We all have personal behaviors that we would like to change. For instance, to lose some weight, to exercise more, to give up a bad habit, to incorporate a good habit and some personal "nudges" can be used to help an individual make changes in their own life. What concerns me is when we are unknowingly being "nudged" into behavior without our realizing it. When nudges is applied on us without our acknowledgement it is manipulation and control. It is the unknowing "nudges" that are being used on all of us that I am trying to make others aware of with this blog. That is why a great interest for this site is being promoting by so many others. Now hundreds are reading this blog daily to learn how to become more aware of others who are trying to use "nudges" to manipulate their behavior.
Priming: Activating particular associations in memory. Our memory is built on connections of associations, and priming is the awakening or activation of certain associations within our memory. Many experiments have shown over and over that priming one's thoughts, even without awareness of the person, can influence another thought and even action. Even subliminal priming can stimulate people into action, even when the priming was too brief to even be recognized and be perceived consciously. There is much of our social influence and information processing that is automatic. It is unintentional, and happens without our conscious awareness (Meyers). Sunstein and Thaler in Nudge encourage the use of priming by private, public, business and government sources to harness this social influence to become nudgers to "channel" certain behaviors. They say "sometimes the merest hint of an idea or concept will trigger an association that can stimulate action. These "primes" and their effects can be surprisingly powerful." Manipulations that are subtle can have an unnoticeable force for influence and change, and as such is playing with your subconscious in ways that you will never even know. But they do!
Sunday, July 31, 2011
Saturday, July 30, 2011
Determinism or Free Will?
After struggling through a chapter on quantum physics I thought my brain would explode. I was wondering why the heck I had to learn about something so tiny that it mostly can't even be measured due to how small it is. But then at the conclusion of the chapter I realized that understanding this breaks down to two key theories in life...determinism and free will. I will explain by incorporating Occam's Razor rule that where two or more explanations exist for the same physical phenomenon, we should choose the simplest one...In other words: keep it simple!
The two philosophical theories that are in contradiction are Newton's Laws of Motion and quantum mechanics. Newton's Laws explained the principle of knowing the precise values of an object's position and momentum. In knowing this and the object's interactions with other objects, people could then predict exactly where things will be and how fast they will be moving for all times in the future. But, with quantum mechanic's Heisenberg Uncertainty Principle, the location and motion of objects are only probable. This boils down to the two big debates of our time: Determinism vs. Free Will.
With Newton's theory the world is determined because the physical world is like a giant machine that continues on its predetermined course once it is set in motion. For those that ascribe to this belief the future is set in stone, it is totally predetermined by events that were set in motion along time ago. On the other hand, there is the Heisenberg Uncertainty Principle which argues that the universe is not pre-determined due to the fact that the probabilities are not known on an individual encounter.
Einstein thought that the view of quantum mechanics was not known because it was not complete due to the fact that the scientists' just lacked information at that stage. But, Niels Bohr argued that when it came down to an individual electron it was not determined until the moment the electron actually struck the screen. He claimed that it was impossible to predict what would happen even if the scientists' had all the available information.
There you have it! I tried to keep it simple but I still thought you should know that there is purpose in understanding (briefly) quantum physics even if you aren't a scientists. This is the debate I have been discussing through out my posts with regard to applied social psychology and determinism by nudging. Social psychologists believe in a determinist world and they are out to figure out people's behavior in order to control it.
The two philosophical theories that are in contradiction are Newton's Laws of Motion and quantum mechanics. Newton's Laws explained the principle of knowing the precise values of an object's position and momentum. In knowing this and the object's interactions with other objects, people could then predict exactly where things will be and how fast they will be moving for all times in the future. But, with quantum mechanic's Heisenberg Uncertainty Principle, the location and motion of objects are only probable. This boils down to the two big debates of our time: Determinism vs. Free Will.
With Newton's theory the world is determined because the physical world is like a giant machine that continues on its predetermined course once it is set in motion. For those that ascribe to this belief the future is set in stone, it is totally predetermined by events that were set in motion along time ago. On the other hand, there is the Heisenberg Uncertainty Principle which argues that the universe is not pre-determined due to the fact that the probabilities are not known on an individual encounter.
Einstein thought that the view of quantum mechanics was not known because it was not complete due to the fact that the scientists' just lacked information at that stage. But, Niels Bohr argued that when it came down to an individual electron it was not determined until the moment the electron actually struck the screen. He claimed that it was impossible to predict what would happen even if the scientists' had all the available information.
There you have it! I tried to keep it simple but I still thought you should know that there is purpose in understanding (briefly) quantum physics even if you aren't a scientists. This is the debate I have been discussing through out my posts with regard to applied social psychology and determinism by nudging. Social psychologists believe in a determinist world and they are out to figure out people's behavior in order to control it.
Friday, July 29, 2011
Social Influence
Everyone thinks that they are authentic and autonomous and not following the crowd. Nevertheless, social influence has a huge effect on how people chose and how they act. Social influence leads to conformity. It is like a stampeding herd which no one knows how it got started nor which direction it will go. An excellent example of this is the Arab Spring. NO ONE KNEW that a small event in Tunisia would lead to leaders being overturned in governments through out the Middle-East. Who could have predicted the power of the social influence involved? Sure, there were many other factors that came into play, like the social media aspect of Facebook and Twitter. But aren't they social influences?
Social Influence is the power to change and influence people's thoughts, feelings and behaviors. This can be accomplished through imitation, conformity, compliance, obedience and persuasion. As Sunstein and Thaler would say: through social nudges.
Conformity is changing your behavior to fit in with a group. Some social psychologist contend that they can even predict when a person will conform according to a person's social expectation due to social norms. (I have been talking about this through-out my posts--scroll down for more information and connections)
Sunstein and Thaler in Nudge argue that culture, politics, economic decisions and advertising all rely on the notion of social influence. They state that "the effects of social influences may or may not be deliberately planned by particular people but small interventions and coincidences, at a key stage, can produce large variations in outcomes." The way this can be accomplished so easily is just to mention this is what "most people prefer" or "this is the most popular item" or "growing numbers of people are switching to" or this is the "top 5 searches on google." Then with this in mind, think of the power of the news stating the results of a Pew or Gallop poll. The power of social influence is immense. Therefore, people conform to what they think other people expect and what other people are doing. The sad thing about this (and there are many) is who starts the direction of the nudge? Where does it begin? If everyone is following or conforming, who is leading? Accordingly, it is the choice architects. It is the agents of influence and change. Are you down-loading a song because you know it is a good or because 546,000 others have downloaded that song, that video, etc. Just try to pay attention to how often someone... is trying to get you to conform and follow-the-leader. This isn't kindergarten, it is time to pay attention to the choices you are making.
Social Influence is the power to change and influence people's thoughts, feelings and behaviors. This can be accomplished through imitation, conformity, compliance, obedience and persuasion. As Sunstein and Thaler would say: through social nudges.
Conformity is changing your behavior to fit in with a group. Some social psychologist contend that they can even predict when a person will conform according to a person's social expectation due to social norms. (I have been talking about this through-out my posts--scroll down for more information and connections)
Sunstein and Thaler in Nudge argue that culture, politics, economic decisions and advertising all rely on the notion of social influence. They state that "the effects of social influences may or may not be deliberately planned by particular people but small interventions and coincidences, at a key stage, can produce large variations in outcomes." The way this can be accomplished so easily is just to mention this is what "most people prefer" or "this is the most popular item" or "growing numbers of people are switching to" or this is the "top 5 searches on google." Then with this in mind, think of the power of the news stating the results of a Pew or Gallop poll. The power of social influence is immense. Therefore, people conform to what they think other people expect and what other people are doing. The sad thing about this (and there are many) is who starts the direction of the nudge? Where does it begin? If everyone is following or conforming, who is leading? Accordingly, it is the choice architects. It is the agents of influence and change. Are you down-loading a song because you know it is a good or because 546,000 others have downloaded that song, that video, etc. Just try to pay attention to how often someone... is trying to get you to conform and follow-the-leader. This isn't kindergarten, it is time to pay attention to the choices you are making.
