Category Archive for: Science [Return to Main]

Monday, September 22, 2008


Jeffrey Sachs says anti-intellectualism "could end up getting us all killed":

The American anti-intellectual threat, by Jeffrey D. Sachs, Commentary, Project Syndicate: In recent years, the United States has been more a source of global instability than a source of global problem-solving.

Examples include the war in Iraq, launched by the US on false premises, obstructionism on efforts to curb climate change, meager development assistance and the violation of international treaties such as the Geneva Conventions. While many factors contributed to America’s destabilizing actions, a powerful one is anti-intellectualism...

By anti-intellectualism, I mean especially an aggressively anti-scientific perspective, backed by disdain for those who adhere to science and evidence. The challenges faced by a major power like the US require rigorous analysis of information according to the best scientific principles.

Climate change, for example, poses dire threats... that must be assessed according to prevailing scientific norms... We need scientifically literate politicians adept at evidence-based critical thinking to translate these findings and recommendations into policy and international agreements.

In the US, however, the attitudes of President Bush, [and] leading Republicans ... have been the opposite of scientific. The White House did all it could for eight years to hide the overwhelming scientific consensus that humans are contributing to climate change. It tried to prevent government scientists from speaking honestly to the public. The Wall Street Journal has similarly peddled anti-science and pseudo-science to oppose policies to fight human-induced climate change.

These anti-scientific approaches affected not only climate policy, but also foreign policy. The US went to war in Iraq on the basis of Bush’s gut instincts and religious convictions, not rigorous evidence. ...

These are ... powerful individuals out of touch with reality. They reflect the fact that a significant portion of American society, which currently votes mainly Republican, rejects or is simply unaware of basic scientific evidence regarding climate change, biological evolution, human health and other fields. ...

Recent survey data by the Pew Foundation found that while 58 percent of Democrats believe that human beings are causing global warming, only 28 percent of Republicans do. Similarly, a 2005 survey found that 59 percent of self-professed conservative Republicans rejected any theory of evolution, while 67 percent of liberal Democrats accepted some version of evolutionary theory.

To be sure, some of these deniers are simply scientifically ignorant, having been failed by the poor quality of science education in America. But others are biblical fundamentalists... They reject geological evidence of climate change because they reject the science of geology itself.

The issue here is not religion versus science. All of the great religions have traditions of fruitful interchange with -- and, indeed, support for -- scientific inquiry. ...

The problem is an aggressive fundamentalism that denies modern science, and an aggressive anti-intellectualism that views experts and scientists as the enemy. It is those views that could end up getting us all killed. ...

It is difficult to know for sure what is giving rise to fundamentalism in so many parts of the world. ... Fundamentalism seems to emerge in times of far-reaching change, when traditional social arrangements come under threat. The surge of modern American fundamentalism in politics dates to the civil rights era of the 1960s, and at least partly reflects a backlash among whites against the growing political and economic strength of non-white and immigrant minority groups in US society.

Humanity’s only hope is that the vicious circle of extremism can be replaced by a shared global understanding of the massive challenges of climate change, food supplies, sustainable energy, water scarcity and poverty. ...

The US must return to the global consensus based on shared science rather than anti-intellectualism. That is the urgent challenge at the heart of American society today.

Tuesday, September 16, 2008

Gut Instinct and Math Ability

In case you are tired of politics and financial crises, here's something a bit different:

Gut Instinct’s Surprising Role in Math, by Natalie Angier, NYT: You are shopping in a busy supermarket and you’re ready to pay up... You perform a quick visual sweep of the checkout options and immediately start ramming your cart through traffic toward an appealingly unpeopled line halfway across the store. As you wait in line and start reading nutrition labels, you can’t help but calculate that the 529 calories contained in a single slice of your Key lime cheesecake amounts to one-fourth of your recommended daily caloric allowance...

One shopping spree, two distinct number systems in play. Whenever we choose a shorter grocery line over a longer one, or a bustling restaurant over an unpopular one, we rally our approximate number system, an ancient and intuitive sense that we are born with and that we share with many other animals. Rats, pigeons, monkeys, babies — all can tell more from fewer, abundant from stingy. An approximate number sense is essential to brute survival: how else can a bird find the best patch of berries, or two baboons know better than to pick a fight with a gang of six?

When it comes to genuine computation, however, to seeing a self-important number like 529 and panicking when you divide it into 2,200, or realizing that, hey, it’s the square of 23! well, that calls for a very different number system, one that is specific, symbolic and highly abstract. By all evidence, scientists say, the capacity to do mathematics, to manipulate representations of numbers and explore the quantitative texture of our world is a uniquely human and very recent skill. People have been at it only for the last few millennia, it’s not universal to all cultures, and it takes years of education to master. Math-making seems the opposite of automatic, which is why scientists long thought it had nothing to do with our ancient, pre-verbal size-em-up ways.

Yet a host of new studies suggests that the two number systems, the bestial and celestial, may be profoundly related, an insight with potentially broad implications for math education. ...

Continue reading "Gut Instinct and Math Ability" »

Friday, August 22, 2008

"Doctors vs Economists"

Chris Dillow says this "not to demean doctors, but to elevate economists":

Doctors vs economists, Stumbling and Mumbling: The BBC are offering two series glorifying the medical profession: Superdoctors, which presents the “cutting edge” of medicine, and Blood and Guts, Michael Mosley’s whiggish view of the history of surgery “from butchery to brilliance.”

Which raises a question. Why do doctors  get such great publicity and acclaim when economists don’t?

For all its excellence, the medical profession still leaves a lot to be desired. Medical errors kill tens of thousands a year; doctors still have little idea how to treat many complaints such as gout, the common cold, backache or many degenerative diseases; and their treatment of the mentally ill is still often atrocious.

And yet, for all this, doctors get much less obloquy than we economists get for our frequent failures to forecast recession - even though our errors are less costly than doctors’.  Why is this? Here are some possibilities:

1. Survivorship bias. A man who’s been cured by a doctor lives to tell everyone. A man who’s been killed by one stays quiet. Economists’ “victims” - those stupid enough to believe forecasts- don’t keep schtum.
2. Publication bias. New medical research is often presented as an exciting breakthrough. Economic research rarely lends itself to such glowing headlines.
3. The fight against nature. If doctors are unable to cure disease, this is seen not as a failure of their intellect, but rather as testament to the force of hostility of nature, against which they are heroically battling. What people fail to see is that economic forecasting is also a fight against a powerful force - the existence of free will. The reason for this is simple; economic activity next year is a function of the choices people will make then. But because they have free will, we cannot predict these choices. In this light, what’s astonishing is not that forecasts are wrong, but that they are ever right at all.
4. Selective judgment. Economists get judged, wholly wrongly, on their weakest activity - economic forecasting - whereas doctors get judged on their strongest.
5. Our greater antecedents. Economics has progressed in all sorts of ways. We know now, for example, that protectionism is generally a bad idea; that inflation targeting is a better monetary framework than fixed exchange rates; that countries can’t get rich merely by heavy capital investment, and so on. And yet it’s harder to present the history of economics as pure progress, as Michael Mosley does for surgery. One reason for this, perhaps, is that the great economists of the past were genuinely brilliant whereas their medical contemporaries were quacks, charlatans and butchers.  At the same time as Paul Samuelson was  creating foundations of the economics we learn today, Walter Freeman was hammering ice-picks into people - and he was regarded as a pioneer at the time. And let’s not even consider Adam Smith’s medical contemporaries.

Now, I say all this not to demean doctors, but to elevate economists. Our profession - at its best - should not be regarded as in anyway inferior to the natural sciences.

Friday, August 01, 2008

The Antikythera Mechanism

Lee Arnold sends this along, and says:

Nature magazine has put up a great new video about the Antikythera mechanism. It includes computer animations of the mechanism from 3-D x- rays of the object and someone who is building a working replica. 

This is an astounding thing.

The video is here.

Monday, July 28, 2008

Economics "is at Last a Science"

The subtitle on this article says:

The dismal science is at last a science—and the world is the beneficiary.

Here are a few parts of the article, though much is omitted, which is mostly an argument about the virtues of the market system:

Economics Does Not Lie, by Guy Sorman, City Journal: Though economics as a discipline arose in Great Britain and France at the end of the eighteenth century, it has taken two centuries to reach the threshold of scientific rationality. Previously, intuition, opinion, and conviction enjoyed equal status in economic thought; theories were vague, often unverifiable. Not so long ago, one could teach economics at prestigious universities without using equations and certainly without the complex algorithms, precise (though not infallible) mathematical models, and computers integral to the field today.

Continue reading "Economics "is at Last a Science"" »

Wednesday, July 02, 2008

Political Participation and Genetic Inheritance

How much influence does genetic makeup have on voting behavior?:

Political participation is partially rooted in genetic inheritance, EurekAlert: The decision to vote is partly genetic, according to a new study published in the American Political Science Review. The research, by James H. Fowler and Christopher T. Dawes, of the University of California, San Diego and Laura A. Baker, of the University of Southern California, is the first to show that genes influence participation in elections and in a wide range of political activities. See the full study.

Fowler and Dawes have followed this work with research just published in the July issue of the Journal of Politics in which they identify a link between two specific genes and political participation. They show that individuals with a variant of the MAOA gene are significantly more likely to have voted in the 2000 presidential election. Their research also demonstrates a connection between a variant of the 5HTT gene and voter turnout, which is moderated by religious attendance. These are the first results ever to link specific genes to political behavior. The published study will be online July 1, but a pre-publication PDF is linked here.

The initial research is based on voter turnout records in Los Angeles matched to a registry of identical and non-identical twins. These comparisons show clearly that identical twins, who share 100 per cent of their genes, are significantly more similar in their voting behavior than fraternal twins who share only 50 per cent of their genes on average. The results indicate that 53 per cent of the variation in voter turnout is due to differences in genes. The results also suggest that, contrary to decades of conventional wisdom, family upbringing may have little effect on children's future participatory behavior.

To replicate these findings the researchers went beyond the California voter data to examine patterns nationwide using the National Longitudinal Study of Adolescent Health conducted from 1994 to 2002. This data has been utilized in a wide variety of genetic studies, but this is the first time the data has been used to show that participatory political behavior is heritable. For example, among identical twins, the researchers conclude that 72 per cent of the variance in voter turnout can be attributed to genes. Moreover, genetic-based differences extend to a broad class of acts of political participation, including donating to a campaign, contacting a government official, running for office, and attending a political rally. According to Fowler, "we expected to find that genes played some role in political behavior, but we were quite surprised by the size of the effect and how widely it applies to many kinds of participation." ...

"These findings are extremely important for how we think about political behavior," said Fowler. For example, it is widely known that parents and children exhibit similar voting behavior, but this has always been interpreted as learned behavior rather than inherited behavior. It is also well-known that these particular genes influence social behavior, but it has not been widely appreciated that social behavior plays an important role in voting and other forms of political behavior. In particular, the 5HTT gene appears to play an important role in the well-known association between voting and going to church, suggesting that it is the combination of social activity and genes that helps to shape political behavior. According to Fowler, "We are not robots – the genes just seem to make it more likely that some of us will respond to our social lives by getting involved in politics." Fowler also cautioned that there is no such thing as a 'voter gene': "That idea is just silly. Complex social behaviors are the result of hundreds of genes interacting with hundreds of social factors – these results are really just the tip of the iceberg."

The authors point out that while political scientists have typically not focused on the role of genetic and biological factors in political behavior, the present work points to a significant role for genes and, therefore, a next step in research is to determine why genes matter so much. They conclude, "These studies provide the first step needed to excite the imaginations of a discipline not used to thinking about the role of biology in human behavior."

Sunday, June 15, 2008


My Father's Day gift came yesterday afternoon:

Continue reading "Graduation" »

Friday, June 06, 2008

What is Thought?

Steve Hsu over in physics has thoughts about thinking:

The Singularity, AI and IEEE, by Steve Hsu: An entire special issue of IEEE Spectrum has been devoted to the Singularity, with contributions from people like Vernor Vinge, Rodney Brooks, Gordon Moore and Douglas Hofstader. I'm confident it won't happen in my lifetime. I don't even think a machine will pass a strong version of the Turing test while I am around.

My favorite book on AI is Eric Baum's What is Thought? (Google books version). Baum ... notes that evolution has compressed a huge amount of information in the structure of our brains (and genes), a process that AI would have to somehow replicate. A very crude estimate of the amount of computational power used by nature in this process leads to a pessimistic prognosis for AI even if one is willing to extrapolate Moore's law well into the future.

This perspective seems quite obvious now that I have kids -- their rate of learning about the world is obviously enhanced by pre-evolved capabilities. They're not generalized learning engines -- they're optimized to do things like recognize patterns (e.g., faces), use specific concepts (e.g., integers), communicate using language, etc.

What is Thought? In What Is Thought? Eric Baum proposes a computational explanation of thought. Just as Erwin Schrodinger in his classic 1944 work What Is Life? argued ten years before the discovery of DNA that life must be explainable at a fundamental level by physics and chemistry, Baum contends that the present-day inability of computer science to explain thought and meaning is no reason to doubt there can be such an explanation. Baum argues that the complexity of mind is the outcome of evolution, which has built thought processes that act unlike the standard algorithms of computer science and that to understand the mind we need to understand these thought processes and the evolutionary process that produced them in computational terms.

Baum proposes that underlying mind is a complex but compact program that exploits the underlying structure of the world. He argues further that the mind is essentially programmed by DNA. We learn more rapidly than computer scientists have so far been able to explain because the DNA code has programmed the mind to deal only with meaningful possibilities. Thus the mind understands by exploiting semantics, or meaning, for the purposes of computation; constraints are built in so that although there are myriad possibilities, only a few make sense. Evolution discovered corresponding subroutines or shortcuts to speed up its processes and to construct creatures whose survival depends on making the right choice quickly. Baum argues that the structure and nature of thought, meaning, sensation, and consciousness therefore arise naturally from the evolution of programs that exploit the compact structure of the world.

Tuesday, May 13, 2008

The Evolution of the "Economic Web"

One of the editors at Scientific American brought this to my attention, and he is hoping to receive feedback. This is part of their "Edit This" series. The idea is that they post a draft of an article they plan to print in a future edition of the magazine, then incorporate feedback into the the print version:

Tell us your reactions to the arguments made in this piece. Your feedback will be incorporated into a version of this article that will appear in a future print issue of Scientific American.

The article itself, "which is sure to raise the hackles of some members of the economic community," argues that economists cannot explain the relationship between innovation and growth, and proposes a "grammar model" as an alternative to traditional growth models:

The Evolving Web of Future Wealth, by Stuart Kauffman, Stefan Thurner, and Rudolf Hanel, SciAm: ...Perhaps the most stunning feature of the economy over time is the explosion of goods and services. Yet contemporary economics has no adequate theory to understand this explosion or its importance for economic growth and the evolution of future wealth.

