend to save 8% monthly. Indeed, fewer people indicate that they will take up the 8% savings rate when it is presented as the default than would take it up on an opt-in basis. 

• Study 2 concerns attempts to decrease the consumption of fatty foods. Some measures (taxes, one-day-per-week ban) are hard paternalism, one is a System 1 nudge (shifting the placement of food items on menus), and two are System 2 nudges involving information provision (media campaign, smartphone app).

• The effectiveness of each of the measures in reducing consumption of fatty foods is presented to the subjects, with seven variations. 

• Up to 25% of subjects think that government shouldn’t be in the business of trying to change diets. 

• Most subjects (among those who do not object to the government being involved) seem to prefer whatever measure is most effective. 

• But 19 to 54% of subjects prefer the info provision, even when it is less effective than the System 1 nudge. 

• The “hard” interventions attract little support.

• The October 2017 version of the paper includes these two sentences in the abstract: "The opposition to soft interventions appears to be driven by concerns about manipulation and the fear of a 'slippery slope' to non-consensual interventions. Opposition to soft interventions is reduced when they are carried out by employers rather than the government."