Adjustment Bureau
Tonight I want to do a short comment on the movie Adjustment Bureau. The movie was adapted from a Philip K. Dick story called Adjustment Team. Other movies that have been based on Philip K. Dick books are, Paycheck, Minority Report, Blade Runner, Total Recall, and Next.
Adjustment Bureau is one of the few movies I have seen recently that has a believable love story while relating information on the loss of free will and personal choice. The movie portrays an adjustment to the way people think when they get off the planned course. The movie makes you think (read my blog Thou shalt think) and perhaps wonder at the extent and length that the Adjustment Bureau might take to influence behavior to get the results or consequences that it is desired. The important lesson from this movie (if one is looking) is the way to change the outcome is to change and not conform. Many people today do not want to stand against the group even if they have to ignore the evidence of their own perceptions. Not only are people lead to think certain ways by framing and priming but they are afraid to go against the majority thought. Sunstein and Thaler argue in Nudge that "people will go along with the group even when they think, or know, that everyone else has blundered. Unanimous groups are able to provide the strongest nudges--even when the question is an easy one, and people ought to know that everyone else is wrong." They further state that "a little nudge, if it is expressed confidently, can have a major consequence for the group's conclusion. The clear lesson here is that consistent and unwavering people, in the private or public sector, can move groups and practices in their preferred direction." That sounds like an adjustment bureau to me.
Adjustment Bureau is one of the few movies I have seen recently that has a believable love story while relating information on the loss of free will and personal choice. The movie portrays an adjustment to the way people think when they get off the planned course. The movie makes you think (read my blog Thou shalt think) and perhaps wonder at the extent and length that the Adjustment Bureau might take to influence behavior to get the results or consequences that it is desired. The important lesson from this movie (if one is looking) is the way to change the outcome is to change and not conform. Many people today do not want to stand against the group even if they have to ignore the evidence of their own perceptions. Not only are people lead to think certain ways by framing and priming but they are afraid to go against the majority thought. Sunstein and Thaler argue in Nudge that "people will go along with the group even when they think, or know, that everyone else has blundered. Unanimous groups are able to provide the strongest nudges--even when the question is an easy one, and people ought to know that everyone else is wrong." They further state that "a little nudge, if it is expressed confidently, can have a major consequence for the group's conclusion. The clear lesson here is that consistent and unwavering people, in the private or public sector, can move groups and practices in their preferred direction." That sounds like an adjustment bureau to me.
Wednesday, July 27, 2011
Heuristics in diagnoses in psychology
In lecture I was taught that not only doctors make mistakes with their diagnoses but so do psychologists and psychiatrists. They also fall victim to making heuristics (quick decisions or short-cuts). One problem that occurs is the illusory correlation which is a psychological heuristic that involves seeing relationships one expects to see even when no such relationship exists. They can also error in confirmation bias which is presumptive questioning that will lead the interviewer to the diagnoses he or she seeks. This occurred frequently in the 1980's and 1990's with the onslaught of repressed memories diagnoses. It was done by the framing of the questions that leads the patient down a road of false memories until they seem to be real. And this in turn gives the proof of the diagnoses. Then the hindsight bias can occur which is the clinician feeling I-knew-it-all-along. This is not to say that this always happens but just that it can and does happen.
Tuesday, July 26, 2011
Representative Heuristics made by Doctors
Do doctors make the same mistakes in their thinking that Sunstein, Thaler and Shiller (and many others) say we all make? According to an article written in the New Yorker (1/29/2007) by Jerome Groopman...sadly they do. Groopman states that doctors have two or three diagnoses within minutes of meeting with the patient. The minute they walk into the room they are assessing your appearance, complexion, the way you hold your head, movements of the eyes and mouth, the way you sit or stand and your breathing. They make their diagnoses on "short-cuts or rules of thumb, known in psychology as heuristics." These heuristics or quick judgements can be the cause of "grave errors." Another mistake that doctors make is the representativeness error being influenced by what is "typically true." Doctors also can use what is known as the availability heuristic which is the tendency to judge the likelihood of an event by the ease with which relevant examples come to mind. Then they rely on a confirmation bias which is finding problems that confirm what they expect to find by selectively accepting or ignoring information. They also can fall victim to what Shiller (last nights blog) calls wishful thinking or affective error in which a decision is based on what they wish were true because they like you or you remind them of themselves or they know you well.
Studies are being done on the way doctors think with a new field of study in this area. Groopman argues that doctors may not be the "dispassionate and rational actors that we think they are." Instead, doctors are susceptible to emotion and biases and make cognitive errors in judgement. Groopman quotes Dr. Croskerry (head of Dartmouth General Hospital) stating "currently in medical training, we fail to recognize the importance of critical thinking and critical reasoning. The implicit assumption in medicine is that we know how to think. But we don't."
This is an example of the many theories and terms and ways of thinking or not thinking that is taught and asserted by psychologists, applied social psychologists, policy makers and regulation czars. This article is worrisome to say the least. Besure to take a minute to look it up and give it a read so that you can read the many examples of doctors and their mistaken diagnoses. Well, that is if you have the stomach for it.
Studies are being done on the way doctors think with a new field of study in this area. Groopman argues that doctors may not be the "dispassionate and rational actors that we think they are." Instead, doctors are susceptible to emotion and biases and make cognitive errors in judgement. Groopman quotes Dr. Croskerry (head of Dartmouth General Hospital) stating "currently in medical training, we fail to recognize the importance of critical thinking and critical reasoning. The implicit assumption in medicine is that we know how to think. But we don't."
This is an example of the many theories and terms and ways of thinking or not thinking that is taught and asserted by psychologists, applied social psychologists, policy makers and regulation czars. This article is worrisome to say the least. Besure to take a minute to look it up and give it a read so that you can read the many examples of doctors and their mistaken diagnoses. Well, that is if you have the stomach for it.
Monday, July 25, 2011
Principles of Behavioral Finance
Tonight I want to explain a few terms that were quoted from Nudge in last nights blog. I am finding that these terms are used by many that are teaching, prompting or explaining behavioral economics, behavioral finance, and applied social psychology. Also, I find that my textbook, Nudge, and Dr. Robert Shiller (professor of economics at Yale, specializes in behavioral economics) all use basically the same examples to explain the concepts, as well. First, a word on Dr. Robert Shiller. He is the author of two books which (I believe) may explain the new movement mentioned by Thaler and Sunstein: libertarian paternalism regarding economics. His latest books are Irrational Exuberance and The New Financial Order. I mention Dr. Shiller because I will use his definitions of terms from his Open University course on Economics offered free of charge to anyone online (check it out...many full courses available).
Dr. Shiller states the principles of behavior finance are:
Wishful thinking: "people tend to make the error of believing what they want to believe, leading to biased probablility." An example of this kind of erronous thinking is believing your team will win or the candidate you voted for will win just because you want them to.
Attention Anomalies: "human attention tend to be sporadic, we make errors in attention." We give too much attention to some things while we pay too little attention to other things. Shiller argues that people tend to pay attention to what other people are paying attention to. Thus, we give excess attention to the media lead agenda setters (nudge). Consequently, we forget the details and specifics but remember generalities. My textbook calls this online judgement: judgement that is made at the moment that is processed and then is stored and determines our attitude formation and behavior.
Anchoring: "people make quanative judgements by subconsciously using some arbitrary stimulus. Then we tend to have over confidence in our anchored judgements...we think we know." Besure to look back at last nights blog to see how useful Sunstein and Thaler thinks anchors are. Remember anchors are placed and well-chosen nudges.
Representativeness Heuristics: "This refers to a human tendency to judge events on basis of similarity to other events that are prominent in our mind without regard to the actual probability of the event."
These key terms should help to inform you more closely of the mistakes we make in our assumptions that the choice architects, influence and change agents are counting on us making.
Dr. Shiller states the principles of behavior finance are:
Wishful thinking: "people tend to make the error of believing what they want to believe, leading to biased probablility." An example of this kind of erronous thinking is believing your team will win or the candidate you voted for will win just because you want them to.
