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Behavioral Economics and Rationality
A Category Archive (756 entries)
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May 21, 2013
Behavioral Economics and Rationality
Bryan Caplan
A while back on Twitter, I asked:Question for people who think my views on immigration are "crazy": Would the same views remain "crazy" if I were Haitian?Brad Trun, blogger at Libertarian Realist, wrote a direct and forthright reply. Some will... MORE
May 15, 2013
Behavioral Economics and Rationality
Bryan Caplan
Consider a world where 80% of people are Conformists, 10% of people are Righteous, and 10% are Reprobates. The Conformists are epistemically and morally neutral, so they believe and support whatever is popular. The Righteous are epistemically and morally... MORE
May 10, 2013
Behavioral Economics and Rationality
Art Carden
In response to precipitous increases in the opportunity cost of my time and my wish to Avoid News, I've scaled back my presence on social media. I still maintain Economics in One Meme and a still-nascent "professional" Facebook page, where... MORE
May 7, 2013
Behavioral Economics and Rationality
Bryan Caplan
As far as I can tell, none of the comments on my Keynesian bet bleg point out or propose a Keynesian bet. On Twitter, however, Noah Smith alerted me to the existence of the following Smith-DeLong bet:If, at any time... MORE
April 26, 2013
Behavioral Economics and Rationality
David Henderson
To move into Pismodise you must meet four conditions: Be 55 or older, keep your dog under 20 pounds, be present when guests stay at your home, and be comfortable with what most Americans consider a very small house. "If... MORE
April 23, 2013
Behavioral Economics and Rationality
Bryan Caplan
Free-market economists rarely declare, "We have to do X about unemployment." Why not? Free-market economists' standard reply is just, "We expect X to fail." Their critics, however, have a less favorable explanation: Free-market economists oppose X because free-market economists are... MORE
April 22, 2013
Public Choice Theory
Garett Jones
In fiction politicians can say what they really think of voters. Two examples: 1. The Onion reports Hillary Clinton's thoughts on whether she should run for President (questionable language): ...while I can't definitively say what my plans are one way... MORE
Behavioral Economics and Rationality
Bryan Caplan
Every social system requires favorable expectations to survive. Democracy can't survive unless people expect losing parties to voluntarily surrender power. Anarcho-capitalism can't survive unless people expect private defense firms to peacefully resolve their disputes. Once you take the power of... MORE
April 20, 2013
Behavioral Economics and Rationality
Art Carden
There are a lot of great comments on my last post, "Better Living Through Statistics: Muslim Terrorists Edition." A few observations: That Muslims are far more likely to be terrorists than others is barely relevant to our day-to-day lives given... MORE
April 19, 2013
Behavioral Economics and Rationality
Art Carden
As I've written before, I'm excited about Bryan's forthcoming The Case Against Education (ooh! Here's a FEE podcast version on YouTube!). Here's another piece of advice that continues the Bubble/Serenity conversation started by Bryan and David. At the margin, you... MORE
April 18, 2013
Cost-benefit Analysis
Bryan Caplan
Recent Twitter exchange between myself and Tyler:@tylercowen: [ZMP] is about morale effects in the workplace, not "finding something for them to do," the latter is trivially easy.@bryan_caplan: This reply deserves mischief-free elaboration.@tylercowen: Is there a difference?@bryan_caplan: Asking "Is there a... MORE
April 17, 2013
Behavioral Economics and Rationality
Bryan Caplan
"If your phone doesn't ring, it's me." When a potential employers doesn't call about your application, they're telling you something about you - but they're also saying something about themselves. My friend Perry Metzger explains:[Reprinted with Perry's permission.]BTW, one effect... MORE
April 15, 2013
Behavioral Economics and Rationality
Bryan Caplan
Vipul Naik called my attention to an interesting comment on immigration and bubbles:Isn't the bubble idea in opposition to the unlimited immigration idea? Your bubble advice boils down to surrounding yourself as much as possible with like minded people. Immigration... MORE
April 11, 2013
Behavioral Economics and Rationality
David Henderson
That could be the title of co-blogger Bryan's latest post, as commenter Rochelle essentially pointed out. Even though I'm not with him on all the particulars, I am with most. Here was my earlier version. My main purpose with this... MORE
Behavioral Economics and Rationality
Bryan Caplan
Someone on Twitter asked for advice on how to create a Beautiful Bubble. Perhaps he was teasing me, but it's a good question. Here's my 10 Step Program:1. Amicably divorce your society. Don't get angry at the strangers who surround... MORE
