New studies show existence and positive purpose biases. First, we presume that what exists is better that what is not: People treat the mere existence of something as evidence of its goodness. Studies 1 and 2 demonstrate that an existing state is evaluated more favorably than an alternative. Study 3 shows that imagining an event increases estimates of its likelihood, which in turn leads to favorable evaluation; the more likely that something will be, the more positively it is evaluated. Study 4 shows that the more a form is described as prevalent, the more aesthetically attractive is that form. … Mere existence leads to assumptions of goodness; the status quo is seen as good, right, attractive, tasty, and desirable.
You see this a lot whenever people try to explain a type of behavior or trait. An evolutionary explanation is immediately sought, when in fact it could just be the behavior is not than important or advantageous one way or the other.
Scott I strongly agree with you on that and further we make excuses for some subjects we need teach Latin or factoring of quadratic equations though very few people will ever use them. People will make the excuse that we must teach Latin because it expands vocabulary. Has it been proven that Latin is a better way to expand vocabulary than teach more vocabulary. Do the Latin teachers even focus on expanding vocabulary or do they teach it as an academic exercise full useless declension and conjugation? People say but factoring quadratic equations teaches thinking skills but I ask could we learn to think skill while leaning something useful?
Yes, of course to the extent that the current status quo has "stood the test of time" while alternatives have not, a status-quo bias is entirely reasonable. Even the assertion that the purpose of the sun is to nurture life makes a lot of sense as an application of the anthropic principle; just try living in interstellar space without a readily available energy source nearby!
I think it's long for the world despite not being functional. The point of the post is that people preserve pointless institutions.
I agree with this post, but generalize it further. People perceive agency everywhere, whether it exists or not. Real agency looks like optimization pressure. When looking at objects that they can't make themselves, people MASSIVELY overestimate the total optimization pressure that goes into the design of any given object.
I think one important point being ignored here is the fact that a person's choice/final decision varies relative to the context at which he is being asked the question.
So lets say for example, the question is, who would be a better president? Person Y might vote McCain, but declare (verbally) someone else to a pollster. Because, as you know, due to the Bradley effect.
Institutions do arise from complexity. As relationships grow more interconnected in a market or markets regulators might seek to regulate risk of harm. For example size favors health insurers in the PPO market because of bargaining power with providers, the larger they are, the more patients they bring to the provider, the stronger their bargaining power on price. The sheer size of the insurer might lead to monopsony behavior so a minimum loss ratio is mandated by regulators to protect consumers from what might be popularly termed predatory pricing of health insurance policies. Since I am aware of this pattern of regulatory behavior would I be in favor or against a change in the way an insurance regulator operates if it would losen or tighten regulatory requirements. Again it would depend on which special interest I leaned towards. I don't think that one could say goodness perception is a universal it is a nuance at best.
I might have a favorable opinion of the anti-trust division of the justice department prior to the Microsoft case but after the Microsoft case I might have a less favorable opinion. Is my change in opinion about the charter of the division being violated or am I biased about an admired company? If I on the other hand was a Linux user I might applaud the action.
Isn't perceived goodness dependent on the behavior of the institution in relation to the perceiver's point of view? You might have a favorable opinion of Medicare and Social Security if you are over 65 but a less favorable one if you are under 65. If you are under 65 and face supporting a parent in their retirement you might have a good perception of Social Security and Medicare.
This all boils down to context of observer and observed.
Since existing institutions are much better than most possible institutions, it makes sense to prefer the status quo to most alternatives. If your impressions about other very different institutions aren't very strong evidence, then even the institutions that appear great should be expected to do poorly. If you're better at evaluating institutions, existence is less evidence.
The "regression towards the mean" argument doesn't apply to small perturbations (assuming something like continuity), and it should be easier to evaluate small perturbations, so it should be easier to walk the gradient towards a local maximum than to find a distant point of higher utility.
Status-quo bias is so strong in favor of the present that it also discounts the evolution, or complicated history, that generated the present. So it works against Hayek's main point as well, i.e., that we often forget the trial-and-error of the past.
Robin, don't you show a similar teleology bias in assuming that things (human behaviors & institutions) serve a purpose, rather than being being byproducts of various psychological and social mechanisms? The difference is that you don't assume that these purposes are laudable; instead they are typically some signaling or evolutionary purpose.