Attention Anomalies: "human attention tend to be sporadic, we make errors in attention." We give too much attention to some things while we pay too little attention to other things. Shiller argues that people tend to pay attention to what other people are paying attention to. Thus, we give excess attention to the media lead agenda setters (nudge). Consequently, we forget the details and specifics but remember generalities. My textbook calls this online judgement: judgement that is made at the moment that is processed and then is stored and determines our attitude formation and behavior.
Anchoring: "people make quanative judgements by subconsciously using some arbitrary stimulus. Then we tend to have over confidence in our anchored judgements...we think we know." Besure to look back at last nights blog to see how useful Sunstein and Thaler thinks anchors are. Remember anchors are placed and well-chosen nudges.
Representativeness Heuristics: "This refers to a human tendency to judge events on basis of similarity to other events that are prominent in our mind without regard to the actual probability of the event."
These key terms should help to inform you more closely of the mistakes we make in our assumptions that the choice architects, influence and change agents are counting on us making.
Nudge-able
"People are nudge-able" according to Cass Sunstein, Obama's regulation czar. That makes him our choice architect, does it not? As I study applied social psychology in school and read Nudge simultaneously, I am amazed at the similarities. Nudge is how to do applied social psychology. I feel it is important to point out and emphasize the connections so that you might understand since it is likely that you may not be attending college and studying applied social psychology. My only goal is that you might understand and see if you approve of the new agenda setting. Nudge sets forth exactly what they think of you and what they plan to do and are doing to help you along. Here is some more of what Sunstein and Thaler say:
"One of our major goals is to see how the world might be made easier, or safer, for the Homers in each of us" (that is Homer Simpson).
" Most of us are busy, our lives are complicated, and we can't spend all our time thinking and analyzing everything."
"Anchors serve as nudges. We can influence the figure you will choose in a particular situation by ever-so-subtly suggesting a starting point for your thought process."
"Default options act as powerful nudges...setting the best possible defaults will be a theme we explore often in this book" (Nudge).
"Framing works because people tend to be mindless, passive decision makers."
"Choices, even in life's most important decisions, are influenced in ways that would not be anticipated." That is to say, "people are nudge-able."
"One of our major goals is to see how the world might be made easier, or safer, for the Homers in each of us" (that is Homer Simpson).
" Most of us are busy, our lives are complicated, and we can't spend all our time thinking and analyzing everything."
"Anchors serve as nudges. We can influence the figure you will choose in a particular situation by ever-so-subtly suggesting a starting point for your thought process."
"Default options act as powerful nudges...setting the best possible defaults will be a theme we explore often in this book" (Nudge).
"Framing works because people tend to be mindless, passive decision makers."
"Choices, even in life's most important decisions, are influenced in ways that would not be anticipated." That is to say, "people are nudge-able."
Saturday, July 23, 2011
The Emerging Science of Choice
Being a full-time student there isn't much time for reading anything except assigned reading. Nevertheless, I try to sneak-in a book I am interested in before I go to sleep. It helps me to relax and get my mind off of all the studying I need to do. I have been reading the book I mentioned in my blog called Nudge. Nudge is how to do applied social psychology. I feel this is so important to understand that I will be blogging on this for awhile. I believe that this is key to understanding the changing environment of choice and persausion. Thaler and Sunstein say that their information is based on the emerging science of choice...that would be the behavioral sciences. Which I won't go into again as they have been mentioned in previous blogs (also research B.F. Skinner for more information). The research is raising "serious questions about the rationality of many judgements and decisions that people make (see the New Rationality of Economics)." Thaler and Sunstein go on to say that "human decision making is not so great."
Furthermore, people tend to not really make choices but use the status-quo bias or default option. This bias suggests that most people "lack motivation or the ability to process information about choice alternatives" so they just select default so people don't have to make a selection for themselves. Sunstein and Thaler believe that this is a great power to be hijacked by policy makers (choice architects, influence and change agents) "that can greatly influence the outcome" by setting the default to create the behavior that is desired. More to the point, they state "the effects of well-chosen default options provide the gentle power of nudges; a nudge is any factor that significantly alters the behavior of Humans." It may be prudent to educate yourself on the power of nudges that are working to form and shape your decisions and your behavior. Remember, Sunstein and Thaler state this is a new movement and it is a science aimed at nudging you in their direction.
Furthermore, people tend to not really make choices but use the status-quo bias or default option. This bias suggests that most people "lack motivation or the ability to process information about choice alternatives" so they just select default so people don't have to make a selection for themselves. Sunstein and Thaler believe that this is a great power to be hijacked by policy makers (choice architects, influence and change agents) "that can greatly influence the outcome" by setting the default to create the behavior that is desired. More to the point, they state "the effects of well-chosen default options provide the gentle power of nudges; a nudge is any factor that significantly alters the behavior of Humans." It may be prudent to educate yourself on the power of nudges that are working to form and shape your decisions and your behavior. Remember, Sunstein and Thaler state this is a new movement and it is a science aimed at nudging you in their direction.
Friday, July 22, 2011
Tragedy In Norway
Tragedy: a lamentable, dreadful, or fatal event or affair; calamity; disaster.
Evil: morally wrong or bad; immoral; wicked, harmful; injurious.
Shameful: disgraceful; vile behavior; lacking any sense.
Shock: a sudden or violent disturbance of the emotions or sensibilities.
Sadness: affected by grief; sorrowful or mournful.
Sorrow: distress caused by loss, grief.
There is nothing that can be said at a time such as this. I am shocked and sadden by such horrific news from peaceful Norway. I am sorry. So very sorry for your sorrow and loss.
Evil: morally wrong or bad; immoral; wicked, harmful; injurious.
Shameful: disgraceful; vile behavior; lacking any sense.
Shock: a sudden or violent disturbance of the emotions or sensibilities.
Sadness: affected by grief; sorrowful or mournful.
Sorrow: distress caused by loss, grief.
There is nothing that can be said at a time such as this. I am shocked and sadden by such horrific news from peaceful Norway. I am sorry. So very sorry for your sorrow and loss.
Thursday, July 21, 2011
Greek debt crisis solved! For now.
The markets had to get real ugly for France's Sarkozy and Germany's Chancellor Merkel to come to a compromise to stop the debt crisis in the EU from spreading. The solution was to create a new rescue fund called the EFSF which Sarkozy compared to the creation of a European Monetary Fund, somewhat like the IMF, only for European Union Members Only club. Well, members and wanta be's. The fund will also be available for troubled banks (that sounds familiar). The rescue for Greece is $229 billion (or $159 billion Euro's) and the new EFSF will have $440 billion Euro's. The exciting part for Greece is that they will get the bailout whether they default or not...only they will call it a selective default. The question is will this save Italy and Belguim, as well? Most likely.
Wednesday, July 20, 2011
Libertarian Paternalism
Libertarian paternalism seems a contradiction of terms. I have just started to read Nudge by Richard Thaler and Cass Sunstein. I am still in the introduction but I have come across two terms that caught my attention as they so closely coincide with my blogs on applied social psychology. Then I did a brief search on the authors and found a few significant similarities.
The first term that caught my attention was choice architect. A choice architect is one that focuses attention of people in a particular direction. In my blogs I have often mentioned influence and change agents which do the same thing. A choice architect is one that chooses a particular option and influences others to it by nudging.
The second term of note is libertarian paternalism which the authors say is a new movement. It involves being free to choose. Yet, they describe paternalism as the legitimation for choice architects to try to influence people's behavior. Choice architects are both private and public people that "attempt to move people in directions that will make their lives better. A nudge is any aspect of the choice architecture that alters people's behavior in a predictable way." This is exactly what I have been blogging about. If you are new to this blog, it would be informative to scroll down and read past posts.
Now for a brief look at the authors. Both of whom are to be considered choice architects, as well as, influence and change agents.
Richard Thaler is a professor of behavioral finance at the University of Chicago Graduate School of Business. He teaches behavioral science and economics.
