The weeks seems to be passing faster as the entries on ERPZ becomes more frequent. The one-entry-per-day rate now is not exactly very sustainable without additional support from guest writers and contributors so I’m once again calling out for interested parties to leave a comment with your emails so I might be able to contact you and get your contribution up.
The linked article mentioned about the ‘paradox of choice’, which is the topic of Barry Schwartz’stalk on TED.com. He explains the disadvantages of being offered too many choices and the problems associated with the implications of having too many choices in the first place on the psyche of the person after making the decision, citing Dan Gilbert’s presentation in the same TED conference.
Barry is another great speaker, mixing humour consistently throughout his talk with a steady flow of cartoons. The point he makes in our escalating expectations is very real and worth pondering over for anyone who wants to exert discipline on their thinking to keep their mind healthy. He claims he wrote the book, The Paradox of Choice to explain to himself why he felt worst when he got a better jeans than he previously did.
Just a few days back I was discussing how we have to hold contradicting ideas as social science students; and it dawned on me that some students after training themselves to do just that, fails to make a judgment using the ideas. To them, it seems that everything is equally right and there’s no quantitative means of assessing which side is better. I hate to say this but then you actually have the power to decide what is right. After all, politicians, social scientist, economists and such are always at loggerheads and as I mentioned in that earlier post, no one is exactly right – at least we’ll never know what is truly right. We can only be sure of approximations to the right thing but then again there are high estimates, low estimates, depending on how things turn out.
The fact is we all make many decisions these way. There’s no way to know for sure that a plan will carry through and we have default positions, knowing all well what they rest upon and how they might change. We might wake up at 10am every Sunday Morning but then we adjust accordingly when we have appointments around that time on that day. You know that your priority is with the appointment and not with sleep; so unless your priority is the other way round, you’ll compromise. Likewise, when confronted with the question as to whether a Monopoly is harmful to consumers you might have to consider your priorities. You might be concerned with net transfer of wealth from consumers to the monopolist and thus against the theoretical supernormal profits. In that case you’ll argue that while the firm might be a natural Monopoly and the only one serving the market, it is harmful as long as it’s not taxed such that it only earn normal profits (with the tax revenue redistributed to the consumers).
On the other hand your sympathy might lie with consumer choice and welfare so you believe that as long as the monopolist exhibit some sort of dynamic efficiency, innovating and proliferating the market with variety then you’re fine with the Monopoly. After all, it is giving the consumers what they want that earn them the profits. But in an event when it becomes complacent and exhibits some sort of inefficiency (not in the P=MC sense though) then it needs some competition injected. Following that line of argument, some might choose to take side with competition right from the start and argue that as long as the market is a rather contestable market, with huge players ready and able to enter anytime (despite high barriers to entry), then the Monopoly need not be too closely regulated. The above arguments would all make sense and they could well be right answers for economics essays but then the question is whether you’ve presented your case convincingly by showing what are your priorities or principal considerations.
In other words, you do not make judgments when you’re analyzing or dissecting the ideas but when called upon, you’re able to demonstrate your principal concerns and judge the ideas in accordance to them. You should be comfortable with changing your stand when you adjust your judging guidelines and not cling on too hard to your positions. Karl Albrecht, author of Practical Intelligence believes that the open-mindedness so essential to learning and the path towards intelligence require this ability to see opinions/positions and separate from ourselves. So learn to pick up opinions from making judgments but readily drop them and learn to justify what prompted you to do so (new information input, changing circumstances, difference in judging guidelines).
Tyler Cowen mentioned something about product insurance at one part of his book, Discover Your Inner Economist. He says that one should not argue with his wife when she insist on buying product insurance even when you know that the results are economic analysis are at your favour. Presumably, there are some other cost-benefit analysis taking place, at the level where the cost of winning the argument greatly overwhelms the benefit (which of course is the cash saved on the product insurance). The Economist asked why people continue to buy them even when products are unlikely to fail, which means that these product insurances are immensely profitable for the electronics retail sector. The researchers who examined purchase data from a big electronics retailer for over 600 households from November 2003 to October 2004 concluded that the purchases were linked to the shopper’s mood. Of course, a less-than-rational wife might be the explanation, but even the wife has a sound explanation for that:
[…] the emotional tranquillity that comes with buying a new warranty is not in itself without value, even if “rationally, it doesn’t make sense”.