My first reaction was that we do have models of variety and growth:

Optimal Product Variety, Scale Effects, and Growth, by Henri L.F. de Groot and Richard Nahuis: ...Product variety is an important determinant of economic welfare. Following the seminal work by Dixit and Stiglitz (1977), and Spence (1976) the welfare effects of variety have been analyzed from various angles.[1] ... With the presence of economies of scale in production, producing a small variety saves resources that can be used to extend the production volume. Hence a trade-off arises... It turns out that the market supports too low product diversity. Subsequent studies addressed the optimality question in the presence of growth. In a dynamic context, reduced variety not only saves resources that can be used for extending the produced quantity, but potentially also to increase the rate of growth. Grossman and Helpman (1991, chapter 3) analyze welfare in a model of endogenous growth. In their analysis, there is (continuous) growth in product variety resulting from investment in R&D. The more labour an economy allocates in the R&D sector, the less labour remains for producing consumption goods. The question here is one of growth in variety versus volume of consumption goods. The optimal trajectory entails more rapid growth of variety than the market equilibrium sustains, as firms ignore the contribution of their knowledge creation to a common ’knowledge pool’. Grossman and Helpman (1991) also analyze a quality ladder model. ... Here innovative effort aimed at quality improvement might be suboptimal high or low, depending on the size of the quality step. Van de Klundert and Smulders (1997) develop an endogenous growth model in which, contrary to Grossman and Helpman (1991), R&D is an in-house activity aimed at improving quality. Besides quality growth, variety is also determined endogenously. ...

The studies discussed so far assume that variety has a direct effect on consumers’ welfare as consumers have a love for variety. Another branch of literature looks at the productivity effects of increased product variety...

And as footnote 1 notes, "In the overview..., we have no pretension of being exhaustive," so this is by no means all of the work on this topic. But these models don't, as far as I know, explain how new innovations and variety arise, and that is one of the things the Scientific American article is trying to do (though I'm not sure it is fully successful, the model produces broad statistical relationships that predict how frequently innovations ought to occur, but is not precise about the types of innovations that will arise). Back to the article:

Economic growth theory is highly sophisticated about the roles of capital, labor, human capital, knowledge, interest rates, saving rates and investment in existing economic opportunities, or investment of savings in research to find novel goods and services. Yet the major conceptual frameworks that undergird contemporary economics (competitive general equilibrium, rational expectations and game theory) share a crucial failing. They assume that all the goods and services (as well as the relations between them) and all the strategies for engaging with them in a local or global economy can be "pre-stated"—that is, known in advance. In reality, novel goods and services may constantly enter markets, thereby requiring economic actors to develop ever more novel strategies: all the relevant variables cannot be pre-stated.

Thus standard growth theory misses an essential feature of this "economic web" of goods and services. Even more important, as we shall explain, it ignores the role that the structure of the economic web itself plays in driving the creation of novelty and the evolution of future wealth. ...

Continue reading "The Evolution of the "Economic Web"" »

Monday, May 12, 2008

Why Did the EPA Fire a Respected Toxicologist?

Herbert Needleman speaks out:

Why did the EPA fire a respected toxicologist?, EurekAlert: In March, the US House Energy and Commerce Committee launched an investigation into potential conflicts of interest in scientific panels that advise the Environmental Protection Agency on the human health effects of toxic chemicals. The committee identified eight scientists that served as consultants or members of EPA science advisory panels while getting research support from the chemical industry to study the chemicals under review. Two scientists were actually employed by companies that made or worked with manufacturers of the chemicals under review.

Such conflicts, Chairman John Dingell (D-Mich.) noted, stand in stark contrast to the agency’s dismissal last summer of highly respected public health scientist Deborah Rice, an expert in toxicology, from a panel examining the health impacts of the flame retardant deca. The EPA fired Rice after the chemical industry’s trade group, the American Chemistry Council, complained that was could not provide an objective scientific review because she had spoken out about the health hazards posed by deca.

This trend is neither new nor unique, argues legendary lead researcher Herbert Needleman, a pediatrician and child psychiatrist, in a new article published this week in the open-access journal PLoS Biology. With his groundbreaking research on the cognitive effects of lead on children, Needleman laid the foundation for one of the greatest environmental health successes of modern times—five-fold reduction in the prevalence of lead poisoning in American children.

In “The Case of Deborah Rice: Who is the Environmental Protection Agency Protecting"” Needleman points out that the EPA summarily fired Rice even though it had honored her just a few years before with one of its most prestigious scientific awards for “exceptionally high-quality research into lead’s toxicity.” Why" Because the American Chemistry Council asked the agency to fire her.

“EPA, without examining or contesting the charge of bias, complied,” Needleman write. “Rice was fired. The next formal act of the EPA was to remove all of her comments from the written report completely erase her name from the text of the review. There is now no evidence that she ever participated in the EPA proceedings, or was even in the room.” Needleman is confident that Rice, who is “widely admired by her colleagues for her intelligence, integrity and moral compass,” will “withstand this insult and continue to contribute to the public welfare.”

The full article from full article from Plos Biology:

The Case of Deborah Rice: Who Is the Environmental Protection Agency Protecting?, by Herbert Needleman: For researchers who operate at the intersection of basic biology and toxicology, following the data where they take you—as any good scientist would—carries the risk that you will be publicly attacked as a crank, charged with scientific misconduct, or removed from a government scientific review panel. Such a fate may seem unthinkable to those involved in primary research, but it has increasingly become the norm for toxicologists and environmental investigators. If you find evidence that a compound worth billions of dollars to its manufacturer poses a public health risk, you will almost certainly find yourself in the middle of a contentious battle that has little to do with scientific truth (see Box 1).

Continue reading "Why Did the EPA Fire a Respected Toxicologist?" »

Monday, May 05, 2008

"Learning ... Turns Out to Have Dangerous Side Effects"

When nature maximizes survival under constraint, learning is just another parameter in the equation:

Lots of Animals Learn, but Smarter Isn’t Better, by Carl Zimmer, NY Times: ...Learning ... turns out to have dangerous side effects that make its evolution even more puzzling. Dr. Kawecki and his colleagues have produced striking evidence for these side effects by studying flies as they evolve into better learners in the lab.

To produce smarter flies, the researchers present the insects with a choice of orange or pineapple jelly to eat. Both smell delicious to the insect. But the flies that land on the orange jelly discover that it is spiked with bitter-tasting quinine. The flies have three hours to learn that the nice odor of oranges is followed by a nasty taste.

To test the flies, the scientists then present them with two plates of jelly, one orange and one pineapple. This time, neither has quinine. The flies settle on both plates of jelly, feed, and the females lay their eggs.

“The flies that remember they had a bad experience with orange should continue to avoid orange and go to the pineapple,” Dr. Kawecki said.

Dr. Kawecki and his colleagues collect the eggs from the quinine-free pineapple jelly and use them to produce the next generation of flies. The scientists repeat the procedure on the new flies, except that the pineapple jelly is spiked with quinine instead of the orange.

It takes just 15 generations under these conditions for the flies to become genetically programmed to learn better. At the beginning of the experiment, the flies take many hours to learn the difference between the normal and quinine-spiked jellies. The fast-learning strain of flies needs less than an hour.

But the flies pay a price for fast learning.

Continue reading ""Learning ... Turns Out to Have Dangerous Side Effects"" »

Saturday, May 03, 2008

Are Economists Different?

I've been thinking about economists. We are a different breed, I think, at least in one sense. We see markets everywhere. Thinking of getting married? We see a marriage market where partners rationally look at the costs and benefits of a "partnership" and decide accordingly. It is all very sterile and scientific, nothing more than supply and demand, like always.

Thinking of going for a walk in the woods? We can model that choice, it's fairly simple. It has an opportunity cost, and a benefit, and if the benefit exceeds the cost, the walk will be taken.

In fact, all of the "apparently noneconomic dimensions of society" are no match for the economist:

Gary S. Becker ... sheds new light on previously unconnected and poorly understood social phenomena. ... His singular axiom - that all actors in the social game are economic persons who maximize their advantages in different cost situations - allows Becker to study persistent racial and sexual discrimination, investment in human capital, crime and punishment, marriage and divorce, the family, drug addiction, and other apparently noneconomic dimensions of society.

There are very few choices that cannot be reduced to the language of economics. There are, after all, markets in everything!

But maybe economists are people for whom this way of thinking is attractive. People choose their majors, they are not assigned randomly, and for some people this "economic way of thinking" is very natural (and for some it is quite foreign - explain as you will, it just doesn't seem to "click" with them). The first time you see a problem explained with economic tools you say, yes, that's it - that's how people make decisions because when you look inside, it explains how you see the world. And even where you hadn't viewed the world through the eyes of economics before, you suddenly have new insights. Aha! Now I understand how people choose to get married!

Paul Zak gave a seminar yesterday and it made me wonder if economists might, as a group, have some sort of hormonal deficiency, a bad Oxytocin gene or something.

Oxytocin is thought to increase trust between humans:

Oxytocin is a hormone which is released during many experiences, including birth in women. In the brain, oxytocin is involved in social recognition and bonding.

Oxytocin appears to be the 'social glue' that holds entire families, communities and societies together, without needing the government to monitor transactions. Empathy for others begins with the release of oxytocin, which compels feelings of love.

When we feel trusted, our brains release oxytocin. This, in turn, causes us to recriprocate the 'trusted' feeling.

With an added dose of oxytocin, subjects' generosity to strangers increased up to 80%.

Generosity to strangers? With no benefit for me? That can't be right, it doesn't fit our models.

Here's something I found interesting, In Zak's experiments with Oxytocin, there was always one group of people who didn't play the game the same way others played. In the game:

178 students ... were separated into groups of investors and trustees, who were not allowed to communicate with each other. Each investor began the experiment with a fund equal to about five Swiss francs that could be invested with a trustee. Any investment would be automatically tripled. The trustee then could decide how much, if any, of the money would be paid to the investor. Both investor and trustee could take home cash at the conclusion of the experiment, based on how they managed the investments. The more the trustee withheld, the larger his final cash payoff. By design, the investors were caught in a dilemma. If they trusted their partners and invested the maximum allowable, they might reap triple their investment. But they could just as easily lose everything if betrayed by a partner who decided to keep all the proceeds. ...

The researchers found that the volunteers who took oxytocin were twice as likely to risk all their money with a stranger. ... Moreover, the hormone only affected someone's response to another person. Those who engaged in financial trading with a computer partner showed no effect from the hormone...

So, summarizing, we both start with $10. If you send me all of your money, I then have $10 + three times what you sent me = $40 and you will have nothing. If I send you back anything more than $10 but less than $30 we will both be better off. In general, people were willing to trust the other person, and trust increased when Oxytocin was administered. Most of the time, the trust was rewarded.

But there was one group of students with Oxytocin levels that were clear outliers (excessive amounts indicating their receptors were likely inactive) who never gave anything back to the person who had trusted them - they pocketed the $40 (or three times whatever they were sent plus the original $10) and whistled all the way to the bank. They were the exception though, most did choose to give something back so that the gains were shared. But it is not in their self-interest to do so.

Update: Here's the graph I was referring to:


[One other interesting feature. If the first person sent less than 30%, i.e. less than $3.00, people did not tend to send anything back. It was as though the second person said you idiot, we have this great opportunity to make money, yet you won't trust me to hold up my end? - I'll show you by keeping the money.]

So here's what I wonder. Are economists, as a group (and perhaps libertarians foremost among them), more like the students who acted purely according to self-interest? Did they choose to become economists because when they looked inside at their own decisions, this model of the world - the one where people always follow their self-interest - fit? Do we have a chemical make-up that causes us to see self-interest as a primary, dominating emotional force in all decisions? Is that why we have a hard time understanding things like pure altruism?

Monday, April 21, 2008

Hard-Wired for Fairness

Fairness makes us happy:

Brain reacts to fairness as it does to money and chocolate, EurekAlert: The human brain responds to being treated fairly the same way it responds to winning money and eating chocolate, UCLA scientists report. Being treated fairly turns on the brain's reward circuitry.

"We may be hard-wired to treat fairness as a reward," said study co-author Matthew D. Lieberman, UCLA associate professor of psychology...

"Receiving a fair offer activates the same brain circuitry as when we eat craved food, win money or see a beautiful face," said Golnaz Tabibnia, a postdoctoral scholar at ... UCLA and lead author of the study...

The activated brain regions include the ventral striatum and ventromedial prefrontal cortex. Humans share the ventral striatum with rats, mice and monkeys, Tabibnia said.

"Fairness is activating the same part of the brain that responds to food in rats," she said. This is consistent with the notion that being treated fairly satisfies a basic need, she added.

In the study, subjects were asked whether they would accept or decline another person's offer to divide money in a particular way. If they declined, neither they nor the person making the offer would receive anything. Some of the offers were fair, such as receiving $5 out of $10 or $12, while others were unfair, such as receiving $5 out of $23.

"In both cases, they were being offered the same amount of money, but in one case it's fair and in the other case it's not," Tabibnia said.

Almost half the time, people agreed to accept offers of just 20 to 30 percent of the total money, but when they accepted these unfair offers, most of the brain's reward circuitry was not activated; those brain regions were activated only for the fair offers. Less than 2 percent accepted offers of 10 percent of the total money. The study group consisted of 12 UCLA students...

"The brain's reward regions were more active when people were given a $5 offer out of $10 than when they received a $5 offer out of $23," Lieberman said. "We call this finding the 'sunny side of fairness' because it shows the rewarding experience of being treated fairly."

A region of the brain called the insula, associated with disgust, is more active when people are given insulting offers, Lieberman said.

When people accepted the insulting offers, they tended to turn on a region of the prefrontal cortex that is associated with emotion regulation, while the insula was less active.

"We're showing what happens in the brain when people swallow their pride," Tabibnia said. "The region of the brain most associated with self-control gets activated and the disgust-related region shows less of a response."

"If we can regulate our sense of insult, we can say yes to the insulting offer and accept the cash," Lieberman said.

Can taking economics courses can to overcome the fairness hard-wiring?:

We Are What We Learn, by Ray Fisman, Forbes: ...[W]e put 70 Yale Law students in a computer lab, and had them play a game that would reveal to us their views on fairness. (The study, which was coauthored with Shachar Kariv and Daniel Markovits, can be found here.)

The students made 50 decisions about giving. In some cases students started with $10, and for each dollar they gave up, their (anonymous) partner in the game would get, say, $5. In this case, giving was "cheap." In others, giving was expensive (each dollar given up yielded only 20 cents for the partner).

Someone who gives a lot when it's cheap and keeps most of the pie for himself when giving is expensive focuses on efficiency: He's making sure the maximum amount is paid out to him and his partner combined. Someone who keeps 80% of the pie when it would be cheap to give is more focused on equality. Someone who always keeps everything, regardless of the price of giving, is just plain selfish, the very embodiment of the rational, self-interested Homo economicus.

It turns out that exposure to economics makes a big difference in how students split the pie, in terms of both efficiency and outright selfishness. Students assigned to classes taught by economists were more likely to give a lot when it was cheap to do so. But they were also much more likely to take the whole pie for themselves.

Thursday, April 03, 2008

Are You Sure?

I wonder if the author is certain about this:

On Being Certain: Believing You are Right Even When You are Wrong: The day after the 1986 Challenger shuttle accident, psychologist Ulric Neisser asked 106 students to write down exactly where they were and what they were doing when they first heard about the explosion. When he interviewed the students two and a half years later, 25 percent of them gave strikingly different accounts. But when confronted with their original journal entries, many students defended their beliefs. One of them answered, “That’s my handwriting, but that’s not what happened.” ...

