Monthly Archives: July 2010

Arrogant Professionals

  • CEO – “We study a unique panel of over 11,600 probability distributions provided by top financial executives and spanning nearly a decade of stock market expectations. Our results show that financial executives are severely miscalibrated: realized market returns are within the executives’ 80% confidence intervals only 33% of the time. We show that miscalibration improves following poor market performance periods because forecasters extrapolate past returns when forming their lower forecast bound (“worst case scenario”), while they do not update the upper bound (“best case scenario”) as much. Finally, we link stock market miscalibration to miscalibration about own-firm project forecasts and increased corporate investment.” (more)
  • Doc – “A study led by the Harvard researcher Nicholas Christakis asked the doctors of almost five hundred terminally ill patients to estimate how long they thought their patient would survive, and then followed the patients. Sixty-three per cent of doctors overestimated survival time. Just seventeen per cent underestimated it. The average estimate was five hundred and thirty per cent too high. And, the better the doctors knew their patients, the more likely they were to err. … Studies find that although doctors usually tell patients when a cancer is not curable, most are reluctant to give a specific prognosis, even when pressed. More than forty per cent of oncologists report offering treatments that they believe are unlikely to work.” (more)
  • Lawyer – “[Consider] predictions by a sample of attorneys (n = 481) across the United States who specified a minimum goal to achieve in a case set for trial. … After the cases were resolved, case outcomes were compared with the predictions. Overall, lawyers were overconfident in their predictions, and calibration did not increase with years of legal experience. Female lawyers were slightly better calibrated … In an attempt to reduce overconfidence, some lawyers were asked to generate reasons why they might not achieve their stated goals. This manipulation did not improve calibration.” (more)

I strongly suspect these patterns are driven mostly by customers, i.e., that more accurate professionals would be less successful in inspiring confidence by others in them.  If you are a successful professional, that is probably in part because of your unjustified arrogance.

Added: Carl reminds us of an ’06 post on overconfident software managers.

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Looking Too Good

An initial study investigating tolerance of group members who abuse a public good surprisingly showed that unselfish members (those who gave much toward the provision of the good but then used little of the good) were also targets for expulsion from the group. Two follow-up studies replicated this and ruled out explanations grounded in the target being seen as confused or unpredictable. A fourth study suggested that the target is seen by some as establishing an undesirable behavior standard and by others as a rule breaker. Individuals who formed either perception expressed a desire for the unselfish person to be removed from the group. …

The fact that generous people are unpopular is consistent with the well-documented aversion to exceptional individuals: dislike of those who seem extremely competent; displeasure with those who offer help; and, more recently, the rejection of those who adhere strongly to a moral position. …

Within a group task setting, social comparison tends to induce feelings of inter-personal competition. People feel driven to outdo the group member who is setting the standard. In a setting such as ours, the standard being set by the benevolent other is to give up a considerable amount of personal resources and receive only a small payoff in return. To compete with such a person means that one would need to give even more and take even less, not a very desirable prospect. Removal of this person would eliminate that competitive standard. Further, it is known that in social dilemma situations, people ignore the objective nature of their outcomes in favor of a subjective, relative evaluation of them. (more; HT Tyler)

Need any clearer evidence that status has a big relative (or positional) component?  Similar behavior happens in the real world.  Forager band hunters often exchange arrows, to hide who actually killed the animal everyone is eating; claiming credit for a kill is bad form and punished.  The book Managerial Dilemnas describes Hawthorne Works electrical factory workers in the 1930s:

Continue reading "Looking Too Good" »

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Hypergamy & Polygamy

Tuesday I complained that the main argument against polygamy (men with multiple wives), that it creates more unmarried and hence unhappy  men, also argues for polyandry (women with multiple husbands), female prostitution, stronger punishment of wife affairs, and for forbidding women who never marry.  Many complained that I neglected to consider intrinsic gender asymmetries, which would induce more polygamy than polyandry, and more gays than lesbians.  Then there is Steven Landsburg:

Robin has it completely backward: When the wife of a 30 year old man (who is well past the prime age of violence) has an extramarital affair with an 18 year old, she is alleviating the problem, not contributing to it. Besides, most extramarital affairs do not deprive the husband of a long term sex partner.

