Mark D. White

Last month, The Economist published an article (based on research published in Journal of Marketing) on consumers' irrationality when compared discounts and added content:

Consumers often struggle to realise, for example, that a 50% increase in quantity is the same as a 33% discount in price. They overwhelmingly assume the former is better value. In an experiment, the researchers sold 73% more hand lotion when it was offered in a bonus pack than when it carried an equivalent discount (even after all other effects, such as a desire to stockpile, were controlled for).

In a recent issue, the magazine printed a letter by Rory Sutherland of Ogilvy & Mather UK, succinctly and humorously pointing out the problem with attributing irrationality to such consumers:

You mentioned research which revealed that shoppers often prefer “50% extra free” to a notionally more generous 30% reduction in price, and you cited this as evidence of irrationality or poor mathematical ability on the part of consumers. I think you may be wrong and consumers may be right.

There is, as the advertising sage Jeremy Bullmore observed, a significant difference between a bonus and a bribe. A price tells you much more about a product than merely what it costs. A price cut may be sensibly perceived as a mark of mild desperation on the part of the seller and it is not unreasonable to infer from a price cut that a product is an inferior good. Charging the full price but adding something extra does not convey the same desperation. In any case this whole debate is silly.

If people value 50% extra free more highly than 33% off, then that is an end of the matter. Since all value is subjective, what you are doing by offering the former is simply creating more perceived value at a lower cost. Whether or not the resulting behaviour conforms to some autistic neoclassical idea of rationality is irrelevant.

If the sole purpose of life was to be rational, we would have banned golf years ago.

Mr. Sutherland said it better than I ever could--and I've tried, in many places and many contexts, including previous posts (such as here), book chapters, and my forthcoming book, The Manipulation of Choice: Ethics and Libertarian Paternalism. Economists--of both mainstream and behavioral varieties--all too often see irrationalities where none exist because they insist on interpreting choice through the lens of their narrow understand of decision-makers and the overly simplistic choices they assume on consumers' parts.

The factors that consumers take into consideration when make choices are much more complicated than economists recognize--as Mr. Sutherland points out. And while behavioral economists are making headway in identifying some of these factors, they still don't account for qualitative ones like principles and ideals. Nor do they consider the complex and subjective interests of consumers (and all decision-makers), choosing instead to assume simple unitary goals like wealth-maximization. Until they take these common influences on choice into account, they will see irrationalities wherever they look--which reflects more on the shortcoming of their models than on the decision-makers themselves.

Mark D. White

In a New York Times op-ed this morning, Daniel E. Lieberman, an evolutionary biologist at Harvard, makes a strong case for our strong attraction to sugar, but a weak case for paternalistic action on the part of the government to limit our consumption of it.

The problem is captured by the question he poses after he lays out the scientific reasoning: "What should we do?" Professor Lieberman somehow makes the leap from "people are eating too much sugar" to "the government should do something to stop this" without appreciating the size of the chasm he's jumping. (Just ask David Hume.) He fails to explain why this is a problem that justifies government intrusion into the choices of individuals--he simply takes it for granted that because we have evolved to crave more sugar than he thinks is optimal, the government is entitled to adjust our sugar consumption to bring it in line with what he thinks is optimal.

This is yet another example of the most offensive aspect of paternalism: value substitution. We are lucky to have access to Professor Lieberman's scientific insights regarding why we crave sugar so much. But then he asserts his opinion that we eat too much sugar, based on his opinion regarding our optimal diets (based on our ancestors' nutritional nirvana long before Coca-Cola and Nabisco). This much is fine--everyone is entitled to his (or her) opinion, and he is fortunate that The New York Times gives him a platform to express it. But like all who endorse paternalism based on what they think we can do better, Professor Lieberman crosses a line when he shifts from expressing his opinion regarding our behavior to endorsing government action to adjust our behavior based on that opinion.

But isn't it commonsense that we should eat less sugar (and salt, and trans fats) and more healthy foods? Of course. But is that all our only concern? Is it our only interest? Should it be? Not only does value substitution mispresent our true interests, but it only greatly oversimplifies them. I know I shouldn't eat too much sugar. But I also think a sugary treat or drink is a fine complement to a meal, or the cornerstone of a celebration, or a nice way to acknowledge a job well. People's interests are complex, and while they do include health, they also include a myriad of other things, things that are ignored when a scientific expert or government regulator proclaims, "Too much! Too much!"