April 9, 2013
Behavioral Economics and Rationality
Bryan Caplan
From Schmidt and Hunter, "General Mental Ability in the World of World" (2004, Journal of Personality and Social Psychology):Why Is GMA [General Mental Ability] So Important for Job Performance?It can be difficult for people to accept facts and findings they... MORE
April 7, 2013
Alternative Economics
Art Carden
I can't wait for Bryan's The Case Against Education: every semester, my beliefs move in favor of the signaling model and against the human capital model of schooling. This isn't to say there aren't a lot of students who are... MORE
April 3, 2013
Behavioral Economics and Rationality
Bryan Caplan
Suppose you had a meeting with Al Capone in 1923. He tells you, "The Irish are giving us trouble with their cut-rate beer, so we're gonna rub 'em out." You'd probably feel a chill run down your spine. You certainly... MORE
April 2, 2013
Behavioral Economics and Rationality
Bryan Caplan
Imagine advocating democracy a thousand years ago. You sketch your basic idea: "Every few years we'll have a free election. Anyone who wants power can run for office, every adult gets a vote, and whoever gets the most votes runs... MORE
March 11, 2013
Behavioral Economics and Rationality
David Henderson
See Update Below. While web surfing the other day, I came across work by Princeton economist Thomas C. Leonard. There's a lot of good work there. In this post, I want to highlight his review of Nudge by Richard Thaler... MORE
March 3, 2013
Behavioral Economics and Rationality
Bryan Caplan
My dear friend and colleague Tyler Cowen thinks the signaling model of education is, roughly speaking, empirically irrelevant. He's repeatedly urged me to stop barking up what he sees as a very wrong tree. I was pleasantly surprised, then, to... MORE
March 1, 2013
Behavioral Economics and Rationality
Bryan Caplan
Whenever an economist or libertarian opposes means-testing of Social Security and Medicare, I immediately ask: "So should we extend all currently means-tested programs to the entire population?" Listeners often admit that it's a persuasive challenge. At our last lunch, however,... MORE
February 28, 2013
Behavioral Economics and Rationality
Bryan Caplan
Steve Sailer has an interesting reaction to yesterday's post on Asians' Democratic leanings: Bryan has the psychological dynamics 180 degrees backwards. The Republicans problem with Asian and Latin voters is not that Republicans don't respect the newcomers enough, it's that... MORE
February 27, 2013
Behavioral Economics and Rationality
Bryan Caplan
Republican critics of immigration often decry Hispanics' lop-sided identification with the Democratic Party. Due to their low income, the story goes, Hispanics naturally prefer the party of Big Government. Since Hispanics will never vote Republican, Republicans' only prudent response is... MORE
February 25, 2013
Behavioral Economics and Rationality
Bryan Caplan
When students first hear about the famous Akerlof's "lemons model," they almost invariably misinterpret it. "Aha," they think, "this is why used car dealers get rich ripping off unsuspecting customers." The true point, of course, is that asymmetric information makes... MORE
February 20, 2013
Behavioral Economics and Rationality
Bryan Caplan
Further evidence that social scientists underestimate the power of evolution, courtesy of Marlene Zuk:[A] new field called experimental evolution is showing us that sometimes evolution occurs before our eyes, with rapid adaptations happening in 100, 50, or even a dozen... MORE
February 12, 2013
Family Economics
Bryan Caplan
My Selfish Reasons to Have More Kids tries to persuade people to increase their fertility. Jonathan Last's What To Expect When No One's Expecting explicitly disavows this aim: Finally, this book is not an attempt to convince you to have... MORE
February 11, 2013
Behavioral Economics and Rationality
Bryan Caplan
What personality types are most likely to support open borders? Since almost no one in the First World favors open borders, we shouldn't expect to find common personalities that typically support open borders. It's conceivable, though, that rare personalities typically... MORE
February 8, 2013
Behavioral Economics and Rationality
Bryan Caplan
I just finished re-reading The Godfather. It's full of grist for the social science mill. My personal favorite:"There are men in this world," he said, "who go about demanding to be killed. You must have noticed them. They quarrel in... MORE
February 7, 2013
Behavioral Economics and Rationality
Bryan Caplan
I'm puzzled by Dan Klein's recent guest post. I trust his empirics. Indeed, I prize them. But what do they show? As far as I can tell, Dan's empirics show that a sizable minority of economists are small-l libertarians, but... MORE
February 1, 2013
Behavioral Economics and Rationality
Bryan Caplan
