Tag Archives: Status

Elite Evaluator Rents

The elite evaluator story discussed in my last post is this: evaluators vary in the perceived average quality of the applicants they endorse. So applicants seek the highest ranked evaluator willing to endorse them. To keep their reputation, evaluators can’t consistently lie about the quality of those they evaluate. But evaluators can charge a price for their evaluations, and higher ranked evaluators can charge more. So evaluators who, for whatever reason, end up with a better pool of applicants can sustain that advantage and extract continued rents from it.

This is a concrete plausible story to explain the continued advantage of top schools, journals, and venture capitalists. On reflection, it is also a nice concrete story to help explain who resists prediction markets and why.

For example, within each organization, some “elites” are more respected and sought after as endorsers of organization projects. The better projects look first to get endorsement of elites, allowing those elites to sustain a consistently higher quality of projects that they endorse. And to extract higher rents from those who apply to them. If such an organization were instead to use prediction markets to rate projects, elite evaluators would lose such rents. So such elites naturally oppose prediction markets.

For a more concrete example, consider that in 2010 the movie industry successfully lobbied the US congress to outlaw the Hollywood Stock Exchange, a real money market just then approved by the CFTC for predicting movie success, and about to go live. Hollywood is dominated by a few big studios. People with movie ideas go to these studios first with proposals, to gain a big studio endorsement, to be seen as higher quality. So top studios can skim the best ideas, and leave the rest to marginal studios. If people were instead to look to prediction markets to estimate movie quality, the value of a big studio endorsement would fall, as would the rents that big studios can extract for their endorsements. So studios have a reason to oppose prediction markets.

While I find this story as stated pretty persuasive, most economists won’t take it seriously until there is a precise formal model to illustrate it. So without further ado, let me present such a model. Math follows. Continue reading "Elite Evaluator Rents" »

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What Does Harvard Do Right?

Is Harvard the top rated college because it is the most clever in deciding who to admit? Not obviously. Instead, in the short run Harvard can gain plenty from a positive feedback loop: the best people apply and prefer to go there, which adds a glow to those who graduate from there, which makes the best want to apply, and so on.

While this seems an obvious and simple story, I must admit I haven’t been thinking enough in such terms, probably in part because I haven’t seen formal economic models that capture this story well. I thank venture capital (VC) titan Marc Andreessen for clarifying. Here is part of a 14 May twitter chat between him (MA) and myself (RH):

RH: VC is dominated by a few firms. What is the scale economy? Few geniuses? Info of seeing most pitches? Ability to create new fashions? Other?

MA: Core dynamic: A few firms have positive selection on their side; the other firms have adverse selection working against them.

The battle among VC firms is less “who is smarter?” than “who do the best founders approach first?”.

RH: OK, but why approach the top few first? What is more attractive about being funded by them vs others?

MA: Founders care about the VC brand halo because potential employees, potential customers, and other potential investors care.

RH: Is it just that top VC get first pick, so they are better picks, so their picks get halo by being in that pool, rinse & repeat?

MA: Yes, that’s the core positive feedback loop. How it starts is less meaningful than how it perpetuates.

Core dynamic: A few firms have positive selection on their side; the other firms have adverse selection working against them.

The battle among VC firms is less “who is smarter?” than “who do the best founders approach first?”.

The main historical driver of positive selection is prior success: a halo branding effect that new startups seek.

In essence, a new startup uses its VC’s brand as a credibility bridge until the startup establishes its own brand.

RH: Sure, but the question is why some VC brands shine brighter. Their money isn’t any more green.

MA: They have an aura of success as a consequence of having previously funded successful startups.

Arguably these dynamics are changing in real time in some interesting ways:

RH: Is there a prediction on if VC industry will become more or less concentrated as result of these changes?

MA: My belief is that VC is restructuring the same way retail stores, law firms, accounting firms, and investment banking did:

This seems to be the hallmark of a professionalizing industry being run properly. You either go big or you go specialist.

RH: I guess the key idea is that there are big scale economies with doing standard tasks, but big diseconomies for specialized tasks.

MA: Yes, but with the subtlety that the well-run scale players are also excellent at many of the specialized tasks.

RH: Many, but not most, or the specialized shops couldn’t exist long.

MA: This is exactly what happened in the talent agency business in the 1980s and 1990s. The big agencies got great at many things.

The specialized shops have to stay small and stay laser-focused on particular areas of specialized advanced competency.

But of course similarly, a scaled franchise firm that gets sloppy runs the same risk, can degrade itself into the middle tier.