Well there are several factors here to disentangle.  If the problem was just that some men never got any sex, well then yes women having more partners couldn’t hurt.  And if the problem was instead inequality in male sex, and if women had affairs with random men, then that couldn’t hurt either.  But if the problem is sexual inequality and if women are hypergamous, preferring the very best men, then we should expect it to be the same few, most likely married, men who repeatedly benefit from affairs.  An affair-occupied wife tends give less sex to her husband, which increases male sex inequality.

Now if you assume that women who want affairs, lesbian relations, or husband sharing would, if denied their favorite option, simply refuse to have sex with anyone, then allowing these things can’t reduce any guy’s sex. But allowing such things can make a difference when women would substitute other options.

So yes, banning polygamy could be part of a larger coherent strategy to reduce male sexual inequality, to resist natural female hypergamy.  But banning polygamy and also polyandry and prostitution, while allowing lesbian relations and preventing natural punishment of wife affairs, well that looks nothing like a coherent strategy to reduce male sexual inequality.  We should look elsewhere to explain our pattern of what we ban and what we allow.

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Others’ Views Are Detail

In Jan ’09 I wrote:

This is now my best account of disagreement. We disagree because we explain our own conclusions via detailed context (e.g., arguments, analysis, and evidence), and others’ conclusions via coarse stable traits (e.g., demographics, interests, biases). While we know abstractly that we also have stable relevant traits, and they have detailed context, we simply assume we have taken that into account, when we have in fact done no such thing.

New data suggests a different view:

The results of 4 studies suggest that when individuals mentally construe an attitude object concretely, either because it is psychologically close or because they have been led to adopt a concrete mindset, their evaluations flexibly incorporate the views of an incidental stranger. However, when individuals think about the same issue more abstractly, their evaluations are less susceptible to incidental social influence and instead reflect their previously reported ideological values. …

The results of these four studies appear quite robust: They held for a variety of political and social attitude objects (including general issues and specific policies related to four different and important topics: organ donation, euthanasia, illegal immigration, and universal health care), and they emerged across different types of evaluative responding (overall attitudes, voting intentions, and elaboration positivity) as well as different manipulations (temporal distance and two direct manipulations of construal level). …

Whereas local evaluations serve to guide responding in the here and now by flexibly incorporating incidental contextual details, global evaluations can help to guide action at a distance by consistently reflecting a person’s core values and ideals, which are likely to be shared within important relationships or groups. (more)

Here’s my tentative reading of this.  We pay more attention to messy detail in near far, relative to far view. On any given topic, we see our core values and explicit reasons as big important central influences on our opinions, whereas we see the opinions of others more as incidental detail.  So we think we should listen to random other people more on small detail topics, and less on big important topics.

Random others are little people, you see, which are fit for little topics.  But they are just not big and important enough to influence us on big important topics; only big important things should do that. Like big explicit reasons. This makes us tend to disagree greatly with most others on what we see as big topics, though much less on millions of small detail topics, like “there’s another tree.”

Perhaps it makes sense to keep random others from influencing our core values (which are about us), but on questions of fact (which are about the world out there), most folks seem to make the huge mistake of vastly underestimating the info contained of others’ opinions, relative to the info contained in their own explicit reasons. Yes there may be people and times when others’ opinions really do contain relatively little info, but most folks are far too quick to assume that this applies to them now.