Have results from the Stanford Marshmallow Experiment ever been used to predict adult income? Or even better, adult income controlling for education and IQ?Any relevant citations are much-appreciated.... MORE
January 31, 2013
Behavioral Economics and Rationality
Bryan Caplan
EconLog reader Abigail Haddad sent me an interesting email. I'm reprinting it in full with her permission:Hi Bryan, I commented on "Why don't applicants volunteer their test scores?" last year and suggested that there was a verification problem, since employers... MORE
January 30, 2013
Behavioral Economics and Rationality
Bryan Caplan
Robin Hanson recently inspired me to re-read Tolstoy's "The Death of Ivan Ilych." In a just world, social scientists of all descriptions would analyze this great work from a hundred different angles. On my latest reading, though, what struck me... MORE
January 28, 2013
Behavioral Economics and Rationality
Bryan Caplan
On Thursday, Casey Mulligan lectured on his The Redistribution Recession at GMU. Lots of interesting, neglected evidence on the spike in labor market distortions since 2007. Yet the talk was marred by Mulligan's commitment to a market-clearing model of labor... MORE
January 21, 2013
Behavioral Economics and Rationality
Bryan Caplan
Suppose you suddenly discover a far better way of doing X. Your discovery uses fewer resources, yields higher quality, and even has more positive externalities than Ye Olde Standby. There's just one catch: your discovery is a discovery. By definition,... MORE
January 11, 2013
Behavioral Economics and Rationality
Bryan Caplan
The best response by far to yesterday's challenge was a pair of tweets by Dan Lin:@bryan_caplan Find a person who got laid off from a charity after minimum wage increase. She tearfully says "I just want to help people."@bryan_caplan Oprah... MORE
January 10, 2013
Behavioral Economics and Rationality
Bryan Caplan
Last week, I argued that some ideas are inherently hard to sell to people with "Feeling" personalities:If you're trying to sell libertarianism to Feeling people, "hard head, soft heart" ideas are more persuasive than "hard head, hard heart" ideas. But... MORE
January 8, 2013
Behavioral Economics and Rationality
Bryan Caplan
1. Suppose you lived in a society with a massive, age-old injustice. Think slavery. Are you the kind of person who would staunchly oppose this injustice anyway?2. Suppose a colorful, feel-good movement advocating a massive, new injustice suddenly became fashionable. ... MORE
Behavioral Economics and Rationality
Bryan Caplan
When economists say "wage rigidity," they almost always mean downward wage rigidity. Nominal wages almost never come down. Yet in W. Somerset Maugham's Of Human Bondage, set in late 19th-century England, upward wage rigidity plays an interesting role in the... MORE
January 7, 2013
Behavioral Economics and Rationality
Bryan Caplan
As a rule, I dislike shouting matches. But I especially dislike shouting matches between people I largely agree with. As a libertarian, this puts me in an uncomfortable position, because many libertarians seem to relish shouting matches - even, or... MORE
January 4, 2013
Economics and Culture
Bryan Caplan
Steve Horwitz and Sarah Skwire have restarted a long-standing debate about the shortage of libertarian women. They make a very fair point: Libertarians should have been friendlier and more respectful to women - and turn over a new leaf forthwith. ... MORE
January 3, 2013
Behavioral Economics and Rationality
Bryan Caplan
I've often heard people dismiss my dear friend and colleague Robin Hanson for his "Aspergers," his blindness to the way that most human beings feel and think. They're not entirely wrong, but Robin's latest post, a review of a Peter... MORE
December 27, 2012
Behavioral Economics and Rationality
Bryan Caplan
In the X-men comics, t.v. series, and movies, normal humans instinctively treat super-powered mutants with fear and disgust. The popular mutant policy options are: (a) register them as deadly weapons, (b) preemptively imprison them, or (c) kill them one and... MORE
December 24, 2012
Behavioral Economics and Rationality
David Henderson
Do retirement savings policies--such as tax subsidies or employer-provided pension plans--increase total saving for retirement or simply induce shifting across accounts? We revisit this classic question using 45 million observations on savings for the population of Denmark. We find that... MORE
December 7, 2012
Behavioral Economics and Rationality
Bryan Caplan
Last spring I asked EconLog readers about the obviousness of on-the-job incompetence. Most people thought incompetence was very obvious indeed. It turns out that this view is widespread. The General Social Survey asks:In your job how easy is it for... MORE
December 4, 2012
Behavioral Economics and Rationality
Bryan Caplan
Over at Open Borders, Nathan Smith shares his preliminary immigration policy empirics from the World Values Survey. Out of 48 countries surveyed, the people of Vietnam (?!) favor the fewest restrictions on immigration, and the people of Malaysia favor the... MORE