RH: Summary: long trend is to scale given tasks, but also task specialization. Overall scale rises, but falls locally when specialize.

MA: Right, exactly. And this explains the size distribution — the scaled players have to be big; the boutiques have to stay small.

You see this in investment banking. You either work with Goldman Sachs or you work with a small boutique specialist bank.

RH: This makes sense, but I’m not sure we have any formal models that predict this correlation nicely.

This same sort of story also seems to work in the short run to explain why some journals have higher prestige. It is not so much that top journal editors are more clever, or use a smarter system to review submissions. It is just that the best papers are submitted there first, which makes the average quality of their publications higher, and so on.

In the long run, we see changes in the prestige rankings of these colleges, journals, investment banks, and venture capital funds. The key question is: what determines those long run changes? Do competitors with slightly better ways to evaluate or help submissions slowly win out over others? Or do other factors dominate?

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Financial Status

At a finance conference last year, I learned this: Instead of saving money directly for their own retirement, many workers have their employers save for them. Those employers hire in-house specialists to pick which specialty consulting firms to hire. These consulting firms advise employers on which investment firms to use. And those investment firms pick actual productive enterprises in which to invest. All three of these intermediaries, i.e., employer, consultant, and investor, take a cut for their active management.

Even employees who invest for themselves tend to pick at least one high fee intermediary: an active-management investment firm. Few take the low cost option of just directly investing in a low-overhead index fund, as recommended by academics for a half-century.

I’ve given talks at many active-management investment firms over the years. They pay speakers very well. I’ve noticed that (like management consults) they tend to hire very visibly impressive people. They also give big investors a lot of personal quality time, to create personal relationships. Their top people seem better at making investors like them than at picking investments. One math-focused firm said it didn’t want more investors because investors all demand more face time and influence over investment choices.

Since 1880 the fraction of US GDP paid for financial intermediation has gone from 2% to 8%. And:

The unit cost [relative to asset income] of financial intermediation appears to be as high today as it was around 1900. This is puzzling. Advances in information technology (IT) should lower the physical transaction costs of buying, pooling and holding financial assets. Trading costs have indeed decreased, but trading volumes have increased even more, and active fund management is expensive. … Investors spend 0.67% of asset value trying (in vain on average, by definition) to beat the market. … While mutual funds fees have dropped, high fee alternative asset managers have gained market share. The end result is that asset management unit costs have remained roughly constant. The comparison with retail and wholesale trade is instructive. In these sectors … larger IT investment coincides with lower prices and lower (nominal) GDP shares. In finance, however, exactly the opposite happens. … A potential explanation is oligopolistic competition but … the historical evidence does not seem to support the naive market power explanation, however. (more)

Our standard academic story on finance is that it buys risk-reduction, and perhaps also that we are overconfident in finance judgements. But it isn’t clear we’ve had much net risk reduction, especially to explain a four times spending increase. (In fact, some argue plausibly that those who take more risk don’t actually get higher returns.) On overconfidence, why would it induce such indirection, and why would its effects increase by such a huge factor over time?

Finance seems to me to be another area, like medicine, schools, and many others, where our usual standard stories just don’t work very well at explaining the details. In such cases most economists just gullibly plow ahead trying to force-fit the standard story onto available data, instead of considering substantially different hypotheses. Me, I try to collect as many pieces of related puzzling data as I can, and then ask what simple but different stories might account at once for many of those puzzles.

To me an obvious explanation to consider here is that we like to buy special connections to prestigious advisors. We look good when bonded to others who look good, and we treat investor relations as especially important bonds. We seem to get blamed less for failures via prestigious associates, and yet are credited for most of our success via them. Finally, we just seem to directly like prestigious associations, even when others don’t know of them. And we may also gain from associating with others who share our advisors.

To explain the change in finance over time, I’ll try my usual go-to explanation for long-term changes in the last few centuries: increasing wealth. In particular, social bonds as a luxury that we buy more of when richer. This can explain the big increases we’ve seen in leisure, product variety, medicine, and schooling.

So as we get rich, we spend larger fractions of our time socializing, we pay more for products with identities that can tie us to particular others, we spend more to assure associates that we care their health, and we spend more to visibly connect with prestigious associates. Some of those prestigious associates are at the schools we attend, the places we live, and via the products we buy. Others come via our financial intermediaries.

This hypothesis suggests an ironic reversal: While we usually play up how much we care about associates, and play down our monetary motives, in finance we pretend to make finance choices purely to get money, while in fact we lose money to gain prestigious associates.