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Polygamy Hypocrisy

Polygamy is on trial in Canada, where one of the issues is what justifies anti-polygamy laws infringing on the choices of consenting adults. Advocates of the status quo say polygamy hurts society by creating more unmarried men, who are unhappy and violent, and by making men compete more fiercely for women’s admiration:

Does polygamy between consenting adults harm anyone else? The question has been raised in Canada, where polygamy has been illegal since the nineteenth century, but the supreme court in British Columbia is going to have to decide whether this law is unconstitutional. Doesn’t it infringe the right of adults to arrange their lives by mutual consent? The original law was directed against Mormons, and the present test is also directed against a polygamous fundamentalist Mormon commune. …

There has been one brief filed against decriminalising polygamy … from … anthropologist Joe Henrich. … [He says] monogamy gives huge advantages to societies which practice it. It arose, like philosophy, among the Greeks, passed through the Romans, and then the Christian church took it over as an ideal and managed over the course of around a thousand years to establish it as the norm in Europe, even for the aristocracy. ….

Men who fail to get wives will be driven by competition that it increasingly dangerous to society and to themselves. … Unmarried men are more violent and more generally criminal. … The worst affected are the poor and uneducated. … Because the competition for women is so fierce, making them valuable objects rather than loveable people, men … must control them more carefully. The same dynamic places pressure on the recruitment of younger and younger brides into the marriage market. … Finally, the men will reduce their investment in any particular wives and children. … because they will increasingly spend their efforts on getting more wives rather than looking after the ones they have.

Henrich argues that these factors help to explain the measurable economic failures of highly polygynous countries, including low saving rates, high fertility, and low GDP per capita. … Monogamous marriage has unobvious advantages. In fact he considers that it was the seedbed of European ideas of democracy and, later, human rights and women’s equality. (more)

I very much doubt the Greeks invented monogamy, and the rest of this seems also exaggerated. But such arguments seem worth considering, as a US legal suit to allow polygamy would probably face similar complaints.

Note that such arguments, that polygamy creates more unmarried men, who are unhappy and violent, and makes men compete more fiercely for women’s admiration, also support other laws.  For example, they support laws prohibiting lesbian female relations, or more generally prohibiting women from remaining unmarried to any man.  After all, unmarried women just as directly cause unmarried men, relative to polygamously married women.  Yet there is little political support for such prohibitions.

[Added 7a:  These anti-polygamy arguments also make good pro-polyandry arguments, since men who share a wife are also no longer unmarried men. Added Thurs: They also argue for prostitution.]

These anti-polygamy arguments also support more vigorous punishment of extra-marital affairs. After all, men whose wives cheat on them also get unhappy and violent, and the prospect of inducing wives to cheat makes men compete more fiercely for their admiration. Yet not only does our formal law have only weak punishments for such cheating, it actually goes out of its way to prohibit what would be the naturally strong punishment of blackmail. And our informal social norms regarding cheating spouses usually advise others to “stay out of it.”

It seems to me pretty obvious that we prohibit polygamy mainly because the folks who want to do it (rural religious communes) have low status in our society.  Also, since high status folks cheat and don’t want that discouraged via blackmail, we prohibit blackmail.  Yes there is an element of inertia, but gays have overcome such inertia in ways that polygamists can’t. Gays are common in high status communities and professions; for our elites, many of their best friends really are gay. Not at all true for polygamists.

More interesting data from WrongBot reviewing the book Sex At Dawn: Continue reading "Polygamy Hypocrisy" »

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Brave Position Club?

At my post yesterday on race, several comments accused me of cowardice for not taking a position there on race-IQ correlations, even though that is not directly relevant to the post, and even though I have commented on that topic before. While I mostly don’t avoid taking positions on controversial topics if I think I have something interesting to say about them, I also don’t go out of my way to take controversial positions just to take them. Apparently some folks, however, take pride in going out of their way to take controversial positions even when they have nothing interesting to say on such topics.

I suppose I can appreciate that some folks want to signal they don’t fear social retribution, though I suspect many interpret them as signaling that they have no political or managerial ambitions.  But it occurs to me that folks could be more systematic about this signal; imagine a Brave Position Club.

The Brave Position Club would have an official long list of, perhaps 100, brave topics, and club members would simply be defined as folks who had publicly declared a clear current position (perhaps chosen from a menu) on all those brave topics. The topics should be chosen to be the most socially awkward topics, ones for which people typically fear the most social costs for taking certain positions.  The topics should also be chosen neutrally, so as to “gore everyone’s oxen” equally, rather than to preferentially expose the hypocrisies of certain disfavored groups.