November 30, 2012
Behavioral Economics and Rationality
Bryan Caplan
Consider a simple model of voter behavior:People vote for whoever respects them more.My immediate reaction: This Respect Motive is a roughly accurate description of over half the electorate. Furthermore, it's hard to name any socially recognized group whose members do... MORE
November 29, 2012
Behavioral Economics and Rationality
Bryan Caplan
Two quick replies to Garett:1. If terrorists were as flexible as he suggests, airport security would be useless. Terrorists would simply switch to one of the countless undefended targets: trains, sporting events, malls, etc. Profiling doesn't have to be perfect... MORE
November 27, 2012
Behavioral Economics and Rationality
Bryan Caplan
William Feerick emailed me some interesting thoughts on an old EconLog post, reprinted below with his permission.Hello Bryan, I recently came across an article you wrote some time ago on your EconLog blog, where you mentioned Tim Besley's counter-examples to your... MORE
Behavioral Economics and Rationality
Bryan Caplan
The U.S. Commodity Futures Trading Commission (CFTC) is suing one of my favorite websites and my primary source of news: Intrade. The CFTC accuses Intrade of:[O]ffering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and... MORE
November 26, 2012
Behavioral Economics and Rationality
Bryan Caplan
Two decades ago, economists started taking intelligence seriously. Now economists are starting to take conscientiousness seriously. Unfortunately, most existing data sets don't contain personality tests. Even when they do, personality tests are only self-reports. Wouldn't it be great if we... MORE
November 25, 2012
Behavioral Economics and Rationality
Bryan Caplan
David Brooks praises Lincoln for showing that the "challenge of politics lies precisely in the marriage of high vision and low cunning." He elaborates: The movie is about pushing the 13th Amendment through the House of Representatives. The political operatives... MORE
November 21, 2012
Behavioral Economics and Rationality
Bryan Caplan
A while back, James Donald left a somewhat strident comment on EconLog. The key passage:When the superior rule the inferior, it is not only better for the superior, it is also better for the inferior.Many readers will reject Donald's claim... MORE
November 20, 2012
Cost-benefit Analysis
Bryan Caplan
I think Garett's basically wrong about airport security on the free market. Yes, both markets and politics respond to risk misperceptions. But the political response is much more likely to ignore cost and convenience, to impose whatever sounds good. The... MORE
Regulation and Subsidies
Garett Jones
Alex and some of the internet are noting that airline security might cost lives and does cost liberty. Yglesias asks one counterfactual: How many airplanes would be "blown up by terrorists" if there were no airline security? I might have... MORE
November 17, 2012
Behavioral Economics and Rationality
Garett Jones
This week I tweeted:What argument do defenders of government-mandated airline seatbelt paternalism use? It can't be that plane crashes aren't salient to buyers.Note that I'm asking why the government has to mandate seatbelt usage. Since people overestimate the chance of... MORE
Behavioral Economics and Rationality
Bryan Caplan
Tyler blogs this 2001 Bryan and Venkatu piece on systematically biased beliefs about inflation:In the roughly 20,000 responses we have received from our telephone survey since August 1998, the average rate at which respondents thought prices had risen over the... MORE
November 9, 2012
Behavioral Economics and Rationality
Bryan Caplan
Question for you: When was the last time you openly worried about "your side" treating "their side" unjustly? This could mean:1. "Your side" intellectually misrepresenting "their side."2. "Your side" politically oppressing "their side."3. "Your side" embracing positions that, taken seriously,... MORE
November 7, 2012
Behavioral Economics and Rationality
Bryan Caplan
The lessons people want to draw from Romney's defeat:1. He would have have won if he were more/less socially conservative.2. He would have won if he were more/less economically conservative.The lessons people should draw from Romney's defeat:1. He would have... MORE
Economic Methods
Bryan Caplan
Just one election cycle ago, Tyler embraced a conclusion I found implausible on the basis of a model I found absurd:When it comes to marijuana legalization, I believe that the "anti-" forces will muster as many parental votes as they... MORE
November 6, 2012
Behavioral Economics and Rationality
Bryan Caplan
We can't stop our minds from jumping to conclusions. If we smell smoke, we jump to the conclusion, "Fire." If metal glitters, we jump to the conclusion, "Gold." If a person smiles at us, we jump to the conclusion, "Friend." ... MORE
November 4, 2012
Behavioral Economics and Rationality
Bryan Caplan