After making a reasonable case for limiting unhealthy foods in schools--a proposal I have very little problem with--Professor Lieberman proclaims that "adults need help too." This is the paternalistic mindset in a nutshell: you need help because we know better than you how you should run your life. Again, he makes a tremendous leap, from "you are being tempted by cheap sugar from the food industry" to "you need the government to step in and counter this influence." First, there is no way to know how much sugar consumption is due to "irresistible temptation" and how much is due to open-eyed choice. Paternalistic regulation--whether in the form of prohibition, taxes, or nudges--is a blunt tool that misses the nuances of human decision-making.

Second, this treats people as slaves to their passions--there's Hume again--which must be manipulated by the state to counter manipulation by industry. Professor Lieberman devotes just two sentences to spreading information, but decides that it hasn't done enough--"enough," of course, based on his opinion regarding what should have happened. But here's another possibility: people know how bad sugar is from them, and armed with that information plus all of their multifaceted interests, they nonetheless choose to eat more sugar than Professor Lieberman would like them to.

Professor Lieberman concludes with this: "We have evolved to need coercion." I hope he's not making that claim on the basis on his scientific expertise, because science cannot tell us what we need. Science can help explain why we do what we do--as Professor Lieberman well details in the early part of his article--but it has nothing to contribute to what we need. Such a proclamation requires knowledge of our goals, interests, or "purpose"--the last one a teleological notion which scientists normally disavow--and none of which science or government knows better than people themselves.

Mark D. White

This morning's Baby Blues comic strip falls under the category "out of the mouths of babes":

Even litte Hammie knows that it isn't always about the numbers--sometimes it's about the principle of that matter!

This made me think of Amartya Sen's example of counterpreferential choice in which a person has to choose between a small and large apple, leaving the other one for someone else. The person wants the larger apple, but also feels the larger apple should be left for the other person out of courtesy, and may therefore choose the smaller apple. It isn't necessarily that the person "wants" to be courteous more than he or she wants the larger apple; it may be that the person's highest desire is for the larger apple, but his or her respect for social decorum overrules that preference when it comes to choosing an apple. (I make that point often in my work on Kant and choice; for instance, see my Kantian Ethics and Economics, pp. 42-46.)

Mark D. White

Please excuse the flippant title, and get ready for a bit of a rant. (Listen--it's almost Friday, and it's been a rough couple of weeks.)

I'll start with a old joke: Two campers are in the woods when they spot a bear heading toward them. One camper starts running while the other bends down to carefully tie his shoes. The first camper yells back to his friend, "do you really think that will help you outrun the bear?" The second camper yells back, "I don't need to outrun the bear--I just need to outrun you."

I was reminded of that joke when reading a Real Time Economics blog post at The Wall Street Journal's site a couple weeks ago about a recent study on "last-place aversion." In the paper (available here), the authors report on experiments in which the participants were found more likely to take gambles that might boost their social ranking (rather than certain payoffs of equivalent expected value), and to forego costless action to help those worse off than themselves, the lower in the ranking they were to begin with. The authors use these results to support individuals' aversion to being at the bottom of the social ranking, preferring to have at least one person or group to look down upon.

I don't doubt the findings or the interpretation, but they sadden me. In fact, the entire concept of relative preferences and well-being disturbs me and always has. The idea that many (perhaps most) people base their feelings of satisfaction and happiness on what the folks next door have rather than on their own needs and desires--assuming they even have their own needs and desires--is ironically and tragically counterproductive in the aggregate. (On this I agree with Robert Frank, though not on his policy recommendations based on it.)

Maybe this unconscious desire to one-up our peers has an evolutionary basis--it would certainly seem to inspire a striving for material (and thereby reproductive) success--but it also seems to vary widely on cultural grounds (being much more pronounced in the U.S. than in Europe, for instance). (I thank Dr. Maryanne Fisher for her insights on this point.) But just because it's natural doesn't make it good or right--thank you, G.E. Moore--and just as we strive to counter other hardwired inclinations toward prejudice and oppression toward others, I would hope we would reject those which represent an attitude of disrepect toward ourselves.

