Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

We don't have a hundred biases, we have the wrong model

worksinprogress.co

Post reply on HN
Print view View original

41–50 of 97 posts

Re: We don't have a hundred biases, we have the wrong model

#41

Post by jhap »

I thought this was kind of a lame article. The point of behavioral economics is to systematically understand the heuristics people are using. That is hard to do! Trying to describe all the heuristics together is difficult and untestable -- i.e., not that good for the experimental research which most behavioral economists practice. Still it is well-known in the field that this is an open question worth theorizing about and I think many people do[1][2], although there is not a consensus on the "best" theory as far as I know.

The author like then lauds some impressive/hard to conduct/large-scale interventions which are formidable but don't really teach us about economic theory, and in fact neither were published in economics journals. Maybe the field should move in that direction, I am agnostic on the point, but the author's argument wasn't coherent in my opinion.

[1] https://rajchetty.com/wp-content/uploads/2021/04/behavioral_...

[2] https://www.hbs.edu/ris/Publication%20Files/Selective%20Atte...

Re: We don't have a hundred biases, we have the wrong model

#42

Post by bergenty »

throw93232 wrote: post #5

》epicycles were still not enough to describe what could be observed. Epicycles based models were far superior in practice, such as predicting planetary conjunctions. Heliocentric models did not really catched up, until Newton invented gravity and calculus. And centre of mass of solar system (barycenter in Newtonian physics), is outside of Sun, so heliocentric models technically never gave solid predictions! Stellar p…

How do you do the double >>

Re: We don't have a hundred biases, we have the wrong model

#44

Post by hyperpallium2 »

jjk166 wrote: post #23

The rational actor model assumes that a person will behave optimally - using all information available to make and carry out the best decision possible for their goals. I strongly suspect that a better model is that people instead of optimizing their outcomes instead optimize the ease of decision making while still getting an acceptable course of action. Most of our biases serve to either allow us to make decisions q…

Also, evolution takes into account uncertainty of information. In contrast, when we reason intellectually, our first step is to clean up the data and get clear on what the question actually is - though we typically don't count that as "reasoning".

On the last point, evolution doesn't dock points for missed opportunities... provided someone else didn't miss them.

Re: We don't have a hundred biases, we have the wrong model

#45

Post by darkerside »

spacebanana7 wrote: post #29
jjk166 wrote: post #23

The rational actor model assumes that a person will behave optimally - using all information available to make and carry out the best decision possible for their goals. I strongly suspect that a better model is that people instead of optimizing their outcomes instead optimize the ease of decision making while still getting an acceptable course of action. Most of our biases serve to either allow us to make decisions q…

The idea you’re describing sounds similar to Satisficing Theory [1]. I agree this approach does a much better job of describing real life decision making than the traditional rational actor model. Unfortunately, Satisficing rarely gets discussed (at least in my experience) in mainstream economics/psychology, despite having been around since the 1950s. [1] https://en.wikipedia.org/wiki/Satisficing

Seems obvious that type 1 thinking satisfices and type 2 maximizes.

Re: We don't have a hundred biases, we have the wrong model

#47

Post by whatshisface »

darkerside wrote: post #45
spacebanana7 wrote: post #29

Earlier quoted context omitted.

The idea you’re describing sounds similar to Satisficing Theory [1]. I agree this approach does a much better job of describing real life decision making than the traditional rational actor model. Unfortunately, Satisficing rarely gets discussed (at least in my experience) in mainstream economics/psychology, despite having been around since the 1950s. [1] https://en.wikipedia.org/wiki/Satisficing

Seems obvious that type 1 thinking satisfices and type 2 maximizes.

Nobody can maximize that's impossible, it'd involve something like making perfect stock picks.

Re: We don't have a hundred biases, we have the wrong model

#48

Post by rdw »

nine_k wrote: post #20
leobg wrote: post #3

My reading of the article is an application of Chesterton’s Fence to so-called cognitive biases. Not to see them as a mere defect, or proof of our fallibility. But to instead look for the objective for which they perhaps truly are the most reasonable solution. Example from the article: > Many costly signals are inherently wasteful. Money, time, or other resources are burnt. And wasteful acts are the types of things t…

Conspicuous consumption can be rational, or at least beneficial in the evolutionary sense. If you are a lawyer with a good practice, you are expected to drive a nice large car. If you drove a battered old economy-class car, your clients might see it as a sign that something is wrong with you (there are several plausible ideas) and shun dealing with you. There go fat fees and investment savings.

Yes, I've heard this said many times about sales people. If they're not visibly wasting money, people are reluctant to hire them because they either aren't good (and thus have no money to waste), or won't be hungry (because they've saved the money they earned by not wasting it). So conspicuous consumption becomes a way to signal that the sales person is capable of reliably generating large incomes.

Re: We don't have a hundred biases, we have the wrong model

#49

Post by thecassandrist »

jjk166 wrote: post #23

The rational actor model assumes that a person will behave optimally - using all information available to make and carry out the best decision possible for their goals. I strongly suspect that a better model is that people instead of optimizing their outcomes instead optimize the ease of decision making while still getting an acceptable course of action. Most of our biases serve to either allow us to make decisions q…

I tend to optimize for the least amount of perceived effort, most benefit, least actual productive output. I will spend 2 days writing a utility so I never have to do the same repetitive 30 second task twice.

I’m rationally irrational.

Re: We don't have a hundred biases, we have the wrong model

#50

Post by Nursie »

> I will close with a belated defense of the rational-actor model.

> Evolution is ruthlessly rational.

Yes, but that doesn't mean its products or their behaviour are mostly or even partly rational, just that whatever strategy they adopted has worked to ensure survival.

If this is your definition of what's 'rational', that seems a very low bar to set.

That said I enjoyed the article. Frankly it's long seemed to me that economic models based around the idea of the human as a rational actor are fundamentally wrong, because people are not rational (and I include myself in this, more's the pity). Look out at the world, see all the self-sabotage, the unfounded hatred, the violence, the retribution, the temporarily embarrassed millionaires who vote to keep themselves in the gutter.

Can we stretch the idea of "rational" behaviour by looking at evolutionary impulses and saying "well, at X point in the past, this impulse may have helped tribal cohesion and increased the chances of group survival, even at the cost of blah blah blah". Sure we can, sure. But that behaviour is not then "rational" in the society we live in today.

So yeah, modelling of populations based on rational self interest really does look like it has a foundational error. An economics based around a much more chaotic model of human behaviour, with some rationalities built in, is probably needed.

Post reply on HN