Require Legal Liability Insurance

The point of liability law is mainly to induce good behavior by having courts threaten to make related people pay cash later if a bad thing happens. The law tries to set who would pay how much to whom after what events in order to induce such people to take good care, so as to minimize the sum of the costs of bad things happening, care taken to avoid them, and the legal process itself.

One thing that limits the ability of law to make these choices well is the fact that most people have limited amounts of the kinds of assets that the legal system is willing to grab to settle a lawsuit. Like cash, stocks, and on. Some people are “judgement proof”, meaning they have none of these things. Most others have some assets, but substantially less than the law might want to make them pay in some situations.

Because most people have limited assets in this sense, those who bring lawsuits typically focus their attention on related parties with “deep pockets”, i.e., those who have far more assets. If such parties have any involvement at all in some bad event, lawsuits focus on blaming them and trying to make them pay.

This focus on deep pockets seems a clear failure of the system. Liability should instead be chosen based on the usual legal criteria of who could have most cheaply prevented the bad event, who could have reasonably foreseen the event in order to target their prevention efforts, and who did or did not take sufficient levels of care given such things.

If people had more assets that they could pay in the event they were held liable for a bad event, the law would have more options. It wouldn’t have to make them pay more, but it could do so if the situation seemed to warrant it.

One kind of solution is to allow the legal system to touch more kinds of assets. For example, in many ancient societies you could be sold into slavery to pay legal debts. Or your larger family clan might be held liable for your actions. While many places today have a homestead exemption that prevents some kinds of creditors from taking a primary home to cover debts, the law could have fewer such exceptions. However, many people feel uncomfortable with such approaches.

A different solution, one that should induce less of this discomfort, is to require people to buy general legal liability insurance. In many places today all drivers are required to buy insurance for auto accident liability up to stated amounts. The idea here is to just generalize that to all legal liability. We’d pick some minimum amount everyone should be ready to pay, say one million dollars. Then everyone would have to find an insurance company willing to cover them for that amount. If they were held liable by a court, they’d personally pay what they could out of their personal assets, and then the insurance firm would pay the rest.

Insurance firms would of course charge you different premiums, based on their estimates of how many assets you have and your likelihood of being held liable for bad events. To convince them you are a low risk, you could show them many things about yourself, and even let them continually monitor you in many ways.

Of course there is a cost to the insurance process, and there would remain some hidden info and actions which would produce some transfers between people who look alike to insurance firms, and make most people not quite as careful as they ideally would. But surely this should move care in the right direction, compared to a system where people get sued less because they don’t have enough money to pay.

Well yes, it is possible that the whole legal system is just making everyone pay too much across the board for all bad events. In which case making people able to pay more just makes things worse. But if we think this is the situation we should just cut back on the legal system, starting by making it harder to sue parties with deep pockets. Maybe we should limit all parties to a max liability of a few tens of thousands of dollars.

But if you don’t want to cut back on the liability of those with deep pockets, and if you accept that deep pocket folks aren’t actually as more responsible for bad events, surely not enough to explain how much more often they are sued, then you gotta think it would be good if other people could be held more liable than they are today.

So you should want to require general legal liability insurance. And then we’d all have to pay a bit more, but we’d all have fewer bad events. Which should be worth the trade, if the legal system is close to doing the right thing now with our limited abilities to pay.

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Testing Moral Progress

Mike Huemer just published his version of the familiar argument that changing moral views is evidence for moral realism. Here is the progress datum he seeks to explain:

Mainstream illiberal views of earlier centuries are shocking and absurd to modern readers. The trend is consistent across many issues: war, murder, slavery, democracy, women’s suffrage, racial segregation, torture, execution, colonization. It is difficult to think of any issue on which attitudes have moved in the other direction. This trend has been ongoing for millennia, accelerating in the last two centuries, and even the last 50 years, and it affects virtually every country on Earth. … All the changes are consistent with a certain coherent ethical standpoint. Furthermore, the change has been proceeding in the same direction for centuries, and the changes have affected nearly all societies across the globe. This is not a random walk.

