Tag Archives: Choice

So what is the risk?

From the Digital Life, Design 2009 conference I found this video of a discussion with Daniel Kahneman (2002 Nobel Prize winner in Economic Sciences) and Nassim Nicholas Taleb (author of “Fooled by Randomness” and “The Black Swan”). In “Reflections on a Crisis” they explore how economic behaviours, bias and risk taking got us to where we are in the global recession and how counter-intuitive actions may help us recover.

DLD is not a conference that I was too aware of until recently, but with the benefit of offering all their sessions on video we can all get the benefits without a trip to Munich (although I may be making the case for a ticket to next years event!). Other speakers videos this year well worth watching include Dan Airely (of course!), David Weinberger “Knowledge in the Age of Abundance” , Mark Zuckerberg of Facebook growth and where next and a panel on Internet Politics in the age of the first “Internet President”.

“Motorcycles finally go green” – really?

Wired Autoblog closes the year with a roundup of the half a dozen green bike orientated stories it has already run. No “new” news but OK as an intro to the subject. The article and comments pickup on the difference (for existing bikes) between good fuel economy – tick – and low pollution – uh, not really. As my Aprilia hardly gets 30mpg and 120 miles on a tank I am not even sure on the first point…

The more discussion the better, but I can’t see a lot more R&D money going into it in the next few years unless battery technology really changes.

PS why? – as usual the US comments have their kicks at the liberals and big government, or hit back at the failure of free markets – is every blog post on any topic grist to the mill for this poorly thought out rhetoric? Play nicely, children…

Smartest guys in the room

Imagine the scene – you get Dan Kahneman, Richard Thaler, Sendhil Mullainathan in a room in California to deliver a master class on behavourial economics, courtesy of Edge. In the audience you have Jeff Bezos, Nathan Myhrvold, Danny Hillis, Ev Williams, George Dyson and other A listers.

6 sessions, with videos and text, plus Q&A.  As an example  – session 1 – Thaler’s Nudge theory, choice architecture and “libertarian paternalism” are explored – interesting that he was going to call his book “Everything Matters”.  I like the phrase “one click paternalism” as well if not the possible negative outcome. Maybe we can get the opt out choice architecture right on our company car share scheme.

While its not an instant fix – behavioral econ rarely is – its worth the investment in time to get up to speed on the basics.

BTW The use of the Enron film title is just me being ironic…

Choice, perception & behaviour

The New York Times adds its voice to the emerging acceptance of behavioural elements in economics and markets generally, in an op-ed by David Brooks.  Lots of good lines-

“”My sense is that this financial crisis is going to amount to a coming-out party for behavioral economists and others who are bringing sophisticated psychology to the realm of public policy. At least these folks have plausible explanations for why so many people could have been so gigantically wrong about the risks they were taking.”
 
“So perhaps this will be the moment when we alter our view of decision-making. Perhaps this will be the moment when we shift our focus from step three, rational calculation, to step one, perception.”

 

The writer’s comment that “choice architecture”, as per Richard Thaler’s Nudge theory, will only work in limited cases echoes my own views, but if markets and governments fail to influence the decision making process then what?  back to the individuals non rational decision making again…

And with halloween approaching read how the Vancouver Sun charcaterises current markets as Motivated by Fear, with yet another mainstream introduction to neuroeconomics – also on BBC Radio 4 yesterday –“Money on the Brain”

Somethings happening in this area when the big guys start to pay attention.