It strikes me as horribly inauthentic to subsume your own standards of well-being, happiness, and satisfaction for other people's, especially if it leads to a counterproductive "race to the top" in which no one's intrinsic preferences are satisfied. I said as much here about two years ago (focusing on status goods like Starbucks coffee, which I now drink regularly, thanks to the same Dr. Fisher), so I won't rehash those arguments. Nonetheless... argh.

Don't get me wrong, researchers in psychology and economics do us a great service in highlighting these unconscious dispositions. But where are the voices crying out to restrain them, to orient our decision-making more towards activities that will satisfy our desires rather than simply make us feel good compared to our neighbors? Dr. Frank decries what Thorstein Veblen termed conspicuous consumption, certainly, but he focuses policy changes such as steeply progressive tax rates to "solve" the problem. This is to treat the symptoms rather than the disease (as behavioral economists are wont to do). Once we recognize our flaws we don't have to take them as given--but we have to make the effort.

And we shouldn't want for the people next door to do it first.

Mark D. White

A fascinating article in the latest issue of Utilitas (23/4, December 2011) by Toby Handfield (Monash University) titled "Absent Desires" takes up the issue of absent desire in relation to satisfied and frustrated desire, arguing that having absent desires is incommensurable with having satisfied desires:

What difference does it make to matters of value, for a desire-satisfactionist, if a given desire is absent, rather than present? I argue that it is most plausible to hold that the state in which a given desire is satisfied is, other things being equal, incommensurate with the state in which that desire does not exist at all. In addition to illustrating the internal attractions of the view, I demonstrate that this idea has attractive implications for population ethics. Finally, I show that the view is not subject to John Broome’s ‘greedy neutrality’ worry.

This has obvious relevance for Stoic ethics and normative population studies (as Handfield notes), but also Buddhist thought as well as standard welfare economics (for example, the measurement of well-being when demand is affected by advertising, creating a desire that was previously "absent").

Mark D. White

David Brooks has a wonderful piece in today's New York Times prompted by the publication of Daniel Kahneman's new book, Thinking, Fast and Slow (a review copy of which I saw at Strand last weekend and in my ignorance failed to pick up). Of particular note is this passage of Brooks' referencing the impact of Kahneman's work (particularly that done with the late Amos Tversky):

Kahneman and Tversky were not given to broad claims. But the work they and others did led to the reappreciation of several old big ideas:

We are dual process thinkers. We have two interrelated systems running in our heads. One is slow, deliberate and arduous (our conscious reasoning). The other is fast, associative, automatic and supple (our unconscious pattern recognition). There is now a complex debate over the relative strengths and weaknesses of these two systems. In popular terms, think of it as the debate between “Moneyball” (look at the data) and “Blink” (go with your intuition).

We are not blank slates. All humans seem to share similar sets of biases. There is such a thing as universal human nature. The trick is to understand the universals and how tightly or loosely they tie us down.

We are players in a game we don’t understand. Most of our own thinking is below awareness. Fifty years ago, people may have assumed we are captains of our own ships, but, in fact, our behavior is often aroused by context in ways we can’t see. Our biases frequently cause us to want the wrong things. Our perceptions and memories are slippery, especially about our own mental states. Our free will is bounded. We have much less control over ourselves than we thought.

I am pleased that Brooks did not venture into normative territory here (for the exception of the word "wrong" in the last paragraph above). All in all, a very nice article by Brooks about a truly groundbreaking thinker.

Mark D. White

There are two very interesting papers in the new issue of Philosophy and Phenomenological Research (83/1, July 2011), listed below. I find the description of the ambivalent and conflicted self in the first one very familiar (or do I?), and the second addresses something I've wondered about for a while: the nature of hope.