But I find an ingredient missing in this story; the researchers probably falsely assume that all the shoppers have got the same level of perceptiveness. And I believe perception have all to do with the purchase of product insurance. Think about it, when was the last time you had a product which failed and the warranty period was just over and you blame yourself for not buying additional coverage? But how about the last time when you did buy the product insurance and it didn’t fail at all within the span of its usage, not once? Just like the belief that we’re unlucky enough to always join the slowest queue in the supermarket; our erroneous perception of the frequency we get unlucky can make us more frustrated with a product insurance unextended than a product which didn’t fail after we bought the coverage despite the fact that they probably inflicts the same cost on you. Obviously it actually hurts you more when you think back and regret not extending coverage; you probably won’t even think back on how stupid you were to buy product insurance for a reliable product since you’re using it happily.
This creates a bias for purchasing product insurance. Our faulty perception supplements our faulty memory in suggesting that buying product insurance would be the wise choice, going by the seemingly sound argument of ‘if the product fails, I’m protected; and even if it doesn’t, I get a peace of mind plus the retailers deserve the reward if they recommended me the durable kind of good’. You could very well have realised that if the product was that durable the manufacturer would already have taken a cut for that on the retail price and that if the product ran a high chance of failure the retailer wouldn’t even offer you the product insurance in the first place. And if your wife has anything to say about that, it’ll probably be “Must you be that calculative?”
Some students struggle with social sciences and humanities like Economics, Geography and History because they think they can’t hold two contradictory ideas at the same time and not take a side. Economist are somewhat famous for being able to do that and often criticized for being that way. As a matter of fact, humans are remarkably capable of doing that; we overrate our consistency of thought and the need for ideas that don’t contradict. When we demand scientific proofs for certain claims yet openly express faith in certain religious claims, we’re adopting contradictory frameworks of proof.
The reason why these subjects require that we hold contradictory ideas or for us to withhold judgment of these ideas is the lack of a proper quantitative approach to evaluating them. We might be able to come up with pros and cons but we are unable to assign a positive figure to denote the value and significance of the pro and a corresponding negative figure for a con and then evaluate them in an accounting matrix that will tell you which is better and how much better. Any attempts at that will be subjective and arbitrary anyways. As a result, it is important that students of these subjects hold on to them without judging but maintain the ability to dissect and analyse these ideas, zoom into certain features and investigate different aspects of it when necessary. More importantly, we’ll have to master our language and internalize the nuances of the typical jargons used in the field to discuss these observations we make.
As humans, we will definitely have preferences for some explanation over others as well as some outcomes over others and this is a reason behind all the disputes that social scientist usually have with each other, including high profile ones by economists. And worst, unlike sciences where there are experiments everyone can agree on to check their ideas and theories to discover ‘the truth’, the search for truths in social sciences have often ended in vain because of the dynamic nature of the field. Scientists might not agree before a discovery is confirmed (Linus Pauling, a super-Nobel laureate with 3 Nobel prizes famously believed that DNA’s structure should be a Triple Helix) but once it is confirmed, we find little delusional souls continuing with their false beliefs unless they are ignorant of the confirmation. Economics had its share of control experiments that happened in the world, often by chance. Unfortunately, they can never be repeated perfectly and their results are never agreed upon by experts in the field.
This is not to say that the subjects offer little value to the world; in fact the dynamic nature of these fields mean that there is always questions to answer and things to explore readily. And that is why we need more people to be able to hold different ideas at the same time and have different opinions on the same issue under different sort of circumstances and be able to see the world this way.
I got to know about this book through a friend who was exploring topics that ranged from manipulating personality test results to acting smart in front of employers. It’s a great boon that this is not the kind of book that teaches you to act smart. Karl Albrecht writes realistically about how we can go about making ourselves more intelligent in practical situations. There are many ideas in the book I’ve thought about previously but failed to put into concrete concepts as he did. I must say Karl did a wonderful job.
Like most of the other books on thinking, Karl discusses the make-up of the brains, the way different lobes on the brain controls different stuff and how they work together in concert and then he draws some meaningful speculation on the way we think. There are many speculations which are largely unproven in neuro-sciences but are well known in the field of psychology. Never mind the actual theories, Karl shows us how they might be useful for aiding us discover our mind’s potential. He firms up the concept of ‘Affirmative Thinking’, which I think is a very important idea in our lives. We’ve cease to be gatekeepers of our mind in this media age, often pushed around, influenced by the people who are in turn controlled by others around as well as prevailing culture and fads. To accept that we are often being bombarded by thoughts and ideas of others and we often take them as if they’re our own is the first step to controlling our thinking and helping us steer ourselves towards healthy thinking and mental habits.
Karl recommends simple methods to help us regain control of our minds and direct our attention so that we can tap on our mental habits, thinking preferences and styles to aid us with daily thinking, problem-solving and just plain existing in our complex world. I’m interested in the implication of Karl’s ideas on education and learning. He has another book I’m looking forward to read, Social Intelligence, which he actually wrote before this book.
