Hallgeir Sjåstad and Roy F. Baumeister, “The Future and the Will: Planning Requires Self-control, and Ego Depletion Leads to Planning Aversion.”
Journal of Experimental Social Psychology 76: 127-141, 2018.
• The authors hypothesize that the willingness to engage in the task of making plans for the future requires self-control; therefore, people who generally have low self-control ("trait" self-control) are less likely to plan, and people who are "ego depleted," who are fatigued ("state" self-control), also will be less likely to plan. (As with many notions in the behavioral sciences, ego depletion is not without its share of controversy.)
• This article, therefore, adopts the view that willpower draws on a depletable resource, and that when people have depleted that resource through cognitively taxing tasks, they will, in the short term, display reduced willpower (be ego-depleted). In other words, people with higher trait and state self-control will plan more.
• The authors conduct four studies. Study 1 looks at the correlation between trait self-control and planning; Study 2 and Study 3 ask if depletion (low state self-control) reduces planning; and, Study 4 tries to identify the channel through which ego depletion might undermine planning.
• Study 1 (N=201, Amazon Mechanical Turk, 30 cent payment per participant!) asks individuals questions about the extent of their self-control, their engagement in planning in the past, and their intended planning in the future. Sure enough, high self-control is associated with high past and future planning. Further, there is some evidence that women plan more than men.
• Study 2 is a lab experiment (n=105), where the control (non-depleted) group starts with a relatively easy, 12-minute writing task (avoid the letters x and z) and the depleted group has a 24-minute, difficult task (avoid the letters A and N); this depletion method is used to overcome problems identified in earlier experiments where shorter or less onerous tasks do not do much to distinguish the two groups. Those with the hard writing task report being both more exhausted and less interested (than those with the easy task) in making plans for the next four weeks. The depleted folks are less happy, too, but it doesn’t seem to be mood differences that dissuade the planning.
• Study 3 takes advantage of the possibility that shopping at Ikea tends to makes couples miserable! The participants (N=112) are Ikea shoppers in Norway, with half surveyed pre-shopping, and half surveyed post-shopping. Those who have completed their shopping report making many more recent decisions than the pre-shoppers, as well as being more exhausted. Further, post-shoppers are less willing to plan, though they do not express lower ambitions for the future. (They still want the benefits of planning, it seems, but are less willing to put in the effort.)
• Study 4 (N=128) picks up on the mechanism connecting ego depletion with planning aversion. Once again, laboratory participants are separated into depletion groups through differentially trying writing tasks. But in this experiment, they are given the opportunity to actually engage in planning, instead of just being asked about their intentions to plan in the future.
• The participants are asked how hard they like to work, and how hard they think planning would be. Again, the depleted folks avoid planning; further, they express a lessened desire to exert effort to engage in planning, and this altered desire (greater effort avoidance) mediates much of the relationship between depletion and planning: effort avoidance seems to be a major channel connecting depletion to reduced planning.
• "A vicious circle might develop in which failure to plan creates stresses and difficulties, which impose a further drain on limited self-regulatory resources, which in turn makes people all the more reluctant to plan [p. 139]."
Barbara Vis and Dieuwertje Kuijpers, “Prospect Theory and Foreign Policy
Decision-Making: Underexposed Issues, Advancements, and Ways
Forward.” Contemporary Security Policy 39(4): 575-589, 2018.
• Risk, in both prospect theory and in useful foreign policy applications, involves outcome uncertainty—so risk considerations are important in the gains domain as well as the loss domain.
• Probability weighting often is ignored in applications of prospect theory, but it can override the usual “risk averse for gains, risk loving for losses” result.
• In particular, low probability gains might see risk loving behavior, and low probability losses might be met with risk averse behavior.
• And in foreign policy applications, low probabilities for unusual events are common.
• Multiple dimensions are relevant in foreign policy decisions, so there can be multiple reference points, and outcomes might involve gains with respect to some reference points but losses with respect to other reference points.
• When (to whom and for what decisions) might prospect theory apply? What decisions are better described by expected utility theory?