Case in point: If a fence existed along the Mexican/American border, how many would support tearing it down? I don't get the impression that money is a major factor in the anti-fence camp. Besides, with legions of unemployed American unskilled labourers, and Krugman-reading bureaucrats aching to "stimulate" the economy, the actual cost of constructing it seems trivial.
The studies are similar to the way i think about motivation. The status quo bias exists due to the manner i believe benefit-cost is processed by the brain.
We normally think of behaviour as occuring when benefit minus cost is positive, but i think a threshold has to be reached before behaviour is likely to occur.
A behavioural event will occur thus:
Benefit - (Cost + Threshold) > 0
In a market transaction, the Aristotilean premise is that exchange will occur when the value of the exchange is equal to the cost for both partites. This is wrong, i believe. The value has to be greater than the cost for both parties. If party A offers $2 to party B in a $10 ultimatum game, perhaps the equation above is not positive for player B.
Simply put, the status quo is prefered to a marginally superior alternative. The alternative has to be substantially superior to the status quo to be prefered.
Benefit-cost threshold differentials are possibly per individual, and might account for differences in motivation, mood, optimism, depression, etc.
we presume the universe is designed to achieve broad positive purposes
Richard Dawkins: "The universe we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil and no good; nothing but blind, pitiless indifference."
If we remember what social and institutional life was like before the transition to open and competitive political / economic orders, then overstating the downside of alternative-dreaming makes sense.
He who thinks, might do.
You couldn't form limited liability corporations at will until the mid-19th C. in a handful of Western countries. Everywhere else at the time -- and *everywhere* before then -- imagining other ways of doing things and trying them out was not allowed. Well, you could try, but because that would've threatened the stability of a primitive social order (like in H-G's) or a natural state (in agricultural societies), it would've been squashed -- by violence.
In that world, the benefit of imagining and experimenting with alternative social institutions would have been minuscule compared to the costs -- the certain move by a broad coalition to crush the outside-the-boxers violently if it got too far, or even "milder" things like cutting off access to necessities even in the early stages, just to let the experimenters know who's boss.
It's even worse because the costs are paid immediately (close to it anyway), while the benefits would have to be heavily discounted because they'd only materialize far into the future.
If I were a curious, experimental person in that world, I too would tell myself that the status quo may not be perfect, but that it's good enough.
You see this a lot whenever people try to explain a type of behavior or trait. An evolutionary explanation is immediately sought, when in fact it could just be the behavior is not than important or advantageous one way or the other.
Some prediction markets reward with money; others do not. If you have a fixed budget you can lose, point taken.
Scott I strongly agree with you on that and further we make excuses for some subjects we need teach Latin or factoring of quadratic equations though very few people will ever use them. People will make the excuse that we must teach Latin because it expands vocabulary. Has it been proven that Latin is a better way to expand vocabulary than teach more vocabulary. Do the Latin teachers even focus on expanding vocabulary or do they teach it as an academic exercise full useless declension and conjugation? People say but factoring quadratic equations teaches thinking skills but I ask could we learn to think skill while leaning something useful?
Prediction markets reward accuracy. Biased players go broke and exit the market; unbiased (or less biased) players remain, and are richer.
Prediction markets create a financial incentive to overcome bias.
Strangely enough, I published a post arguing against this view only a few hours ago.
Yes, of course to the extent that the current status quo has "stood the test of time" while alternatives have not, a status-quo bias is entirely reasonable. Even the assertion that the purpose of the sun is to nurture life makes a lot of sense as an application of the anthropic principle; just try living in interstellar space without a readily available energy source nearby!
I think it's long for the world despite not being functional. The point of the post is that people preserve pointless institutions.
I agree with this post, but generalize it further. People perceive agency everywhere, whether it exists or not. Real agency looks like optimization pressure. When looking at objects that they can't make themselves, people MASSIVELY overestimate the total optimization pressure that goes into the design of any given object.
I think one important point being ignored here is the fact that a person's choice/final decision varies relative to the context at which he is being asked the question.
So lets say for example, the question is, who would be a better president? Person Y might vote McCain, but declare (verbally) someone else to a pollster. Because, as you know, due to the Bradley effect.
