Free Lunch and Iraq

Two very different articles highlight just how little cost-benefit analysis matters sometimes, whether at the highest policy levels or in the most mundane of circumstances.  Humans evolved in a world of threats and status, and oftentimes that runs counter to any sort of logic.  And so we face many opportunities lost and much damage done. 

Bob Herbert writes today about “The $2 Trillion Dollar Nightmare,” the on-going estimate of the total cost of the Iraq war.  He notes the lack of public discussion of the “consequences of these costs, which are like a cancer inside the American economy.”  Then he discusses the testimony of a Nobel-prizing winning economist, Joseph Stiglitz, and the vice chairman of Goldman Sachs, Robert Hormats: “Both men talked about large opportunities lost because of the money poured into the war. ‘For a fraction of the cost of this war,’ said Mr. Stiglitz, ‘we could have put Social Security on a sound footing for the next half-century or more’.” 

Carol Pogash wrote recently about “Free Lunch Isn’t Cool, So Some Students Go Hungry.”  Many students who qualify for federally-subsidized lunches go without:  “Lunchtime ‘is the best time to impress your peers,’ said Lewis Geist, a senior at Balboa and its student body president. Being seen with a subsidized meal, he said, lowers your status’.” 

Pogash writes later, “Ann Cooper, director of nutrition services for the public schools in Berkeley, Calif., said that attention to school cafeterias had traditionally focused on nutrition, but that the separation of students who pay and those who receive free meals was an important ‘social justice issue’.”

Beyond threats and status, cultural distinctions matter in these sorts of decisions.  The war on terror was framed, from the very first moment, as a war of civilization against barbarians—our very way of life seems to be under threat.  And students know what eating a subsidized meal signifies, that all that effort in having “spiky hair and sunglasses” goes to waste in that moment of being seen on the wrong side of the American Dream. 

In the end the costs do matter, particularly in opportunities lost, as our own biological and cultural heritages conspire together.  That’s more than the market, more than being predictably irrational, it’s the tragic acting out of our own selves at the smallest and largest of scales.  But they are dramas we ourselves write, and so can change. 

But it won’t be easy.  Write what you know best, one writer’s rule goes.  In everyday life it’s what we do all the time.  Breaking free from that, from lamenting what might have been to seizing what could be, will take courage and vision and work.

Decision Making and Emotion

Economists and policy makers are coming to the realization that rationality, in its multiple forms, doesn’t always explain why people make the decisions that they do.  By rationality, I mean both the assumption of “economic man” (a utilitarian cost/benefit analyzer) and the emphasis on education and knowledge as the privileged means of shaping behavior.   

Let’s take three recent headlines: “Why Sadness Increases Spending,” “Craving the High That Risky Trading Can Bring” and “Teenage Risks, and How to Avoid Them.”  All point to the role of emotion in decision making (any surprise here?). 

The first article states, “A research team [of Cynthia Cryder, Jennifer Lerner, and colleagues] finds that people feeling sad and self-focused spend more money to acquire the same commodities than those in a neutral emotional state.” 

The second provides an Aristotelian summary: “The findings, while preliminary, suggest — perhaps unsurprisingly — that traders who let their emotions get the best of them tend to fare poorly in the markets. But traders who rely on logic alone don’t do that well either. The most successful ones use their emotions to their advantage without letting the feelings overwhelm them.” 

The third tells us, “Scientific studies have shown that adolescents are very well aware of their vulnerability and that they actually overestimate their risk of suffering negative effects from activities like drinking and unprotected sex…  ‘It now becomes clearer why traditional intervention programs fail to help many teenagers,’ Dr. Valerie Reyna and Dr. Frank Farley wrote. ‘Although the programs stress the importance of accurate risk perception, young people already feel vulnerable and overestimate their risks.’  In Dr. Reyna’s view, inundating teenagers with factual risk information could backfire, leading them to realize that behaviors like unprotected sex are less risky than they thought. Using an analytical approach of weighing risks versus benefits is ‘a slippery slope that all too often results in teens’ thinking that the benefits outweigh the risks,’ she said.” 

This type of research provides small steps forward vis-à-vis traditional Western assumptions about decision making and rationality.  But my question is, Why don’t they go further?  Why do they simply seem to affirm our common sense view of the world? 

Continue reading “Decision Making and Emotion”

Closing Some Doors

Too many choices?  The New York Times has an article by John Tierney, “The Advantages of Closing a Few Doors.”<span>  Tierney discusses Dan Ariely’s new book, Predictably Irrational: The Hidden Forces That Shape Our Decisions: “an entertaining look at human foibles like the penchant for keeping too many options open.” 

Here’s one section about an experiment to look for cash behind one of three doors, with each door having a set pay-off and the other doors slowly disappearing over time unless one used a click to help keep it open (thus wasting a click that could provide more money): 

[The researchers] plumbed the players’ motivations by introducing yet another twist. This time, even if a door vanished from the screen, players could make it reappear whenever they wanted. But even when they knew it would not cost anything to make the door reappear, they still kept frantically trying to prevent doors from vanishing. Apparently they did not care so much about maintaining flexibility in the future. What really motivated them was the desire to avoid the immediate pain of watching a door close. “Closing a door on an option is experienced as a loss, and people are willing to pay a price to avoid the emotion of loss,” Dr. Ariely says.

That paragraph strikes me as in need of some good ethnography—that “apparently” looms too large in my imagination. 

Continue reading “Closing Some Doors”

Sleep, Eat, Sex – Orexin Has Something to Say

Blogging on Peer-Reviewed ResearchOrexin is a neuropeptide which is released by the posterior lateral hypothalamus, and is linked to wakefulness and sleep, appetite regulation, and the motivation of sexual and addictive behaviors.  One apt way to think about it is as a hormone in the brain, combining some of the popularly conceived effects of adrenaline and testosterone into one. 

(Don’t get too excited now!  I am just trying to give you a way to think about it, that orexin works to promote arousal and response…)

I am writing a post on the links of orexin to appetitive behavior, particularly addiction, but I’ve generated a lot of material.  So I am going to give you this one first, which summarizes aspects of orexin (also known as hypocretin) and neurological function with respect to sleep, appetite and sex. 
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Dopamine and Addiction – Part One

By Daniel Lende 

The Pathway 

In your brain you have a system that comes up from some of the oldest evolved parts of your brain to some of the most recently evolved parts.  Reptile parts to ape parts.  In brain research on addiction, it’s generally called the mesolimbic dopamine pathway or system.  All the main addictive drugs affect this system, making the mesolimbic pathway a core component in addictive behavior.  Addictive experiences—gambling, shopping, eating and sex—also impact the mesolimbic dopamine system. 

In both scientific research and the popular press, the dopamine system is often cast in the role of “bad boy,” a hard-wired brain circuit that has gotten out of control, self-indulging in an orgy of pleasure.  That neat story tells us a lot about how we cast our own morals onto the brain, selectively picking out research to provide a nice scientific sheen.  Hard-wired for hedonism, we have to work even harder at self-control.   

It strikes me as the same sort of story that addicts know how to spin so well.  So let’s be blunt.  Denial! 
Continue reading “Dopamine and Addiction – Part One”