Robert A. Burton tries to get to the bottom of the curious sensation he calls the “feeling of knowing”—being certain of a fact despite having no (or even contrary) evidence. Throughout his book, Burton makes the compelling argument that certainty “is neither a conscious choice nor even a thought process.” Instead, he says, that unmistakable sense of certainty “arises out of involuntary brain mechanisms that, like love or anger, function independently of reason.”

Burton thinks that just as we perceive our external world through our physical senses, our internal world presents itself in the form of feelings, such as familiar or strange and correct or incorrect. And he shows that these inner perceptions are necessary for us to function properly in everyday life, because our thoughts are subject to constant self-questioning. For example, even though reason may tell us that running up a tree to escape a lion is an excellent strategy, experience shows that great strategies can fail and that there may be better options. Because alternative choices are present in any situation, logical thought alone would be doomed to a perpetual “yes, but” questioning routine. Burton reasons that it is the feeling of knowing that solves this dilemma of how to reach a conclusion. Without this “circuit breaker,” indecision and inaction would rule the day.

One of the startling implications of Burton’s thesis is that we ultimately cannot trust ourselves when we believe we know something to be true. “We can’t afford to continue with the outdated claims of a perfectly rational unconscious or knowing when we can trust gut feelings,” he writes. ...

Thursday, March 06, 2008

Cooperating with Strangers

Herbert Gintis on altruism:

Gintis' perspective piece in Science reveiws recent behavioral game theory research, EurekAlert: ...Modern democratic societies are associated with strong economic performance as well as numerous ills -- the decay of traditional family and ethnic ties, loss of community, inequality, and destruction of the environment.

In a Perspectives piece appearing in the March 7 issue of Science, ... Professor Herbert Gintis ... reviews recent behavioral game theory research by Herrmann, Thöni, and Gächter. Their paper ... strongly suggests that systematic differences across societies ... affect their capacity to cooperate effectively.

Using cooperative games, Herrmann et al. collected data in 15 countries with varying levels of economic development. They show that university students in democratic societies with advanced market economies rarely exercised a type of antisocial punishment featured in the game, while this behavior was commonly exercised by students in traditional societies based on authoritarian and parochial social institutions. The results suggest that the depiction of civil society as the sphere of naked self-interest is radically incorrect; rather, the success of democratic market societies may depend critically on individuals balancing self interest with morality.

“The authors’ empirical results show that the advanced market societies with democratic institutions produce an ethic of spontaneous cooperation, with a strong altruistic dimension, that likely accounts at least in part for their material success and legitimacy, says Gintis. ...

The article's introduction explains that although there appears to be a loss of community in large, developed societies relative to smaller, more traditional societies,  large, developed societies require more cooperation with strangers and hence more altruism:

Punishment and Cooperation, by Herbert Gintis, Science: Even champions of modern society agree that it involves a loss of community (based on family and ethnic ties) and an expansion of civil society, with emphasis on the more impersonal interactions among individuals with minimal social ties. ... On page 1362 of this issue, Herrmann et al. report ... that the success of democratic market societies may depend critically on moral virtues as well as material interests, so the depiction of civil society as the sphere of "naked self-interest" is radically incorrect.

The standard view holds that human nature has a private side in which we interact morally with a small circle of intimates and a public side in which we behave as selfish maximizers. Herrmann et al. suggest that most individuals have a deep reservoir of behaviors and mores that can be exhibited in the most impersonal interactions with unrelated others. This reservoir of moral predispositions is based on an innate prosociality that is a product of our evolution as a species, as well as the uniquely human capacity to internalize norms of social behavior. Both forces predispose individuals to behave morally even when this conflicts with their material interests. ...

Continue reading "Cooperating with Strangers" »

Saturday, February 16, 2008

Ben Stein Watch

Evolutionary biologists have started their own Ben Stein watch:

Ben Stein Wins Intelligent Design Money, by Gary Stix, SciAm Observations: Ben Stein was the goofball host of the cable show “Win Ben Stein’s Money.” A Christian University in southern California has just announced that it is honoring Stein for his upcoming movie that makes the case for taking intelligent design seriously. The press release, issued today, declares: “Ben Stein Wins Money from Intelligent Design Community.”

Stein is scheduled to receive from Biota University the Phillip E. Johnson Award for Liberty and Truth, named after a well-known creationist. ... The release does not mention how much Ben Stein won, but it does cite Stein’s upcoming movie "Expelled: No Intelligence Allowed."

“In his new movie “Expelled,” Stein wonders whether humans were designed by an intelligent being or whether we were simply the result of an ancient natural accident. In his search for an answer, he discovers an elitist scientific establishment that punishes the scientific proponents of Intelligent Design because they reject some of the claims of Darwin’s theory of evolution. ‘Big science in this area of biology has lost its way,’ says Stein. ‘Scientists are supposed to be allowed to follow the evidence wherever it may lead, no matter what the implications are. Freedom of inquiry has been greatly compromised, and this is not only anti-American, it’s anti-science.’ ...

The award ceremony will feature premiere clips from the forthcoming movie ... and will include a brief address by Stein.”

The movie is a potential setback to science educators’ continuing efforts to set the record straight because Stein, the son of renowned economist Herbert Stein, lends a patina of respectability to neo-Creationist science as a result of his status as a minor celebrity. Perhaps more egregious than the movie is Stein’s contention in his writing that "Darwinism, perhaps mixed with Imperialism, gave us Social Darwinism, a form of racism so vicious that it countenanced the Holocaust against the Jews and mass murder of many other groups in the name of speeding along the evolutionary process."

What can only be hoped is that a trenchant critical response by journalistic and science publishing institutions (and, of course, the blogging community)--will suffice so that Ben Stein never gets funding to make an Expelled II. Please download the recent National Academy of Sciences report "Science, Evolution and Creationism" to get the straight story.

Friday, February 01, 2008

Clean Coal?

President Bush, in the State of the Union Address:

To build a future of energy security, we must trust in the creative genius of American researchers and entrepreneurs and empower them to pioneer a new generation of clean energy technology. Our security, our prosperity, and our environment all require reducing our dependence on oil. ... Let us fund new technologies that can generate coal power while capturing carbon emissions. ... Let us create a new international clean technology fund, which will help developing nations like India and China make greater use of clean energy sources. ... The United States is committed to strengthening our energy security and confronting global climate change. And the best way to meet these goals is for America to continue leading the way toward the development of cleaner and more energy-efficient technology. To keep America competitive into the future, we must trust in the skill of our scientists and engineers and empower them to pursue the breakthroughs of tomorrow.

SciAm Observations follows up:

Clean Coal Turns to Cinders, by Steven Ashley, SciAm Observations: For those journalists who have been monitoring “clean coal” technology over the last few years, it was no surprise to hear that the U.S. Department of Energy has canceled its so-called FutureGen plant, which was to burn coal to produce electricity and then sock away the resulting climate change-causing carbon dioxide emissions underground. ...

Continue reading "Clean Coal?" »

Wednesday, January 30, 2008

"Why Don't Chimpanzees Like to Barter Commodities?"

Chimpanzees are reluctant to trade "a very good commodity (apple slices)" for "an even more preferred commodity (grapes)." This research attempts to explain why and in the process learn something about how barter might have arisen among humans:

Why don't chimpanzees like to barter commodities?, EurekAlert: For thousands of years, human beings have relied on commodity barter as an essential aspect of their lives. It is the behavior that allows specialized professions, as one individual gives up some of what he has reaped to exchange with another for something different. In this way, both individuals end up better off. Despite the importance of this behavior, little is known about how barter evolved and developed.

This study (published in PLoS ONE on January 30) is the first to examine the circumstances under which chimpanzees, our closest relatives, will exchange one inherently valuable commodity (an apple slice) for another (a grape), which is what early humans must have somehow learned to do. Economists believe that commodity barter is one of the most basic precursors to economic specialization, which we observe in humans but not in other primate species. First of all, the researchers found that chimpanzees often did not spontaneously barter food items, but needed to be trained to engage in commodity barter. Moreover, even after the chimpanzees had been trained to do barters with reliable human trading partners, they were reluctant to engage in extreme deals in which a very good commodity (apple slices) had to be sacrificed in order to get an even more preferred commodity (grapes).

Prior animal behavior studies have largely examined chimpanzees’ willingness to trade tokens for valuable commodities. Tokens do not exist in nature, and lack inherent value, so a chimpanzee’s willingness to trade a token for a valuable commodity, such as a grape, may say little about chimpanzee behavior outside the laboratory.

In a series of experiments, chimpanzees at two different facilities were given items of food and then offered the chance to exchange them for other food items. A collaboration of researchers ... found that the chimpanzees, once they were trained, were willing to barter food with humans, but if they could gain something significantly better – say, giving up carrots for much preferred grapes. Otherwise, they preferred to keep what they had.

The observed chimpanzee behavior could be reasonable because chimpanzees lack social systems to enforce deals and, as a society, punish an individual that cheats its trading partner by running off with both commodities. Also because of their lack of property ownership norms, chimpanzees in nature do not store property and thus would have little opportunity to trade commodities. Nevertheless, as prior research has demonstrated, they do possess highly active service economies. In their natural environment, only current possessions are “owned,” and the threat of losing what one has is very high, so chimpanzees frequently possess nothing to trade.

“This reluctance to trade appears to be deeply ingrained in the chimpanzee psyche,” said one of the lead authors, Sarah Brosnan ... at Georgia State University. “They’re perfectly capable of barter, but they don’t do so in a way which will maximize their outcomes.”

The other lead author, Professor Mark F. Grady, Director of UCLA’s Center for Law and Economics, commented: “I believe that chimpanzees are reluctant to barter commodities mainly because they lack effective ownership norms. These norms are especially costly to enforce, and for this species the game has evidently not been worth the candle. Fortunately, services can be protected without ownership norms, so chimpanzees can and do trade services with each other. As chimpanzee societies demonstrate, however, a service economy does not lead to the same degree of economic specialization that we observe among humans.”

The research could additionally shed light on the instances in which humans also don’t maximize their gains, Brosnan said.

Friday, December 14, 2007

"Time to Reexamine Time"

Taking a momentary break from the subprime crisis, the fall in the dollar, the distribution of income and wealth, the Fed, tax cuts, and so on, here's something on the nature of time:

Making Space for Time, by Scott Dodd, Scientific American: ...Many of the world’s top theoretical physicists and cosmologists gathered ... to grapple with the mystery of how time works. New telescope observations and novel thinking about quantum gravity have convinced them that it is time to reexamine time. ...

On the face of it, time seems pretty simple, like a one-way street: eggs don’t unscramble, ... and your grandparents will never be younger than you. But the universe’s basic laws appear to be time-symmetrical, meaning they are unaffected by the direction of time. From the point of view of physics, the past, present and future exist simultaneously.

For more than a century, physicists have proposed any number of explanations for this apparent contradiction, from the psychological (the flow of time is an illusion) to the physical (some unknown property of quantum mechanics reconciles the contradiction). None has proved satisfactory. In 1927 astrophysicist Sir Arthur Eddington coined the term “time’s arrow” for the phenomenon and linked it to entropy: as the universe gets older, it becomes more disordered, following the second law of thermodynamics. But scientists cannot explain why order lies in the past and disorder in the future. ...

Laura Mersini-Houghton, a physicist at the University of North Carolina at Chapel Hill [says]... “It’s been very difficult to make progress over the past 20 years, because there hasn’t been much new to say.” That is all changing thanks to stronger instruments for probing the heavens. The cosmic microwave background radiation, a remnant of the big bang, shows that 380,000 years after its birth, the universe was filled with hot gas, all evenly distributed and highly ordered. Eventually the early cosmos underwent inflation and began to coalesce into the disordered universe of stars and atoms we know today.

What remains puzzling, though, is why the early universe was so orderly—a condition that physicists consider highly improbable—and what caused it to swell so rapidly. “The arrow-of-time problem, once you get down to the nitty-gritty of it, is, Why was the early universe the way it was?” says Sean Carroll, a cosmologist at the California Institute of Technology. ...

Prominent physicists ... invoked string theory, black hole equations and the idea that we live in one of many parallel universes as possible explanations.

The multiverse concept emerged as one of the more favored—or at least frequently talked about—theories for the strange tidiness of the early cosmos. “If you accept the idea that this might be only one of many possible universes, then that makes it more plausible,” Mersini- Houghton says. Universes that started out more chaotic might not have survived or evolved to support intelligent life. So one-way time—and our entire existence, for that matter—could be just a happenstance. ...

Sunday, December 09, 2007

Menu Invariant Neurons and Transitivity

Interesting. Transitivity may be hard-wired:

Neurons in the frontal lobe may be responsible for rational decision-making, EurekAlert: You study the menu at a restaurant and decide to order the steak rather than the salmon. But when the waiter tells you about the lobster special, you decide lobster trumps steak. Without reconsidering the salmon, you place your order—all because of a trait called “transitivity.”

“Transitivity is the hallmark of rational economic choice,” says Camillo Padoa-Schioppa, a postdoctoral researcher in HMS Professor of Neurobiology John Assad’s lab. According to transitivity, if you prefer A to B and B to C, then you ought to prefer A to C. Or, if you prefer lobster to steak, and steak to salmon, then you will prefer lobster to salmon.

Padoa-Schioppa is lead author on a paper that suggests this trait might be encoded at the level of individual neurons. The study, which appears online Dec. 9 in Nature Neuroscience, shows that some neurons in a part of the brain called the orbitofrontal cortex encode economic value in a “menu invariant” way. That is, the neurons respond the same to steak regardless if it’s offered against salmon or lobster.

Continue reading "Menu Invariant Neurons and Transitivity" »

Saturday, November 24, 2007

Faithful to Science

I haven't had much time to think about this, but posts are getting stale amid the rush of the holiday weekend, so, staying in "echo mode":

Taking Science on Faith, by Paul Davies, Commentary, NY Times: Science, we are repeatedly told, is the most reliable form of knowledge about the world because it is based on testable hypotheses. Religion, by contrast, is based on faith. ...

The problem with this neat separation into “non-overlapping magisteria,” as Stephen Jay Gould described science and religion, is that science has its own faith-based belief system. All science proceeds on the assumption that nature is ordered in a rational and intelligible way. You couldn’t be a scientist if you thought the universe was a meaningless jumble of odds and ends haphazardly juxtaposed. ...

The most refined expression of the rational intelligibility of the cosmos is found in the laws of physics, the fundamental rules on which nature runs. The laws of gravitation and electromagnetism, the laws that regulate the world within the atom, the laws of motion — all are expressed as tidy mathematical relationships. But where do these laws come from? And why do they have the form that they do?

When I was a student, the laws of physics were regarded as completely off limits. The job of the scientist, we were told, is to discover the laws and apply them, not inquire into their provenance. The laws were treated as “given” — imprinted on the universe like a maker’s mark at the moment of cosmic birth — and fixed forevermore. Therefore, to be a scientist, you had to have faith that the universe is governed by dependable, immutable, absolute, universal, mathematical laws of an unspecified origin. You’ve got to believe that these laws won’t fail, that we won’t wake up tomorrow to find heat flowing from cold to hot, or the speed of light changing by the hour.