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Advice Shows Status

When we give and seek advice, we think and talk as if we mainly just want to exchange useful information on the topic at hand. But seeking someone’s advice shows them respect, especially if that advice is followed. And in fact, a lot of our advice giving and taking behavior can be better understand in such status terms:

When making decisions together, we tend to give everyone an equal chance to voice their opinion. To make the best decisions, however, each opinion must be scaled according to its reliability. Using behavioral experiments and computational modelling, we tested (in Denmark, Iran, and China) the extent to which people follow this latter, normative strategy. We found that people show a strong equality bias: they weight each other’s opinion equally regardless of differences in their reliability, even when this strategy was at odds with explicit feedback or monetary incentives. (more)

Individuals in powerful positions are the worst offenders. According to one experimental study, they feel competitive when they receive advice from experts, which inflates their confidence and leads them to dismiss what the experts are telling them. High-power participants in the study ignored almost two-thirds of the advice they received. Other participants (the control and low-power groups) ignored advice about half as often. … Research shows that they value advice more if it comes from a confident source, even though confidence doesn’t signal validity. Conversely, seekers tend to assume that advice is off-base when it veers from the norm or comes from people with whom they’ve had frequent discord. (Experimental studies show that neither indicates poor quality.) Seekers also don’t embrace advice when advisers disagree among themselves. And they fail to compensate sufficiently for distorted advice that stems from conflicts of interest, even when their advisers have acknowledged the conflicts and the potential for self-serving motives. … Though many people give unsolicited advice, it’s usually considered intrusive and seldom followed. Another way advisers overstep is to chime in when they’re not qualified to do so. … many advisers take offense when their guidance isn’t accepted wholesale, curtailing further discussion. (more)

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Bowing To Elites

Imagine that that you are a politically savvy forager in a band of size thirty, or a politically savvy farmer near a village of size thousand. You have some big decisions to make, including who to put in various roles, such as son-in-law, co-hunter, employer, renter, cobbler, or healer. Many people may see your choices. How should you decide?

Well first you meet potential candidates in person and see how much you intuitively respect them, get along with them, and can agree on relative status. It isn’t enough for you to have seen their handiwork, you want to make an ally out of these associates, and that won’t work without respect, chemistry, and peace. Second, you see what your closest allies think of candidates. You want to be allies together, so it is best if they also respect and get along with your new allies.

Third, if there is a strong leader in your world, you want to know what that leader thinks. Even if this leader says explicitly that you can do anything you like, they don’t care, if you get any hint whatsoever that they do care, you’ll look closely to infer their preferences. And you’ll avoid doing anything they’d dislike too much, unless your alliance is ready to mount an overt challenge.

Fourth, even if there is no strong leader, there may be a dominant coalition encompassing your band or town. This is a group of people who tend to support each other, get deference from others, and win in conflicts. We call these people “elites.” If your world has elites, you’ll want to treat their shared opinions like those of a strong leader. If elites would gossip disapproval of a choice, maybe you don’t want it.

What if someone sets up objective metrics to rate people in suitability for the roles you are choosing? Say an archery contest for picking hunters, or a cobbler contest to pick cobblers. Or public track records of how often healer patients die, or how long cobbler shoes last. Should you let it be known that such metrics weigh heavily in your choices?

You’ll first want to see what your elites or leader think of these metrics. If they are enthusiastic, then great, use them. And if elites strongly oppose, you’d best only use them when elites can’t see. But what if elites say, “Yeah you could use those metrics, but watch out because they can be misleading and make perverse incentives, and don’t forget that we elites have set up this whole other helpful process for rating people in such roles.”

Well in this case you should worry that elites are jealous of this alternative metric displacing their advice. They like the power and rents that come from advising on who to pick for what. So elites may undermine this metric, and punish those who use it.

When elites advise people on who to pick for what, they will favor candidates who seem loyal to elites, and punish those who seem disloyal, or who aren’t sufficiently deferential. But since most candidates are respectful enough, elites often pick those they think will actually do well in the role. All else equal, that will make them look good, and help their society. While their first priority is loyalty, looking good is often a close second.

Since humans evolved to be unconscious political savants, this is my basic model to explain the many puzzles I listed in my last post. When choosing lawyers, doctors, real estate agents, pundits, teachers, and more, elites put many obstacles in the way of objective metrics like track records, contests, or prediction markets. Elites instead suggest picking via personal impressions, personal recommendations, and school and institution prestige. We ordinary people mostly follow this elite advice. We don’t seek objective metrics, and instead use elite endorsements, such as the prestige of where someone went to school or now works. In general we favor those who elites say have the potential to do X, over those who actually did X.