Huemer’s favored explanation:

If there are objective ethical truths to which human beings have some epistemic access, then we should expect moral beliefs across societies to converge over time, if only very slowly.

But note three other implications of this moral-learning process, at least if we assume the usual (e.g., Bayesian) rational belief framework:

  1. The rate at which moral beliefs have been changing should track the rate at which we get relevant info, such as via life experience or careful thought. If we’ve seen a lot more change recently than thousands of years ago, we need a reason to think we’ve had a lot more thinking or experience lately.
  2. If people are at least crudely aware of the moral beliefs of others in the world, then they should be learning from each other much more than from their personal thoughts and experience. Thus moral learning should be a worldwide phenomena; it might explain average world moral beliefs, but it can’t explain much of belief differences at a time.
  3. Rational learning of any expected value via a stream of info should produce a random walk in those expectations, not a steady trend. But as Huemer notes, what we mostly see lately are steady trends.

For Age of Em, I read a lot about cultural value variation, and related factor analyses. One of the two main factors by which national values vary correlates strongly with average national wealth. At each point in time, richer nations have more of this factor, over time nations get more of it as they get richer, and when a nation has an unusual jump in wealth it gets an unusual jump in this factor. And this favor explains an awful lot of the value choices Huemer seeks to explain. All this even though people within a nation that have these values more are not richer on average.

The usual view in this field is that the direction of causation here is mostly from wealth to this value factor. This makes sense because this is the usual situation for variables that correlate with wealth. For example, if length of roads or number of TVs correlate with wealth, that is much more because wealth causes roads and TVs, and much less because roads and TV cause wealth. Since wealth is the main “power” factor of a society, this main factor tends to cause other small things more than they cause it.

This is as close as Hummer gets to addressing this usual view:

Perhaps there is a gene that inclines one toward illiberal beliefs if one’s society as a whole is primitive and poor, but inclines one toward liberal beliefs if one’s society is advanced and prosperous. Again, it is unclear why such a gene would be especially advantageous, as compared with a gene that causes one to be liberal in all conditions, or illiberal in all conditions. Even if such a gene would be advantageous, there has not been sufficient opportunity for it to be selected, since for almost all of the history of the species, human beings have lived in poor, primitive societies.

Well if you insist on explaining things in terms of genes, everything is “unclear”; we just don’t have good full explanations to take us all the way from genes to how values vary with cultural context. I’ve suggested that we industry folks are reverting to forager values in many ways with increasing wealth, because wealth cuts the fear that made foragers into farmers. But you don’t have to buy my story to find it plausible that humans are just built so that their values vary as their society gets rich. (This change need not at all be adaptive in today’s environment.)

Note that we already see many variables that change between rich vs. poor societies, but which don’t change the same way between rich and poor people within a society. For example rich people in a society save more, but rich societies don’t save more. Richer societies spend a larger fraction of income on medicine, but richer people spend a smaller fraction. And rich societies have much lower fertility even when rich people have about the same fertility.

Also not that “convergence” is about variance of opinion; it isn’t obvious to me that variance is lower now than it was thousands of years. What we’ve seen is change, not convergence.

Bottom line: the usual social science story that increasing wealth causes certain predictable value changes fits the value variation data a lot better than the theory that the world is slowly learning moral truth. Even if we accepted moral learning as explaining some of the variation, we’ll need wealth causes values to explain a lot of the rest of the variation. So why not let it explain all? Maybe someone can come up with variations on the moral learning theory that fit the data better. But at the moment, the choice isn’t even close.

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Super-Factor Scenario

A man always has two reasons for doing anything: a good reason and the real reason. J. P. Morgan

In economics today, as in many related fields, data analysis is king, and theory takes a back seat, at least as far as status goes. When people celebrate particular exemplary data analyses, they usually point to a use of difficult statistical techniques, or more commonly to some clever idea for how certain data could speak to an important question. They point far less often to what is more often the real limiting factor: access to relevant data, and to resources (such as time and student assistance) to process that data. Organizations with data are far more willing to show them to academics from prestigious institutions.

