socialsciencespace.com

Robert Shiller on Behavioral Economics

An interesting interview. Here are some snippets…

It turns out that the human mind is very complicated. Economic theory likes to reduce human behaviour to a canonical form, the structure has been, ever since Samuelson wrote this a half century ago, that people want to maximise their consumption. All they want to do is consume goods; they don’t care about anyone else. There’s neither benevolence nor malevolence. All they care about is eating or getting goods and they want to smooth it, they described it in terms of so-called utility functions through their lifetime and that’s it. That is such an elegant simple model, but it’s too simple and if you look at what psychology shows, the mind is the product of human evolution and  it has lots of different patterns of behaviour.  The discoveries that psychologists make to economics are manifold.

I think that the economics profession suffers from physics-envy. I really do. We all wish we could be Einstein. It’s too strong a model, we can’t all develop the theory of relativity. The world of people isn’t like that. When you look at what happens for example in a financial crisis, you’ve got to get immersed in a lot of detail. It doesn’t become understandable by abstract economic reasoning.  This means you have to look at an impression of what’s driving people, what’s on their minds, what they don’t know, what the lawyers did with the contracts, what the people are assuming the government might do if such and such happens. It involves a lot of real world thinking which doesn’t fit with the Einstein model.

We are learning amazing things about human behaviour, we could also add neuroscience. It seems to me that the profession advances by bringing in insights from other professions. And the place where 20 years ago I would least have expected it is the medical school. But you know people from the medical school are now coming into economic seminars because they go back to their lab and they can do an MRI or single-neuron study and see what’s happening inside the brain. It used to be that we had no insight, we believed in what Samuelson called ‘revealed preference’. We will look at people’s functions of their mind by seeing what they do in their economic actions and there’s no other way. But now we can look inside the brain and see something. One thing about behavioural economics incorporating neuro-economics is that it’s going to be a very productive field in the next twenty years and it’s going to change our thinking about the economy.

[E]conomists’ analysis should inform better public policy and reduce the frequency of crashes. We don’t want to have these crashes in the first place. And so they will be unsung heroes who saw something coming and averted it. It’s just like the guy who designed the traffic lights and he prevents accidents. You don’t go to this person thankfully saying ‘you prevented my accident’, you don’t even know that the person prevented it. So that’s the kind of world where economists will fade into the background, just like the street planners in the city, and yet be doing good things.

Source: Socialsciencespace
economicspsychologybehavioural economicsneurosciencepublic policy
ideas.time.com

Why Gadgets Are Great for Introverts

A wired world can be alienating, but its great virtue has always been democratization. When we bathe in the blue light of our gadgets, we’re doing many things: surfing, working, gaming and, yes, tuning out the world. But we’re also hearing ideas from people whose voices might not have carried in the pre-wired era, who might not have broken through the chatter. One of the most unremarked advances of the online revolution is that we now hear loudly from the quieter half of the population.

The author of the post has written a book that’s on my reading list: Quiet: The Power of Introverts in a World That Can’t Stop Talking.

You can also listen to an interview she did for the Little Atoms Podcast.

Source: TIME Ideas | TIME.com
introvertspsychologytechnologybooks
bbc.co.uk

A Point Of View: The trouble with freedom

We’ve come to believe that freedom is the natural human condition, which only tyrants prevent everyone from enjoying - but when a tyrant is toppled, we can’t know what will come next, says John Gray.

We believe that freedom and democracy are inseparable, so that when a dictator is toppled the result is not only a more accountable type of government but also greater liberty throughout society.

An older generation of thinkers recognised that freedom and democracy don’t always go hand in hand. The 19th Century liberal John Stuart Mill was a life-long campaigner for greater democracy, but he also worried that personal liberty would shrink once governments could claim to express the will of the majority.

We need freedom because our goals and values are highly diverse and often quite different from those of the people around us. Having a voice in collective decisions - the basis of democracy - is a fine thing, but it won’t protect your freedom if the majority is hostile to the way you choose to live.

Many will tell you that this danger can be dealt with by bills of rights that put some freedoms beyond the range of political interference. But politics has a habit of finding ways around the law, and when the state is weak declarations of rights tend to be unenforceable.