• Oddly, ambiguity goes unmentioned in this article.
Thomas Rouyard, Arthur Attema, Richard Baskerville, José Leal, Alastair
Gray, “Risk Attitudes of People with ‘Manageable’ Chronic Disease: An
Analysis Under Prospect Theory.” Social Science & Medicine 214: 144-153, 2018.
• Many patients are non-compliant with recommended medical treatments, at a cost to their health. Is it possible that their choices reflect risk-loving behavior in the loss domain?
• Two outcomes are examined in this study, longevity and quality of life. The usable sample size is n=110; 52 members of this sample have Type 2 diabetes mellitus.
• The empirical approach is aimed at identifying the prospect theory “value function” (in both the loss and gain domains) and the probability weighting (of an objective probability of .5). The estimation of the value function includes an estimation of the extent of loss aversion.
• Many questions are of the nature: Your status quo is to live 20 more years with an excellent quality of life. You must choose between option A, which would give you (with certainty) an additional 3 years of life with a pretty good quality of life, or option B, which offers a 50% chance of gaining 6 years of life, 3 years of high quality and 3 years of low quality, and a 50% chance of remaining with the status quo.
• For loss aversion, the relevant question is of the nature: The status quo is to live 20 more years with an excellent quality of life. A risky prospect available to you involves a 50% probability of gaining an additional 10 years of life with a pretty good quality of life, and a 50% probability of losing L years of life. What is the L that makes you indifferent between the risky prospect and the status quo?
• The authors find that most folks are risk averse in both the loss and gains domains. Older people tend to be more risk averse. Loss aversion is significant (median λ=1.19).
• It probably isn’t risk seeking that leads to medical noncompliance.
Richard H. Thaler, “From Cashews to Nudges: The Evolution of Behavioral
Economics.” American Economic Review 108(6): 1265–1287, June 2018.
• "In the beginning there were stories [p. 1265]." Those stories were of anomalies with respect to the standard economic model of rational choice. For instance, the "cashews" in the title refer to an incident where guests thanked then-graduate-student Richard Thaler for rendering inaccessible the pre-dinner snacks: the guests seemed to believe that the loss of the option to eat cashews made them better off.
• A key development in behavioral science was the work of Kahneman and Tversky, which indicated that departures from fully rational behavior are systematic. This non-randomness suggests that modifications of the rational model could do a better job at explaining behavior. Further, Kahneman and Tversky's prospect theory offers a simple explanation for some of these systematic departures.
• Standard economic theory often is presented as a descriptive theory of how people choose as well as a normative theory of how people should choose. It is better at the latter (normative) task than at the former (descriptive) task.
• Thaler and Shefrin propose a planner/doer model of intrapersonal (or intra-firm) conflict; the planner component of a decision maker can alter the doer's incentives by employing commitment strategies or deploying the (payoff-compromising) induction of guilt.
• Economics typically assumes that dollars are fungible, that the best way to spend them is independent of where the dollars originated. But people assign income to different "mental accounts" according to its origin. Some income might be allocated to a mental checking account, so it is psychologically available for spending, whereas other funds might be assigned to mental savings, and therefore, are psychologically unavailable for quotidian consumer purchases. Dollars, in practice, are not fungible -- as anyone who has ever "played with house money" knows.
• Is it fair to raise prices just because demand increases, as when a snowstorm makes snow shovels highly sought after? Many people (but not many economists!) think that such price increases are unfair, and might punish businesses that engage in such behavior.
• The endowment effect is when mere “ownership” of an object (like a coffee mug) seems to raise the valuation that the “owner” places on the object. Endowment effects reduce the willingness-to-trade of owned objects, and some of Professor Thaler's work shows that endowment effects are common even when decision makers operate in markets, and when they have opportunities to learn over time.
• Even in financial markets, with their ongoing nature, high stakes, and sophisticated participants, security prices are not always right: for instance, parts of a firm can bizarrely be deemed more valuable in financial markets than is the entire firm (even though the complementary parts are not themselves of negative value).
