Posts Tagged Bias

Behavioural Economics Videos

Behavioural economists have been quick on the uptake in using video lectures to convey their message. Here is a short round-up focusing on quality rather than comprehensiveness.
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Book Review: The Halo Effect

The Halo Effect: How managers let themselves be deceived by Phil Rosenzweig. ISBN: 978-1-84739-336-4

Business academic Rosenzweig has written a definitive book about critical thinking in the context of business success. A lot of people claim to understand why businesses succeed or fail, whether in journalism such as Fortune magazine, in bestselling books such as In Search of Excellence or in academia. With admirable clarity, Rosenzweig sets out the scientific failings of these, boiling down the errors to a list of nine “delusions” which infect even some of the most prestigious business research.
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Dan Ariely’s Predictably Irrational, and so are we

Review of Dan Ariely (2008) Predictably Irrational: The hidden forces that shape our decisions Harper Collins. ISBN: 978-0-00-725-652-5

This is a gem of a book: short, engagingly-written and connected both to the science and the policy implications. Ariely is a seasoned bias researcher (he sees himself as a behavioural economist rather than a psychologist) and this book runs through many of the experiments he has been involved in, as well as related research.

Unlike other introductions to bias, such as Sutherland’s Irrationality or Fine’s A Mind of Its Own, this is not a systematic review of different classes of bias but one person’s perspective on some experiments and their implications.

The main thrust of the book, as suggested by the title, is the economist’s idea of rational choice does not describe how we actually behave, because we are irrational in predictable ways (or, as I prefer to call it, biased). I was particularly interested in his attack on supply and demand curves, those central pillars of introductory economics. In place of the economic constructs, you can learn a set of ideas from psychology (e.g. contrast effects; arbitrary coherence; anchoring; “hot state” decisions) which more reliably fit how people behave.

The undermining of homo economicus has a number of implications for how we can live better and happier lives: we cannot leave it to the free market to fix things; we can achieve more by voluntarily restricting our choices; we need to self-police our selves to counter our tendency to rationalise immoral behaviour.

Ariely’s personality comes through as warm, humane and humourous, clearly concerned about the effects of irrational (or immoral choices but optimistic that by being aware of bias we can compensate for it.

I recommend anyone interested in the topic of bias taking this on a long train ride, and taking a lot longer to think about the implications.

My detailed notes on the book: not a substitute for reading it yourself.

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Why there are so many idiots on the road?

You know the experience. You’re in your car, just trundling along when, as you cross the junction… “WHOA! He just came out of nowhere! If I hadn’t braked, that would have been a collision. Why do they let these idiots on the road?”

Blogging on Peer-Reviewed Research
Some of the research on bias examines driving. In particular, there are experiments on how drivers perceive their own skills in relation to other peoples’. Read the rest of this entry »

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Capital Punishment and Homicide

Many comparative studies show that capital punishment provides no deterrent whatsoever against murder. However, there are widely cited econometric studies that seem to show that for each person executed, several murders are prevented. Why the discrepancy? Because the econometrics is junk science.

This post originally appeared on the Kewl Doodz’n’Chyx community blog.

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