Introduction
Guess 2/3 the average! Instructions: Guess what 2/3 of the average of all guesses in class will be, from (inclusive). The winner will be the one closest to the 2/3 average of all guesses.
Psychological assumptions… Permeate the social sciences Rational view Behavioral view Biased judgment Malleable preferences Influenced by social context! Psychology as a tool for policy!
After this course you will Be a better consumer of psychological research Understanding the scientific method in social science Becoming familiar with experimental design Possess an additional set of tools for policy analysis, design and implementation Example: Psychology and decision making in poverty
A simple, yet profound fact
Decisions stem not from the objective states of the world, but the individual mental representations created of those states!
A simple, yet profound fact Decisions stem not from the objective states of the world, but the individual mental representations created of those states! This is NOT to claim that all behavior is erratic and unpredictable…
Everyone is “irrational”.
Classic Studies in Psychology Milgram – obedience to authority Zimbardo – Stanford prison experiment Asch – conformity
Classic Studies in Psychology Milgram – obedience to authority Zimbardo – Stanford prison experiment Asch – conformity Each of these highlight the power of the situation!
Cognitive Biases Shortcuts for dealing with a busy world Why: bounded rationality! How much attention do we have?
Cognitive Biases System 1 versus System 2 Intuition vs. Reasoning Problems with monitoring and correction
A bat and a ball together cost $1.10. The bat costs a dollar more than the ball. How much does the ball cost?
Another example… “Please indicate the average amount of time that you have spent watching, reading and listening to the media coverage of the situation in Iraq (TV, newspapers, magazines, online), per week, since the first week of the war.” up to ½ hr up to 2 ½ hrs up to 4 ½ hrs ½ - 1 hr 2 ½ - 3 hrs 4 ½ - 5 hrs 1 – 1 ½ hrs 3 – 3 ½ hrs 5 – 5 ½ hrs 1 ½ - 2 hrs 3 ½ - 4 hrs 5 ½ - 6 hrs 2 -2 ½ hrs 4 – 4 ½ hrs 6 – 6 ½ hrs more than 2 ½ hrs more than 4 ½ hrs more than 6 ½ hrs Low FrequencyMid FrequencyHigh Frequency Interest, continued media consumption and confidence in assessments about the war Interest, continued media consumption and confidence in assessments about the war
Low
Understanding human behavior Rational agent model (normative) Well-informed Stable preferences Controlled and calculating Behavioral model (descriptive) Mediocre judgment Malleable preferences Impulsive *but, behavior is often predictable!!
Other concepts Power of defaults Organ donation Nudge, recent book by Richard Thaler and Cass Sunstein Cognitive priming Princeton students Female Asian graduate students in mathematics Channel factors matter! Tetanus shots
What should I keep in mind?
The inconsistency of humans… Chronic divergence between intentions and behaviors Influence of context Current vs. future self
The inconsistency of humans… Chronic divergence between intentions and behaviors Influence of context Current vs. future self But: inconsistency ≠ unpredictability!
Decisions stem not from the objective states of the world, but the individual mental representations created of those states!
Guess 2/3 the average! Instructions: Guess what 2/3 of the average of all guesses in class will be, from (inclusive). The winner will be the one closest to the 2/3 average of all guesses.
Next week… More on bounded awareness Introduction to behavioral economics