The topic list should be long enough so that people who chose positions by “thinking for themselves” would likely choose socially-awkward retribution-worthy positions on at least a few of the topics. A club member who declared the safe opinion on all the brave topics would be clearly identified as a “kiss-ass brown-noser” who didn’t think for themselves.

I’d be tempted to join such a club, at least if some careful analysis had gone into picking the topics neutrally, and if I expected enough other folks to join for it to become focal.  Would you join?  Who should join and why?

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Signaling Conspiracies

Low- and high-end fashion products tend to have less conspicuous brand markers than midprice goods, according to a paper soon to be published in The Journal of Consumer Research.

Rather than rely on obvious logos, expensive products use more discreet markers, such as distinctive design or detailing. High-end consumers prefer markers of status that are not decipherable by the mainstream. These signal group identity only to others with the connoisseurship to recognize their insider standing.

In one study, fashion students were more likely than regular students to favor subtle signals for products visible to others, like handbags. But for private products less relevant to identity, like underwear and socks, there was no difference between the groups. (more; HT Nicholas Walker)

This is one of the factors that makes signaling hard to study – signals are often designed to be hard for ordinary folks to discern.  And that fact makes it easy to be skeptical that any signaling is going on at all.  Skeptics can say “signals, what signals?”

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OK, Let’s Talk Race

Sunday’s Post:

Once again, in the midst of the cacophony, calls abound for a national “dialogue” on race. Yet our nation cannot muster the patience or stamina to sustain such a discussion beyond a single news cycle. … At the barest suggestion of race, we line up at opposite corners and start hurling accusations. …

Racial inequality is perpetuated less by individuals than by structural racism and implicit bias. Evidence of structural inequality is everywhere: in the grossly disproportionate numbers of young black men and women in prison; in the color of students shunted into remedial and special education tracks. … It is evident, too, in the history of blatant discrimination against black farmers practiced by the Agricultural Department.

But that does not make doctors, nurses, police officers, judges, teachers, lawyers, city planners, admission officers or others prejudiced. Most are well-intentioned professionals who believe themselves to be free of racial bias. … Implicit bias is a reality we must confront far more openly. A growing mass of compelling research reveals the unconscious racial stereotypes many of us harbor that affect our decisions. … White and black test-takers match black faces more quickly than white ones with words representing violent concepts. … The more stereotypically black the features of a criminal defendant, the harsher the sentence he or she is likely to receive. Implicit bias has been shown to factor into hiring decisions and into the quality of health care that individuals receive. …

The good news is that structures can be dismantled and replaced and unconscious biases can be transformed. … First, though, they must be acknowledged. … Our nation has to stop denying the complexity of our racial attitudes, history and progress. Let’s tone down the rhetoric on all sides.

Many folks reasonably suspect invitations to discuss race are traps – it seems hard to say much on race without being accused of racism, racial insensitivity, etc. But let me cautiously weigh in anyway.

Yes, we have unconscious expectations about others, yes those depend in part on race, and yes those expectations are a mixture of info and error.  Some unconscious race-based expectations are a reasonable summary of actual common differences between races, while others are mistaken, with expectations that are too favorable or unfavorable for particular races.

I see two basic approaches to reducing racial expectation errors:

  1. Rely on, and perhaps improve, local incentives for individual decision makers to identify and correct their own errors, and to select themselves into decision places well matched to their abilities to avoid such errors.
  2. Have a broad conversation on the rough sorts of racial errors we expect to be common, then authorize officials to use discretion to pick regulations to reduce such errors at an acceptable cost, relative to other considerations.

One big problem with the regulation approach is that giving regulators discretion can make things worse, as well as better. Two examples above, of racial errors by sentencing judges and by the Ag Dept, seem examples where regulator discretion went quite wrong. Since medicine is heavily regulated to preserve doctor discretion, racial treatment errors by doctors has a similar cause.

