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December 2009 posts

Nudge meets long-term health care in reform bills

Mark D. White

Apparently, according to a recent AP article by Carla K. Johnson, present in both the House and Senate health care reform bills is a program in which

workers at participating companies would be automatically enrolled - critics say "tricked into" enrolling - unless they opted out. People would see a deduction for the program from their paychecks - estimates range from $160 to $240 a month - unless they signed a form or clicked a box saying they wanted to keep the money.

This idea can be traced most directly to Nudge: Improving Decisions About Health, Wealth, and Happiness, the bestselling book by Cass Sunstein and Richard Thaler, in which the authors recommend that governments and businesses rearrange options and design default choices to (in Thaler's words from the AP article) "try to help people make decisions without telling them what they have to do."

However, as I explain in my chapter in the forthcoming book, Essays on Philosophy, Politics & Economics: Integration & Common Research Projects, edited by Christi Favor, Gerald Gaus, and Julian Lamont, when governments or businesses act to "nudge" people to make choices, these nudges unavoidably help people make decisions the policymakers want them to make, not the decisions the people want to make themselves.

That is exactly what this long-term care proposal does--by automically enrolling people in the plan, the policymakers are assuming people want to be in the plan (or should want to be in the plan, according to the policymakers), and they use people's cognitive imperfections to put them in the plan. They claim that people are too shortsighted, lazy, or prone to procrastition to sign up for the plan themselves, so they take advantage of this behavioral quirk, counting on people to be too shortsighted, lazy, or prone to procrastination to opt out of the plan. And if this component of the reform bills passes, you can bet that the policymakers will claim success by pointing the number of people who did not opt out. But this does not prove that this reflects their true choice, preference, or well-being, but just that people acted as the policymakers predicted to the plan they designed, which reflects their preferences, not (necessarily) the employees'.

(For more on my opinions regarding Nudge, besides the book chapter linked above, see this blog exchange in which I posted an unpublished op-ed.)


Ethics and Economics: New Perspectives is available

Mark D. White

In other book news, Ethics and Economics: New Perspectives, edited by Irene and me (and including chapters by Jonathan, Irene, and me, as well as many other notable scholars), has been published by Routledge. Amazon (US) has the release date as January (link in the book list at the right), but Amazon UK, and other booksellers on that side of the pond, have it in stock currently.

This book is the joint product of special issues of the Review of Political Economy and the Review of Social Economy, both on ethics and economics, that Irene and I edited (respectively). The papers were reorganized and a new introduction written, resulting in a new edition that we hope is (even) greater than the sum of its parts.


Call for papers: Northwestern University Society for Ethical Theory and Political Philosophy

Mark D. White

The following call for papers is courtesy of PEA Soup - note they specifically ask for economics-and-philosophy submissions (in honor of Elizabeth Anderson's work in the area).

CFP: Northwestern University Society for Ethical Theory and Political Philosophy

CALL FOR PAPERS

NORTHWESTERN UNIVERSITY
SOCIETY FOR ETHICAL THEORY AND POLITICAL PHILOSOPHY FOURTH ANNUAL CONFERENCE
 
MAY 20-22, 2010
KEYNOTE SPEAKERS:
  • Elizabeth Anderson, University of Michigan
  • Christine Korsgaard, Harvard University

SUBMISSION GUIDELINES: The deadline is February 15, 2010.  We welcome submissions from faculty and graduate students, as sessions will be reserved for student presentations.  Essays should be roughly 4000 words, with an abstract of at most 150 words.  Essays in all areas of ethical theory and political philosophy will be considered, though some priority will be given to those that take up themes from the works of Elizabeth Anderson and Christine Korsgaard, such as value theory, philosophy and economics, democratic theory, practical reason, constructivism, personal identity, and the moral status of animals.  Essays and abstracts should be prepared for blind review in word, rtf, or pdf format.  Students should submit by e-mail to [email protected]; faculty should submit by e-mail to [email protected].  Notices of acceptance will be sent by March 31, 2010.  For more information, please contact Jon Garthoff at the e-mail address above or visit:

http://www.philosophy.northwestern.edu/conferences/moralpolitical/

If women had run the financial world – wouldn’t we have faced this crisis? By Irene van Staveren.