• Draft picks in the National Football League are mispriced: the best value for teams seems to lie in draft picks in the early part of the second round. The people making the draft picks might be excessively optimistic about their ability to identify winners when making first round picks.
• In the standard rational choice model, nudges (aspects of the choice architecture that don't affect standard payoffs or incentives) would not have much influence on choices -- but they often do.
• Some firms try to use nudges to take advantage of those systematic departures from rational behavior on the part of their consumers; Professor Thaler calls this nefarious sort of choice architecture "sludge."
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.
David G. Blanchflower and Andrew Oswald, “Unhappiness and Pain in
Modern America: A Review Essay, and Further Evidence, on Carol
Graham’s Happiness for All?” NBER Working Paper No. 24087, November
2017.
• The authors summarize and respond to a 2017 book by Carol Graham, Happiness for All?
• Graham’s work centers on subjective well-being (SWB) measures, especially the Cantril ladder question, which, according to the World Happiness Report, "asks respondents to think of a ladder, with the best possible life for them being a 10, and the worst possible life being a 0. They are then asked to rate their own current lives on that 0 to 10 scale."
• Some of Graham’s claims about happiness in the US: (1) SWB is getting more unequal, and income inequality lowers SWB; (2) people are increasingly unhopeful, especially white Americans and poorer Americans; and, (3) Americans, particularly poorer ones, suffer from high levels of pain and stress.
• The age-adjusted suicide rate for black American men is one-third the rate for white American men.
• Blanchflower and Oswald point out that almost surely, SWB is not nearly as unequally distributed as is income.
• It does appear that Americans are becoming less happy, and that reported pain is very high (34% in past 4 weeks) in the US; the international average is 20%.
• Middle-age Americans are particularly troubled. SWB tends to fall almost monotonically from the late teens until somewhere around age 40-50, and then tends to increase (slowly) for some 40 years.
• Education is associated with higher SWB.
• There has been significant convergence in SWB among racial groups in the US in the past 45 years.
• Though there is some evidence that women in the US have become less happy in the last 30 years relative to men, reported SWB is quite similar across genders.
Barry Schwartz and Nathan N. Cheek, “Choice, Freedom, and Well-Being:
Considerations for Public Policy.” Behavioural Public Policy 1(1): 106-121, 2017.
• A (misleading?) syllogism: more freedom means higher well-being; more choice means more freedom; therefore…
• Nudges constrict freedom of choice
• Should we maintain free choice (possibly even force people to make choices, as opposed to setting a default, for instance), or promote better choices?
• The availability of options is increasing in much of the world. But more options can: (1) paralyze; (2) spur regret and dissatisfaction; and (3) undermine the (objective) quality of decisions.
• Choices can (1) satisfy our preferences; (2) serve as utilitarian means to our ends; and, (3) express something about us. Pleasure (1) and utility (2) both can be undermined by large choice sets.
• Expanded choice sets provide new options for (3) self-definition. This seems desirable. But they also can increase the expressive stakes for trivial decisions, and those increased stakes need not be beneficial. [Who wants to be judged on what brand of soda they buy?]
• Further, large choice sets might divert increased attention to decisions about material goods, to the detriment of social connections.
• [Warning!: broad-brush cultural commentary to follow:] Western cultures tend to understand people as individuals, and believe that good societies give wide scope to individualism. Large choice sets, then, are requisite for self-realization.
More collectivist societies (including working-class America?) might focus on the interdependencies among people, so that a person’s relations are more important than individuality. People in such societies might prefer reduced choice sets.
• Older people seem more comfortable with fewer choices, while younger people prefer large choice sets in domains in which they are confident that they can make competent choices.
• A perceived lack of competence more generally detracts from the desirability of large choice sets – and the competence shortfall might concern knowledge of one's own preferences.
• Large choice sets can involve a cognitive burden, and might be worse for people already facing resource scarcity.
• Perhaps the right policy intervention is to encourage people to think through when they are most interested in making careful choices.