Cass Sunstein is a professor of law and behavioral economics at the University of Chicago Law School. He is on leave at this time as he is currently an administrator for the White House Office of Information and Regulatory Affairs in the Obama administration. Take a second to think about this and the potential for choice architects to influence and change our behavior in a direction of predictability from the White House. The potential seems almost limitless. Also, remember the role that professors play in directing their students understanding and knowledge base. Now think about that influence in law and economics. Now you have it.
The first term that caught my attention was choice architect. A choice architect is one that focuses attention of people in a particular direction. In my blogs I have often mentioned influence and change agents which do the same thing. A choice architect is one that chooses a particular option and influences others to it by nudging.
The second term of note is libertarian paternalism which the authors say is a new movement. It involves being free to choose. Yet, they describe paternalism as the legitimation for choice architects to try to influence people's behavior. Choice architects are both private and public people that "attempt to move people in directions that will make their lives better. A nudge is any aspect of the choice architecture that alters people's behavior in a predictable way." This is exactly what I have been blogging about. If you are new to this blog, it would be informative to scroll down and read past posts.
Now for a brief look at the authors. Both of whom are to be considered choice architects, as well as, influence and change agents.
Richard Thaler is a professor of behavioral finance at the University of Chicago Graduate School of Business. He teaches behavioral science and economics.
Cass Sunstein is a professor of law and behavioral economics at the University of Chicago Law School. He is on leave at this time as he is currently an administrator for the White House Office of Information and Regulatory Affairs in the Obama administration. Take a second to think about this and the potential for choice architects to influence and change our behavior in a direction of predictability from the White House. The potential seems almost limitless. Also, remember the role that professors play in directing their students understanding and knowledge base. Now think about that influence in law and economics. Now you have it.
Tuesday, July 19, 2011
Big Five Personality Factors
Political psychologists use the 'Big Five' personality traits to study political leaders. This theory is used the most and widely accepted. Although, it is customary to study personality through a questionnaire most presidents are not going to do such a thing. After all they really don't want to be read like a book, or seem so predictable. Part of their power is the mystery of who they really are. Nevertheless, political psychologists want to figure them out. So the next best thing to understanding them on an individual basis is to study their speeches, interviews, and biographers. It is not an exact science that is for sure, but it may shed some light on their personalities and help with predicting their behavior.
'Big Five'
1. Openness (curious and searching vs. consistent and cautious). Open to new ideas and experiences.
2. Conscientiousness (efficient and organized vs. easy-going and free spirited). Taking extreme care and thought in decision-making.
3. Extrovert (outgoing vs. solitary and reserved). Full of energy. Somewhat egotistical. People pleaser but not always in an honest way.
4. Agreeable (ccompassionate and understanding) Listens to others. Truly caring about others opinions.
5. Neuroticism (ssuspicious) Has odd relations with others. Suffers from delusions and misunderstandings.
The trait scores of the presidents showed that the strongest personality trait found in the living and dead presidents was openness. A study done by Rubenzer showed that Thomas Jefferson and Abraham Lincoln scored high on openness and greatness. In addition, it was decided that left and center left scored high on measures of openness. While those on the right scored high on conscientiousness. Does all this help us to know our presidents better and help us or the 'experts' to predict their behavior in certain situations? Maybe in a general way. But, probably not enough to know for sure.
Although, we can surmise from this study that since Obama is left on his political leanings that he would be open to new ideas and ways of doing business in and out of the White House. And he is. He certainly is inventive and has extremely unusual (non-conservative) ideas. Just look at the many changes he has made since becoming president. He is certainly open with our pocket books.
'Big Five'
1. Openness (curious and searching vs. consistent and cautious). Open to new ideas and experiences.
2. Conscientiousness (efficient and organized vs. easy-going and free spirited). Taking extreme care and thought in decision-making.
3. Extrovert (outgoing vs. solitary and reserved). Full of energy. Somewhat egotistical. People pleaser but not always in an honest way.
4. Agreeable (ccompassionate and understanding) Listens to others. Truly caring about others opinions.
5. Neuroticism (ssuspicious) Has odd relations with others. Suffers from delusions and misunderstandings.
The trait scores of the presidents showed that the strongest personality trait found in the living and dead presidents was openness. A study done by Rubenzer showed that Thomas Jefferson and Abraham Lincoln scored high on openness and greatness. In addition, it was decided that left and center left scored high on measures of openness. While those on the right scored high on conscientiousness. Does all this help us to know our presidents better and help us or the 'experts' to predict their behavior in certain situations? Maybe in a general way. But, probably not enough to know for sure.
Although, we can surmise from this study that since Obama is left on his political leanings that he would be open to new ideas and ways of doing business in and out of the White House. And he is. He certainly is inventive and has extremely unusual (non-conservative) ideas. Just look at the many changes he has made since becoming president. He is certainly open with our pocket books.
Monday, July 18, 2011
Conservative Social Psychologists? I think not.....
There is an enlightening video-presentation given by a social psychologist to a group of social psychologists that addresses the lack of diversity related to conservatives in the field. Dr. Haidt argues that the group is a "tribal-moral community" that has many taboos and danger zones. As such, they don't speak of "race differences, sex differences", they don't blame the victim, they watch for stereotyping and nativism." In this tribal group he tries to discover how many conservative social psychologist there are. He could only find 3 conservative social psychologists. He gives that a percentage of 0.03%. He admits that there are a few "closet conservatives" but they refuse to come out because they will not be allowed to publish their findings or do the studies they would like to do. He states that for claiming to be "super tolerant, free thinkers" that the group is very closed to conservatives and their ideas. He argues that in reality there are "taboos which constrain thinking, they won't allow for moral and political diversity and they create a hostile climate for non-liberal students." He believes that the field should set a goal for 10% conservatives by 2020. He argues that for social psychologists to have true diversity that they must be open to other perspectives that will "challenge their dormant ideas and be bold enough to let the conservatives pull them out of their ideological ruts!" Bravo to Dr. Haidt for his courage to tell the truth about his closed society that applauds their openness. His 25 minute presentation is called The New Synthesis in Moral Psychology. And thanks to my professor Dr. Ridge for making this perspective known.
Sunday, July 17, 2011
Operational Code Theory
With political psychology, the study of the personalities of world political leaders is important to understanding how leaders will react to certain world events. The operational code is a cognitive approach that goes beyond the personalities of world leaders to their belief systems. Basically, it is narrowed down to their worldview of either harmony or conflict. It is through understanding the belief systems of the leaders that analysis can diagnose what decisions they will make in certain situations. "This theory complex specifies belief-based solutions to the puzzles posed by diagnostic, decision making, and learning processes in world politics" (Walker 2002). Most studies by political psychologists have focused on the national level of understanding. But this study was developed in 1953 during the Cold War to help understanding the antecedents of behavior of the Soviets to predict how they would react to certain events. It was believed that with this understanding of pre-behavior, or intentions through belief systems that political action could become predictable. This is just fascinating to say the least and it goes links into game theory.
Saturday, July 16, 2011
Pro-Social Behavior and the Environment
Social psychologists and environmental psychologists team up to try to understand how to get people to be more conscious of their environment. It use to be that environmental psychologists focused on how the physical surroundings affected the people. But now it is how we affect the environment. Thus, applied social psychological theories are useful to understand the perceptions, feelings, and behaviour of people towards the environment and how to change the behavior to be more pro-social. This is done by first understanding what causes the behavior and what policies can be designed to promote and target the prior behavior for change. And, they want to see how effective the different interventions work.
There are many things that factor into being pro-social, pro-environmental. But I will mention values and how they relate to environmental concerns. First, there is NEP (no, this is not the Russians "New Economic Program" of the 1930's that confiscated all land & property also called NEP) it is the measurement of the fundamental beliefs and intentions that cause behavior called the new environmental paradigm (NEP).
Basically there are three value orientations.
1. Egoistic value orientation: which is that people try to get the best outcome for themselves like power, material wealth and ambition.
2. Altruistic value orientation: which is concern for the welfare of other people by caring about equality, social justice and helpfulness.
3. Biospheric or ecocentric value orientation: which reflects concern for non-human species and the earth and unity with nature.