This is part of a more general pattern: when we give people status, the criteria we claim to use to choose who gets status often differs substantially from our real criteria. Let’s see how that might play out regarding the strong claim I posted on Saturday:

If we put together a huge super-dataset describing many individual people in as many ways as possible, a factor analysis of this dataset may find important new super-factors that span many of these features domains. Such super-factors would be promising candidates to use in a wide range of social research, and social policy. (more)

When someone finally does this data analysis that I’ve proposed, and finds some super-factors, they will be rightly celebrated. But what will they be celebrated for? Their main actual contribution will have been to get some organization to pony up enough resources to look for super-factors. But that’s not the sort of thing for which we like to celebrate intellectuals. So I predict that such people will instead be celebrated for the very idea of looking for super factors, for looking for a certain kind of super-factor, or for a clever computational or statistical technique used in the search.

There isn’t much risk of people finding my post and using that to undercut this celebration. I know of many cases where prestigious academics were celebrated for “insights” that others had expressed beforehand. As long as those others and/or their venues were of sufficiently lower status, academics see no conflict. Should anyone make an issue of it, there are always differing details that can be seized on to explain why the two ideas were really quite different.

If we had prediction markets on such things, and used them as the main way we allocated credit on such claims, well then in that case I might be able to lock in great rewards now, rewards that others couldn’t steal later. But that is one of the reasons we don’t want prediction-market-based rewards. In the end we like most of our hypocrisies, including those involving giving people status for different reasons than we claim.

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Variety Seems Social

We sometimes complain that we are bored, and so we need to “change up” our products, services, and life habits. We often says this is due to our general preference for variety. But we are actually quite selective in when we want variety. In many areas of our lives we have little variety, and that doesn’t bother us much.

Toothpaste and mouthwash have flavors, but I use the same flavors for months at a time. My breakfasts are mostly alone, and have only minor variations from day to day. Dinners I usually eat with my wife, and we rotate between maybe a dozen different standard dishes. I often eat lunch out with a half dozen colleagues, and we rotate between a half dozen or so places, and in each place I vary what I order. When we host someone who visits from out of town, we go to a wider range of places.

The clothes I sleep in vary very little, and the clothes I wear around the house vary less than the clothes I wear to the office, which vary less than the clothes I wear to special occasions. Under-clothes vary less than more visible clothes. In my home, when we’ve repainted, or bought new furnishings or wall fixings, we tend to change things more often in our more visible rooms. We change the yard the most often, and the living room and entryway the next most often.

Products like cars, couches and refrigerators vary more on the outsides that more people can see than they do on the insides that few people see. We more often rearrange visible things like the placement of furniture compared to less visible things like where clothes are located in our chests or closets, or where dishes sit in kitchen cabinets. Advertising can change the images and attitudes associated with products, even when products don’t physically change, and we have more ads for types of products whose use is more visible to more people.

The general pattern here seems to be that variety is social – we prefer variety more for things that have wider social scopes. It is as if we personally don’t care much for variety, but we need our larger social circles to see that we can afford and tolerate a great deal of variety.

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Seeking Super Factors

In a factor analysis, one takes a large high-dimensional dataset and finds a low dimensional set of variables that can explain as much as possible of the total variation in that dataset. A big advantage of factor analysis is that it doesn’t require much theoretical knowledge about the nature of the variables in the data or their relations – factors are mostly determined directly by the data.

Factor analysis has had some big successes in helping us to understand how humans differ. As many people know, intelligence is the main factor explaining variation in cognitive test performance, ideology is the main factor explaining variations in political positions, and personality types explain much of the variation in stable attitudes and temperament. These factors have allowed us to greatly advance our understanding of intelligence, ideology, and personality, even while remaining ignorant of their fundamental causes and natures.

However, people vary in far more ways than intelligence, ideology, and personality, and factor analyses have been applied to many of these other human feature categories. For example, there have been factors analyses of jobs, brands, faces, body shape, gait, accent, diet, clothing, writing styleleisure behavior, friendship networks, sleep habitsphysical health, mortality, demography, national cultures, and zip codes.

