Posts Tagged ‘choice’
“Don’t throw the baby out with the bath water”*…
From Dynomight (and here), an argument that algorithms, while problematic today, aren’t necessarily evil…
What does “algorithmic ranking” bring to mind for you? Personally, I get visions of political ragebait and supplement hucksters and unnecessary cleavage. I see cratering attention spans and groups of friends on the subway all blankly swiping at glowing rectangles. I see overconfident charlatans and the hollow eyes eyes of someone reviewing 83 photo she just made her boyfriend take of her in front of a sunset. Most of all, I see dreams of creative expression perverted into a desperate scramble to do whatever it takes to please the Algorithm.
Of course, lots of people like algorithmic ranking, too.
I theorize that the skeptics are right and algorithmic ranking is in fact bad. But it’s not algorithmic ranking per se that’s bad—it’s just that the algorithms you’re used to don’t care about your goals. That might be an inevitable consequence of “enshittification”, but the solution isn’t to avoid all algorithms, but just to avoid algorithms you can’t control. This will become increasingly important in the future as algorithmic ranking becomes algorithmic everything…
Dynomight elaborates on the problem, its genesis, and a plausible answer: “Algorithmic ranking is unfairly maligned,” from @dynomighty.bsky.social.
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As we rethink rankings, we might recall that on this date in 1969 a group at the top of most lists took it to the roof: The Beatles performed on the rooftop of their Apple Corps headquarters at 3 Savile Row, in central London’s office and fashion district. Joined by guest keyboardist Billy Preston, the band played a 42-minute set before the Metropolitan Police arrived and ordered them to “reduce the volume.” It was the final public performance of their career. The concert ended with “Get Back,” after which John Lennon quipped, “I’d like to say thank you on behalf of the group and ourselves, and I hope we’ve passed the audition.”
The full concert footage is available at the invaluable Internet Archive. Here, a taste of “Get Back”…
“We cannot reason ourselves out of our basic irrationality. All we can do is to learn the art of being irrational in a reasonable way.”*…
Classical economists posit that investment decisions are driven by rationality — a clear-eyed evaluation of risks and rewards… but then, meme stocks.
Kwabena Donkor, an assistant professor of marketing at Stanford Graduate School of Business has just unveiled some new research that suggests that identity distorts our financial choices, leading us to overvalue investments that reinforce our sense of self…
People don’t just invest with their wallets — they invest with their identity,” says Donkor, a faculty fellow at the Stanford Institute for Economic Policy Research.
In a novel field study involving soccer fans, Donkor and several colleagues uncover evidence of how identity can skew economic thinking. The researchers ran a series of experiments focused on fans who placed nearly 40,000 bets on English Premier League matches during the 2021-22 season. Participants — nearly 800 from Kenya and 1,600 from the United Kingdom — were given a budget and asked to place bets on upcoming matches. They received winnings based on the outcomes of randomly selected games.
Most of the participants were longtime supporters of a particular team. (Manchester United was their top favorite.) They were more optimistic about their favorite teams, betting 20% more on them. They rated their teams as having a 10% to 18% higher chance of victory than other teams, even when presented with forecasts from professional oddsmakers suggesting otherwise. These results persisted even after accounting for factors such as personal beliefs and appetite for risk.
The study also finds that participants placed a lower value on gains not aligned with their identity — what the researchers referred to as an “identity tax.” Fans effectively devalued these neutral bets by 17% to 27%. For poorly performing teams, this “tax” could soar as high as 47%, reflecting a strong emotional impulse to support their favorite team even when the odds were against it
The research, detailed in a paper cowritten with Lorenz Goette of the National University of Singapore, Maximilian Müller of the Toulouse School of Economics, Eugen Dimant of the University of Pennsylvania, and Michael Kurschilgen of UniDistance Suisse, shows that identity-driven preferences explain much of the gap in bettors’ behavior. Simulations showed that distorted beliefs due to identity account for as much as 44% of the difference in fans’ betting behavior. The remainder stemmed from preferences rooted in identity itself — people were willing to sacrifice potential gains to support options that aligned with who they are…
… The study’s findings have far-reaching implications for understanding economic behavior, particularly in areas like consumer finance, brand loyalty, and even political decision-making…
… the research hints at how consumers view different products. Items that align with a person’s identity are likely to be seen as complements rather than substitutes. For example, Donkor says a consumer who identifies strongly with sustainability might view eco-friendly products as essential enhancements to their lifestyle, even if they’re similar to comparable, less expensive goods.
Ultimately, these findings could improve our thinking about the biases that influence our financial lives. As the researchers point out, acknowledging the role of identity in decision-making is one key to designing better policies, creating more effective financial products, and ultimately improving individual welfare. “If we ignore identity,” Donkor concludes, “we miss the bigger picture in decision-making.”…
Understanding the choices that we, and those around us, make: “What Soccer Fans Can Teach Us About Making Irrational Decisions,” from @SIEPR.
* Aldous Huxley
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As we ponder the price (and as a reminder that there are other kinds of irrational decisions and that sometimes returns do matter to investors), we might recall that it was on this date in 2008 that Bernard “Bernie” Madoff was arrested and charged with defrauding investment clients of as much as $65 billion. A pioneer in electronic trading and chairman of the Nasdaq stock exchange in the early 1990s, he had turned to money management. By 2008, Madoff was running a huge and growing fund that promised its investors high and stable returns… the problem: it was a Ponzi scheme, the largest known Ponzi scheme in history.
