Bad Balance Bias

Balance in life is good. You need to work, relax, have fun, try new things, continue old things, have sex, do sport, play games, sleep. The balanced lifestyle is the ideal, and we all know this.

Problems start when we extend this idea of balance beyond our personal lives. We deal with political and charitable choices as if balance was a virtue. It’s bad enough for governments – they are expected to fund highways, trains, buses and subways, to subsidise clean energy, petrol exploration and energy efficiency, pay money for the opera, for theatre, for sport, for museums and for films. At least in the government’s case the sums involved are so huge that they change the marginal value of these various activities, making this balance obsession possibly acceptable.

But personal charity is the worst. People will give money to combat hunger in Africa, to help the victims of the Tsunami, to educate the under-privileged, to combat global warming and malaria. Since most donations are small, there must be one charity whose marginal value is the highest; rationality implies we should give all our cash to that one. Not only is this not the case, but people seem to prefer to spread their donations around. “You can’t just do one thing” is the reaction I get when questioning this. Yes you can, for charitable giving, and you should.

What are the implications, if my analysis is correct and people demonstrate an irrational love of balance? First, that people will react better to statement like “we are transferring part of X’s funding to Y” rather than “We are cutting X’s funding. We are also increasing Y’s funding.” Secondly that it will be easier to reduce the funding for some X, but much harder to get rid of X entirely. Lastly, that charities boasting a range of different types of projects will fare much better than they should.

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