Lately a few people have accused me of being "closed-minded." As they'd predict, I reject the accusation. I say my degree of openness is close to optimal. Consistent with Bayesian reasoning, I am as reluctant to claim vindication by events... MORE
October 29, 2012
Behavioral Economics and Rationality
Luigi Zingales
Preet Bharara, Manhattan's U.S. attorney, is a man on a mission. Not satisfied with the historical conviction of former McKinsey managing director Raja Gupta for insider trading, he quickly moved to investigate mortgage fraud. Earlier this month he sued Wells... MORE
Behavioral Economics and Rationality
Bryan Caplan
Suppose a 15-year-old from a poor family in the First World asked you an earnest question: "What can I do to escape poverty?" How would you answer?Responses from progressives, liberals, moderates, and left-libertarians are especially welcome.... MORE
October 26, 2012
Behavioral Economics and Rationality
Bryan Caplan
Yesterday I presented my case against education to GMU's Osher Lifetime Learning Institute. As usual, the experience was a true merit good: picture a packed room of retirees full of enthusiasm and curiosity for the life of the mind. The... MORE
October 20, 2012
Behavioral Economics and Rationality
Bryan Caplan
1. Garett and Me on EvilMy reply to Garett:I'd be much more impressed by an experiment showing that subjects spontaneously try to hurt others. Suppose you tell them they can pay some money in order to change others' endowments. Start... MORE
October 18, 2012
Behavioral Economics and Rationality
Garett Jones
Bryan says: I'd be much more impressed by an experiment showing that subjects spontaneously try to hurt others.Actually, there are plenty of those in the experimental public goods literature. The questions raised by these public goods experiments might be what started... MORE
October 16, 2012
Behavioral Economics and Rationality
Bryan Caplan
Garett's post on the prevalence of sheer malevolence is fascinating, but I'm not convinced. A key fact about experiments is that many participants just want to please the experimenter. Once they sit down in the lab, they start asking, "What... MORE
October 15, 2012
Behavioral Economics and Rationality
Garett Jones
A claim confirmed repeatedly in experiments:In the destructor game, players are randomly paired and assigned the roles of destructor versus passive player. The destructor player chooses to destroy or not to destroy a share of his passive partner's earnings....15% of... MORE
October 11, 2012
Growth: Consequences
Bryan Caplan
Remember my Time Diary Self-Experiment? Only 41 people responded, so I take the feedback with a grain of salt. Still, both of my predictions were correct. To refresh your memory, I asked respondents to repeatedly ask themselves:1. Was my experience... MORE
October 8, 2012
Economic Philosophy
Bryan Caplan
I was just at a conference where several eminent economists embraced the following principle:The United States should adopt whatever policies maximize the per-capita GDP of the existing population of the United States, and their descendents.It was frustrating to listen. On... MORE
October 1, 2012
IQ in Economics
Garett Jones
In Arnold's new essay entitled "Libertarians and Group Norms," he writes:[W]e live in a world that demands enormous levels of trust among strangers...I doubt that anyone fully comprehends what holds this fabric of trust together. I agree. But we're building comprehension,... MORE
September 26, 2012
Behavioral Economics and Rationality
David Henderson
Normally, schools offer scholarships to entice students to enroll. This year, the Massachusetts Institute of Technology's business school handed them money to go away. The Sloan School of Management's full-time M.B.A. program, usually about 400 students, was oversubscribed by an... MORE
September 25, 2012
Behavioral Economics and Rationality
David Henderson
An article yesterday by Conor Friedersdorf, "The GOP Wasted 4 Years on the Wrong Critique of Obama's Foreign Policy" plus my own observations of Mitt Romney and his apparent strategy now convince me that Barack Obama will be re-elected. Why... MORE
Behavioral Economics and Rationality
Bryan Caplan
Before I studied public opinion, I often wondered, "Why are democracies' policies so bad?" After I studied public opinion, I started asking myself the opposite question: "Why aren't democracies' policies even worse?" The median American is no Nazi, but he... MORE
September 23, 2012
Behavioral Economics and Rationality
Bryan Caplan
Calorie restricted diets demonstrably increase the lifespans of yeast, fish, rodents, and dogs. Will they work for humans? For obvious reasons, controlled human experiments are problematic. Researchers therefore turned to the next best thing: experiments on non-human primates - rhesus... MORE
Behavioral Economics and Rationality
David Henderson