Over the years I have often asked my physicist colleagues why the laws of physics are what they are. The answers vary... The favorite reply is, “There is no reason they are what they are — they just are.” The idea that the laws exist reasonlessly is deeply anti-rational. After all, the very essence of a scientific explanation of some phenomenon is that the world is ordered logically and that there are reasons things are as they are. ...

Although scientists have long had an inclination to shrug aside such questions concerning the source of the laws of physics, the mood has now shifted considerably. Part of the reason ... that the laws of physics have now been brought within the scope of scientific inquiry is the realization that what we long regarded as absolute and universal laws might not be truly fundamental at all, but more like local bylaws. They could vary from place to place on a mega-cosmic scale. A God’s-eye view might reveal a vast patchwork quilt of universes, each with its own distinctive set of bylaws. ...

The multiverse theory is increasingly popular, but it doesn’t so much explain the laws of physics as dodge the whole issue. There has to be a physical mechanism to make all those universes and bestow bylaws on them. This process will require its own laws, or meta-laws. Where do they come from? The problem has simply been shifted up a level from the laws of the universe to the meta-laws of the multiverse.

Clearly, then, both religion and science are founded on faith — namely, on belief in the existence of something outside the universe, like an unexplained God or an unexplained set of physical laws... For that reason, both monotheistic religion and orthodox science fail to provide a complete account of physical existence. ...

It seems to me there is no hope of ever explaining why the physical universe is as it is so long as we are fixated on immutable laws or meta-laws that exist reasonlessly or are imposed by divine providence. The alternative is to regard the laws of physics and the universe they govern as part and parcel of a unitary system, and to be incorporated together within a common explanatory scheme.

In other words, the laws should have an explanation from within the universe and not involve appealing to an external agency. The specifics of that explanation are a matter for future research. But until science comes up with a testable theory of the laws of the universe, its claim to be free of faith is manifestly bogus.

Very quick (and probably wrong) reaction: I guess I don't see why falsifiability isn't enough to distinguish science from faith. The argument - I think- is that a statement like "this object is blue," which appears falsifiable isn't since if the laws of the universe change the object may be red instead of blue tomorrow. So I have to take it on "faith" that blue will stay blue forever. Fine, but as I look at the object it's either blue or it isn't. If it changes from blue to red someday, then that is an indication that either the hypothesis itself or one of the maintained hypotheses (i.e. that the laws of physics are constant, at least locally) is false. So I don't see why the scientific method fails us in this particular instance. But as I said, I didn't give this the thought it deserves, so feel free to explain why I've totally missed the point. It wouldn't be the first time that has happened.

Thursday, November 22, 2007

"How Much Inequity Can You Take in a System?"

On equity:

Money motivates -- especially when your colleague gets less, EurekAlert: The feelings an individual has on receiving his pay cheque depend critically on how much his colleague earns. Hard evidence for this comes from an experiment conducted by economists and brain scientists at the University of Bonn. They tested male subjects in pairs, asking them to perform a simple task and promising payment for success. ... Participants who got more money than their co-players showed much stronger activation in the brain's "reward centre" than occurred when both players received the same amount. Details of the study are ... in the renowned academic journal "Science". ...

In the experiment ... the participants had to lie down next to each other in parallel brain scanners. They were asked to perform the same task simultaneously. Dots appeared on a screen and they had to estimate the number being displayed. They were then told whether their answer was correct. If they had solved the task correctly, they received a financial reward, which might range from 30 to 120 euros. Each participant also learnt how his partner in the game had performed and how much he would pocket in return.

Throughout this procedure the tomograph monitored the changes in blood circulation in the different regions of the subject's brain. ... A total of 38 men took part in the experiment. "We registered enhanced activity in various parts of their brains during the test," explains the Bonn neuroscientist Dr. Bernd Weber. "One area in particular, the ventral striatum, is the region where part of what we call the 'reward system' is located."

The reward system is activated when an individual has an experience he considers worth aspiring to. "In this area we observed an activation when the player completed his task correctly," says Bernd Weber... By contrast, when the subject got his estimate wrong, activity in his ventral striatum would subside. For us, however, the exciting finding here was the role played by another factor: the performance of the player in the other scanner. Weber's colleague Dr. Klaus Fliessbach sums up the outcome, "Activation was at its highest for those players who got the right answer while their co-player got it wrong."

The researchers then took a closer look at those cases in which both players estimated the number of points correctly. If the participants received the same payment there was relatively moderate activation of the reward centre. But if player one was given, say, 120 euros, while his partner received only 60, the activation turned out to be much stronger for player one. For player two, on the other hand, the blood flow into the ventral striatum actually decreased - even though he had performed the task successfully and had been rewarded for his efforts.

"This result clearly contradicts traditional economic theory," explains Bonn-based economist Professor Dr. Armin Falk. "The theory assumes that the only important factor is the absolute size of the reward. The comparison with other people's rewards shouldn't really play any role in economic motivation." It is the first time that this hypothesis has been challenged using such an experimental approach. It does not mean, of course, that the absolute size of the reward has no impact on the "reward centre": more excitement was registered in response to 60 euros than 30. "But the interesting point to emerge from our study is that the relative size of one's earnings plays such a major role," Armin Falk insists. ...


Monkeys Have Sense of Fairness, Study Finds, by Susan McMillan, Emory Wheel: Two researchers at the Yerkes National Primate Research Center have found that brown capuchin monkeys have a sense of fairness and will reject inequitable rewards, much as humans do.

Frans de Waal, C.H. Candler ... said his work with Georgia State University professor Sarah Brosnan was based on a study they did in 2003. In that experiment, monkeys responded negatively when a partner received a superior reward for completing the same task, retrieving a pebble and placing it the researcher’s hand.

“As soon as the partner’s getting something better, like grapes, they don’t want to do it any more,” de Waal said. “They throw the food out of the cage sometimes.”

Brosnan and de Waal conducted a follow-up study to rule out alternative explanations for why monkeys would reject slices of cucumber, a previously acceptable reward.

“The most important one was you could argue that the monkeys reject the cucumber pieces because they see grapes and they want grapes,” de Waal said. “We would show them grapes, but we would put them away, and showing them the grapes didn’t make a difference in our test. It had to do with what partner was getting.”

Brosnan and de Waal also varied the amount of effort required to complete the task to see its effect on the monkeys’ reactions.

They found that when monkeys had to expend more effort, they were more sensitive to inequity and less likely to accept cucumber slices when partners had received grapes for equal or less work. But both would accept grapes even if they completed tasks at different levels of difficulty, de Waal said.

“If you gave them grapes, they were not sensitive to effort,” he said. “The grape is such a good reward that they would do whatever to get the grape.” ...

According to de Waal, the research illustrates inequity aversion, a concept from the field of behavioral economics, which applies behavioral psychology to economic interactions. Like the monkeys in de Waal’s study, humans do not always act as rational profit maximizers and sometimes turn down good offers if someone else is getting a better deal.

“For a monkey to refuse a perfectly fine food like cucumber just because somebody else is getting something better is an irrational reaction,” de Waal said. “Profit maximizing requires that whenever you can get something you take it.”

Some scholars, however, argue that reactions like the monkeys’ make sense in a social context. The capuchins’ sense of fairness has “evolved within the context of cooperation,” de Waal said, because capuchins live in groups and sometimes hunt squirrels together.

“If you don’t get in accordance to your effort, you should be sensitive to that, or everyone will take advantage of you,” he said. “It’s actually a rational response to make sure you get the right rewards for the right amount of work.”

De Waal said reactions to inequity are important for researchers to study because of widening gaps between haves and have-nots.

“How much inequity can you take in a system?” he said.

"The Theory of Moral Neuroscience"

Adam Smith's Lost Legacy says this discussion of how neuroscience is confirming the role of empathy in human sociality and morality is "worth a look":

The Theory of Moral Neuroscience, by Ronald Bailey, Reason Online: "As we have no immediate experience of what other men feel, we can form no idea of the manner in which they are affected, but by conceiving what we ourselves should feel in the like situation," observed ... Adam Smith in the first chapter of ... The Theory of Moral Sentiments (1759). "Whatever is the passion which arises from any object in the person principally concerned, an analogous emotion springs up, at the thought of his situation, in the breast of every attentive spectator." Smith's argument is that our ability to empathize with others is at the root of our morality.

Recent discoveries in neuroscience are bolstering Smith's insights about the crucial role of empathy in human sociality and morality. For example, in the 1990s, Italian scientists researching motor neurons in macaque monkeys discovered mirror neurons. As the story goes, a monkey's brain had been wired up to detect the firing of his neurons... One researcher returned from lunch licking an ice cream cone. As the monkey watched the researcher, some of his neurons fired as though he were eating the ice cream... The monkey's neurons were "mirroring" the activity that the monkey was observing.

Neuroscientist Giacomo Rizzolatti and his colleagues ... reported their discovery of monkey mirror neurons in 1996. Researchers soon found evidence for mirror neurons in human beings. Just like monkeys, it turns out that when we see someone perform an action—picking up a glass of water or kicking a ball—our mirror neurons simulate that action in our brains. Researchers have suggested that mirror neurons are crucially involved in the distinctive human development of language, morality, and culture.

Research looking at the brains of autistic people highlights the role that some neuroscientists believe that mirror neurons play in empathy. ...[T]he symptoms of autism often involve a marked lack of awareness of the feelings of others and little or no social interaction or communications with others. In 2005, researchers at the University of California San Diego (UCSD) ...[found] "...results [that] support the hypothesis of a dysfunctional mirror neuron system in high-functioning individuals with ASD"... Mirror neurons are not absent from the brains of ASD people, but they are misfiring. ...

Mirror neurons are not the sole source of our moral sense. After all, ASD individuals are not notably immoral. However, they are an important part of it. Empathy, the ability to feel someone else's joy, pain, and gratitude, helps guide our pre-reflective moral values. So let's consider the limits of empathy for schooling us in morality. Harvard University psychologist Joshua Greene offers the case in which, while driving, you see a bleeding hiker lying by the roadside. You must decide between taking the man to the hospital or refuse to do so because the injured man would bleed all over your expensive upholstery.

Greene correctly observes, "Most people say that it would be seriously wrong to abandon this man out of concern for one's car seats" But what about the case in which you receive a letter from an international charity that promises to lift a poor family in Africa out of abject misery at the cost of a $200 contribution from you? "Most people say that it would not be wrong to refrain from making a donation in this case," writes Greene. What's the difference? ... Greene proposes an evolutionary answer. He points out that our ancestors evolved in an environment in which they could only choose to save people that they knew personally, not total strangers living continents away.

Greene's findings again buttress Adam Smith's insight from more than two centuries ago that empathy works to prompt us to help our neighbors but attenuates with social distance. "That we should be but little interested, therefore, in the fortune of those whom we can neither serve nor hurt, and who are in every respect so very remote from us, seems wisely ordered by Nature," writes Smith. ...

But we do not have to be the slaves of our evolved moral intuitions. By showing us the neural workings of our moral sense, neuroscience is giving us the tools to understand and improve our moral choices. As Greene concludes, "I am confident that the scientific study of human nature will have an increasingly important role in nature's grand experiment with moral animals." ...

Tuesday, November 06, 2007

What is Intelligence?

I don't know a lot about this topic, it's psychology not economics, so please add anything you can in comments. This is part of the lead essay to a discussion at Cato Unbound that attempts to answer questions such as "Is intelligence a unitary, general factor — the psychometrician’s famed g — or is it more plural and fragmented? What role do genes play in determining IQ? The environment? If intelligence is in the genes, then why do IQ scores continue to rise generation after generation all over the world?":

Shattering Intelligence: Implications for Education and Interventions, by  James R. Flynn, Cato Unbound: The concept of a general intelligence or g factor has proved enormously fruitful in two respects. On the level of individual differences, it captures the fact that if one person outperforms another on one kind of conceptually demanding task, that advantage is likely to persist over a whole range of other cognitive tasks. ...

An example of a good IQ test is the WISC (Wechsler Intelligence Scale for Children). The reason it is good is that its ten subtests have enough cognitive complexity so that a high IQ person tends to beat the average person by a handy margin on all ten. That is equivalent to saying that it is a good measure of g. A test that included subtests of minimal cognitive complexity, let us say tying your shoes, would be a bad IQ test. The task is so simple that unintelligent people would perform it as well as intelligent people.

Shattering general intelligence Despite all the triumphs of the concept of general intelligence, I believe intelligence is like the atom: you have to know both why its parts cohere and why they sometimes fly apart. Americans made massive IQ gains on the WISC between 1947 and 2002 amounting to almost 18 points... These gains ranged from only 2 points on the WISC subtest called Information to 24 points on the subtest called Similarites (what do dogs and rabbits have in common?), despite the fact that both have the cognitive complexity that makes them good measures of g.

A bright person tends to accumulate more general information than a dull person at any given time and also tends to better at classifying things (will say that dogs and rabbits are both mammals). But over time, we find that society can develop these conceptual skills quite independently of one another. Children may progress a lot over time in putting on scientific spectacles, which means that many more of them will say “both mammals” rather than say something like “I use my dog to hunt rabbits.” While thanks to the rise of a visual culture that discourages reading, the average child today may have no greater store of general information than children did 55 years ago.

Diagnosing how conceptual skills actually develop The fact that various conceptual skills develop so independently over time has wide implications for education. ...

Once you break intelligence down into its autonomous components, many things become clear. For example, the Nation’s Report Card shows that today’s children are ahead of their parents in reading at early ages and then the gains fade away by the age of 17. How is that possible? The children are doing much better on heavily g loaded IQ tests like the WISC at all ages. Should not brighter people be able to read adult novels better?

This mystery is solved when you look at IQ trends over time. Since 1972 (when the NRC began), the big IQ gains have been on certain subtests and not others. There have been virtually no gains in vocabulary and information. You cannot enjoy War and Peace very much if you have to run to the dictionary or encyclopedia every other paragraph. We are doing a better job of teaching children the mechanics of reading at early ages. But their parents had mastered the mechanics by age 17 and at that age, neither generation has an information or vocabulary advantage. So we have made no progress is teaching young people how to enjoy adult literature. ...

The transience of intelligence General intelligence or g has something to do with brain quality, and good genes have a lot to do with having an above average brain. Therefore, there was a tendency in differential psychology to think that our genes-determined brain accompanies us throughout our lives and that environment, except in extreme conditions (living with wolves since infancy), merely leaves minor imprints on that brain. After all, twin studies showed that even when identical twins were separated at birth, they had IQs at adulthood that were much more similar than the IQs of randomly selected people. What better evidence did you need that genes/brain went though life and environment just did a bit of tinkering along the way?

But this created a dilemma: if genes were so dominant, how could IQ gains over time be so huge? Unless you thought that there was a large genetic upgrading from one generation to the next, large intelligence gains should be impossible. Yet they occurred, which implied that there were environmental factors of huge potency. How could environment be both so feeble and so potent?