Then policy makers use different theories of social controls to motivate people with rewards and/or punishments to encourage more pro-social/pro-environmental behavior. They use many of the techniques that I have mentioned in previous blogs. This is done through promoting pro-environmental behavior by first, interventions that target a person's perceptions, cognitions, motivations and norms. And second, they will use interventions that aim at changing the consequence.
There are many things that factor into being pro-social, pro-environmental. But I will mention values and how they relate to environmental concerns. First, there is NEP (no, this is not the Russians "New Economic Program" of the 1930's that confiscated all land & property also called NEP) it is the measurement of the fundamental beliefs and intentions that cause behavior called the new environmental paradigm (NEP).
Basically there are three value orientations.
1. Egoistic value orientation: which is that people try to get the best outcome for themselves like power, material wealth and ambition.
2. Altruistic value orientation: which is concern for the welfare of other people by caring about equality, social justice and helpfulness.
3. Biospheric or ecocentric value orientation: which reflects concern for non-human species and the earth and unity with nature.
Then policy makers use different theories of social controls to motivate people with rewards and/or punishments to encourage more pro-social/pro-environmental behavior. They use many of the techniques that I have mentioned in previous blogs. This is done through promoting pro-environmental behavior by first, interventions that target a person's perceptions, cognitions, motivations and norms. And second, they will use interventions that aim at changing the consequence.
Friday, July 15, 2011
System Justification Theory
This is a theory that originated with Karl Marx and was taken on again by social psychologists. The system justification theory is an endorsement of a rationalization for the system in power even if it promotes inequality. My professor related that it is a belief that binds and blinds. It is accepting the way things are and believing that people and groups get what they deserve. It is an ideological buffer that is purported to maintain the status quo and is dependent on political orientation. I tend to be concerned when a theory is based on Marxism. It is strange how the teaching of Marx is so prominent in all the fields of studies these days. Being a non-traditional student I can remember a time in America when the teachings and ideology of Karl Marx was looked upon as the father of communism and not in a good way. But that was then and this is now. And now I can't sit in any class that Marx isn't mentioned. Strange how things can change so much.
Thursday, July 14, 2011
Terror Management Theory
Today I learned about terror management theory. This theory is very interesting, especially with the implications that social psychologists link to it. Terror management was developed by Ernest Becker in the 1970's in his book called Denial of Death. Basically, it is that we all fear death and have great anxiety over dieing. In order to manage this fear we engage in cultural worldviews that aim to protect us. We adopt cultural prescriptions that shield us from our fears. Such as cultural beliefs in God, religion, family, morality, and ethics.
Other theorists have argued that people will gravitate towards leaders with the same worldview of God and faith and with slogans that will symbolically deliver us from death...usually with dreams and hopes of prosperity. The theorists argue that the conservative movement exploits death with the war on terror and that they can protect us. So I thought if this was true that maybe a good campaign slogan for one of our many conservative candidate's could be Victory Over Death. I may have just been very tired in class today as I had been up since 5:45 but I thought it was funny. I mean why beat around the bush. Just declare it as such if that is the case. Well, except most people don't know that they are being manipulated by change and influence agents. So this might be way over the top. Nevertheless, I am going to pay close attention to this campaign cycle and see if it is true that the conservative candidates use the terror management theory.
Other theorists have argued that people will gravitate towards leaders with the same worldview of God and faith and with slogans that will symbolically deliver us from death...usually with dreams and hopes of prosperity. The theorists argue that the conservative movement exploits death with the war on terror and that they can protect us. So I thought if this was true that maybe a good campaign slogan for one of our many conservative candidate's could be Victory Over Death. I may have just been very tired in class today as I had been up since 5:45 but I thought it was funny. I mean why beat around the bush. Just declare it as such if that is the case. Well, except most people don't know that they are being manipulated by change and influence agents. So this might be way over the top. Nevertheless, I am going to pay close attention to this campaign cycle and see if it is true that the conservative candidates use the terror management theory.
Wednesday, July 13, 2011
GOLD ISN'T MONEY
Today the Chairman of the Federal Reserve, Ben Bernanke, said that gold wasn't money. Congressman Ron Paul had a good sparring match with the Chairman today. Ron Paul talked to Bernanke about the fact that the national debt has gone up 5.1 trillion dollars and still the economy is in bad shape. He asked why all the money has gone to big banks and big corporations who were already making money. He also put it out there that if consumer spending is so important to the economy then maybe it would have been better to distribute the money to the consumers which would have given $17,000.00 to every single American. He said they couldn't have done any worse with the money. Paul pointed out the inflation is truly at 9% per year and that groceries and goods are up 35% according to a free market group that still figures inflation the way it was done 3 years ago before the fed's changed it.
But the best part of my day was when Ron Paul mentioned that gold was at $1,588.00 today, while the dollar has been devalued 50% and Moody's is considering downgrading the dollars rating and this is the 2nd time Moodys has mentioned doing so. Then Ron Paul asked, "Do you think gold is money?" And Bernanke paused, looked up just a little to the left and then looked back at congressman Paul and answered "No, it's an asset." Wow...really Ben! That was a big one! Bernanke went on to explain that in the trade it is called "a tail risk." People buy it when they think the economy is "really, bad bad and fear the outcomes." Well, now that does make me feel . I will sleep just fine tonight knowing how our Chairman thinks. Boy, I think it is getting a little turbulent out there...ya, better buckle up!
But the best part of my day was when Ron Paul mentioned that gold was at $1,588.00 today, while the dollar has been devalued 50% and Moody's is considering downgrading the dollars rating and this is the 2nd time Moodys has mentioned doing so. Then Ron Paul asked, "Do you think gold is money?" And Bernanke paused, looked up just a little to the left and then looked back at congressman Paul and answered "No, it's an asset." Wow...really Ben! That was a big one! Bernanke went on to explain that in the trade it is called "a tail risk." People buy it when they think the economy is "really, bad bad and fear the outcomes." Well, now that does make me feel . I will sleep just fine tonight knowing how our Chairman thinks. Boy, I think it is getting a little turbulent out there...ya, better buckle up!
Tuesday, July 12, 2011
Watch The News? Are You Kidding!
Sometimes being an older college student (non-traditional seems to take the sting out of older) is challenging in mores ways than one. Some days I truly do feel very different from the rest of my fellow students and today was one of those days. I have to admit I went to class excited for the lecture today on political psychology and its implications for political behavior.
It was when the professor asked if anyone ever watched Brian Williams on NBC Nightly News. I raised my hand. And then he said, "well like anyone would watch the news every night. And I said, "I am somebody & I watch Brian Williams every night." Then one of my classmates said, "well sure my parents watch the nightly news, they don't have a life." And I thought, so I am a full-time student just like you but because I make the time to watch the news and stay informed, I don't have a life. It kinda got under my skin. I also watch Bloomberg News and read The Economist...To me that is life...real life on what is happening in the real world that will effect each and everyone of us.
Besides...is the only reason to get a college education to make money? Isn't it also (and maybe more importantly) to be educated and to think and to be informed. Not one of the classmates said they watched the news. Some said they were too busy on Facebook. Now there's living a life!
What I find most interesting about today's lecture was on what influences political behavior. We watched Obama's February 2008 "Yes We Can" speech set to music and sung by pop musicians. When the students were asked how they felt after watching that they were stating how it makes them want to vote for Obama. One girl said when she saw it in 2008 that she felt sorry for her parents and other republicans. All I could think of was that 5 minute advertisement for Obama was using everything we were learning in the class on how applied social psychology works to influence and change behavior in the direction they want. It made me think this stuff really works!
It was when the professor asked if anyone ever watched Brian Williams on NBC Nightly News. I raised my hand. And then he said, "well like anyone would watch the news every night. And I said, "I am somebody & I watch Brian Williams every night." Then one of my classmates said, "well sure my parents watch the nightly news, they don't have a life." And I thought, so I am a full-time student just like you but because I make the time to watch the news and stay informed, I don't have a life. It kinda got under my skin. I also watch Bloomberg News and read The Economist...To me that is life...real life on what is happening in the real world that will effect each and everyone of us.