This all pushes me to more favor two hypotheses:

  1. We choose people for roles mostly via evolved mental modules designed mainly to do well at coalition politics. The resulting system does often pick people roughly well for their roles, but more as a side than a direct effect.
  2. In our society, academia reigns as a high elite, especially on advice for who to put in what roles. When ordinary people see another institution framed as competing directly with academia, that other institution loses. Pretty much all prestigious institutions in our society are seen as allied with academia, not as competing with it. Even religions, often disapproved by academics, rely on academic seminary degrees, and strongly push kids to gain academic prestige.

We like to see ourselves as egalitarian, resisting any overt dominance by our supposed betters. But in fact, unconsciously, we have elites and we bow to them. We give lip service to rebelling against them, and they pretend to be beaten back. But in fact we constantly watch out for any actions of ours that might seem to threaten elites, and we avoid them like the plague. Which explains our instinctive aversion to objective metrics in people choice, when such metrics compete with elite advice.

Added 8am: I’m talking here about how we intuitively react to the possibility of elite disapproval; I’m not talking about how elites actually react. Also, our intuitive reluctance to embrace track records isn’t strong enough to prevent us from telling specific stories about our specific achievements. Stories are way too big in our lives for that. We already norms against bragging, and yet we still manage to make our selves look good in stories.

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Forged By Status

To encourage people to associate with us, we want to seem principled, with a stable permanent nature. We want this nature to seem attractive and to fit with our community’s social norms, we want it to be associated with high status, and we want it to fit our personal situation and preferences. However, community norms and status rankings often change, and we often participate in overlapping communities with different norms. So we need to be able to change our nature and norms, to adapt to changing conditions. Yet we also want such changes to feel authentic, and not consciously or overtly done just to accommodate neighbors. How can we accomplish all these goals at once?

One simple strategy is to have a stable personality, but to sometimes let impressive high status people move us to change that personality. When we hear someone express an opinion, directly or indirectly, we evaluate that person and their expression for impressiveness and status. The higher our evaluation, the more receptive we let ourselves be to the emotions they express, and the more plastic we become at that moment to changing our “permanent” nature in response.

In this way we can limit our changes, yet still track changing norms and status. We become like metal that is forged by heat; we usually have a solid reliable shape, but we let ourselves be reshaped by the rare heat of great impressiveness. Some recent evidence suggests that we in fact do this:

In one experiment, … psychologists … randomly assigned participants to one of two groups: one whose members read .. [a] short story centered on marital infidelity, and another whose members read a “nonfictionalized” version of the story, written in the form of a report from a divorce court. The nonfiction text was the same length and offered the same ease of reading. … It contained the same information, including some of the same dialogue. (Notably, though readers of this text deemed it less artistic … they found it just as interesting.)

Before they started reading, each participant took a standard test of the so-called big five personality traits. …. Then, after … were again given the personality test. … The personality scores of those who read the nonfiction text remained much the same. But the personality scores of those who read the … story fluctuated. The changes were not large but they were statistically significant, and they were correlated with the intensity of emotions people experienced as they read the story. …

Another experiment … asked participants to read one of eight short stories or one of eight essays. Essays … average length, ease of reading and interest to readers were the same as those of the stories. … We had expected that people who read a piece of fiction would experience the greatest fluctuation in their personality scores, but we didn’t find this. The genre of the text — fiction or nonfiction — didn’t matter much; what mattered was the degree of perceived artistry. Those who read a story or essay that they judged to be artistic changed their personality scores significantly more than did those who judged what they read to be less artistic. (more)

Fluctuations in personality comparable to those that occurred in reading artistic literature have been found when people listened to music (Djikic, 2011) and looked at pieces of visual art (Djikic, Oatley, & Peterson, 2012). These results support the hypothesis that literature shares with other arts an effect of introducing a perturbation to personality, which can sometimes be a precursor to a more permanent personality change. (more)

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The Next Status Game

Urban North Americans live in what is probably the most status-conscious culture on earth. The reason we don’t recognize it as such is because most of us are stuck in a model derived from the old aristo/bourgeois/prole hierarchy, where status is linear and vertical, a ladder on which one may (or may not) be able to move either up or down.