As my last post on media genre factors showed, factors found in different feature categories are often substantially correlated with one another. This suggests that if we put together a huge super-dataset describing many individual people in as many ways as possible, a factor analysis of this dataset may find important new super-factors that span many of these features domains. Such super-factors would be promising candidates to use in a wide range of social research, and social policy.

Now it remains logically possible that these super-factors will end up being simple linear combinations of the factors that we have already found in each of these feature categories. Maybe we already know most of what there is to know about how humans vary. But I’d bet strongly and heavily against this. The rate at which we have been learning new things about how humans vary doesn’t remotely suggest we’ve run out of new big things to learn. Yes, merely knowing the super-factors isn’t the same as understanding their origins. But just as we’ve seen with factor analysis in more specific areas, knowing the main factors can be a big help.

So I’d guess that the super-factors found in a super dataset of human details will be revolutionary developments. We will afterward see uncovering them as a seminal milestone in our progress in understanding human variation. A Nobel prize worthy level of seminality. All it will take is lots of tedious work to collect a super dataset, and then do some straightforward number crunching. A quest awaits; who will rise to the challenge?

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Media Genre More Basic Than Politics Or Personality?

While our personalities are correlated with whether we are liberal or conservative, it seems that neither one of these causes the other. Instead, their correlation is caused by something else that causes both, and that is caused in part by genetics:

The primary assumption within the recent personality and political orientations literature is that personality traits cause people to develop political attitudes. In contrast, … the covariance between personality and political preferences is not causal, but due to a common, latent genetic factor that mutually influences both. … Change in personality over a ten-year period does not predict change in political attitudes. .. Rather, political attitudes are often more stable than the key personality traits assumed to be predicting them. (more)

Amazingly, we know of another variable B that fits this bill, of being correlated with both personality A and political orientation C, and mediating their relation. In technical language, A and C are conditionally independent given B, so that P(C|AB) = P(C|B). This B is preferences for media genres!

Research has consistently demonstrated that political liberalism is predicted by the personality trait Openness to Experience and conservatism by trait Conscientiousness. … Increased preferences for Dark/Alternative and Aesthetic/Musical media genres, as well as decreased preferences for Communal/Popular media genres, mediated the association between Openness to Experience and liberalism. In contrast, greater preferences for Communal/Popular and Thrilling/Action genres, as well as lower preferences for Dark/Alternative and Aesthetic/Musical genres mediated the link between Conscientiousness and conservatism. (more)

So media genre preference is actually a plausible candidate for something closer to whatever causes personality and political orientation, and is caused in part by genes. This makes intuitive sense to me, because I personally feel more aware of, confident in, and comfortable with my media genre preferences than in my personality types or my political orientation.

These authors (Xiaowen Xu & Jordan Peterson) took a survey of 543 US people, and did a factor analysis on their media preferences. They found five factors. The strongest media factor is:

  • Cerebral/Nonfiction: e.g., educational, arts & humanities TV; nonfiction, academic, reference, current events, biography, science, medical books.

This factor doesn’t correlate with political orientation, but it does correlate with the openness personality factor, which has a subfactor of intellect, so this all makes sense.

The other four media factors split nicely into a 2×2 matrix along two dimensions. One dimension is “highbrow” vs. “lowbrow.” (Cerebral/Nonfiction is also “highbrow”.) The other dimension is personality/politics: two factors correlate with both liberals and those with open personalities, and two factors correlate with both conservatives and those with conscientious personalities. Here are these four media factors:

Highbrow:

  • Open/Liberal: Aesthetic/Musical: e.g., world, jazz, opera, folk, classical, funk, gospel, blues, new age music; foreign film, poetry book.
  • Consc/Conser: Communal/Popular: e.g., daytime talk, reality, game, soaps, kids TV; made for TV movies; music TV; family films; pop music.

Lowbrow:

  • Open/Liberal: Dark/Alternative: e.g., horror, science fiction, fantasy, cult, erotic, animation, & independent film; punk, alt, & metal music; sketch comedy.
    Consc/Conser: Thrilling/Action: e.g., action, sports & spy TV; war, western, action film; computer & adventure book.