Besides...is the only reason to get a college education to make money? Isn't it also (and maybe more importantly) to be educated and to think and to be informed. Not one of the classmates said they watched the news. Some said they were too busy on Facebook. Now there's living a life!
What I find most interesting about today's lecture was on what influences political behavior. We watched Obama's February 2008 "Yes We Can" speech set to music and sung by pop musicians. When the students were asked how they felt after watching that they were stating how it makes them want to vote for Obama. One girl said when she saw it in 2008 that she felt sorry for her parents and other republicans. All I could think of was that 5 minute advertisement for Obama was using everything we were learning in the class on how applied social psychology works to influence and change behavior in the direction they want. It made me think this stuff really works!
Monday, July 11, 2011
Tocqueville and Two Possibilities of Equality
After last nights blog on the two most prevalent values across all cultures being equality and freedom, I thought I would follow up with what Alexis de Tocqueville said on the two ways of equality.
Political Consequences of the Social State of the Anglo-Americans:
"So, for a people who have reached the Anglo-Americans' social state, it is hard to see any middle course between the sovereignty of all and the absolute power of one man. One must not disguise it from oneself that the social state I have just described may lead as easily to the one as to the other of those results. There is indeed a manly and legitimate passion for equality which rouses in all men a desire to be strong and respected. This passion tends to elevate the little man to the rank of the great. But the human heart also nourishes a debased taste for equality, which leads the weak to want to drag the strong down to their level and which induces men to prefer equality in servitude to inequality in freedom. It is not that peoples with a democratic social state naturally scorn freedom; on the contrary, they have an instinctive taste for it. But freedom is not the chief and continual object of their desires; it is equality for which they feel an eternal love; they rush on freedom with quick and sudden impulses, but if they miss their mark they resign themselves to their disappointment; but nothing will satisfy them without equality, and they would rather die than lose it.
On the other hand, when the citizens are all more or less equal, it becomes difficult to defend their freedom from the encroachments of power. No one among them being any longer strong enough to struggle alone with success, only the combination of the forces of all is able to guarantee liberty. But such a combination is not always forthcoming. So, nations can derive either of two great political consequences from the same social state; these consequences differ vastly from each other, but both originate from the same fact." (Democracy in America)
Political Consequences of the Social State of the Anglo-Americans:
"So, for a people who have reached the Anglo-Americans' social state, it is hard to see any middle course between the sovereignty of all and the absolute power of one man. One must not disguise it from oneself that the social state I have just described may lead as easily to the one as to the other of those results. There is indeed a manly and legitimate passion for equality which rouses in all men a desire to be strong and respected. This passion tends to elevate the little man to the rank of the great. But the human heart also nourishes a debased taste for equality, which leads the weak to want to drag the strong down to their level and which induces men to prefer equality in servitude to inequality in freedom. It is not that peoples with a democratic social state naturally scorn freedom; on the contrary, they have an instinctive taste for it. But freedom is not the chief and continual object of their desires; it is equality for which they feel an eternal love; they rush on freedom with quick and sudden impulses, but if they miss their mark they resign themselves to their disappointment; but nothing will satisfy them without equality, and they would rather die than lose it.
On the other hand, when the citizens are all more or less equal, it becomes difficult to defend their freedom from the encroachments of power. No one among them being any longer strong enough to struggle alone with success, only the combination of the forces of all is able to guarantee liberty. But such a combination is not always forthcoming. So, nations can derive either of two great political consequences from the same social state; these consequences differ vastly from each other, but both originate from the same fact." (Democracy in America)
Sunday, July 10, 2011
Values and Postmaterialism
Rokeach is considered to have done the most influential study on values (according to my textbook) by studying all major values of all human cultures (1973). He argued that the two values that were most related as important were equality and freedom. He assigned equality the rating from low vs. high and freedom the same and he matched them into four categories as four separate ideologies. They were as follows:
1. Socialism as high equality and high freedom.
2. Communism as high equality and low freedom.
3. Capitalism as low equality and high freedom.
4. Fascism as low equality and low freedom.
A different study on values by Inglehart (1977) centered on the generational differences, not in terms of left or right but of materialism and postmaterialsim. He argued that values of recent generations were more inclined to postmaterialism, which to Inglehart meant people "value orientation that emphasizes self-expression and quality of life over financial and physical security." I am more inclined to think that these studies were likely to be characteristic of values by those coming out of the 1960's and early 1970's than post 1980's. Things changed in the 80's and all the postmaterialist hippies turned into extremely materialist yuppies. So for me I am surprised that my textbook that was published in 2008 is quoting studies from a different timetable. Nevertheless, the authors then jump into today and state that that such value orientations are tied with how people will vote today and showing a clear bias by stating that Green parties provide a clear example of value orientation by voting for postmaterialist ideals. Nevertheless, they concluded that it is the ideological standing between left-wing and right-wing positions that are of "paramount importance for understanding political behavior." Just makes me wonder why they bothered citing the other studies when they turned out not to be very relevant. Or does it serve the purpose of placing heuristics and biases that might become a part of our less conscious and unconscious thinking but may nevertheless influence our thinking unknowingly. After all that is what influence and change agents do.
1. Socialism as high equality and high freedom.
2. Communism as high equality and low freedom.
3. Capitalism as low equality and high freedom.
4. Fascism as low equality and low freedom.
A different study on values by Inglehart (1977) centered on the generational differences, not in terms of left or right but of materialism and postmaterialsim. He argued that values of recent generations were more inclined to postmaterialism, which to Inglehart meant people "value orientation that emphasizes self-expression and quality of life over financial and physical security." I am more inclined to think that these studies were likely to be characteristic of values by those coming out of the 1960's and early 1970's than post 1980's. Things changed in the 80's and all the postmaterialist hippies turned into extremely materialist yuppies. So for me I am surprised that my textbook that was published in 2008 is quoting studies from a different timetable. Nevertheless, the authors then jump into today and state that that such value orientations are tied with how people will vote today and showing a clear bias by stating that Green parties provide a clear example of value orientation by voting for postmaterialist ideals. Nevertheless, they concluded that it is the ideological standing between left-wing and right-wing positions that are of "paramount importance for understanding political behavior." Just makes me wonder why they bothered citing the other studies when they turned out not to be very relevant. Or does it serve the purpose of placing heuristics and biases that might become a part of our less conscious and unconscious thinking but may nevertheless influence our thinking unknowingly. After all that is what influence and change agents do.
Saturday, July 9, 2011
The End of Ideology? I Think Not!
Applied social psychology has linked up with political psychology to figure out our political behavior and why we do what we do or don't do. One thing the influence and change agents want to know is whether ideology is still important today or has it changed from previous generations. The importance of this knowledge will help them to better predict people's voting behavior. They assumed that if ideology still mattered that people would vote consistently with their ideology, such as left/liberal & right/conservative and vote accordingly. However, that is not what they discovered. They found that since WWII, the left/right ideological differences no longer played an important role in politics.
Because:
1. People's attitudes lacked consistency.
2. People didn't seemed to be moved by ideological requests.
3. There wasn't a fundamental difference between left/right ideologies.
4. There wasn't ample differences between left-wing and right-wing view points.
This research was done in 2006. Personally, I find this hard to believe. Most right-wing conservative are vehemently different than left-wing liberals. Just mention Glenn Beck or Sarah Palin to a liberal and see how that goes. Or mention the legalization of medical marijuana to a conservative and be sure to duck. I see people firmly planting their political actions accordling to their ideology. Nevertheless, I am just stating what I am being taught in a major university.
Because:
1. People's attitudes lacked consistency.
2. People didn't seemed to be moved by ideological requests.
3. There wasn't a fundamental difference between left/right ideologies.
4. There wasn't ample differences between left-wing and right-wing view points.
This research was done in 2006. Personally, I find this hard to believe. Most right-wing conservative are vehemently different than left-wing liberals. Just mention Glenn Beck or Sarah Palin to a liberal and see how that goes. Or mention the legalization of medical marijuana to a conservative and be sure to duck. I see people firmly planting their political actions accordling to their ideology. Nevertheless, I am just stating what I am being taught in a major university.