"Ambivalence, Valuational Inconsistency, and the Divided Self" by Patricia Marino

Consider a person whose evaluative stance toward life is riddled with a particular kind of affective conflict: he is attracted to seemingly incompatible goods; he values various things that he knows cannot co-exist; he is drawn to ways of life that are not compatible or reconcilable. I have in mind here not the hypocrite, who says one thing and does another, nor the waffler, who feels differently at different times and in different circumstances. Nor am I concerned here with mere conflicts of desire. Instead the person I am describing is one who has an honest, stable, but inconsistent evaluative stance toward the world—not divided merely about what he wants, but about what he feels is worth wanting. This person may not be logically inconsistent—he does not believe any contradictions—rather, his endorsed attitudes and desires fail to add up to an internally coherent, unified, evaluative outlook on life. He cares about things that essentially conflict, about things that cannot fit together. He is, in a sense I define more precisely below, valuationally inconsistent.

Of course, this person will find it hard to be satisfied with the world. But some philosophers think there is something else wrong with such inconsistency, and something worse: that such inconsistency is somehow intrinsically bad for an agent, rendering him irrational, self-undermining, or non-autonomous. Here I argue against this view: there is nothing much wrong, I claim, with valuational inconsistency, at least from the point of view of the self. In particular, such "inconsistency" raises the same difficulties for an agent as ordinary conflictedness, of the kind most of us, with our multiple life roles and overlapping concerns, experience every day. Of course, claims of rationality are always difficult to assess, given the plasticity of the term. I will argue here for four specific conclusions about valuational inconsistency: it does not render a person unable to act; it does not render a person’s actions ineffective because of vacillation; it does not undermine a person’s autonomy; and it need not make an agent dissatisfied with himself. My defense, then, concerns the claim that valuational inconsistency is bad for an agent. I leave aside, here, the question of whether such inconsistency is bad from a broader moral, pragmatic, or social point of view. 

"Hopes and Dreams" by Adrienne M. Martin

It is a commonplace in both the popular imagination and the philosophical literature that hope has a special kind of motivational force. This commonplace underwrites the conviction that hope alone is capable of bolstering us in despair-inducing circumstances, as well as the strategy of appealing to hope in the political realm. In section 1 of this paper, I argue against this commonplace that hope’s motivational essence is not special or unique—it is simply that of an endorsed desire. The commonplace is not entirely mistaken, however, because standard ways of expressing hope do have motivational influence that is different in kind from that of desire. In sections 2 through 4, I examine one of these ways of expressing hope, fantasizing, and argue that fantasies can present us with reasons to modify our goals and projects in multiple ways.

Mark D. White

This week, Notre Dame Philosophical Reviews published a review by Nomy Arpaly (Brown University) of The Thief of Time: Philosophical Essays on Procrastination:

This book addresses the dearth of philosophical treatments of procrastination. It consists of fifteen articles, some by philosophers and some by psychologists, economists, and others. There are three parts to the book: one concerned with analyzing procrastination and finding out its sources, one that explores the connection between procrastination and imprudence and vice, and one which deals with ways in which procrastination can be overcome. Since the book's subtitle is "Philosophical Essays on Procrastination," a warning might be in order: strictly speaking, some of the essays are not philosophical, and some appear to sit on the borderline between moral psychology and just plain psychology or economics. Some articles even dabble in (scientifically savvy) self-help.

After going through the book part by part and chapter by chapter (and spending a long paragraph offering valuable praise and criticism of my chapter), she concludes:

All in all, this collection is good reading for anyone who would like to do philosophy on the subject of procrastination or who seeks to procrastinate her work by reading interesting things.

All in all, a thorough, fair, and overall positive review!

Mark D. White

In today's installment of The Stone in The New York Times, UCLA's John McCumber presents a very critical view of "rational choice philosophy," by which he seems to mean the narrow version promulgated by most mainstream economists. In discussing the ethical problem with rational choice theory, he writes:

Rational choice theory, being a branch of economics, does not question people’s preferences; it simply studies how they seek to maximize them. Rational choice philosophy seems to maintain this ethical neutrality (see Hans Reichenbach’s 1951 “The Rise of Scientific Philosophy,” an unwitting masterpiece of the genre); but it does not. Whatever my preferences are, I have a better chance of realizing them if I possess wealth and power. Rational choice philosophy thus promulgates a clear and compelling moral imperative: increase your wealth and power!