Continue reading "What is Intelligence?" »

Saturday, October 27, 2007

Environmental Change and Agricultural Output

New results on the impact of environmental change on the world's agricultural economy:

Human-generated ozone will damage crops, Nancy Stauffer, MIT Energy Initiative: A novel MIT study concludes that increasing levels of ozone due to the growing use of fossil fuels will damage global vegetation, resulting in serious costs to the world's economy.

The analysis, reported in the November issue of Energy Policy, focused on how three environmental changes (increases in temperature, carbon dioxide and ozone) associated with human activity will affect crops, pastures and forests.

The research shows that increases in temperature and in carbon dioxide may actually benefit vegetation, especially in northern temperate regions. However, those benefits may be more than offset by the detrimental effects of increases in ozone, notably on crops. Ozone is a form of oxygen that is an atmospheric pollutant at ground level.

The economic cost of the damage will be moderated by changes in land use and by agricultural trade, with some regions more able to adapt than others. But the overall economic consequences will be considerable. According to the analysis, if nothing is done, by 2100 the global value of crop production will fall by 10 to 12 percent.

"Even assuming that best-practice technology for controlling ozone is adopted worldwide, we see rapidly rising ozone concentrations in the coming decades," said John M. Reilly, associate director of the MIT Joint Program on the Science and Policy of Global Change. "That result is both surprising and worrisome."

Continue reading "Environmental Change and Agricultural Output" »

Wednesday, October 24, 2007

Stratospheric Reflections: The Mount Pinatubo Solution to Global Warming

I hope we aren't reduced to this type of solution to the global warming problem:

How to Cool the Globe, by Ken Caldera, Commentary, NY Times:  Despite growing interest in clean energy technology, it looks as if we are not going to reduce emissions of carbon dioxide anytime soon. The amount in the atmosphere today exceeds the most pessimistic forecasts made just a few years ago, and it is increasing faster than anybody had foreseen. ...

What can be done? One idea is to counteract warming by tossing small particles into the stratosphere (above where jets fly). This strategy may sound far-fetched, but it has the potential to cool the earth within months.

Mount Pinatubo, a volcano in the Philippines that erupted in 1991, showed how it works. The eruption resulted in sulfate particles in the stratosphere that reflected the sun’s rays back to space, and as a consequence the earth briefly cooled.

If we could pour a five-gallon bucket’s worth of sulfate particles per second into the stratosphere, it might be enough to keep the earth from warming for 50 years. Tossing twice as much up there could protect us into the next century.

A 1992 report from the National Academy of Sciences suggests that naval artillery, rockets and aircraft exhaust could all be used to send the particles up. The least expensive option might be to use a fire hose suspended from a series of balloons. Scientists have yet to analyze the engineering involved, but the hurdles appear surmountable.

Seeding the stratosphere might not work perfectly. But it would be cheap and easy...

This is not to say that we should give up trying to reduce greenhouse gas emissions. ... Think of it as an insurance policy, a backup plan for climate change.

Which is the more environmentally sensitive thing to do: let the Greenland ice sheet collapse and polar bears become extinct, or throw a little sulfate in the stratosphere? The second option is at least worth looking into.

Wednesday, October 17, 2007

The Other Half

I think it was Greg Mankiw who wrote about lesser known co-authors getting the short end of the stick when it comes to recognition for their work even when they are the driving force behind the research. The IPCC is suffering a similar fate with Al Gore seeming to have won the Nobel Prize all by himself from the press and pundit coverage, so I'm glad to see Jeff Sachs shine a light on scientists at the IPCC who played a key role in establishing the scientific basis for the climate change problem:

The appliance of science, by Jeffrey Sachs, Project Syndicate: Al Gore's Nobel peace prize is a fitting tribute to a world leader who has been prescient, bold, and skillful in alerting the world to the dangers of man-made climate change. Gore's co-recipient of the Nobel peace prize is less known, but no less deserving. The Intergovernmental Panel on Climate Change (IPCC) is the UN's global body for assessing the scientific knowledge on climate change and bringing that knowledge to the attention of the public and the world's policy makers. Its receipt of the Nobel peace prize sends three powerful messages.

First, the world's leading climate scientists and most of the world's governments have brought climate science to the forefront of global policy debates. Climate change is complicated. ... A worldwide effort is needed to understand changes in all parts of the world.

Since its inception in 1988, the IPCC has harnessed the best scientific minds from around the world to document and explain what is known and not known about human-induced climate change. ... The review process is transparent and governments are invited to participate by nominating experts to various working groups, reviewing and commenting on IPCC draft documents, and approving final IPCC reports. This process builds accuracy and confidence. ...

The second message is that such a global process linking scientists and governments in a common effort is vital, because without it the airwaves can get clogged with the ignorance and misinformation peddled by special interest groups. For years, oil companies such as Exxon ... sponsored misleading journalism and groups that masqueraded as "thinktanks." The IPCC faced down these vested interests. Today, ExxonMobil and other major oil companies are much more honest and constructive in their discussions... They could not, in the long-term, beat the science without gravely damaging their reputations.

Finally, this year's Nobel peace prize is a wake-up call to governments, starting with the United States, to get more serious about science and sustainable development. The Bush administration has been disastrously anti-scientific. It has been staffed with ideologues who reject or neglect climate science... Most governments are in fact ill-equipped to understand the scientific issues, even when they are much less ideological and dogmatic than Bush. ...

The world should respond in three ways. First, we should take seriously the need for a new climate-change accord when global negotiations begin in Bali, Indonesia this December. ...

Second, we should initiate IPCC-like scientific processes for other global challenges, including the global loss of biodiversity, desertification, and over-fishing of the oceans. In each area, the general public and the world's governments only dimly perceive a global crisis. Governments have signed treaties to limit the damage, but they are not acting on those promises with the urgency required, in part because they do not understand the underlying scientific challenges.

Finally, we must revamp national governments so that they have processes and capabilities similar to the IPCC. Global processes like the IPCC are crucial, but the issues must also be "brought home" to the conditions and challenges facing each country. ... The IPCC proved that science can contribute powerfully to meeting these challenges, and that scientists and policymakers can work together to help solve problems of critical importance for humanity.

Saturday, October 13, 2007

Human Capital

An email suggests this article from Economic Principles:

The Generation of 1958, by David Warsh: Fifty years ago last week, the Soviet satellite known as Sputnik roared into orbit around the Earth, catching the United States completely by surprise. Americans had expected that their Vanguard satellite would lead the way into space. ... The Soviets’ successful launch was a beacon to some, a fright to many. A future in space for mankind suddenly seemed an exhilarating possibility, at least to those who had thought about it since the time of Jules Verne. But so did missile-driven global thermonuclear war. In its way, Sputnik was every bit as galvanizing an event as 9/11. ...

The real watershed came the next year, however, when Congress passed the National Defense Education Act. President Dwight Eisenhower signed the NDEA into law on September 2, 1958. School reform had been on the table for most of a decade. ...  As Peter Dow makes clear in Schoolhouse Politics: Lessons from the Sputnik Era, the October surprise broke a longstanding logjam on Capitol Hill. Southern Democrats in the House of Representatives, for whom “the three Rs” meant Reds, race and religion, were finally forced to report out a bill

What exactly was the $10 billion NDEA?  It depends on whom you ask.  (A billion dollars was a lot of money in the 1950s; the National Defense Highways Act of a couple years before, which created the Interstate highway system, was budgeted at $25 million over a decade. In today’s dollars, each program would cost ten or fifteen times as much.)

Continue reading "Human Capital" »

"Swarm Theory"

Part of a much longer article:

Swarm Theory, by Peter Miler, National Geographic: I used to think ants knew what they were doing. ... I just figured they had a plan... How else could ants organize highways, build elaborate nests, stage epic raids, and do all the other things ants do?

Turns out I was wrong. Ants aren't clever little engineers, architects, or warriors after all—at least not as individuals. When it comes to deciding what to do next, most ants don't have a clue. ... Deborah M. Gordon, a biologist at Stanford University. ... [says] "Ants aren't smart, ... Ant colonies are." A colony can solve problems unthinkable for individual ants, such as finding the shortest path to the best food source, allocating workers to different tasks, or defending a territory from neighbors. .... They do it with something called swarm intelligence.

Where this intelligence comes from raises a fundamental question in nature: How do the simple actions of individuals add up to the complex behavior of a group? ...

Continue reading ""Swarm Theory"" »

Saturday, September 29, 2007

The Economics of Time Travel

Ever wonder how much it would cost to build a time machine? No? Well, if you ever do, here's the answer:

Time machine possible says professor, Gold Coast News: Building a time machine that travels into the future is not science fiction - if you are a multi-trillionaire, a physics expert says.

Dr Craig Savage, who lectures in relativity and quantum mechanics at the Australian National University, says it is possible for people to travel forward in time but the costs involved are too great.

''If you could build a spaceship that could go three quarters of the speed of light you would time travel one hour into the future for every hour of your time,'' he said.

''People have designed such spacecrafts at various times but they would just be unimaginably expensive to create. ''It's not an issue of technology, it's one of economics.''

The cost of operating a time travelling machine, in relation to the cost of electricity, would be ten trillion dollars, Dr Savage estimates.

Wednesday, September 26, 2007

Politicizing Science

Should science be more political?:

Science must be more political, by Michael Schrage, Commentary, Financial Times: ...The great tragedy of science today, complain its champions, is its ugly and polarising politicisation. ...

Perhaps the tragedy, though, is not that science is too political – it is that science is not political enough. ... Public policy would be significantly better off if scientists were treated with greater scepticism and less deference.

Public debate would be far better informed if scientists were pushed to make their work more accessible, self-critical and contextually aware of findings in complementary technical disciplines. Politicians in democracies should not hesitate to exploit publicly the inherent uncertainties and legitimate disagreements in scientific analyses on sensitive issues. Highlighting science’s flaws – not unlike highlighting flaws in healthcare, national security and economic programmes – is good politics and even better policy.

Science as an enterprise may be objective; scientists as individuals are not. ... Scientists can be as vulgar, pigheaded and contemptuously dismissive of contrary evidence as any lawyer, civil servant, journalist or elite professional. ...

An individual scientist deserves much the same standing in a science policy debate as would a parent or teacher in policy disputes over education. Institutionally, however, America’s National Academies of Science, the UK’s Royal Society and the acronymed jumble of United Nations agencies have increasingly abandoned traditional roles as science “advisers” in favour of actively lobbying for their quantitative models and scenario extrapolations to be public policy planning tools. In effect, scientific institutions have evolved into “special pleaders”, as vested in the rightness of their recommendations as any influence-seeking industrial trade group or bar association. The “scientific objectivity” of their forecasts is achieved through negotiated committee consensus.

Unfortunately, most of these consensus declarations minimise methodological disagreements, competing interpretations and self-criticism. Judicial rulings by supreme courts may include two or three cogent dissenting views from the bench; elite science review committees typically do not. Are distinguished scientists less ideological and more objective about evidence than distinguished jurists? Hardly.

The core problem is fundamental confusion over scientific consensus in public policy. A scientific consensus on how to split the atom is not a policy consensus on which bombs or nuclear reactors to build; a scientific consensus around the origins and transmission of HIV/Aids is not a consensus about public health interventions; and scientific consensus about climate change is not policy consensus around carbon taxes or renewable energy. History teaches that culture, ethics, economics and, yes, politics overwhelmingly determine how scientific consensus ultimately translates into policy. Scientific consensus is overrated as a successful policy rationale. ...

But to the extent rational people insist “consensus science” justifies brave new policies, they invite closer scrutiny of how that consensus was reached. Here science does not do well. Ask physicists, molecular biologists, meteorologists, climatologists or economists what rules define “consensus” in their respective disciplines. Their answers will disappoint. No scientific consensus exists about what constitutes a scientific consensus.

Not 20 years ago, the scientific consensus declared the human genome filled with useless “junk DNA”. Today the emerging “consensus” insists junk DNA is useful after all. A century ago, elite scientific consensus said “eugenics” should determine the west’s population, immigration and education policy. How sustained should the perceived scientific consensus be before multi-billion-pound, life-and-death public policies are fixed around it? ...

Scientists will be more credible and persuasive not if they are less political but if their arguments are more accessible, more testable and, yes, more humble. Then again, that is just a ... hypothesis.

I don't have any problem at all with an honest debate over the validity of scientific claims used to support a particular policy. I do have a problem with dishonest debate, with distorting what science says to support or oppose a policy.

Uncertainty will be present in most cases, but the mere presence of uncertainty does not justify inaction. If a broad, though incomplete scientific consensus exists on a particular topic, and if the science implies that we face large costs of one sort or another in the future, precautionary action may still be justified. We can't just worry about the consequences if the science is wrong. We also need to worry about what might happen if it is right.

Thursday, September 13, 2007

"If The Uncertainties Are Not Small, Standard Cost–Benefit Analysis As Applied To The Economics Of Climate Change Becomes Incoherent"

Partha Dasgupta reviews Cool It: The Skeptical Environmentalist's Guide to Global Warming, by Bjorn Lomborg (via email):

A challenge to Kyoto, by Partha Dasgupta, Nature: Bjorn Lomborg's The Skeptical Environmentalist created a sensation six years ago. The author offered figures to dismiss claims that the ecological-resource base in many parts of the world is deteriorating, and argued that the costs of reducing ecological losses are usually higher than the benefits. Never mind that several of the world's foremost environmental scientists expressed more than mere scepticism towards Lomborg's grasp of their science: prominent publications such as The Economist promoted the book vigorously... People learning of my own work in developing ecological economics would ask, "And have you read Lomborg?" — implying, "Why have you thrown away so much of your working life?"

Things have changed over the past year. Former US vice-president Al Gore's film An Inconvenient Truth and the Fourth Report of the Intergovernmental Panel on Climate Change have given rise to great public concern, and many now regard global warming to be the central problem facing humanity. Lomborg's latest book, Cool It, is a response to that change in public perception. He doesn't question the science...; he questions whether we should do much about it. ...

Continue reading ""If The Uncertainties Are Not Small, Standard Cost–Benefit Analysis As Applied To The Economics Of Climate Change Becomes Incoherent"" »

Tuesday, September 11, 2007

"The Really Hard Science"

This is from the latest issue of Scientific American:

The Really Hard Science, by Michael Shermer, Commentary, Scientific American: Over the past three decades I have noted two disturbing tendencies in both science and society: first, to rank the sciences from “hard” (physical sciences) to “medium” (biological sciences) to “soft” (social sciences); second, to divide science writing into two forms, technical and popular. And, as such rankings and divisions are wont to do, they include an assessment of worth, with the hard sciences and technical writing respected the most, and the soft sciences and popular writing esteemed the least. Both these prejudices are so far off the mark that they are not even wrong. ...

[I]f there must be a rank order (which there mustn’t), the current one is precisely reversed. The physical sciences are hard, in the sense that calculating differential equations is difficult, for example. The variables within ... the subject matter, however, are comparatively simple to constrain and test when contrasted with, say, computing the actions of organisms in an ecosystem... Even the difficulty of constructing ... models in the biological sciences pales in comparison to ... modeling the workings of human brains and societies. By these measures, the social sciences are the hard disciplines, because the subject matter is orders of magnitude more complex and multifaceted.

