on the congnitive biases of economists

August 31, 2018
The Atlantic's Ben Yagoda writes on The Cognitive Biases Tricking Your Brain:
Most of them have focused on money. When asked whether they would prefer to have, say, $150 today or $180 in one month, people tend to choose the $150. Giving up a 20 percent return on investment is a bad move--which is easy to recognize when the question is thrust away from the present. Asked whether they would take $150 a year from now or $180 in 13 months, people are overwhelmingly willing to wait an extra month for the extra $30.
I wonder if there's a name for the cognitive bias fallacy among psychology researchers that their contrived scenarios are showing deep, true things about human psychology? Or that normal humans assume psychology researchers will, you know, be around in a month to give them $180?

I mean duh - if the researcher is still around in 13 months, they'll probably be there in 18, but the folk wisdom of "a bird in the hand" distorts this problem beyond usefulness.

Or this one:
One of the biases [economist Richard Thaler is] most linked with is the endowment effect, which leads us to place an irrationally high value on our possessions. In an experiment [...] half the participants were given a mug and then asked how much they would sell it for. The average answer was $5.78. The rest of the group said they would spend, on average, $2.21 for the same mug. This flew in the face of classic economic theory, which says that at a given time and among a certain population, an item has a market value that does not depend on whether one owns it or not.
I mean really. Is that a problem with people, or with classical economics? You got a mug, you know it works, what it can do, you might not know what it will actually take in the real market to find a replacement if need be. Or you're a buyer - who knows what the hell might be wrong with the mug for sale?

Even in philosophy - so many of these setups seem so artificial because they presume perfect knowledge - like the trolley problem, "would you push a person in front of a trolley if doing so would divert the trolley and save 5 people?" It's supposed to point out something about personal culpability vs things being "the universe's fault", but what if the push just let 6 people die instead of 5? Yeesh.

Or the thing about how compassion is broke - that people might be willing to give generously if shown a picture of a hungry refugee girl, but less so if the picture is of her and her sibling, and even less so if shown a whole classroom full of kids in need. Some people say this shows how human compassion is kind of broken because it doesn't follow math, and while that's a great point in terms of making policy decisions, it's hardly surprising - people feel empowered like they can help one person, to give resources that they might otherwise use for themselves, but scale it up and it feels like too much of a burden (and swimming against the tide of 'how things are' in the case of the whole classroom) or if it's the same amount of charity, that the same amount to more people would get too diluted to seem as meaningful.

The human mind has many biases, and some of that leads us to suboptimal behaviours - but it's actually a pretty well-tuned machine for rough guesses in an uncertain world of social interactions and other people with hidden agendas. Yeah, some of those tunings don't work as well in a world of 7 billion folks and modern communications, but still.
*battlefield turns into a giant orgy*

Cupid: sorry sorry, these are the only type of arrows I have

How they made the full-size, driveable Lego Technic automobile