That model of status is pretty much obsolete. Over the course of the 20th century, the dominant North American leisure class underwent three distinct changes, each marked by shifts in the relevant status symbols, rules for display, and advancement strategies. The first change was from the quasi-aristocratic conspicuous leisure of the late 19th-century time to the bourgeois conspicuous consumption that marked the growing affluence of the first half of the 20th century, a pattern of status competition that is commonly referred to as “keeping up with the Joneses.”

The next change was from bourgeois consumerism to a stance of cultivated non-conformity that is variously known as “cool,” “hip,” or “alternative.” This form of status-seeking emerged out of the critique of mass society as it was picked up by the ’60s counterculture, and as it became the dominant status system of urban life we saw the emergence of what we can call “rebel” or “hip” consumerism. The rebel consumer goes to great lengths to show that he is not a dupe of advertising, that he does not follow the crowd, expressing his politics and his individuality through the consumption of products that have a rebellious or out-of-the-mainstream image—underground bands, hip-hop fashions, skateboarding shoes, and so on.

But by the turn of the millennium cool had ceased to be credible as a political stance, and we have since seen yet another shift, from conspicuous non-conformity to what we can call “conspicuous authenticity.” The trick now is to subtly demonstrate that while you may have a job, a family, and a house full of stuff, you are not spiritually connected to any of it. What matters now is not just buying things, it is taking time for you, to create a life focused on your unique needs and that reflects your particular taste and sensibility. (more)

Let’s see, conspicuous leisure, then conspicuous consumption, then conspicuous non-conformity, then conspicuous authenticity. What’s next?

Maybe no one you know will read the above, and you can safely ignore it. But if you start to learn that many people you know are starting to see conspicuous authenticity as just another way that posers vie for status, then of course your community will come to not accept that as giving real status. No, you’ll start to see some new kinds of behavior as the sort of thing that people do who don’t care about status, but are just being “real”.

Then you’ll start to become aware that other people that you know agree with this new attitude of yours. You’ll get more comfortable with saying that you approve of these sorts of behavior in others, with hearing others say the same thing, and you’ll notice that you feel good when other people credit you with such behavior. You and your associates will all feel good about themselves, knowing they are all good people who deserve respect because they do these things, things that they all know are not about status seeking.

At which point these new behaviors will have become your new status game. You see, status-seeking behavior must be a respected behavior that isn’t seen as overtly status seeking. Because we all agree that we don’t respect behavior that is done mainly to gain status. Even though we do, we do, we very much do.

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Beware Status Arrogance

Imagine that you are expert in field A, and a subject in field B comes up at party. You know that there may be others at the party who are expert in field B. How reluctant does this make you to openly speculate about this topic? Do you clam up and only cautiously express safe opinions, or do you toss out the thoughts that pop into your head as if you knew as much about the subject as anyone?

If you are like most people, the relative status of fields A and B will likely influence your choice. If the other field has higher status than yours, you are more likely to be cautious, while if the other field has lower status than yours, you are more likely to speculate freely. In both cases your subconscious will have made good guesses about the likely status consequences to you if an expert in B were to speak up and challenge your speculations. At some level you would know that others at the party are likely to back whomever has the higher status, even if the subject is within the other person’s area of expertise.

But while you are likely to be relatively safe from status losses, you should know that you are not safe from being wrong. When people from different fields argue about something within one of their areas of expertise, that expert is usually right, even when the other field has higher status. Yes people from your field may on average be smarter and harder-working, and your field may have contributed more to human progress. Even so, people who’ve studied more about the details of something usually know more about it.

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Status Bid Coalitions

Katja Grace and I talked a bit recently about a possible “big scope status bias”, and she wrote a post on one of the ideas we discussed:

I’m not convinced that more abstract things are more statusful in general, or that it would be surprising if such a trend were fairly imprecise. However supposing they are and it was, here is an explanation for why some especially abstract things seem silly. … Abstract rethinking of common concepts is easily mistaken for questioning basic assumptions. Abstract questioning of basic assumptions really is questioning basic assumptions. And questioning basic assumptions has a strong surface resemblance to not knowing about basic truths, or at least not having a strong gut feeling that they are true. (more)

Yes, people who question basic assumptions can be framed as silly for not understanding basic things. But I think a similarly strong effect is that people often just don’t like reconsidering basic assumptions. Once you’ve used certain assumptions and matching concepts for a long time, your thinking comes to rely on them. Not only would you lose a lot of that investment if your assumption was wrong, but it becomes mentally hard to even consider the possibility. A third strong effect, I think, is one I mentioned in my previous post:

It is harder to reason well about big scope choices, which is part of why it impresses to do that well. … Some topics will be so abstract that very few can deal well with them, or even evaluate the dealings of others. So those few people will tend more to be on their own, and not get much praise from others. (more)

Reasoning abstractly in a way that seems to question basic assumptions is often seen as a bid for status. As with most such bids, observers have to decide if to accept or oppose that bid. Observers are tempted to reject it, not only because they don’t like others to rise in status, but also because they don’t like to have to reconsider basic assumptions, and because it is so tempting to reject by ridicule, via insinuating that the bidder is stupid and silly.