Still, I think it is unwise to dismiss altogether the case for group loyalty and adherence to group norms. My inclination is to approve of organizations that promote group objectives and attempt to limit individual choices, as long as participation... MORE
September 19, 2012
Behavioral Economics and Rationality
Bryan Caplan
My friend and former student Eli Dourado has gotten a lot of attention for his recent post, "The Short-Run Is Short." Key passage:Around 40 percent of the unemployed have been unemployed for six months or longer. And the mean duration of... MORE
September 18, 2012
Behavioral Economics and Rationality
David Henderson
Bryan makes a good argument in his post earlier today titled "Will False Belief in the SIVH Destroy Romney's Candidacy?" The evidence against the Self-Interested Voter Hypothesis is strong. But Patrick R. Sullivan's comment should not be missed. He wrote,... MORE
Behavioral Economics and Rationality
Bryan Caplan
Many people believe that voters' positions are determined by their objective self-interest. I call this the SIVH - the Self-Interested Voter Hypothesis. A massive body of evidence shows that the SIVH is just plain wrong. Self-interest has no more than... MORE
September 17, 2012
Behavioral Economics and Rationality
Bryan Caplan
My Facebook friend Matt Rafat posted an exceptionally insightful update. Think of it as Tullock's paradox of revolutions meets Kuran and Sunstein's availability cascades: Normal 0 MicrosoftInternetExplorer4 I'll say it again in case you missed it the first time: It's... MORE
September 16, 2012
Behavioral Economics and Rationality
Bryan Caplan
Critics of the free market often object to commercialism on aesthetic grounds. Caruso, Vohs, and Baxter's recent paper in the Journal of Experimental Psychology ("Mere Exposure to Money Increases Endorsement of Free Market Systems and Social Inequality," 2012) suggests that... MORE
September 13, 2012
Behavioral Economics and Rationality
Bryan Caplan
Garett Jones is one of the most Sumnerian macroeconomists I know. But he's not Sumnerian enough for Sumner. Sumner channels Matt Yglesias to question the importance of Garett's debt deflation mechanism (or to be more precise, debt less-than-expected-inflation mechanism):Debt prices... MORE
September 12, 2012
Behavioral Economics and Rationality
Bryan Caplan
Lectures about the signaling model of education usually provoke excellent reactions from the audience. But they also provoke some truly obtuse questions. The worst of the worst: "So I might as well just drop out of school?"No! A thousand times... MORE
I believe in bubbles. They turn up in theory, in the lab, in history. We are a bubbly species, prone to waves of enthusiasm that crash upon the shore.Our financial crisis is often told as a story of a housing... MORE
September 11, 2012
Behavioral Economics and Rationality
Bryan Caplan
My great hero Thomas Szasz has died at the age of 92. I only met him once, but what a meeting! The year was 2005. I won the Thomas Szasz Award for Outstanding Contributions to the Cause of Civil Liberties... MORE
Behavioral Economics and Rationality
Bryan Caplan
When lies sound better than truth, people tend to lie. That's Social Desirability Bias for you. Take the truth, "Half the population is below the 50th percentile of intelligence." It's unequivocally true - and sounds awful. Nice people don't call... MORE
September 7, 2012
Austrian Economics
Bryan Caplan
My Cato Unbound reply to Steve Horwitz on empirical Austrian economics is up. I concede that Horwitz...makes several sensible points: Some Austrians have no methodological objection to empirical work.Mainstream economists have a dogmatic, narrow view of what counts as "empirical... MORE
September 6, 2012
Economic Philosophy
Bryan Caplan
When my favorite economists change, I usually think they change for the worse. Dan Klein is a glowing exception. I've always liked his work. But in recent years (see e.g. here, here, and here) Dan's metamorphosized from very good to... MORE
September 4, 2012
Behavioral Economics and Rationality
Bryan Caplan
Imagine a world where no one ever voluntarily buys good X. Still, everyone affirms that X is very important, a vital good. If you hold an election, the population unanimously votes in favor of very generous funding for X.Most economists... MORE
September 3, 2012
Behavioral Economics and Rationality
Bryan Caplan
People are often taken aback when I argue that the First World's poor are usually undeserving. In modern political discussion, we're supposed to "propose solutions," not point fingers. Even when we're talking about politically connected banks, we usually discuss alternate... MORE
August 29, 2012
Behavioral Economics and Rationality
Bryan Caplan
Since Bill Dickens' last reply to me is essay-length, my plan is to write a series of relatively short replies, and spread them out over the next month. Here's Part 1. By default, Bill's in blockquotes, I'm not.You subscribe to... MORE
August 27, 2012
Behavioral Economics and Rationality
Bryan Caplan