In popular discussions on the moral dimensions of the financial crisis, there is sometimes reference to a gender dimension. A striking fact, for example, is that those responsible for the bankruptcy of the Iceland financial sector are all males, whereas those appointed to clean up the mess are women. Others refer to women’s more caring nature than men, as less predatory and hence less likely to get themselves into the highly competitive quarters of banking and financial trading. But what do we know about women and morality in economic behaviour?

In order to address just one dimension of this, I am in the process of finalizing public good experiments with male and female students in computer labs in The Netherlands. We try to find out not whether women behave at higher moral standards than men, but whether men and women believe that women behave more cooperatively than men. The literature on gender differences in experimental economics has already widely confirmed that women do behave more cooperatively than men and that women are more risk averse than men. These two results would suggest that more women in the financial sector may have led to less risky security packaging and less risky sales of mortgages and more win-win outcomes instead of predatory outcomes led by self-interested bankers and financial traders. Our question is whether the stronger cooperative attitude of women is recognized by both sexes and also leads to more cooperative outcomes of behaviour. Our preliminary findings, which are just based on one set of experiments and are currently being followed up by two more sets, are the following. First, we find that female subjects still behave more cooperatively than men, even when corrected for differences in risk aversion. Hence, their higher cooperativeness can not entirely be attributed to their lower risk taking than men. For the financial sector, this implies that when female bankers and traders just take as many risks as male traders they still go for more win-win results as compared to their male colleagues. Second, we find that women who are given the information that the other players are also female cooperate more than women and men who do not receive information about the sex of their partners. At the same time, we found that male players do not cooperate more when being informed that their partners are female. This may imply that when a sufficiently large number of women (at least a majority) dominates the financial world, behaviour may becomes less predatory and more cooperative, next to, on average, less risky. In a recent overview of gender differences in experimental economics, Rachel Croson and Uri Gneezy in the Journal of Economic Literature argue that women’s decisions are more context-specific than men’s. For example, they conclude from studies on the ultimatum game and the prisoner’s dilemma game that women’s decisions vary more with the gender of their partner than men’s decisions, indicating that also gender context is more influential for women as compared to men. But they offer no explanation why this would be the case.

Our explanation of the gender differences that we found in our public goods experiment is based on the literature in sociology, gender studies, and social psychology on gender beliefs. Gender beliefs can be defined as different interpretations and expectations about the personality traits (how women and men are) and behaviour (how women and men behave) of men and women. Moreover, gender beliefs are not only descriptive, but also prescriptive, stating how women and men should be and should behave. The differences in gender beliefs about men and women can be summarized around achievement-oriented traits for men – agentic traits – and service-oriented traits for women – communal traits. Both descriptive and prescriptive dimensions of gender beliefs contribute to individual self-definitions as masculine or feminine, and operate at the interpersonal level. Gender beliefs contribute to individuals’ definitions of their self-schemas, social identities, and self-evaluations and they operate in the interpersonal domain, defining the behaviours that are appropriate to various social contexts. The empirical literature on gender beliefs has widely demonstrated that both men and women hold gender beliefs. In particular, they both believe that men are more agentic and should behave more agentic than women, and that women are more communal and should behave more communal than men. Men tend to have st6ronger gender beliefs than women. Social dominance theory and expectation states theory state that because men tend to have on average a higher socio-economic status than women and they want to preserve that advantaged position, it is in their interest to hold on more strongly to traditional stereotypes about gender roles and traits compared to women. Status beliefs may even interact with gender beliefs so that even when individuals do not endorse dominant status beliefs, their recognition that these beliefs are widely shared will lead them to assume that others will treat them according to those beliefs, which will in turn affect their own behaviour in a stereotype way.