(My personal tastes favor Cerebral/Nonfiction first, then Dark/Alternative weak second.)

While personality and political variables come from factor analyses of survey answers to relatively abstract attitude and opinion question, media genre variables seem more closely related to concrete real-life choices that people make. And it makes sense to me that our genes (and culture) more directly cause our inclinations to take concrete actions, and that abstract attitudes and opinions result more indirectly, from our trying to rationalize those actions. So it makes sense to me that media genre preferences are closer to more direct genetic (and cultural) causality.

A few more results from the paper: Older people prefer Dark/Alternative less and Cerebral/Nonfiction more, while women prefer Communal/Popular more and Thrilling/Action less. These can explain the personality correlates of age and gender. Agreeableness is higher for those who like highbrow genres (except Aesthetic/Musical has no effect), and less for those who like lowbrow genres. Extraversion is higher for those who like conservative genres, though it doesn’t correlate directly politics directly because personality factors are highly correlated in this dataset. Neuroticism is less for those who like Cerebral/Nonfiction and Thrilling/Action.

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Masking Design Competence

Most real organizations have many design problems. This is most explicit in engineering type organizations, but such issues are nearly as common in all organizations. Any organization must make many choices regarding the design and marketing of their product or service, in how it will be financed, sourced, produced, tested, stored, transferred, priced, evaluated, etc.

For most such design problems, most organizations have some standard ideal design criteria. The organization is supposed to search in the space of possible designs for ones expected to do well according to the ideal criteria. And then adopt those better designs. In profit-oriented firms, many key criteria are closely aligned with firm profit.

According to the usual ideal norm in organizations, everything should be arranged to promote good designs according to the ideals. For example, the people who most influence a design choice should be those with the most relevant info and the strongest incentives to get it right. People should be hired and promoted according to their ability to help make good design choices. Designs should be changed when circumstances suggest that the ideal design has changed. And so on.

Real organizations also have complex Machiavellian politics. Coalitions form that promote their members at the expense of rivals. Members are chosen for their loyalty and ability to help the coalition. Coalitions sometimes reform, dropping some factions and adding others. Members must show loyalty to their coalitions by visibly promoting design choices that benefit their coalition, even when that comes at the expense of the organization’s ideal design criteria.

This conflict between design choices that meet ideals and those that help coalitions drives may of the illusions and hypocrisies in organizations. For example, people are often placed in positions of power for reasons other than their superior design competence, such as their info and abilities regarding key decisions. This creates a demand to give those people the illusion of design competence.

For example:

When I started at Lockheed Research in 1985, my mentor was a veteran who explained his secret for getting funding from the other Lockheed divisions:

Find an idea for a project we could do for them, but don’t tell them the idea. Instead break the idea into a few key parts, describe the parts to them, and let them put the parts together into the total idea. They will be much more willing to fund a project that is their idea.

A related strategy is to design a solution but then weaken it to a space of nearby solutions. Tell your manager “I think something in this space should work but I can’t figure out what” and let him reinvent your particular solution point. He then owns the design more, and can claim more credit for design competence.

As another example, as I’ve mentioned before people often pretend to ask people for advice as if they wanted info, but in fact they are seeking allies. In general, boards of advisors are rarely actually asked for their advice; they are mainly chosen to add prestige to an organization.

Meetings in organizations often take the appearance of searching for design proposals and evaluating proposals presented. But in fact proposals have usually been selected beforehand, and the meeting is to create an appearance of support form them, and for the story presented about who deserves credit. If a problem is presented for which a solution isn’t offered, that is probably because they don’t don’t see a solution with which they’d want to be associated, and would rather someone else take on that failure area.

Powerful people can also create the appearance of more design competence than they actually have by pushing vague design philosophies that others can then claim to adhere to without actually greatly constraining their choices. Also, powerful people can claim that complex organizational considerations require them to keep the reasons for their design choices secret. Others can then just assume they must have great design competence regarding such considerations.