Between technical and popular science writing is what I call “integrative science,” a process that blends data, theory and narrative. Without all three of these metaphorical legs, the seat on which the enterprise of science rests would collapse. ...

Consider data and theory first. ... Darwin ...[explains] the proper relation between data and theory: “About thirty years ago there was much talk that geologists ought only to observe and not theorize, and I well remember someone saying that at this rate a man might as well go into a gravel-pit and count the pebbles and describe the colours. How odd it is that anyone should not see that all observation must be for or against some view if it is to be of any service!”

Charles Darwin’s dictum holds that if observations are to be of any use they must be tested against some view—a thesis, model, hypothesis, theory or paradigm. The facts that we measure or perceive never just speak for themselves... We can[not]...separate our theories and concepts from our data...

Data and theory are not enough. As primates, humans seek patterns and establish concepts to understand the world around us... We are storytellers. If you cannot tell a good story about your data and theory— that is, if you cannot explain your observations, what view they are for or against and what service your efforts provide—then your science is incomplete. The view of science as primary research published in the peer-reviewed sections of journals only, with everything else relegated to “mere popularization,” is breathtakingly narrow and naive. Were this restricted view of science true, it would obviate many of the greatest works in the history of science, from Darwin’s On the Origin of Species to Jared Diamond’s Guns, Germs, and Steel...

Well-crafted narratives by such researchers as Richard Dawkins, Steven Pinker, the late Stephen Jay Gould and many others are higher-order works of science that synthesize and coalesce primary sources into a unifying whole toward the purpose of testing a general theory or answering a grand question. Integrative science is hard science.

Sunday, September 09, 2007

Brain Study: Liberals and Conservatives Differ

Some of you might be quite closed-minded about this:

Brain study finds political divide, by Denise Gellene, Los Angeles Times: Exploring the neurobiology of politics, scientists have found that liberals tolerate ambiguity and conflict better than conservatives because of how their brains work.

Scientists at New York University and UCLA showed through a simple experiment to be reported Monday in the journal Nature Neuroscience that political orientation is related to differences in how the brain processes information.

Previous psychological studies have found that conservatives tend to be more structured and persistent in their judgments whereas liberals are more open to new experiences. The latest study found those traits are not confined to political situations but also influence everyday decisions.

The results showed "there are two cognitive styles -- a liberal style and a conservative style," said UCLA neurologist Dr. Marco Iacoboni, who was not connected to the latest research. ...

Frank J. Sulloway, a researcher at UC Berkeley's Institute of Personality and Social Research who was not connected to the study, said results "provided an elegant demonstration that individual differences on a conservative-liberal dimension are strongly related to brain activity." ...

Sulloway said the results could explain why President Bush demonstrates a single-minded commitment to the Iraq war and Sen. John F. Kerry, the liberal Massachusetts Democrat who opposed Bush in the 2004 presidential race, was accused of being a flip-flopper for changing his mind about the conflict.

Based on the results, he said, liberals could be expected to more readily accept new social, scientific or religious ideas.

"There is ample data from the history of science showing that social and political liberals indeed do tend to support major revolutions in science," said Sulloway, who has written about the history of science and has studied behavioral differences between conservatives and liberals.

Lead author David Amodio ... of ... New York University cautioned that the study looked at a narrow range of human behavior and it would be a mistake to conclude that one political orientation was better than another. The tendency of conservatives to block distracting information could be a good thing depending on the situation, he said.

Political orientation, he noted, occurs along a spectrum, and positions on specific issues, such as taxes, are influenced by many factors, including education and wealth. Some liberals oppose higher taxes...

Still, he acknowledged that a meeting of the minds between conservatives and liberals looked difficult given the study results.

"Does this mean liberals and conservatives are never going to agree? Maybe it suggests one reason why they tend not to get along," Amodio said.

Might this also explain why college faculty tend to be Democrats?

Thursday, July 19, 2007

"Rediscovering Intelligent Design"

Interesting question. Does anyone know the answer?:

Rediscovering Intelligent Design Posted, by Kieran Healy: Here is a likely poorly-specified question for biologists... The premise is unlikely (something that kills people—all people—but leaves the rest of the world standing) but intriguing. ...

I wondered, what if, long, long after our disappearance, some other species arose on earth at least as intelligent as us and eventually started doing evolutionary and molecular biology. Let’s say they have a working theory of evolution much like our own. Now say for the sake of argument that a bunch of transgenic organisms produced by humans have survived and prospered in the interim. So our future biologists find things like a bacteria that produces insulin, or a plant that secretes insecticide, or rice that is high in beta carotene, or more exotic stuff as needed.[1]

I’m wondering, would such organisms even present themselves as empirical anomalies? (That is, how much would you have to know about genomes and evolution for them to seem odd?) And if they did seem odd, how would they be explained? That is, would the evidence of their intelligent design by a previous, now-extinct species be clear? ... Would some Arthropod-staffed functional-equivalent of the Discovery Institute point its claw at some of these organisms, saying they were anomalies that could only be explained by the intervention of a divine intelligence? Would Charles Crustacean find a story that could account for their evolution by natural selection? I’m particularly interested in whether the artificial provenance of transgenic organisms would be clear on internal evidence alone. I don’t know anything about this stuff, so probably the answer is “Yes” for reasons obvious to experts. But if it weren’t …

Here's the uninformed answer of an economist. I don't think they could tell because if the organism had anomalous traits, they would be genetically selected out over time and thus would not even be observable in the future. Making insulin is a waste of energy if it provides no benefit to the organism.

If they weren't anomalous and provided some sort of competitive advantage, then it would appear to be an evolved trait. The key is that the organism's genetic structure would not be static over time, but instead would evolve in response to its environment. If such evolution wipes out all traces of anything that looks (and is) anomalous in the environment the organism lives, then there will be no way to detect prior design. A counter argument is that there may be dependence on initial conditions, i.e. even though the organism evolves over time, the paths it can follow are set by its initial genetic structure and hence anomalies can still be identified later (traces of insulin making are still evident). Which means all I've done is re-ask the question - are initial conditions detectable later - not answer it.

Okay, I've thrashed around enough. Anyone know the real answer?

Wednesday, July 18, 2007

Fixing the Dents in the Neoclassical Model

Free Exchange, the blog at The Economist, has a nice find and write-up:

Un-Endowing the Endowment Effect, by Let's say you agree to participate in an economics experiment. You show up at the lab ... and are randomly assigned to a specific group. You are then given a coffee mug. Finally, you’re asked if you’d like to trade the coffee mug for a candy bar. If you’re like most ... participants..., you probably don’t trade, but stick with what you’ve got. And perhaps it really is an awfully nice coffee mug, so you've made the right decision. Yet something perplexes economists. When the experiment is repeated with the other group, where the candy bar is the endowed good, most of them keep the sweet instead of taking home the mug.

And that, according to the behavioral economists like Nobel laureate Daniel Kahneman and University of Chicago’s Richard Thaler, is a direct challenge to the deep premises of neoclassical economics. Since the goods were randomly distributed, neoclassical theory predicts that there should have been much more trading than there actually was. Thus the concept of the “endowment effect” was born. It seemed to explain a whole host of other exchange asymmetries, too, such as why people often require a higher price to sell a good than they would ... pay to buy it.

The theory is that everyone in the experiment was acting on ... “loss aversion”..., which causes us to worry more about losses than equivalently sized gains. Parting with an endowed good is perceived as a loss greater than the potential gain from acquiring another good of putatively equal value.

Now a new paper ... forthcoming ...[in] the American Economic Review argues that this asymmetry might not be as formidable as it seems. The paper is based on experiments conducted by Charles Plott of Cal-Tech ..., and Kathryn Zeiler of the Georgetown University Law Center. (A working paper version is available here.)

Plott and Zeiler thought that perhaps traditional signaling theory could help explain the results of those previous experiments. For instance, when the endowed good was handed to the experiment participant, they were usually told, “I’m giving you the mug. It is a gift. You own it. It is yours.” But what if that signaled a certain level of value to you as the recipient of the mug? You don’t know if that candy bar is any good, but the chap who handed you mug seemed really insistent that you should hold onto it.

So, Plott and Zeiler simply told the participants: “The mug is yours. You own it.” They also adjusted for other possible factors. ...[T]hey had students signal their decision to trade (or not) by anonymously marking a card, rather than raising their hands in the midst of a crowd. And the participants got to inspect the other good, without giving up the one they had, before they made their choice.

The result? The exchange asymmetries disappeared. ...

Thursday, July 05, 2007

"Economic Policy and the New Century Public Discourse"

Richard Baldwin discusses how blogs and sites like VoxEU and LaVoce are beginning to bridge the gap between research and real-world applications. Comments by Andrew Leonard at Salon follow the essay, and there are interesting related comments from Angus Deaton on hopeful changes he's observed in the profession in recent years:

Economic policy and the New Century public discourse, by Richard Baldwin, VoxEU: Economics is more relevant to policy-making than ever before, but you would never know it from the public discourse. The internet is helping bridge the gap, and has led the change. But how will the internet’s role in the public discourse on economics change in the future?

More realistic economics Major advances in theoretical and empirical economics now allow economists to address policy issues with much more realistic tools.

On the theory side, new areas such as economics and psychology, and behavioural economics, experimental economics and the new institutional economics have taken the profession light years beyond the simplistic view of human society that dominated thinking just 15 years ago. When it comes to firms, contract theory has allowed explicit modelling of the firm’s organisation choices and their reactions to changing economic environments. Mechanism design has allowed us to think more clearly about how government rules affect equilibrium outcomes in realistic settings.[1]

On the empirical side, the emergence of enormous new data sets and powerful statistical tools have greatly advanced our understanding of exactly how real-world markets work as well as how people, groups and firms react to incentives. In the 1980s, a ‘large sample’ was one with more than a hundred observations. Now researchers routinely work with tens or hundreds of thousands of observations; sample sizes in the millions are increasingly common. One key aspect of all this new information is that it involves ‘panel data,’ i.e. data that track, over time, workers, firms or whatever.[2] Data that vary both across individuals and over time allow us to filter out much of the heterogeneity that marks individuals and time periods. What emerges is a much clearer picture of how things like tax policy or education actually affect economic outcomes.

The new tools don’t mean that we now have all the answers. We don’t. We still don’t know, for example, how economic development really works, or what determines productivity growth. But the new tools mean that we no longer are forced to rely on theory with crude foundations, e.g. firms as profit functions, consumers as utility functions (although there are still many problems where such assumptions are useful abstractions that permit the research to focus on the key trade-offs).

With all these excellent tools at hand, one might have expected the newspapers and Parliamentary debates to be filled with new insights, new results and new approaches. Alas, with few exceptions, the public debate has not moved much beyond the simplistic pro- vs anti-market exchanges that have dominated Europe since the post-war rise of welfare states. Case in point? The 2007 French Presidential election debate.

In the 1980s, brilliant young economists like Paul Krugman, Larry Summers, Jeff Sachs and Joe Stiglitz felt obliged to write Brookings or Economic Policy articles, to sit on government panels, to write policy reports, and to send Op-Ed pieces to the Financial Times. At the time, it was part of the definition of a being a leading scholar. It helped you get tenure at Harvard. It also bridged the gap between cutting-edge research and the public debate on trade policy, exchange rates, current account dynamics, etc.

Today’s brilliant young economists are much less interested in participating in the public debate in these ways. I have no empirical evidence to back up this opinion, but I think it is shared by many economists involved in economic policy issues and I had first-hand experience of it during my five years as a Managing Editor of Economic Policy. Young people need publications in good anonymously-reviewed journals; everything else is a luxury.

Hypotheses on why abound. My belief is that a major intensification of competition among the top US economic departments has occurred over the past two decades, and this led to an overwhelming emphasis on scholarly output that can be easily quantified – journal articles in particular. Things like sitting on Select Committees, testifying to Parliament, or writing policy-oriented books and reports have impacts that are too hard to measure, so they get excluded from the rankings. Oversimplifying to make the point, what does not matter for the rankings doesn’t matter for academic promotion, prestige or pay. While things have not yet gone this far in most of Europe, the trend is starting. Some European economics departments pay a bonus of thousands of euros to faculty whose work gets published in top journals. Writing an influential analysis of a legislative policy proposal gets a pat on the back.

Continue reading ""Economic Policy and the New Century Public Discourse"" »

Monday, June 25, 2007

Altruism in Chimpanzees

More on altruism:

Human-like altruism shown in chimpanzees, EurakAlert: Debates about altruism are often based on the assumption that it is either unique to humans or else the human version differs from that of other animals in important ways. Thus, only humans are supposed to act on behalf of others, even toward genetically unrelated individuals, without personal gain, at a cost to themselves. Studies investigating such behaviors in nonhuman primates, especially our close relative the chimpanzee, form an important contribution to this debate.

This week in PLoS Biology [open access], Felix Warneken and colleagues from the Max Planck Institute for Evolutionary Anthropology present experimental evidence that chimpanzees act altruistically toward genetically unrelated conspecifics. In addition, in two comparative experiments, they found that both chimpanzees and human infants helped altruistically regardless of any expectation of reward, even when some effort was required, and even when the recipient was an unfamiliar individual—all features previously thought to be unique to humans. The evolutionary roots of human altruism may thus go deeper than previously thought, reaching as far back as the last common ancestor of humans and chimpanzees. In a related article, Frans de Waal discusses the issues brought out by this discovery.

Saturday, June 23, 2007

Is Economics a Science?

I thought I'd return to a topic that comes up here occasionally. Alvin Roth says of course economics is a science:

Is Economics a Science? (Of course it is...), by Alvin E. Roth: What follows is an unpublished letter to the Economist, responding to their negative conclusion to the above question..:-)

...Sir: In "News from the lab" ... it is flattering to read that Kagel and Roth (Handbook of Experimental Economics) is "the indispensable reference" on experimental economics. But it is distressing to read that because "...unlike physics, economics yields no natural laws or universal constants" it follows that "...with or without experiments, economics is not and never can be a proper science." By this definition, astronomy, geology, biology, perhaps parts of physics itself, and certainly psychology must not be proper sciences either.

Rather than quibbling about definitions, it may help to consider how laboratory experiments complement other kinds of investigation in economics, as they do in those other sciences. Let me give an example.

One strategy for looking at field data (as opposed to laboratory data) is to search out "natural experiments," namely comparable sets of observations that differ in only one critical factor. The benefit of using field data is that we are directly studying markets and behavior we are interested in, but the disadvantage is that in natural markets we can seldom find comparisons that permit sharp tests of economic theory.

In a 1990 paper (in the informatively named journal, Science) I studied such a natural experiment, involving the markets for new physicians in different regions of the U.K. in the 1970's. The markets in Edinburgh and Cardiff succeeded while those in Newcastle and Birmingham failed, in ways that can be explained by how these markets were organized. But as will be apparent to readers of the Economist, there are other differences than market organization between Edinburgh and Cardiff on the one hand and Newcastle and Birmingham on the other. So, how are we to know that the difference in market organization, and not those other differences, accounts for the success and failure of the markets?