Friday, July 8, 2011
Prospect Theory
Some corrections from last nights blog...The co-author of Nudge is Richard Thaler & Cass Sunstein.
Robert Shiller is a PhD at Yale. I have seen him many times on Bloomberg. He says that the article by Kahneman and Tversky, Prospect Theory: An Analysis of Decision under Risk, (1979) is the most important theory of the last 50 years. Prospect Theory argues that "decisions deviate from expected utility theory outcome because decision makers are willing to take more risk to prevent losses." Expected utility theory argues that the rational person is going to make their decisions by weighing the costs and the benefits of a decision and will choose the one that will bring the least pain and the greatest pleasure by making a rational, informed decision.
In January 2010, Newsweek printed an article called May the Best Theory Win. This article explains that people, no longer are weighing the costs and benefits but are making irrational choices and thus, the need to propose "a new way of looking at the economy...through the prism of evolutionary biology." It is proposed that the key is to "craft" a new, unifying theory of economics that can create better policy. The influence and change agents are interested in combining brain science with economics to map our brain patterns to understand how economic and other decisions are being made. This definitely will take the guess work out of it. Now consider Cass Sunstein, which is Obama's regulation czar and is a behavioral economist. It gives new meaning to what a regulation czar is and what might be the tools of his craft as you consider the changing theory of economics and finance and changing the capitalist system to "adapt" to the New Rational Economics.
Robert Shiller is a PhD at Yale. I have seen him many times on Bloomberg. He says that the article by Kahneman and Tversky, Prospect Theory: An Analysis of Decision under Risk, (1979) is the most important theory of the last 50 years. Prospect Theory argues that "decisions deviate from expected utility theory outcome because decision makers are willing to take more risk to prevent losses." Expected utility theory argues that the rational person is going to make their decisions by weighing the costs and the benefits of a decision and will choose the one that will bring the least pain and the greatest pleasure by making a rational, informed decision.
In January 2010, Newsweek printed an article called May the Best Theory Win. This article explains that people, no longer are weighing the costs and benefits but are making irrational choices and thus, the need to propose "a new way of looking at the economy...through the prism of evolutionary biology." It is proposed that the key is to "craft" a new, unifying theory of economics that can create better policy. The influence and change agents are interested in combining brain science with economics to map our brain patterns to understand how economic and other decisions are being made. This definitely will take the guess work out of it. Now consider Cass Sunstein, which is Obama's regulation czar and is a behavioral economist. It gives new meaning to what a regulation czar is and what might be the tools of his craft as you consider the changing theory of economics and finance and changing the capitalist system to "adapt" to the New Rational Economics.
Thursday, July 7, 2011
More on The New Rational Economic Theory
With the "older" understanding of economic theory, it was believed that people made rational decisions. But psychologist have shown that people are not rational. Psychology turned economic theory upside down. As decision making was studied it became apparent that people use the general principle of the availability heuristic which is that people make decisions by the thing that most readily comes to their mind. Generally, it is something that has been recently heard or seen and is therefore readily available in the memory to make a general judgement about something. This works very well in advertising but it works for about everything. Now place this with priming or prompts (ideas placed to activate an association in our memory) and you can see what a powerful tool this can be.
The prospect theory is that losing hurts more than winning feels good. Game theory comes into play with the prospect theory, which people are willing to gamble to avoid a loss. If markets start to go down people will hang on but when the markets are high people will then sell. Implications can be taken that at a policy level it may become necessary to keep people from hurting themselves, if they are a threat to themselves the law can come in to protect them. In economics, policies can be implimented that make people make good decisions. Some might even call this a form of social engineering and some liberal economists are very much for this. Dick Bailer has just written a book called Nudge, he is a behavioral psychologist.
Thus, the notion is that we, the people, do not make good, rational consumers and this may lead to more theories on judgement and economics and policies to help us out.
The prospect theory is that losing hurts more than winning feels good. Game theory comes into play with the prospect theory, which people are willing to gamble to avoid a loss. If markets start to go down people will hang on but when the markets are high people will then sell. Implications can be taken that at a policy level it may become necessary to keep people from hurting themselves, if they are a threat to themselves the law can come in to protect them. In economics, policies can be implimented that make people make good decisions. Some might even call this a form of social engineering and some liberal economists are very much for this. Dick Bailer has just written a book called Nudge, he is a behavioral psychologist.
Thus, the notion is that we, the people, do not make good, rational consumers and this may lead to more theories on judgement and economics and policies to help us out.
Wednesday, July 6, 2011
The New Rationality of Economics
During this time of information overload people are adapting to our new busy and complex lifestyles by making their economic choices using heuristics (mental shortcuts, making automatic choices with a minimum of thinking) and biases (a tendency of automatic likes & dislikes). Economic psychologists and behavioral economist are combining with applied social psychologist to help explain and predict micro-economic behavior (the individual consumer, investor, and entrepreneur), as well as, trying to know macro-economics (consumer confidence) for marketing and behavior towards finances. The combination of theories will help with knowledge pertaining to "game theory, decision making and choices, social orientation and social references."
Some of the theories are: Prospect theory, by combining or integrating a loss it has a smaller negative effect than two separate losses. There is the endowment effect which contends that people get attached to their own "stuff" and are less willing to sell or to give away these things. Instead, they will think they are worth much more if they try to sell them. There is also the status-quo bias that people will tend to stay with a something familiar and/or the default option rather than change to an alternative choice. And one of my favorites is the sunk-costs effect that we tend to keep pumping money into a lost cause because we don't want to suffer the loss. These are just a drop in the bucket of examples of the new rationality of economics due to our changing financial world and the necessity of realizing how the consumer thinks and behaves so that the influence agents can better serve us...or is it to serve them...I not clear!
Some of the theories are: Prospect theory, by combining or integrating a loss it has a smaller negative effect than two separate losses. There is the endowment effect which contends that people get attached to their own "stuff" and are less willing to sell or to give away these things. Instead, they will think they are worth much more if they try to sell them. There is also the status-quo bias that people will tend to stay with a something familiar and/or the default option rather than change to an alternative choice. And one of my favorites is the sunk-costs effect that we tend to keep pumping money into a lost cause because we don't want to suffer the loss. These are just a drop in the bucket of examples of the new rationality of economics due to our changing financial world and the necessity of realizing how the consumer thinks and behaves so that the influence agents can better serve us...or is it to serve them...I not clear!
Tuesday, July 5, 2011
"Thou Shalt Think"
I just read that tonight in an article that was quoting Ayn Rand. "Thou Shalt Think." I like that, alot! If there is anything I would like to see more of in this country, it would be thinking. I imagine many people assume they are thinking everyday, but are they? Is thinking just going about our daily life and repeating opinionated news and popular slogans? Or, does thinking actually require thought? Maybe a few moments alone in contemplation could lead to some personal thought. People don't like to alone anymore. Now with all the mass media connections, people are always connected to someone or something. People are forever talking, talking and talking. I am at a very busy University and there is nowhere on campus (except the testing center) that people are not connected. All day long in every class I see students scrolling through facebook. In the bathroom the girls are talking while on the can. I feel embarrassed to flush while they are talking. I heard one girl apologize to whoever was on the other end when I flushed. Everyone is always talking but never really saying much. You would think since I am at a major University that I would hear clever and interesting things from my fellow students. But I never do. Sure in class but not in the commons, not in the cafeteria, not walking around on their cells or in groups of friends. It is all just trivia and the mundane. Therefore, I propose that we should band the mundane dribble for some real thinking and stimulating (not sexting) conversation. I suggest that we abide by Ayn Rand's commandment of "Thou Shalt Think" at least for a day. It couldn't hurt.
Monday, July 4, 2011
The Choice
My physical science text tells me that to be a scientist, it is necessary to compare and contrast different ideas and theories in order to arrive at the truth. Tonight, I will look at two very different ideas which lead to two very different conclusions.