“There’s no idea in economics more beautiful than Arrow’s impossibility theorem”*…
Tim Harford unpack’s Kenneth Arrow‘s Impossibility Theorem (which feels a bit like a socio-economic “Monty Hall Problem“) and considers it’s implications…
… if any group of voters gets to decide one thing, that group gets to decide everything, and we prove that any group of decisive voters can be pared down until there’s only one person in it. That person is the dictator. Our perfect constitution is in tatters.
That’s Arrow’s impossibility theorem. But what does it really tell us? One lesson is to abandon the search for a perfect voting system. Another is to question his requirements for a good constitution, and to look for alternatives. For example, we could have a system that allows people to register the strength of their feeling. What about the person who has a mild preference for profiteroles over ice cream but who loathes cheese? In Arrow’s constitution there’s no room for strong or weak desires, only for a ranking of outcomes. Maybe that’s the problem.
Arrow’s impossibility theorem is usually described as being about the flaws in voting systems. But there’s a deeper lesson under its surface. Voting systems are supposed to reveal what societies really want. But can a society really want anything coherent at all? Arrow’s theorem drives a stake through the heart of the very idea. People might have coherent preferences, but societies cannot…
On choice, law, and the paradox at the heart of voting: “Arrow’s Impossibility Theorem,” from @TimHarford in @WhyInteresting. Eminently worth reading in full.
* Tim Harford
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As we contemplate collective choice, we might send grateful birthday greetings to the man who “wrote the book” on perspective, Leon Battista Alberti; he was born on this date in 1404. The archetypical Renaissance humanist polymath, Alberti was an author, artist, architect, poet, priest, linguist, philosopher, cartographer, and cryptographer. He collaborated with Toscanelli on the maps used by Columbus on his first voyage, and he published the the first book on cryptography that contained a frequency table.
But he is surely best remembered as the author of the first general treatise– Della Pictura (1434)– on the the laws of perspective, which built on and extended Brunelleschi’s work to describe the approach and technique that established the science of projective geometry… and fueled the progress of painting, sculpture, and architecture from the Greek- and Arabic-influenced formalism of the High Middle Ages to the more naturalistic (and Latinate) styles of Renaissance.
“No woman can call herself free until she can choose consciously whether she will or will not be a mother”*…
If you’re in possession of a uterus, at some point in your life you’ve likely gotten the message that having children isn’t a choice—it’s your duty. For well over a century, doctors, psychologists, and politicians have engaged in intense public campaigns to persuade American women to bear children, publicly exalting motherhood and warning of personal, and societal, peril if they don’t comply.
There’s a word for this: pronatalism, the promotion of baby-making for a nation’s social, political, and economic purposes…
The techniques that have been used to pressure American women to keep breeding are even more shocking than you might think– proselytizing, pseudoscience, and shaming–all committed in the name of turning women into mothers: “A Brief History of Bullying Women to Have Babies.”
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As we cherish choice, we might send healing birthday greetings to Helen Brooke Taussig; she was born on this date in 1898. The founder of pediatric cardiology, Dr. Taussig pioneered the use of X-rays and fluoroscopy to identify heart defects in newborns; then in 1944, with surgeon Alfred Blalock, she developed a surgical procedure for treating blue baby syndrome. In the 1960s, Taussig was a leader in the identification of Thalidomide (a fertility drug) as a cause of birth defects, and an effective campaigner for its banning.
Though she chose never to marry nor have children herself, Taussig was responsible for advances that have saved millions of children’s lives.
I choose… me!
People in Western countries drown in choice. Want a T-shirt? Thousands of alternatives await you. Want some toothpaste? Sit down, we could be here a while. Many people see these options as a good thing – they’re a sign of our independence, our freedom, our mastery over our own destinies. But these apparent positives have a dark side.
Krishna Savani from Columbia University has found that when Americans think about the concept of choice, they’re less concerned about the public good and less empathic towards disadvantaged people. His work supports the idea that endless arrays of choice focus our attention on individual control and, by doing so, they send a message that people’s fates are their own concerns. Their lives are not the business of the state or public institutions, and if they fail, it is their own fault. With choices at hand, Americans are more likely to choose themselves.
Savani’s experiments and their results make for pretty bracing reading. Still, he notes, not all cultures react the same way. And as for Americans,
… Savani points out that the US is one of the world’s most charitable countries. He writes, “If Americans believe that they are choosing to help other people out of their free will, or if they can affirm their selves through making choices for other people, they may be even more charitable.” The problem lies more with “choice for choice’s sake.”
Read the whole story in Discover.
As we resolve to simplify, we might recall that it was on this date in 1718 that London lawyer, writer, and inventor, James Puckle patented a multi-shot gun mounted on a stand capable of firing up to nine rounds per minute– the first machine gun.
Puckle’s innovation was as formative in the realm of intellectual property as it was in the martial arena: Quoth to the Patent Office of the United Kingdom,”In the reign of Queen Anne of Great Britain, the law officers of the Crown established as a condition of patent that the inventor must in writing describe the invention and the manner in which it works.” Puckle’s machine gun patent was among the first to provide such a description.
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