Continue reading "Is Economics a Science?" »

Friday, June 22, 2007

Evolution and Altruism

Continuing with a recent theme, here's more on altruism from Tom Bozzo and Robert Waldmann:

A Fishy Case Against the 'New Atheists', by Tom Bozzo: Brad DeLong points to Adam Kotsko, who not only liked Stanley Fish's "Atheism and Evidence," but indeed lamented that the Times Select paywall keeps it from a broader audience. So let me expand on my previous reaction to Fish.

Fish criticizes Sam Harris and Richard Dawkins for their confidence that natural explanations will be found for currently not-well-understood phenomena of human behavior and consciousness. He invokes Francis S. Collins to name a scientist who would

argue that physical processes cannot account for the universal presence of moral impulses like altruism, “the truly selfless giving of oneself to others” with no expectation of a reward. How can there be a naturalistic [i.e., evolutionary] explanation of that?

Fish, let alone Collins, shouldn't need an economist to answer, "easy." Behaviors that don't seem to maximize individual fitness but may improve the population fitness aren't a problem for evolutionary explanations. (Elaboration of this concept, I gather, is Dawkins's major contribution to evolutionary theory.) ...

The Darwinian explanation is that the behavior makes the group better off despite (maybe) having cost to some individuals, which frankly doesn't sound facially absurd under, say, a Divine Selection Hypothesis where "good works" facilitate more pleasant after-lives. (An economist might argue that it's not necessarily true that altruism necessarily is "costly" to the individual; at a minimum, I would argue specifically that it narrows the real scope of source-of-moral-behavior conundrums.) More to the point, Dawkins makes no claims that obviously can't be explained in terms of neuron interconnections and brain chemistry...

Robert Waldmann follows with:

Aunts, Fish, Ants, by Robert Waldmann: ATBozzo links to me here... Thanks for link. Fish is, well fish. The possible evolutionary explanation of altruism is quite different from the selection of sickle trait. The generally favored view is called kin selection". The argument is that if we help a random person (more generally organism in our species which we meet) we do something very different from helping a random organism in our species, since we are more likely to meet our kin than our non relations.

Continue reading "Evolution and Altruism" »

Tuesday, June 19, 2007

Pure Altruism?

Brain61907When I presented my colleagues Bill Harbaugh, Dan Burghart, and Ulrich Mayr's research recently, the title I chose, "Paying Taxes Can Make Citizens Happy," was unfortunate since it diverted attention from the main point of the research. A column by John Tierney in today's New York Times provides another chance to highlight the important results from the work.

The big finding in the research is not that individuals enjoy paying taxes, though that certainly captured the headlines. Instead the result to pay attention to is the finding that we may be motivated by pure altruism, though as noted at the end, the concept of pure altruism is trickier to define than it might seem:

Taxes a Pleasure? Check the Brain Scan, by John Tierney, NY Times: The University of Oregon announced a new piece of research last week with a startling headline: “Paying taxes, according to the brain, can bring satisfaction.”

Could this be true? The research is in the new issue of Science, so it’s got the right pedigree, but still. ...

Before any campaign strategists start poring over brain-scan data in the paper, let me temper the happy news. First, this study did not exactly involve a nationally representative sample of taxpayers. The sample consisted of 19 female students at the University of Oregon. And they were not exactly paying taxes as the T-word is understood on the campaign trail.

It is a fascinating bit of research, not so much for its political implications but for what it reveals about humans’ compulsion to be nice.

Continue reading "Pure Altruism?" »

Saturday, June 16, 2007

Charlie Stross: Space Colonization

This is part of a longer essay by Charlie Stross on the economics of space colonization:

The High Frontier, Redux, by Charlie Stross: ...I write SF for a living. Possibly because of this, folks seem to think I ought to be an enthusiastic proponent of space exploration and space colonization. Space exploration? Yep, ... I'm all in favour of advancing the scientific enterprise. But actual space colonisation is another matter entirely...

Historically, crossing oceans and setting up farmsteads on new lands conveniently stripped of indigenous inhabitants ... has been a cost-effective proposition. But the scale factor involved in space travel is strongly counter-intuitive. ...

[I]f we're looking for habitable real estate..., [w]hile exoplanets are apparently common as muck, terrestrial planets are harder to find; Gliese 581c, the first such to be detected (and it looks like a pretty weird one, at that), is roughly 20.4 light years away, or using our metaphor, about ten miles.

Try to get a handle on this: [using the metaphor] it takes us 2-5 years to travel two inches. But the proponents of interstellar travel are talking about journeys of ten miles. That's the first point I want to get across: that if the distances involved in interplanetary travel are enormous, and ... the distances and times involved in interstellar travel are mind-numbing.

This is not to say that interstellar travel is impossible; quite the contrary. But to do so effectively you need either (a) outrageous amounts of cheap energy, or (b) highly efficient robot probes, or (c) a magic wand. And in the absence of (c) you're not going to get any news back from the other end in less than decades. Even if (a) is achievable, or by means of (b) we can send self-replicating factories and have them turn distant solar systems into hives of industry, and more speculatively find some way to transmit human beings there, they are going to have zero net economic impact on our circumstances (except insofar as sending them out costs us money). ...

The long and the short of what I'm trying to get across is quite simply that, in the absence of technology indistinguishable from magic — magic tech that, ... from today's perspective appear to play fast and loose with the laws of physics — interstellar travel for human beings is near-as-dammit a non-starter. And while I won't rule out the possibility of such seemingly-magical technology appearing at some time in the future, the conclusion I draw as a science fiction writer is that if interstellar colonization ever happens, it will not follow the pattern of historical colonization drives that are followed by mass emigration and trade between the colonies and the old home soil.

What about our own solar system?

After contemplating the vastness of interstellar space, our own solar system looks almost comfortingly accessible at first. Exploring our own solar system is a no-brainer: we can do it, we are doing it, and interplanetary exploration is probably going to be seen as one of the great scientific undertakings of the late 20th and early 21st century, when the history books get written.

But when we start examining the prospects for interplanetary colonization things turn gloomy again.

Continue reading "Charlie Stross: Space Colonization" »

Thursday, June 14, 2007

"Paying Taxes Can Make Citizens Happy"

Colleagues find that paying taxes can make people happy:

Paying taxes, according to the brain, can bring satisfaction, EurekAlert: Want to light up the pleasure center in your brain? Just pay your taxes, and then give a little extra voluntarily to your local food bank. University of Oregon scientists have found that doing those deeds can give you the same sort of satisfaction you derive from feeding your own hunger pangs.

A three-member team – a cognitive psychologist and two economists – published its results in the June 15 issue of the journal Science. The scientists gave 19 women participants $100 and then scanned their brains with functional magnetic resonance imaging (fMRI) as they watched their money go to the food bank through mandatory taxation, and as they made choices about whether to give more money voluntarily or keep it for themselves.

The participants lay on their backs in the fMRI scanner for an hour-long session and viewed the financial transfers on a computer screen. The scanner used a super-cooled magnet, carefully tuned radio waves and powerful computers to calculate what parts of the brain were active as subjects saw their money go to the food bank and made yes or no decisions on additional giving.

Researchers found that two evolutionarily ancient regions deep in the brain – the caudate nucleus and the nucleus accumbens – fired when subjects saw the charity get the money. The activation was even larger when people gave the money voluntarily, instead of just paying it as taxes. These brain regions are the same ones that fire when basic needs such as food and pleasures (sweets or social contact) are satisfied.

“The surprising element for us was that in a situation in which your money is simply given to others – where you do not have a free choice – you still get reward-center activity,” said Ulrich Mayr, a professor of psychology. “I don’t think that most economists would have suspected that. It reinforces the idea that there is true altruism – where it’s all about how well the common good is doing. I’ve heard people claim that they don’t mind paying taxes, if it’s for a good cause – and here we showed that you can actually see this going on inside the brain, and even measure it.

The study gives economists a novel look inside the brain during taxation, said co-author William T. Harbaugh, a UO professor of economics and member of the National Bureau of Economic Research in Cambridge, Mass. “To economists, the surprising thing about this paper is that we actually see people getting rewards as they give up money,” he said. “Neural firing in this fundamental, primitive part of the brain is larger when your money goes to a non-profit charity to help other people.” “On top of that,” Harbaugh added, “people experience more brain activation when they give voluntarily – even though everything here is anonymous. That’s a very surprising result – and, to me, an optimistic one.”

However, this latter finding, which offers confirmation to the economic theory of “warm-glow” giving, doesn’t necessarily mean that taxes should be lowered and charity relied on more heavily, Harbaugh said. In a voluntary environment, he added, lots of people free-ride and donations fall.

The study, Mayr said, reflects the balancing act that every society must face. “What this shows to someone who designs tax policy is that taxes aren’t all bad,” he said. “Paying taxes can make citizens happy. People are, to varying degrees, pure altruists. On top of that they like that warm glow they get from charitable giving. Until now we couldn’t trace that in the brain.”

Neural activation from mandatory taxation, the researchers said, helps predict who will give. “We could call the people whose brains light up more when money goes to charity than to themselves altruists,” Mayr said. “The others are egoists. Based on what we saw in the experiments, we can use this classification to predict how much people are willing to give when the choice is theirs.”

There remain a lot of unanswered questions, Harbaugh said. “We show that people liked paying a tax that went to a food bank. But suppose the tax had been unfair. What then" Or suppose that people voted to make other people pay the tax, too" That would help other people even more, so would the voter get a bigger neural reward"”

Harbaugh, Mayr and co-author Dan Burghart, an economics graduate student, say they are not worried about the possibility that governments could use their method to monitor tax evasion, or charities could use it to figure out whom to ask for money. “To do this, we needed a $3 million scanner, some liquid helium and a few weeks of computer time,” Harbaugh said.

“If a participant moved her head,” Burghart added, “we had to start all over. It will be a while before this is built into cell phones.”

Friday, June 01, 2007

"The Church of Economics Has Admitted and Even Rewarded Some Scholars Who Would have been Considered Heretics in Earlier Periods"

Continuing the discussion of heterodox economics, this is Daniel Kahneman with "A Psychological Perspective on Economics":

A Psychological Perspective on Economics, by Daniel Kahneman, AEA Papers and Proceedings, May 2003: My first exposure to the psychological assumptions of economics was in a report that Bruno Frey wrote on that subject in the early 1970’s. Its first or second sentence stated that the agent of economic theory is rational and selfish, and that his tastes do not change. I found this list quite startling, because I had been professionally trained as a psychologist not to believe a word of it. The gap between the assumptions of our disciplines appeared very large indeed.

Has the gap been narrowed in the intervening 30 years? A search through some introductory textbooks in economics indicates that if there has been any change, it has not yet filtered down to that level: the same assumptions are still in place as the cornerstones of economic analysis. However, a behavioral approach to economics has emerged in which the assumptions are not held sacrosanct. In the following I comment selectively on the developments with regard to the three assumptions, on both sides of the disciplinary divide.

I. Selfishness The clearest progress has occurred in correcting and elaborating the assumption of selfishness, and the progress has come entirely from developments in economics, where the invention of the ultimatum game (Werner Guth et al., 1982) had a great impact...

A considerable amount of evidence, drawn from two-person games and from public-goods experiments, suggests that many people, at least in the Western culture, start out trusting and benevolent and reciprocate both good and bad behaviors. ... Many people also have a propensity to punish, even at some costs to themselves, misbehaviors of one stranger toward another stranger. An important theoretical discovery is that the presence of a sufficient number of individuals with these motives in a population will turn individuals who do not have the same motives into apparent cooperators (Fehr et al., 2002).

The experimental and theoretical studies of selfishness that some economists have conducted represent a general advance for social science. They also represent a significant move in economics, beyond the model of economic agents that Amartya Sen (1977) famously labeled “rational fools.” Some of the agents in Fehr’s models are “opportunistic with guile” (OliverWilliamson, 1985), but their behavior is strongly constrained by the fact that they are compelled to interact with people who care about being treated fairly and are willing to do something about it.

II. Rationality No one ever seriously believed that all people have rational beliefs and make rational decisions all the time. The assumption of rationality is generally understood to be an approximation, which is made in the belief (or hope) that departures from rationality are rare when the stakes are significant, or that they will disappear under the discipline of the market. This belief is not shared by everyone: some economists have questioned both the idea that small deviations from rationality do not matter...

The standard of rationality in economics was, and remains, the maximization of subjective expected utility—a combination of von Neumann- Morgenstern preferences and a Bayesian belief structure. There have been important challenges to this definition of rationality. Both Maurice Allais (1953) and Daniel Ellsberg (1961) demonstrated preferences that violate expected utility theory but have considerable normative appeal. A rich literature has developed in attempts to formulate a theory of rational choice that will legitimize the Allais and Ellsberg patterns of preferences. Herbert Simon (1955) introduced the concepts of satisficing and bounded rationality, which can be interpreted as defining a realistic normative standard for an organism with a finite mind.

In the mid-1980’s Amos Tversky and I articulated a direct challenge to the rationality assumption itself, based on experimental demonstrations in which preferences were affected predictably by the framing of decision problems, or by the procedure used to elicit preferences (Tversky and Kahneman, 1986). We argued that the demonstrated susceptibility of people to framing effects violates a fundamental assumption of invariance... Unlike the paradoxes of expected-utility theory, violations of invariance cannot be defended as normative. Furthermore, these violations are not restricted to the laboratory. The labeling of taxes is an obvious example of framing (Ed J. McCaffery, 1994). The power of default options is another. Brigitte C. Madrian and Dennis F. Shea (2001) reported that the enrollment rate in 401(k) plans is close to 100 percent when enrollment is automatic, but if action is required to enroll, only about half the employees will join the plan within their first year of employment. The cost of the activity is hardly sufficient to rationalize this behavior.

The various questions that have been raised about the rationality assumption appear to have legitimized and encouraged the development of economic theories that model departures from economic rationality in specific contexts. There have been quite a few of those...

But the rationality model continues to provide the basic framework even for these models, in which the agents are “fully rational, except for ...” some particular deviation that explains a family of anomalies.

III. Unchanging Tastes and the Carriers of Utility Economists are thoroughly habituated to the sight of indifference maps, but for someone who has been trained as a psychologist they can be a source of puzzlement. It took me a long time to realize that the representation looked odd because I kept looking for an indication of the individual’s current position in the map. There is no such indication, of course, because this parameter is supposed to be irrelevant: preferences for final states of endowment are assumed to be stable over variations of current endowment. This assumption, called  reference independence by Tversky and Kahneman (1991) is the interpretation of unchanging tastes with which I am concerned here. As I will show below, reference-independence can also be viewed as an aspect of rationality. ... [discussion of prospect theory and related developments] ...

IV. Will the Gap Close Further? Much has happened in the conversation between economics and psychology over the last 25 years. The church of economics has admitted and even rewarded some scholars who would have been considered heretics in earlier periods, and conventional economic analysis is now being done with assumptions that are often much more psychologically plausible than was true in the past. However, the analytical methodology of economics is stable, and it will inevitably constrain the rapprochement between the disciplines. Whether or not psychologists find them odd and overly simple, the standard assumptions about the economic agent are in economic theory for a reason: they allow for tractable analysis. The constraint of tractability can be satisfied with somewhat more complex models, but the number of parameters that can be added is small. One consequence is that the models of behavioral economics cannot stray too far from the original set of assumptions. Another consequence is that theoretical innovations in behavioral economics may be destined to be noncumulative: when a new model is developed to account for an anomaly of the basic theory, the parameters that were modified in earlier models will often be restored to their original settings. Thus, it now appears likely that the gap between the views in the two disciplines has been permanently narrowed, but there are no immediate prospects of economics and psychology sharing a common theory of human behavior. ...