The founding generations' hopes and dreams were to develop a place where people could live free in accordance with natures laws which are God's laws. The Declaration of Independence was written to the King of England because he would not allow the people their free will. Therefore, the founding generation broke from a tyrant and set forth to create a place where men and women could live free. For as Benjamin Franklin stated, "Rebellion to Tyrants is Obedience to God." Michael Novak said, "Americans of the founding generation appealed without flinching to the undeceivable Judge of all consciences, precisely because they believed they had formed a covenant with Him, in the name of His most precious gift to the universe, the liberty of the sons and daughters of God."
Contrasting our American founder's plan with the behavioral scientist B.F. Skinner's plan to understanding behavior of people in order to control behavior in ways according to those that want to rule over people's will. (Which Skinner does not believe people have) Thus, Skinner and others like him, are striving to put humankind back under the rule of a tyrant. Only this tyrant is not depicted as such, as they rarely are. He states "operate conditioning" can be used politically if one knows how. Skinner argues, "when concerned about changing behavior, you don't have to turn to vicious methods, you turn to schools, forms of therapy, incentives, and rehabilitation and such, as a good practical method to motivate." He further states, "if we can restructure consequences we can change behavior."
You chose which one sounds better for you. Freedom and liberty or conditioned motivation for the desired behavior. It's up to you! Or rather according to Skinner...it isn't!
The founding generations' hopes and dreams were to develop a place where people could live free in accordance with natures laws which are God's laws. The Declaration of Independence was written to the King of England because he would not allow the people their free will. Therefore, the founding generation broke from a tyrant and set forth to create a place where men and women could live free. For as Benjamin Franklin stated, "Rebellion to Tyrants is Obedience to God." Michael Novak said, "Americans of the founding generation appealed without flinching to the undeceivable Judge of all consciences, precisely because they believed they had formed a covenant with Him, in the name of His most precious gift to the universe, the liberty of the sons and daughters of God."
Contrasting our American founder's plan with the behavioral scientist B.F. Skinner's plan to understanding behavior of people in order to control behavior in ways according to those that want to rule over people's will. (Which Skinner does not believe people have) Thus, Skinner and others like him, are striving to put humankind back under the rule of a tyrant. Only this tyrant is not depicted as such, as they rarely are. He states "operate conditioning" can be used politically if one knows how. Skinner argues, "when concerned about changing behavior, you don't have to turn to vicious methods, you turn to schools, forms of therapy, incentives, and rehabilitation and such, as a good practical method to motivate." He further states, "if we can restructure consequences we can change behavior."
You chose which one sounds better for you. Freedom and liberty or conditioned motivation for the desired behavior. It's up to you! Or rather according to Skinner...it isn't!
Sunday, July 3, 2011
Sometimes...there is no tomorrow
Yesterday I had a list of things to do:
Study for mid-term
Brush cat
Do laundry
Call Dad
Call Lorna
Make dinner
I got through all my list except, call Lorna. I was going to do that tomorrow. But tomorrow didn't come for Lorna. She passed away after a 5 1/2 yr battle with cancer. Once again I am suffering from a regret. If only I had.... So today I wrote all the letters & thank you cards that I was saving to take care of for some distant tomorrow. I did it today.
Good-bye Lorna...for now. I will miss you and appreciate all the fun we had over the years.
Study for mid-term
Brush cat
Do laundry
Call Dad
Call Lorna
Make dinner
I got through all my list except, call Lorna. I was going to do that tomorrow. But tomorrow didn't come for Lorna. She passed away after a 5 1/2 yr battle with cancer. Once again I am suffering from a regret. If only I had.... So today I wrote all the letters & thank you cards that I was saving to take care of for some distant tomorrow. I did it today.
Good-bye Lorna...for now. I will miss you and appreciate all the fun we had over the years.
Saturday, July 2, 2011
What an applied social psychologist does....
An applied social psychologist is a generalist. They use all the theories that social psychologist come up with to better understand what causes the social problems that they need to solve. There are three areas that the applied social ppsychologists work in:
Research: this group studies what the activators are that cause the problems.
Consultants: this group work for individuals & organizations or communities to fix whatever their problem might be. They are managers, work in marketing, PR & communications.
Policy advisors: This group are involved in government, non-profit organizations, business groups, etc. They are the real agents of change.
The applied social psychologist works in the field, mostly. They use theories to understand social thinking, social influence & social relationships. The theories are phenomenal! And they use many different theories to arrive at their interventions.
One of my favorite theories is cognitive dissonance theory. This theory states that people want their beliefs and actions to be in harmony. Therefore if their behavior isn't in harmony with their attitudes, values and beliefs they will do one of two things to avoid the disharmony. They will change their actions to coincide with their beliefs or they will change their beliefs. My other favorite theory is reactance theory. This is when someone is told they can't do something and the person will do it just to show that they still have their freewill to do so. Reactance is reacting to the threat of losing freedom.
So there you have it bumper sticker style.
Research: this group studies what the activators are that cause the problems.
Consultants: this group work for individuals & organizations or communities to fix whatever their problem might be. They are managers, work in marketing, PR & communications.
Policy advisors: This group are involved in government, non-profit organizations, business groups, etc. They are the real agents of change.
The applied social psychologist works in the field, mostly. They use theories to understand social thinking, social influence & social relationships. The theories are phenomenal! And they use many different theories to arrive at their interventions.
One of my favorite theories is cognitive dissonance theory. This theory states that people want their beliefs and actions to be in harmony. Therefore if their behavior isn't in harmony with their attitudes, values and beliefs they will do one of two things to avoid the disharmony. They will change their actions to coincide with their beliefs or they will change their beliefs. My other favorite theory is reactance theory. This is when someone is told they can't do something and the person will do it just to show that they still have their freewill to do so. Reactance is reacting to the threat of losing freedom.
So there you have it bumper sticker style.
Friday, July 1, 2011
Strauss-Kahn
"What a dreadful Spirit that Man possesses, who can put a private Appetite in balance against the universal Good of his Country, and of Mankind." Cato
Rich and powerful men seem to be under a different code of ethics than the rest of mankind. I was amazed in May when Dominique Strauss-Kahn was arrested. I knew he was the managing Director of the International Monetary Fund. I wasn't surprised that he had acted misappropriately. No! I was surprised that he could be arrested. So I was not surprised today upon hearing that he was released from his house arrest and all the suspicion has turned on the victim. But doesn't this surprise anyone? And if not, why not? How is it possible? Is it his money? Or his connections? His power?
Dominique Strauss-Kahn is a member of the French Socialist Party. In the 1970's he was a member of the Union of Communist Students. It was exactly one year from the time he was "elected/placed" as the Managing Director that the world financial collapse occurred. What is his philosophy on the US & our monetary system....Under Strauss-Kahn the IMF's pursuit of financial stability has included calls for a possible replacement of the dollar as the world's reserve currency. For some commentators that amounts to a call for a "new world currency that would challenge the dominance of the dollar. How did a man like this have such a powerful position in deciding how money would be distributed through-out the world? And where will he be heading after the charges are completely dropped? And you can be sure they will be.
Rich and powerful men seem to be under a different code of ethics than the rest of mankind. I was amazed in May when Dominique Strauss-Kahn was arrested. I knew he was the managing Director of the International Monetary Fund. I wasn't surprised that he had acted misappropriately. No! I was surprised that he could be arrested. So I was not surprised today upon hearing that he was released from his house arrest and all the suspicion has turned on the victim. But doesn't this surprise anyone? And if not, why not? How is it possible? Is it his money? Or his connections? His power?
Dominique Strauss-Kahn is a member of the French Socialist Party. In the 1970's he was a member of the Union of Communist Students. It was exactly one year from the time he was "elected/placed" as the Managing Director that the world financial collapse occurred. What is his philosophy on the US & our monetary system....Under Strauss-Kahn the IMF's pursuit of financial stability has included calls for a possible replacement of the dollar as the world's reserve currency. For some commentators that amounts to a call for a "new world currency that would challenge the dominance of the dollar. How did a man like this have such a powerful position in deciding how money would be distributed through-out the world? And where will he be heading after the charges are completely dropped? And you can be sure they will be.
Subscribe to:
Posts (Atom)