Institutions do arise from complexity. As relationships grow more interconnected in a market or markets regulators might seek to regulate risk of harm. For example size favors health insurers in the PPO market because of bargaining power with providers, the larger they are, the more patients they bring to the provider, the stronger their bargaining power on price. The sheer size of the insurer might lead to monopsony behavior so a minimum loss ratio is mandated by regulators to protect consumers from what might be popularly termed predatory pricing of health insurance policies. Since I am aware of this pattern of regulatory behavior would I be in favor or against a change in the way an insurance regulator operates if it would losen or tighten regulatory requirements. Again it would depend on which special interest I leaned towards. I don't think that one could say goodness perception is a universal it is a nuance at best.
I might have a favorable opinion of the anti-trust division of the justice department prior to the Microsoft case but after the Microsoft case I might have a less favorable opinion. Is my change in opinion about the charter of the division being violated or am I biased about an admired company? If I on the other hand was a Linux user I might applaud the action.
Isn't perceived goodness dependent on the behavior of the institution in relation to the perceiver's point of view? You might have a favorable opinion of Medicare and Social Security if you are over 65 but a less favorable one if you are under 65. If you are under 65 and face supporting a parent in their retirement you might have a good perception of Social Security and Medicare.
This all boils down to context of observer and observed.
Since existing institutions are much better than most possible institutions, it makes sense to prefer the status quo to most alternatives. If your impressions about other very different institutions aren't very strong evidence, then even the institutions that appear great should be expected to do poorly. If you're better at evaluating institutions, existence is less evidence.
The "regression towards the mean" argument doesn't apply to small perturbations (assuming something like continuity), and it should be easier to evaluate small perturbations, so it should be easier to walk the gradient towards a local maximum than to find a distant point of higher utility.
Barkley Rosser,
Status-quo bias is so strong in favor of the present that it also discounts the evolution, or complicated history, that generated the present. So it works against Hayek's main point as well, i.e., that we often forget the trial-and-error of the past.
Robin, don't you show a similar teleology bias in assuming that things (human behaviors & institutions) serve a purpose, rather than being being byproducts of various psychological and social mechanisms? The difference is that you don't assume that these purposes are laudable; instead they are typically some signaling or evolutionary purpose.
Case in point: If a fence existed along the Mexican/American border, how many would support tearing it down? I don't get the impression that money is a major factor in the anti-fence camp. Besides, with legions of unemployed American unskilled labourers, and Krugman-reading bureaucrats aching to "stimulate" the economy, the actual cost of constructing it seems trivial.
Cheers,
Zdeno
The studies are similar to the way i think about motivation. The status quo bias exists due to the manner i believe benefit-cost is processed by the brain.
We normally think of behaviour as occuring when benefit minus cost is positive, but i think a threshold has to be reached before behaviour is likely to occur.
A behavioural event will occur thus:
Benefit - (Cost + Threshold) > 0
In a market transaction, the Aristotilean premise is that exchange will occur when the value of the exchange is equal to the cost for both partites. This is wrong, i believe. The value has to be greater than the cost for both parties. If party A offers $2 to party B in a $10 ultimatum game, perhaps the equation above is not positive for player B.
Simply put, the status quo is prefered to a marginally superior alternative. The alternative has to be substantially superior to the status quo to be prefered.
Benefit-cost threshold differentials are possibly per individual, and might account for differences in motivation, mood, optimism, depression, etc.
we presume the universe is designed to achieve broad positive purposes
Richard Dawkins: "The universe we observe has precisely the properties we should expect if there is, at bottom, no design, no purpose, no evil and no good; nothing but blind, pitiless indifference."
If we remember what social and institutional life was like before the transition to open and competitive political / economic orders, then overstating the downside of alternative-dreaming makes sense.
He who thinks, might do.
You couldn't form limited liability corporations at will until the mid-19th C. in a handful of Western countries. Everywhere else at the time -- and *everywhere* before then -- imagining other ways of doing things and trying them out was not allowed. Well, you could try, but because that would've threatened the stability of a primitive social order (like in H-G's) or a natural state (in agricultural societies), it would've been squashed -- by violence.
In that world, the benefit of imagining and experimenting with alternative social institutions would have been minuscule compared to the costs -- the certain move by a broad coalition to crush the outside-the-boxers violently if it got too far, or even "milder" things like cutting off access to necessities even in the early stages, just to let the experimenters know who's boss.
It's even worse because the costs are paid immediately (close to it anyway), while the benefits would have to be heavily discounted because they'd only materialize far into the future.
If I were a curious, experimental person in that world, I too would tell myself that the status quo may not be perfect, but that it's good enough.