Of course, in its simplest form, yes; but readers of this blog know that rational choice does not imply singleminded pursuit of one's own narrow self-interest. McCumber may be correct that more elaborate and ethically rich version of choice theory are presented and promoted too rarely, but I think he is too hasty in dismissing it altogether.

He also conflates rational choice with individualism, and concludes that we need an alternative to "rational choice individualism" that is "quite a bit like Hegel in its view that individual freedom is of value only when communally guided." But flipping from one extreme to the other is not necessary, especially when one begins with a straw man.

For instance, in chapter 3 of Kantian Ethics and Economics: Autonomy, Dignity, and Character, I argue that the economic agent should be considered "individual in essence, social in orientation." Kantian autonomy implies that persons are independent and individual decision-makers, but Kantian ethics demands that those decisions be made in explicitly ethical ways, based on the recognition of the autonomy and dignity of other persons. Individuals' choices don't have to be "communally guided," as McCumber says in his conclusion, because real people already incorporate ethical factors into their decision-making, whether they do so in way that would be recognized as Kantian, virtue-oriented, or utilitarian--and they do so autonomously and independently. As I wrote,

the Kantian-economic approach maintains that agents are essentially individual, but at the same time they can be—and, ethically speaking, must be—social in orientation. I hope to have reassured those with concerns about sociality or community that individualism need not be threatening. In fact, if we treat persons as individuals imbued with autonomy and dignity, social harmony takes on much more meaning because it will be the result of free, individual choices, rather than coercively enforced order. (Kantian Ethics and Economics, p. 105).

Just because rational choice and individualism have not presented well doesn't mean they should be abandoned. We simply need a better understand of them (which is one of the things we try to do on this blog).

Mark D. White

Last night I read a wonderful and concise article by Jillian Craigie (King's College London) from the latest issue of Bioethics (25/6, July 2011) titled "Competence, Practical Rationality and What a Patient Values." The abstract follows:

Craigie argues for assessing the procedure--in this case, practical judgment--by which a person comesto the decision whether to refuse treatment, rather than applying external standards to the decision itself or the reasons that led to it. She emphasizes that in the past, simply exhibiting a behavior and expressing a preference that was characterized as or associated with a mental disorder was taken as evidence that the patient was "irrational." In the case of anorexia nervosa (on which she focuses in the article), if the patient expressed an overwhelming desire to be thin, this was judged to be irrational simply because that was one of the hallmarks of the disorder. Craigie correctly identifies this as circular reasoning, akin to listing homosexuality as a disorder and then "concluding" that homosexual desires are "pathological" (or interpreting denial of a problem as evidence of the problem--for one of the most disturbing instances of this that I've read, see Deirdre McCloskey's Crossing: A Memoir).

Instead, Craigie recommends looking into the quality of the reasoning by which the patient forms the value or preference that leads to the treatment refusal. She considers several approaches of evaluating the process by which the patient comes to a particular conclusion rather than simply judging the decision itself, or the value or preference that led to it. I was gratified to see this approach, because that is what I argue in much of my work on paternalism and welfarism: assuming that paternalism is justified in cases of involuntary behavior, involuntariness must be assessed procedurally--based on how the individual came to "act" in a certain way--rather than judging the value, prudence, or wisdom of the act itself. Whatever external evalutors think of an action is irrelevant--all that matters is how she came to that decision, and if she acted voluntarily.

Craigie argues that there is some evidence--though perhaps not enough at this point--to suggest that anorexics form their overwhelming desires for thinness in ways that compromise their true autonomy, and compares this case to Jehovah's Witness who refuses blood transfusions, in which case she recognizes that the religious value leading to that decision may be a core value of the individual, and is therefore less questionable. This is in line with what I have argued elsewhere (including chapter 5 of Kantian Ethics and Economics), we should assume that individuals make decisions in their own interests, as complex and multifaceted as they are, and interference with them is only justified if there is evidence that a decision (or action) was not made (or taken) voluntarily. (And yes, I realize that voluntariness is a topic of discussion all in itself, but I think the point stands even without specifying it further.) Refusal of medical treatment is  fantastic application of this, and I am very happy Craigie raised these issues.