Once you think of freedom as living as you choose, you’ll see that it’s not just tyrants that stand in its way. The world is full of failed and enfeebled states in which the main threats to freedom come from organised crime, ethnic conflict and militant sectarian groups.

An important reminder that democracy does not ensure freedom. Additional work must be done to ensure the necessary institutions are in place as well.

Source: BBC News
politicshistory
prospectmagazine.co.uk

Riddled with irregularity

perceptionLanguages are extremely diverse, but they are not arbitrary. Behind the bewildering, contradictory ways in which different tongues conceptualise the world, we can sometimes discern order. Linguists have traditionally assumed that this reflects the hardwired linguistic aptitude of the human brain. Yet recent scientific studies propose that language “universals” aren’t simply prescribed by genes but that they arise from the interaction between the biology of human perception and the bustle, exchange and negotiation of human culture.

[Language] peculiarities have been explained by linguists by reference to the history of the people who speak it. That’s often fascinating, but it does not yield general principles about how languages have developed—or how they will change in future. As they evolve, what guides their form?

There are several schools of thought about how colours get named. “Nativists,” who include Berlin and Kay and also Steven Pinker, the Harvard psychologist, argue that the way in which we attach words to concepts is innately determined by how we perceive the world. As Pinker has put it, “the way we see colours determines how we learn words for them, not vice versa.” In this view, often associated with Noam Chomsky, our perceptual apparatus has evolved to ensure that we make “sensible”—that is, useful—choices of what to label with distinct words: we are hardwired for practical forms of language. “Empiricists,” in contrast, argue that we don’t need this innate programming, just the capacity to learn the conventional (but arbitrary) labels for things we can perceive.

For colour, our physiology influences this process, picking out some parts of the spectrum as more worthy of a distinct term than others. The crucial factor is how well we discriminate between similar colours—we do that most poorly in the red, yellowish green and purple-violet parts (we can’t distinguish reds as well as we can blues, for example).

When researchers included this bias in the colour-naming game, they found that generally accepted colour terms emerged in their population of agents in much the same order proposed by Berlin and Key: red, then violet, yellow, green, blue and orange.

[T]here’s nothing in the physiology of vision that would let you guess a priori that red is going to emerge first. And indeed, in the computer simulations there’s initially no well-defined word for red—it is only after some time that a word stably referring to the red part of the spectrum appears, followed later by violet, and so on. Culture—the discourse between agents in the population—is the filter which extracts the labels that are most useful from the biological given of colour vision. So both biology and culture are required to get it right.

It increasingly seems, then, that language is determined not simply by how we are programmed, but by how it is used and by what we need to say.

Source: Prospect
anthropologycolourculturelanguageperceptionphysiology
innovationexcellence.com

The Psychology of Team Turnarounds

Sports psychologists and Washington Post columnists Joe Frontiera and Daniel Leidl reveal that process, distilled from five years of research of business, sports and government teams, in their book Team Turnarounds: A Playbook for Transforming Underperforming Teams.

They spoke with CEOs, frontline managers and governors, as well as owners, general managers and coaches in the National Football League, Major League Baseball, and the National Basketball Association to explore what it takes to get a failing team back on track. All of the teams they analyzed—across every sector—reversed their fortunes and did a 180 from failure to success.

The $64K question:

What’s the one ingredient needed for any successful turnaround?
No matter what kind of team it is, the process for a turnaround is the same. A leader has to boldly identify where the turnaround is needed, say it, and then guide the team forward. However, you need trust for any of this to happen—trust within the team that the turnaround is possible and trust from customers or constituents that the turnaround is taking place.

Source: Innovation Excellence
teamsleadershippsychologysportbusinessbooks
adailypinch.com

Redefining Work and Ourselves

Regardless of the economic environment, you’re bound to hear at least one or two stories from family or friends who are unhappy with their job. But in this current economic environment, there seems to be a lot of questions being asked on the value of work. It’s not that work isn’t important, but is it everything in a person’s life? Should it be?

The problem is, our society puts a lot of value in things and busyness. We’ve been taught to fill up our lives with activities and possessions. Literally. Scheduling our lives to the microsecond and buying bigger houses to store our ever expanding collection of things was just something that our society did. The saying “E pluribus unum” should have been replaced with “Keeping up with the Joneses” on all of our currency and coins over the past several decades. It was more apt.