I went to a seminar today on the neural representations of expected value. The speaker was neuroscientist and psychologist Brian Knutson from Stanford. He began his talk by saying he had given lots of seminars to economists, and lots to psychologists, but today was the first time he had spoken with both departments in the audience at the same time.

Friday, April 20, 2007

Keeping the Public Fully and Honestly Informed

James Hansen, one of the leaders in raising awareness about global warming, has five recommendations for solving the problem including a call to reduce the gap between what the scientific community understands and what the public and policy-makers are led to believe:

Why We Can't Wait, by James Hansen, The Nation: There's a huge gap between what is understood about global warming by the relevant scientific community and what is known ... by ... the public and policy-makers. We've had, in the past thirty years, one degree Fahrenheit of global warming. But there's another one degree Fahrenheit in the pipeline due to gases that are already in the atmosphere. And there's another one degree Fahrenheit in the pipeline because of the energy infrastructure now in place--for example, power plants and vehicles that we're not going to take off the road even if we decide ... to address this problem.

The Energy Department says that we're going to continue to put more and more CO2 in the atmosphere each year--not just additional CO2 but more than we put in the year before. If we do..., even for another ten years, it guarantees that we will have dramatic climate changes...

I've arrived at five recommendations for what should be done to address the problem. If Congress were to follow these recommendations, we could solve the problem. ...

First, there should be a moratorium on building any more coal-fired power plants until we have the technology to capture and sequester the CO2. That technology is probably five or ten years away. It will become clear over the next ten years that coal-fired power plants that do not capture and sequester CO2 are going to have to be bulldozed. ...

Second, and this is the hard recommendation that no politician seems willing to stand up and say is necessary: The only way we are going to prevent having an amount of CO2 that is far beyond the dangerous level is by putting a price on emissions. ...

But a price on carbon emissions is not enough, which brings us to the third recommendation: We need energy-efficiency standards. That's been proven time and again. ...

The fourth recommendation--and this is probably the easiest one--involves the question of ice-sheet stability. ... The concern is that it's a very nonlinear process that could accelerate. ... [T]his problem with the stability of ice sheets is so critical that it really should be looked at by a panel of our best scientists. Congress should ask the National Academy of Sciences to do a study ... The National Academy of Sciences was established by Abraham Lincoln for just this sort of purpose, and there's no reason we shouldn't use it that way.

The final recommendation concerns how we have gotten into this situation in which there is a gap between what the relevant scientific community understands and what the public and policy-makers know. A fundamental premise of democracy is that the public is informed and that they're honestly informed. There are at least two major ways in which this is not happening. One of them is that the public affairs offices of the science agencies are staffed at the headquarters level by political appointees. ...

Another matter is Congressional testimony. I don't think the Framers of the Constitution expected that when a government employee--a technical government employee--reports to Congress, his testimony would have to be approved and edited by the White House first. But that is the way it works now. And frankly, I'm afraid it works that way whether it's a Democratic administration or a Republican one.

These problems are worse now than I've seen in my thirty years in government. But they're not new. I don't know anything in our Constitution that says that the executive branch should filter scientific information going to Congressional committees. Reform of communication practices is needed if our government is to function the way our Founders intended it to work.

The global warming problem has brought into focus an overall problem: the pervasive influence of special interests on the functioning of our government and on communications with the public. It seems to me that it will be difficult to solve the global warming problem until we have effective campaign finance reform, so that special interests no longer have such a big influence on policy-makers.

Monday, April 09, 2007

Which Euler Equation?

One of Leonhard Euler's equations is below, but it's far from the only one (how many Euler equations are there anyway?). However, for reasons explained at the end, many people believe this was his most "beautiful" equation, and one of the most beautiful equations of all-time. Here's a brief history of Euler's life and achievements:

The Countless Achievements of a Math Master, by David Brown Washington Post: ...In 1988, the journal Mathematical Intelligencer asked its readers to list the most beautiful equations in mathematics. Of the top five, [Leonhard] Euler, who was born in Basel, Switzerland, 300 years ago next Sunday, discovered three of them, including No. 1:

eiπ + 1 = 0.

...In 2004, Physics World put the same question to its readers. Of the top 20 equations, Euler had two. The one listed above, known as "Euler's equation," was second only to James Clerk Maxwell's equations describing electromagnetism...

Continue reading "Which Euler Equation?" »

Wednesday, April 04, 2007

Scientific American: A Brain Image of a Microeconomic Theory

Poor people seem to do much better than rich people at finding optimal strategies when small amounts of money are on the line:

A Brain Image of a Microeconomic Theory, Scientific American: The microeconomic law of diminishing marginal utility states that while accumulating a good—pretzels, pencils, nickels, whatever—each successive unit of that good will be less satisfying to acquire than the one before it. ...[R]esearchers at the University of Cambridge in England ... designed a study to see if the haves catch on more slowly than the have-nots when it comes to reward-based learning. Reporting in the current issue of Neuron, the scientists reveal that when a small sum of money is on the line, poorer people learn quickly how to maximize their profits, leaving their wealthier counterparts in the dust.

In a Pavlovian paradigm, a number of abstract shapes flashed in front of 14 participants. After each shape appeared for three seconds, a picture of either a 20-pence coin (roughly 40 cents) or a scrambled image followed. A card of one particular shape was always followed by the coin, and subjects were told that they could take a 20-pence piece home if they could accurately predict when the money card was the next one up.

The participants had in personal assets an average of about $1,700 in their bank accounts, which ranged from zero to nearly $6,000. The group's average income was just over $20,000, spanning from no income for students to the equivalent of about $60,000 for the most well-off of the bunch.

By measuring response time, the researchers got a sense of how quickly people learned which one of the abstract pictures indicated money would follow. They noticed an inverse correlation between how much money a person had (assets and income) and the swiftness with which they were conditioned. The poorer people tended to figure out which card signaled money ahead within about 12 trials, says neurobiologist Philippe Tobler, the study's lead author, whereas the richer people took about 35 trials.

The team next repeated the experiment while the subject's brains were scanned by an fMRI (functional magnetic resonance imaging) machine. Researchers focused their scans on the midbrain (which contains neurons or nerve cells that produce dopamine, a neurotransmitter central to reward-based learning), and the striatum, another reward-based center located under the cerebral cortex. ...

Once again, an inverse association between wealth and learning appeared, with poor people displaying more increased activity in the midbrain and striatum when compared with the more affluent subjects.

Tobler says the study, which is one of the first to try to measure marginal utility in a laboratory setting, challenges the notion held by many economists that utility comparisons cannot be made between people, because they likely value objects differently. He says, however, "It is possible that these kinds of comparisons are more easily done with money, because money is on an absolute scale." A $20 bill is worth the same no matter who had it, but one person might value it more.

I'm missing something - I don't see how this allows utility to be measured and compared across individuals. They measure learning time or the amount of activity in a defined region of the brain, not utility. Utility must be inferred, i.e. how do you turn these measures of learning or brain activity into a measure of utility? How do we know, for example, that doubling the measured level of brain activity is the same as doubling utility? We don't. In addition, suppose you get the same measure for two different people. Does that mean they experience the same level of utility? There's no reason to presume that they do. I can see how this could be used to construct an ordinal measure of utility for an individual (of course, we can already do that), but not a cardinal measure, and not a measure that is comparable across people.

And even if you can measure utility exactly by looking at brain activity and the measure is universal, i.e. comparable across individuals, if one person has a small negative reaction and another a large positive reaction to the same event, say it's taking away $1,000 from one person and giving it to another, it still doesn't mean is justified to hurt one person a little to help another person a lot. That's remains a value judgment.

Update: I found a bit more here. If this is all there is to their marginal utility measure - asking people how likely it is they'd pick up a coin on the street and finding a correlation with wealth, and then separately finding that wealth correlates with brain activity and learning speed - their claims of progress in measuring marginal utility are overblown:

...While the subjects were learning, and unlearning, to associate the reward-predicting image with the coin, the researchers used functional magnetic resonance imaging to measure the activity in their brains’ reward centers. This brain-scanning technique uses harmless radio waves and magnetic fields to measure blood flow in brain regions, which reflects brain activity.

The researchers found that the richer the subjects were—both in terms of assets and income—the slower they learned or unlearned the association between the conditioning image and the coin. The researchers found the same inverse association between wealth and their neural response in reward areas. In contrast, the subjects’ education or age did not correlate with the speed of learning.

The researchers also measured the marginal utility of money by asking the subjects how often they would be likely to pick up a coin from the street. They also found that the greater a subject’s wealth, the lower the chance the subject would retrieve the coin.

Tobler, Schultz, and colleagues wrote that “the progressively smaller gain with increasing wealth would provide decreasing reward value that could lead to the reduced learning speed. Thus, individuals for whom a financial unit has lower marginal utility would show slower acquisition and extinction than individuals for whom the same unit has higher marginal utility. Or, put differently, ‘The rich are different from you and me.’”

Saturday, March 31, 2007

Should We Use Science to Manipulate the Climate?

Should we use science-based proposals for alleviating global warming such as putting particles in the upper atmosphere to deflect solar energy? Do we know enough about the risks of such wide-scale manipulation of the environment to be sure we know how this would turn out?

Scientists weigh risks of climate 'techno-fixes', by Moises Velasquez-Manoff, The Christian Science Monitor: Faced with the specter of a warming planet and frustrated by the lack of progress..., some scientists ... seek a way to give humanity direct control over Earth's thermostat.

Proposals run the gamut from space mirrors deflecting a portion of the sun's energy to promoting vast marine algal blooms to suck carbon out of the atmosphere. The schemes have sparked a debate over the ethics of climate manipulation, especially when the uncertainties are vast and the stakes so high. For many scientists, the technology is less an issue than the decision-making process that may lead to its implementation. [Graphic showing some of the proposals.]

Environmental policy driven purely by cost-benefit analyses cannot, they say, effectively point the way on large issues like climate change. But even as many scientists caution against unintended, even catastrophic consequences of tinkering with climate, they concede that the more tools humankind has to confront a serious problem, the better.

Others wonder if the mere hint of a quick-fix solution will only provide a false sense of security and hamper efforts to address the root problem: carbon emissions from a fossil fuel-based economy. And then there's the trillion-dollar question: In a politically fractured world, how will technologies that affect everyone be implemented by the few, the rich, and the tech-savvy? ...

[G]eoengineering, ... subtracting a fraction of the sun's energy from the earth equal to that trapped by human-emitted greenhouse gases ..., is not a new idea, but only recently has it moved toward the scientific mainstream. In 2006, Nobel Laureate Paul Crutzen ... published a paper on injecting particles into the upper atmosphere to reflect incoming sunlight and cool the earth. Climate scientists have since run scenarios on climate models and first reports found that it might work. In November last year, NASA cohosted a conference on the topic. ...

Continue reading "Should We Use Science to Manipulate the Climate?" »

Doing the Impossible

In rational expectations models, it is usually assumed that agents understand the nature of the equilibrium in the economy in which they operate. That is, they are able to solve the complex set of equations that describe the economy and calculate the equilibrium outcome. Many people object to rational expectations models because this information requirement seems too stringent - how can the average person solve such equations? And if they cannot, how can expectations be rational?

One answer to this is to toss someone a ball and say "catch." Somehow, we don't know exactly how because as explained below it's "technically impossible," but somehow they are able to solve the differential equation problem and easily catch the ball. The discussion below is about baseball, but it describes a similar process - how players are able to solve what appear to be impossible problems using what economists call the "as if" principle - they behave as if they they are able to solve the underlying mathematical problem, e.g. firms behave as if they can set MC=MR and consumers behave as if they can solve the equations needed to maximize their utility. The discussion also covers topics such as findings from the psychology literature on whether "clutch hitters" really exist, and there are connections to the learning literature in economics through the descriptions of the simple algorithms used to solve the problems such as catching a fly-ball. Mostly though I just thought it was interesting and tried to connect it to economics to justify posting it:

The psychology of baseball, EurakAlert: It’s the seventh game of the World Series — bottom of the ninth inning, your team is down 4-3 with runners on second and third — and you’re on deck. You watch as your teammate gets the second out. That means you’re up with a chance to win a championship for your team...or lose it.

You’re known as a clutch hitter, and you’ve hit safely in 22 straight games — an impressive streak to be sure. But as you step into the batter’s box, your hands are sweating and your mind is racing. You think about the last time you faced this pitcher and the curveball he threw to strike you out. You look at him standing on the mound and he looks tired. You try to pick up clues from his body language. How fast is his fastball today? Will he tempt you with that curveball again?

Psychologists are asking different questions: Does your recent hitting streak really matter? Is there even such a thing as a clutch hitter? Will the pitcher’s curveball fool you? And then there are the more basic questions: How is it possible to hit a 100 m.p.h. fastball without being able to see it for more than a split second? How is it that even sandlot players — mere children — can intuitively do the complex geometry needed to get to precisely the right spot to catch a fly ball?

University of Missouri psychologist Mike Stadler uses research from dozens of behavioral scientists, plus some of his own, to try answering these complicated questions in his new book, The Psychology of Baseball. "Baseball turns out to be a good laboratory for studying psychological phenomena," Stadler says, "because you’re pushing the human system to its limits. And that’s a good way to see how the system works."

Psychologists have been studying baseball players almost as long as the Red Sox had been disappointing fans in Boston, and much of the attention has naturally focused on the most heroic part of the game: hitting. Baseball’s great sluggers, such as Babe Ruth, Ted Williams, and Albert Pujols, make it seem so effortless, which makes it hard to accept the scientific consensus that hitting is basically impossible. That’s right, impossible. Why? A ball thrown by a major league pitcher reaches speeds of 100 m.p.h. and an angular velocity (the speed in degrees at which the ball travels through your field of vision) of more than 500 degrees per second. A typical human can only track moving objects up to about 70 degrees per second. Add to this the fact that it takes longer to swing a bat than it does for a pitch to go from the pitcher’s hand to the catcher’s mitt, which means a hitter must start his swing before the ball is released and has less than a half a second to change his mind. All that equals impossible.

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Thursday, March 29, 2007

Killer Asteroids

Robert Reich notes a new report from NASA that "some 100,000 asteroids and comets routinely pass between the Sun and the Earth's orbit. About 20,000 of these orbit close enough to us that they could one day hit the Earth and destroy a major city." Here's more:

Deep Impact A new NASA report on killer asteroids ought to spook people into action, by Robert B. Reich, American Prospect: According to a new report from the National Aeronautics and Space Administration, ... over a thousand ...[asteroids] are large enough (almost a mile wide in diameter) and their orbits close enough to us as to pose a real potential hazard of crashing into the Earth with enough force to end most life on this planet. ...

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