A few weeks ago Bill Dickens and I argued about poverty: see here and here for previous rounds. Now Bill's written a lengthy response to my last post. Italics indicate that Bill's quoting me. Enjoy! Normal 0 MicrosoftInternetExplorer4 /* Style... MORE
August 22, 2012
Economic Education
Bryan Caplan
I want to persuade Matt Yglesias to give Frederic Bastiat the respect he deserves. On some level, though, Matt already reveals remarkable respect for my favorite 19th-century French economist. Imitation is the sincerest form of flattery - and Matt has... MORE
August 20, 2012
Behavioral Economics and Rationality
Bryan Caplan
I'm delighted to get Matt Yglesias talking about Bastiat, but I'm afraid he's missing my point. For Matt, Bastiat's writings are "non-responsive to modern issues." Matt's example:The candlemakers' petition is a devastating satire of pharmaceutical companies' endless lust for patent... MORE
August 17, 2012
Behavioral Economics and Rationality
Bryan Caplan
The outstanding Jason Brennan on the Princeton University Press blog:Now, I freely admit that most bad voters do not recognize they are bad voters. If so, one might object, how can they have a duty not to vote? They do... MORE
August 16, 2012
Behavioral Economics and Rationality
Bryan Caplan
Almost everyone thinks that Social Security is a great program. Why? Because they've been convinced by the kind of arguments Bastiat would mock. Arguments like:"Old people can't work anymore; government should give them money so they won't be poor.""If Social... MORE
August 15, 2012
Behavioral Economics and Rationality
Arnold Kling
Pascal Boyer writes, I am surprized, nay flabbergasted that there is no study of folk-economics in the social science literature. No-one (except Caplan and a few others) seems to study what makes people's economic modules tick. In psychology we have... MORE
Behavioral Economics and Rationality
Bryan Caplan
Thanks to everyone who responded to my query about Bastiat's "What Is Seen and What Is Not Seen." For me, his essay is the pinnacle of economic profundity. You can call it obvious. But when I first started learning economics... MORE
August 13, 2012
Behavioral Economics and Rationality
Bryan Caplan
Free-market economists almost always love Frederic Bastiat's classic essay, "What Is Seen and What Is Not Seen." But the central theme of the essay - opportunity cost - is hardly ideological. It seems like all economists, regardless of ideology, would... MORE
August 8, 2012
Behavioral Economics and Rationality
Bryan Caplan
All societies reward conformity. Yes, there's often a sweet niche for eccentric geniuses. But everyone else faces a stark trade-off: the more you want to succeed, the more you have to submit to social norms. On an emotional level, this... MORE
August 6, 2012
Behavioral Economics and Rationality
Bryan Caplan
Human beings suffer from status quo bias: When they face different default options, they make different choices. Offering "a burger and fries for $10, with $3 off without the fries" is economically equivalent to "a burger for $7, and fries... MORE
July 31, 2012
Behavioral Economics and Rationality
Bryan Caplan
During recessions, hourly pay for realtors and salesmen falls rapidly. Even if they're largely paid on commission, their unemployment still spikes. Doesn't this show that blaming unemployment on nominal wage rigidity is misguided?I think not. Labor markets for realtors and... MORE
July 30, 2012
Behavioral Economics and Rationality
Bryan Caplan
One of my great privileges is to have a mentor and critic as good as Bill Dickens. And truth be told, the best criticism of a project is early criticism. Here's my reaction to his initial critique of Poverty: Who... MORE
July 28, 2012
Behavioral Economics and Rationality
Bryan Caplan
The noble Bill Dickens responded on Facebook to my recent posts on poverty. Reprinted with his permission. My rejoinder is coming shortly.@Bryan Before you get too heavily into this new book, what happens in countries with more generous social welfare... MORE
July 27, 2012
Behavioral Economics and Rationality
Bryan Caplan
Justin Wolfers staunchly defends a view I've long been pushing: economists agree to a shocking extent. If you follow the economic policy debate in the popular press, you would be excused for missing one of our best-kept secrets: There's remarkable... MORE
July 26, 2012
Behavioral Economics and Rationality
Bryan Caplan
Why are the poor more likely to abuse drugs and alcohol? As a matter of dollars and cents, substance abuse should rise, not fall, with income. These habits are expensive, both directly and indirectly. Directly: Drugs and alcohol cost money. ... MORE
July 25, 2012
Behavioral Economics and Rationality
Bryan Caplan
Last week, Matt Yglesias had an extremely insightful critique of the view that unemployment remains high because "we are not as wealthy as we thought we were": It is both true that we are not as wealthy as we... MORE
July 24, 2012
Behavioral Economics and Rationality