It helps to have a culture of assuming that the people with the best credentials in terms of education and prior organization and positional prestige have the most design competence. Since these people happen to the those that are most useful for coalitions to put into positions of power, the conflict between power and apparent design competitions is reduced.

Can readers think of more examples? If so, I’ll add good ones to this post.

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Assimilated Futures

I’ve long said that it is backwards to worry that technology will change faster than society can adapt, because the ability of society adapt is one of the main constraints on how fast we adopt new technologies. This insightful 2012 post by Venkatesh Rao elaborates on a related theme:

Both science fiction and futurism … fail to capture the way we don’t seem to notice when the future actually arrives. … The future always seems like something that is going to happen rather than something that is happening. …

Futurists, artists and edge-culturists … like to pretend that they are the lonely, brave guardians of the species who deal with the “real” future and pre-digest it for the rest of us. But … the cultural edge is just as frozen in time as the mainstream, … people who seek more stimulation than the mainstream, and draw on imagined futures to feed their cravings rather than inform actual future-manufacturing. …

When you are sitting on a typical modern jetliner, you are traveling at 500 mph in an aluminum tube that is actually capable of some pretty scary acrobatics. … Yet a typical air traveler never experiences anything that one of our ancestors could not experience on a fast chariot or a boat. Air travel is manufactured normalcy. …

This suggests that only those futures arrive for which there is human capacity to cope. This conclusion is not true, because a future can arrive before humans figure out whether they have the ability to cope. For instance, the widespread problem of obesity suggests that food-abundance arrived before we figured out that most of us cannot cope. And this is one piece of the future that cannot be relegated to specialists. …

Successful products are precisely those that do not attempt to move user experiences significantly, even if the underlying technology has shifted radically. In fact the whole point of user experience design is to manufacture the necessary normalcy for a product to succeed and get integrated. … What we get is a Darwinian weeding out of those manifestations of the future that break the continuity of technological experience. …

What about edge-culturists who think they are more alive to the real oncoming future? … The edge today looks strangely similar to the edge in any previous century. It is defined by reactionary musical and sartorial tastes and being a little more outrageous than everybody else in challenging the prevailing culture of manners. … If it reveals anything about technology or the future, it is mostly by accident. . …

At a more human level, I find that I am unable to relate to people who are deeply into any sort of cyberculture or other future-obsessed edge zone. There is a certain extreme banality to my thoughts when I think about the future. Futurists as a subculture seem to organize their lives as future-experience theaters. These theaters are perhaps entertaining and interesting in their own right, as a sort of performance art, but are not of much interest or value to people who are interested in the future in the form it might arrive in, for all.

It is easy to make the distinction explicit. Most futurists are interested in the future beyond the [manufactured normalcy field]. I am primarily interested in the future once it enters the Field, and the process by which it gets integrated into it. This is also where the future turns into money, so perhaps my motivations are less intellectual than they are narrowly mercenary. …

This also explains why so few futurists make any money. They are attracted to exactly those parts of the future that are worth very little. They find visions of changed human behavior stimulating. Technological change serves as a basis for constructing aspirational visions of changed humanity. Unfortunately, technological change actually arrives in ways that leave human behavior minimally altered. .. The mainstream never ends up looking like the edge of today. Not even close. The mainstream seeks placidity while the edge seeks stimulation. (more)

Yes, I’m a guilty-as-charged futurist focused on changes far enough distant that there’s little money to be made understanding them now. But I share Rao’s emotional distance from the future-obsessed cultural edge. I want to understand the future not as morality tale to validate my complaints against today’s dominant culture; I instead want to foresee the assimilated future. That is, I want to see how future people will actually see their own world, after they’ve found ways to see it banally as a minimal change from the past.

Cultural futurists have complained that the future I describe in my upcoming book The Age of Em is too conservative in presuming the continuation of supply and demand, inequality, big organizations, status seeking, and so on. Don’t I know that tech will change everything, and soon? No, actually I don’t know that.

Added: To be clear, eventually fundamentals may well change. But the rate of such changes is low enough that in a medium term future most fundamental features probably haven’t changed yet.

