The new Freakonomics book is even better than I anticipated
and strangely starts off with 2 chapters about the UK
- Got many questions
- so decided to write a thinking manual
- eg1 penalty takers should aim for the centre cos goalies never anticipate it
- why not done ... cos poss of looking like idiot is bigger than just failing to score a goal
- so ultimate success means not being afraid to be a FREAK
- earlier books were about INCENTIVES drive life
so need to understand what to measure & how ..so crunch the numbers
1. CHALLENGE Conventional wisdom is often wrong
2. Correlation is not prove of Causality
Why people don't think
- 1. Confirmation Bias - seek it rather than objective|
- 2. Running with the herd, so delegate thinking
- 3. No time to think
|They were called into meet the PM|
He told us that, upon election, the Cameron administration would fight global warming, tooth and nail…’If it were not for England,’ he continued, ‘the world would not be in the state it is in.’…England, he said, having started the Industrial Revolution, led the rest of the world down the path toward pollution, environmental degradation and global warming. It was therefore England’s obligation to take the lead in undoing the damage.”
the bias there is deciding from your own moral compass, instead of from the evidence.
eg of bias 2. The PM won't consider having the market brought into the NHS
- that's fear of getting egg on face
Meanwhile is it a bad thing if somethings are carefully privatised
"No! is the instant green/left kneejerk reaction"
- but the new Freakonomics book disagrees
from the Spectator
"Mr Cameron told them, moist eyed, that there were a few things he would be saving from cuts. Like what, they asked. “‘Well, the National Health Service,’ he said, his eyes alight with pride.”
"Well, it takes them no time to identify the difficulty with that one: “UK health costs had more than doubled over the previous ten years” and, as they observe, “when people do not pay the true costs of something they tend to consume it inefficiently. Think of the last time you sat down at an all you can eat restaurant. How likely were you to eat a bit more than normal? The same thing happens if health care is distributed in a similar fashion.” To make the analogy clear for Mr C, they ask him to imagine “what if, for instance, every Briton were also entitled to a free, unlimited lifetime supply of transportation. That is, what if everyone were allowed to go down to the car dealership whenever they wanted and pick out any new model, free of charge.” Well, that went down a bomb. The smile, they observe, stayed on Mr C’s face but went out of his eyes before he made off..."
- to be fair Freakonomics bias is that the market delivers, but in the UK health costs are 10% of GDP and in the US they are 20% ..so the market is failing in the US
- Also if they are so sure about free market ..contradicted by fact they are on Public Radio not commercial radio.
- Also contradicted later in their eg where the capitalist parents in China fail to buy their kids glasses, but socialist experiment of giving them free $15 glasses works ..thats like the NHS in action
We are taught to bluff
Not saying "I don't know*" is a huge thinking block
- we are programmed from kids to fill in the blanks instead
* don't be afraid to SIDK
Philip Tetlocks research tells us experts bluff
- They resort to dogmatism instead of IDK
p>Backed up by Paul Krugman "Most economists predictions are wrong"
Costs of SIDK are bigger, than not , cos odds are you can bluff your way out
Think what are your opposite arguers incentives ?
- eg Harrabin has deceived so long , that he cannot backtrack and tell the truth on climate.
Incentive: wild predictions pay off
- You win gold if you succeed, but actually everyone forgets if your prediction failed
Suicide happens when you blame yourself as can't blame others
|- They explain that to justify the extraordinary stat that black males suicides are only 1/3 of males ... they can always blame someone else
Seek & listen to Feedback
|making mistakes, vote results etc
eg the shop that wouldn't test it's own advertising progs for fear of execs being embarressed
TEST by seeking natural experiments
Set up field trials (lab trials don't work in social science)
- do it properly RANDOMIZE
- People can't tell expensive wine by taste|
expt proved restaurant wine awards were just awarded for buying advertising
Stop pretending to know answers that you don't !
cos the incentives to pretend are so strong, this may some bravery on your part.