But while these temptations can be strong, observers must also consider coalition politics – how many allies how strong can the bidder bring into play. If a high status field like physics brings broad unified support to the abstract reasoning, people will mostly back down and accept the abstract status bid. But if only a few supporters can be found with only modest status, the temptation to ridicule is likely to win out. Philosophers are often on the borderline here, with enough status to intimidate many, but not enough to intimidate high status folks like physicists, who are more tempted to ridicule them.

Added 10a: This helps explain the puzzle I engaged in Too Much Consulting? When managers want to push changes that seem to question basic firm assumptions, they need especially strong high status support to resist the ridicule response. So they hire prestigious management consultants.

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Big Scope Status Bias

Some data points:

  1. Many incoming college freshman like “international studies” or “international business.” Far fewer like local studies or local business. Yet there will be more jobs in the later area than the former.
  2. The media discusses national and international politics more than more local politics, yet most of the “news you can use” is local.
  3. Our economics department once estimated there’d be substantial demand for a “managerial economics” major. It would teach basically the same stuff as in an economics major gets, but attract students because of the word “managerial.”
  4. Within management, reorganization is usually higher status than managing within existing structures.
  5. The ratio of students who do science majors relative to engineering majors is much larger than the ratio of jobs in those areas.
  6. Within science, students tend to prefer “basic” sciences like particle physics to more “applied” sciences like geology or material science, relative to the ratio of jobs in such areas.
  7. Compared to designing things from scratch, there is far more work out there maintaining, repairing, and making minor modifications to devices and software. Yet engineering and software schools focus mainly on designing things from scratch.
  8. Within engineering, designing products is higher status than designing the processes that manufacture those products.
  9. Designing new categories of products is seen as higher status than new products within existing categories.
  10. Even when designing from scratch, most real work is testing, honing, and debugging a basic idea. Yet in school the focus is more on creating the basic idea.
  11. There seems to be an overemphasis at school on designing tools that may be useful for other design work, relative to using tools to design things of more direct value.

Do these trends have something in common? My guess: we see wider-scope choices as higher status, all else equal. That is, things associated with choices that we think will influence and constrain many other choices are seen as higher status than things associated with those other more constrained choices. For example, we think managers constrain subordinates, world policy constrains local policy, physics constrains geology, product designs constrain product maintenance, and so on. Yes reverse constraints also happen, but we think those happen less often.

The ability to control the choices of others is a kind of power, and power has long been seen as a basis for status. There may also be a far-view heuristic at work here, i.e., where choices that evoke a far mental view tend to be seen as high status. After all, power does tend to evoke a far view.

A lesson here seems to be that while it can raise your status to be associated with big scope choices, you should expect a lot of competition for that status, and a relative neglect of smaller scope choices. That is, more people may major in science, but there are more jobs in engineering. You might impress people by focusing on creating designs in school, but you are likely to spend your life maintaining pre-existing designs. If you want to get stuff done instead of gaining status, you should focus on smaller scope choices.

Now in my life I’ve spent a lot of time trying to reconsider basic big scope choices. For example, I’ve studied foundations of quantum mechanics, and proposed a new form of governance. And I’ve often thought of such topics as neglected. So how can I reconcile such views with the apparent lesson of this post?

One obvious reconciliation is that I’ve just been wrong, having succumbed to the big scope status bias.

Another possibility is that big scope topics tend more to be public goods where people tend to free-ride on the efforts of others. It is easier for a person or group to own the gains from better understanding smaller scope topics, and thus have a strong incentives to deal with them. If so, there would be positive externalities from progress on such topics, to counter the negative externalities from status and signaling. I think this explanation has some truth, but only some.

A third possibility is that it is harder to reason well about big scope choices, which is part of why it impresses to do that well. But if good reasoning is harder as the topic gets more abstract, there should be fewer people who can handle such topics. Some topics will be so abstract that very few can deal well with them, or even evaluate the dealings of others. So those few people will tend more to be on their own, and not get much praise from others.

Are there more possibilities to consider?

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