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Max & Miller’s Mate

Geoffrey Miller’s book The Mating Mind was very influential on me, and so I spent several posts on his book Spent. He has a new book out, coauthored with Tucker Max, called Mate: become the man women want. It is a how-to book, on how men can attract women.

The book’s voice is less academic and more like a drill sergeant — stern older men giving harsh but needed instructions to younger men. They don’t mind using some crude language, and they don’t argue much for their claims, expecting readers to accept what they say on authority. Fortunately, most of what they say seems to be pretty well-grounded in the literature.

The world view they present has mating quite thoroughly infused with signaling. Pretty much everything you do with actual or potential mates is used as a reliable signal of your hidden features. Makes me wonder in what other self-help books it would be okay to present as strong a signaling view. Perhaps there are career advice books that infuse signaling as throughly into their view of the work world. But I expect people wouldn’t tolerate advice books on school, religion, arts, and charity that are this signaling heavy. Even if the advice was solid.

Though heavy on signaling, Max & Miller don’t consider self-deception. They talk simply about men just looking inside themselves to see what they want, and tell men to take what women seem to want at face value. But perhaps talking about self-deception to their target audience (young men who feel they are failing at mating) would just confuse more than help.

At several points Max & Miller warn their readers that women never evolved general ways to see and appreciate things like wealth and intelligence; women instead evolved to appreciate more specific signals like nice clothes and wit. So don’t go trying to show off your IQ score or bank balance.

They don’t advise women to fix this oversight, but instead advise men to fix how they show off. I suspect the idea is that humans are just more general and flexible on how to achieve their goals than on what exactly are their goals. And I suspect this is right. While one can imagine a creature that just wants “whatever helps me have many descendants”, humans are just not those creatures.

Two suggestive implication follow from this fact. First, if descendants of humans are ever blocked in their growth or expansion into the universe due to their failing to be sufficiently flexible or general, that failing will more likely come from their preferences, rather than their engineering or science. Second, as human incomes fall toward subsistence, our primary preferences for survival trump others, inducing effectively more general and flexible preferences. So subsistence income descendants have a better chance of avoiding generality failures.

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Beware Intuitive Econ

Economists have two standard very simple models of product competition: firms can compete on price or compete on quantity.

Early in the Dotcom internet revolution, I remember some people, including even Bill Gates I think, forecasting that since it becomes easier to find and compare prices on the internet, products sold on the internet would have stronger price competition. And since price competition tends to be stronger than quantity competition, that would bring down prices and be good for consumers. Yay internet!

This argument makes intuitive sense, but is dead wrong. And that is the warning of this post: beware simple econ arguments based on intuitions that haven’t been verified in concrete models.

Even in price competition, quantity must also be chosen; price competition is where quantities are chosen indirectly, as a result of the prices. Similarly, even in quantity competition price must also be chosen; quantity competition is where prices are chosen indirectly, as a result of the quantities.

Economists have long had simple models where both price and quantity are chosen explicitly and directly by firms. In these models, what matters is which of these parameters becomes expensive to change first, and which parameters can keep changing more cheaply closer to the last minute of sale.

For concrete examples, consider selling TVs and plumbing services. A TV firm must decide at least weeks before a sale how many TVs they are going to make and deliver then, but they might change the price they offer for such TVs in the last few days before a sale. In contrast, a plumber might pick a price to charge to include in ads many days before customers see such ads and call to get help, but at the last minute the plumber can say “sorry, I don’t have any more openings on my schedule today.”

In models where firms must commit to quantities early, but can keep changing their prices easily until near the last minute, outcomes are close to those in simple models of quantity competition. But if firms must commit to prices early, but can keep changing quantity until near the last minute, outcomes are close to those in simple models of price competition.

So whether firms compete on price or quantity depends more on which of these they must commit to earliest, not which is easier to change at the last minute. Knowing this, once you heard that it would be easier to change prices at the last minute for products sold on internet, you should have predicted that the internet would increase quantity competition and reduce price competition. Which it in fact has.

Economics is general and robust enough to predict things like how selling products on the internet changes competition. But you have to use it right.

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