Gender beliefs are rather essentialist of character, in the sense that they change only very slowly and are often reproduced in new contexts, for example becoming attached to newly emerging jobs in the labour market. This resilience of gender beliefs may signal an evolutionary origin. The dominant evolutionary explanation is through sex selection theory, which holds that men are by nature more competitive because, having many sperm, they want to maximize their number of offspring, whereas women, having only a few eggs, are more cooperative so they seek to maximize the quality of their offspring. This would explain why males exhibit more dominance behaviour than females, both among animals and among humans, and they compete with each other for access to females. Moral gender differences, hence, seem to have an evolutionary origin. Recently, however, sex selection theory has received serious criticisms, within biology, psychology and the social sciences. Biologist Joan Roughgarden has shown internal inconsistencies in Darwin’s sexual selection theory and the adaptation of this theory in evolutionary psychology. She proposes instead social selection theory based on the need for both males and females to cooperate in order to ensure that offspring will be raised. Roughgarden presents a social selection theory through a cooperative bargaining game framework, showing that animals cooperate to rear (and not only produce) the largest number of offspring possible, because offspring are investments held in common between males and females. So, it is also in the interest of males to cooperate, even if they do not always do so for status reasons. A third critique on a sexual selection explanation of gender beliefs is provided by Shelly Taylor who, like Roughgarden, argues that sex differences originate from the need for cooperation, while recognizing that among primates this seems to be a stronger characteristic among females than males. She explains this difference, however, not through biology but through socialization of women into closer friendships and networks around food provisioning, childcare and defence against roaming young males, and the socialization of men into hierarchical groups which function best for tasks such as defence, attack and hunting. Therefore, Taylor argues, women tend to prefer to befriend other women and female friends have closer ties than male friends. Men’s groups therefore are more often threatened by power plays around dominance and control, Taylor argues, and one of the consequences of these power plays is the exclusion of young aggressive males from groups, who then start roaming around. This explanation of the origins of gender beliefs around agentic and communal traits points towards a social constructivist perspective, which holds that gender beliefs are produced in social and historical contexts rather than inherent to individuals’ sex.

The experiments that I and my co-authors are running do not allow us to distinguish between nature and nurture as explanations for gender beliefs. But the literature and our findings suggest that social context rather than biology seems to be a more convincing explanation. As indicated by Ridgeway, the interaction between status beliefs and gender beliefs through expectation status theory is especially likely in cooperative, goals-oriented contexts in which group status beliefs become salient. A public goods game centres around cooperation, a typical feminine trait according to general gender beliefs. Hence, the task in the experiment was not gender-neutral but positively linked to a feminine gender belief, which allowed for the expression of behaviour in relation to the intrapersonal level of gender beliefs: one’s own behaviour independently of others. The other context provided in the experiment was information about the sex of one’s partners, which allowed for the expression of behaviour in relation to the interpersonal level of gender beliefs: one’s behaviour in relation to one’s expectation of the behaviour of others. So, in our experiment we had a cooperative context (task), which is in line with a feminine gender belief, and a gender context provided as treatment variable (information that the other players are female or male). This experimental setting allows us to explain the results in terms of interpersonal gender beliefs and intrapersonal gender beliefs. On the first finding, that the female subjects behaved more cooperatively than men when corrected for differences in risk aversion, this can be explained by intra-personal gender beliefs. Female players believe that they are more cooperative than men, and hence they act more cooperatively than male players who believe that they are less cooperative than women. On the second finding, that women who are given the information that the other players are also female cooperate more than women and men who do not receive information about the sex of their partners, this can be explained by inter-personal gender beliefs. Female players will cooperate more when they are given the information that their partners are also female, because they are socialised into cooperation with other women. At the same time, we found that male players do not cooperate more when being informed that their partners are female. This can be explained on the one hand through socialisation: men have less personal experience with women’s stronger cooperativeness, and on the other hand through the interaction of gender beliefs and status beliefs, which lead men to reassert their higher status by not adopting stereotype feminine behaviour in interactions with women.

  In conclusion, our experiments on gender beliefs in a public good game do suggest that with a significant majority of women in the financial sector, some of the damaging behaviour that helps to explain the current financial crisis would likely to have occurred less than with the current male dominance in the financial sector. But this finding seems to be more a result of a social origin of gender differences in morality than of biological differences in the morality of men and women. The good news about this is that men can learn to behave more cooperatively, to take less excessive risks, and to attach less value to a competitively-defined type of masculinity. This may save us some financial crisis in future, but may also help to achieve more win-win outcomes in other sectors of our economy and society…