So what’s the solution? First, the notion of a work week needs to change. If the new nature of work is more about the quality of ideas and quality of execution, it seems our notions of not only how we work but where and how frequently we produce work deliverables needs to change. Sometimes, the best place to come up with the next idea or how to execute that idea isn’t in an office, but on vacation. Or after you return from one. In short, we need to encourage people to get out of the office. But it’s not just about encouraging vacations. It can be about giving people more time to enjoy hobbies and other pursuits that aren’t work-related, but can spark employees to think differently. To think better.

Second, it seems people need to re-envision what a career path is. The old notions of what made a career need to be re-thought. And that young person who has held seven jobs in the past ten years may not be a job hopper or malcontent. They may have been just been trying to do what it took to get by. And who knows? That diverse skill set they built may actually be an asset.

Ultimately, this is about us. Are we going to continue to look to the same old ways of working and the same old notions of work as the way to leave this nation – and ultimately ourselves – forward? Or are we going to take a chance, have some guts and try to do things differently? To do them better? It’s all in our hands what we want our world of work to be.

Source: Daily Pinch
worklifematerialismhappinesshobbiesrecreation
bigthink.com

The Neuroscience of Creativity and Insight

Today, what Einstein believed intuitively – that insight was essential to scientific discovery and to the arts – can be observed methodically in the lab. Thanks to the invention of fMRI imaging, neuroscientists are capable of peering into a living, thinking brain in a way that their predecessors never dreamed of, with the potential to test long-standing ideas about how we arrive at novel solutions.

Eric Kandel is a pioneer in the field who worked alongside Harry Grundfest in the very first NYC-based laboratory devoted to the study of the brain. In 2000, he was awarded a Nobel Prize in physiology/medicine for showing that memory is encoded in the neural circuits of the brain. Kandel believes that we’re on the verge of reaching a deeper understanding of the nature of creativity that is more than anecdotal.

Source: Big Think
neurosciencecreativitypsychologybiologyinsightmemory
lifehack.org

The Only 2 Tricks You Need for Maximum Productivity

[F]irst it’s important to understand that if you’re not feeling great you’re not going to be able to hit maximum productivity. Take good care of yourself. It’s the foundation for everything.

With that in mind, here are the only two tricks you’ll ever need to reach maximum productivity:

Plot your day

Instead of diving right in, the first thing I do when I get to my desk is I open up a word document, look at my to-dos and emails, and then figure out how to fit everything in.  I literally write out my schedule for the day. […]

Writing a schedule for the day keeps you focused and productive, and it ensures that all the important things are getting your attention. Spend ten minutes in the morning plotting your day and then stick to it.

Carve out time each week to reflect and calibrate

If you really want to be productive throughout the day, one of the most important things to understand is how your daily work fits into the bigger picture of your work and life.

Most of us are so busy that we don’t bother reflecting. That’s a mistake. Nothing is more important than reflecting on your work and your life – how else would you know that you’re on the right track?

Source: Stepcase Lifehack
productivityplanningreflectionworklife
io9.com

Watching reruns can actually help restore willpower

Researchers have shown in the past that positive social interactions can restore depleted willpower. But social situations can also be fraught with negative interactions that can have a depleting effect. Thinking and writing about a favorite television show seems to engage the same mechanism as positive social interactions, without the negative effects.

So, a little nostalgic TV is ok.

Derrick was able to establish that those who exerted “effortful self-control” on day one, then interacted with a “familiar fictional world” on day two, had lower “negative mood” on day three than those who followed up their “effortful self-control” with “novel fictional worlds” or “escapism.”

So how can this research be used in real life? The findings suggest that if you’re facing a task that requires a lot of self-control — like starting a new routine, quitting smoking or dealing with a difficult situation at work — you’ll feel better and have more willpower if you choose re-watching or re-reading favorite books than if you pick up new ones [emphasis added]. Seeing as your brain associates this stimulus with social interaction maybe it would be best to pick your favorite shows with ensembles. Alternatively, you can use this study to justify extensive DVD collections, because you’ll never know when you need a social surrogate pick-me-up.

Source: io9
psychologywillpowertelevisionreading
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