Unfortunately, judges, ag dept officials, and regulated doctors have only weak incentives to overcome their racial biases. Sure they might fear that a broad conversation will arise and create a consensus among voters both that such folks had been racially biased, and that they should be punished strongly for it. But really, how likely is that?

In contrast, employers choosing who to hire can have much stronger incentives. If a labor market isn’t too heavily mis-regulated, any employer could profit substantially by preferring to hire folks that other employers unfairly neglect. If ordinary hiring specialists are too busy or distracted to notice such opportunities, hiring consultants can specialize in charging to identify such opportunities.

Yes, such incentives don’t prevent all employer racial bias, and yes thoughtful hard-working well-meaning regulators (including politicians and civil servants) can and have developed labor regulations that could reduce such bias. The problem is, when you empower regulators to fix such problems, you empower many other kinds of regulators as well, also including lazy stupid racially-biased ones. And you give all these regulators only weak incentives to overcome their biases.

For problems about which many people feel strongly, it is indeed a feels-right forager way to seek a communal conversation to identify new communally-enforced social norms to solve the problem. In large modern societies, however, this urge to solve problems by national conversations and laws seems largely dysfunctional.

Much better, when possible, is to rely on local incentives.  For example, if employer incentives to overcome racial biases seem currently too weak, let’s up the ante by enabling corporate raiders, proxy access, etc.  Forms of futarchy can give participants strong incentives to overcome racial biases regarding policy recommendations.  There is plenty we can do, if people really want to overcome racial biases.

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Anything Not Required …

Natural regulatory endpoint: Anything not required is forbidden.

Insurance companies take in premiums, and pay out claims and administrative expenses; the difference is profit.  If payouts were perfectly predictable, competition might drive this difference to zero. But since payouts are uncertain, premiums must be set higher, to prevent bankruptcy.  In fact, insurance regulators set minimum allowed levels of such “surpluses.”

The new Obamacare rules create a lot more uncertainty – insurers aren’t sure what exactly how it will change their costs, and the rules make it harder for insurers to raise premiums. The natural response of responsible insurers should be: collect larger surpluses, to insure against these uncertainties.  And in fact non-profit insurers have been doing just that.  Some are not at all happy:

The report released Thursday by the Consumers Union … found that seven of 10 Blue Cross Blue Shield affiliates examined had amassed surpluses that are more than three times the level regulators deemed necessary for them to remain solvent. Sondra Roberto … who co-wrote the report … said the prospect that nonprofit plans may be running unwarranted surpluses was even more troubling, given their mandate as charitable organizations.

Geez.  Why even have private insurers, if you aren’t going to let them choose how to respond to changing conditions?

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Unincorporated War

In April I reviewed the The Unincorporated Man, a sf novel that last week won the Libertarian Futurist Society’s Prometheus Award.  The novel is set several centuries hence, in a rich peaceful hi-tech society of forty billion folks, spread across the solar system. On the plus side, war, crime, death, and religion are very rare, and a minimal world government is funded only by a 5% income tax. On the minus side, virtual reality is an illegal sin, and parents help kids far less than now; parents own 20% of kids’ future income, and force kids to sell more income shares to pay for school, etc. Most kids end up owning less than 50% of their income, which reduces their ability to control their job, home, etc.

A cryonics patient from our time is revived, refuses to sign paperwork to pay his 5% income tax, and inspires a mass movement blaming corporations (not parents!) for the “slavery” of having to pay installment payments on voluntarily purchased and consumed school, etc. In April I complained:

[It] is widely praised for its thought-provoking premise. Yet I find no evidence that it provoked thought about its premise. … Among the 70+ reviews/comments on the book I’ve read, a few take a position on this idea (all against), but none engage the idea, i.e., offering arguments for or against it based on details of the book. … In the book’s 500 pages no one ever resents parents; it is all those conniving corporations. … Also, the book never even considers the possibility of non-voting [income shares].

The sequel, The Unincorporated War, is “action-packed”, and readers seem to like it, but alas it inspires even less thought. Spoilers below the fold. Continue reading "Unincorporated War" »

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