Arnold Kling
Bryan writes, Was Capital One's sales pitch fraudulent in this sense? No; at minimum, they're missing element #3 (falsity). As commenter Thomas DeMeo pointed out, the actual allegation may differ from Bryan's hypothetical. consumers were: Misled about the benefits of... MORE
Behavioral Economics and Rationality
Bryan Caplan
I agree with Arnold's analysis of all three of his hypotheticals. But I doubt Capital One's sales pitch was analogous to:I tell you that a tree is about to fall on you, but if you give me all the money... MORE
Behavioral Economics and Rationality
Bryan Caplan
Measuring the cost-effectiveness of medical treatment seems unpopular - especially among conservatives. Why would this be? I have two stories - one fairly charitable, the other not so charitable.The charitable story. Many people - even people who strongly favor heavy... MORE
July 23, 2012
Behavioral Economics and Rationality
Bryan Caplan
Consider two contrasting arguments against a policy rationale:1. Your rationale could conceivably be abused for bad ends.2. Your rationale supports many policies you yourself oppose.Arnold seems to think that my religious objection to his consumer protection views (here, here, and... MORE
Behavioral Economics and Rationality
Arnold Kling
I view Bryan's criticism as somewhat rhetorical. I am getting a lot of similar comments. It is as if I were to praise the Internet and someone were to ask me about Josef Mengele and say: See what happens if... MORE
Political Economy
Arnold Kling
NPR lists policies that economists agree are good ideas but which are political non-starters. Basically, they want to replace the corporate income tax and the payroll tax with a consumption tax and a carbon tax. Let's stipulate that they are... MORE
July 21, 2012
Behavioral Economics and Rationality
Bryan Caplan
The world's competing faiths subscribe to mutually incompatible doctrines - including doctrines about how to avoid eternal suffering in the afterlife. One of these faiths could conceivably be true. But no more than one. If there are X incompatible views,... MORE
July 18, 2012
Books: Reviews and Suggested Readings
Arnold Kling
She is the author of The Charisma Myth, a self-help book that I am in the middle of reading. Before you buy it (and before you comment on this post), I recommend watching this video, evidently from a talk given... MORE
July 17, 2012
Behavioral Economics and Rationality
Bryan Caplan
Tyler and Arnold have written engaging retrospectives on their Ph.D. cohorts at Harvard and MIT. But I'd rather discuss the contributions of Arnold's classmate - and my undergraduate Econ 1 professor - William T. Dickens. Arnold's right to say:Bill Dickens... MORE
July 16, 2012
Behavioral Economics and Rationality
Arnold Kling
I thought that Why Our Elites Stink (I suspect Brooks winces at the headline the editors supplied) these people are brats; they have no sense that they are guardians for an institution the world depends on; they have no consciousness... MORE
Behavioral Economics and Rationality
Bryan Caplan
In a post that officially attacks "common sense," Scott Sumner shows that he possesses a great deal of it. Don't believe that nominal wage rigidity can explain continuing high unemployment?[W]age stickiness is a much bigger problem when inflation is low,... MORE
July 12, 2012
Behavioral Economics and Rationality
Arnold Kling
from Timothy Taylor. Behind Hornbeck's estimates seems to me a deeper pattern of human behavior. When confronted with difficulties, leaving to try somewhere else is hard, but do-able. Staying and continuing with the same behavior is unpleasant, but do-able. But... MORE
July 9, 2012
Behavioral Economics and Rationality
Bryan Caplan
Daniel Kahneman's view of the 2008 crash is eerily similar to my own:Many people now say they knew a financial crisis was coming, but they didn't really. After a crisis we tell ourselves we understand why it happened and maintain... MORE
June 17, 2012
Economic Philosophy
Bryan Caplan
Arnold doesn't share my conditional jubilation over Obama's semi-amnesty. Arnold's in blockquotes, my replies follow.Even if you want open borders, I am not sure that this is how you want your goals accomplished. I see no other politically possible way... MORE
June 11, 2012
Behavioral Economics and Rationality
Bryan Caplan
Gerald Prante of the Tax Foundation, author of the best dissertation I ever chaired, emailed me some interesting comments on means-testing. Reprinted with his permission:Saw your post with regards to means-testing Social Security and Medicare. Such a system would likely... MORE
June 9, 2012
Behavioral Economics and Rationality
Bryan Caplan
Why not means-test Social Security and Medicare? On the surface, this seems like a perfect liberaltarian reform. Libertarians should favor drastic cuts in government spending, liberals should favor drastic cuts in government spending on the rich, and both should favor... MORE
June 8, 2012
Economic Philosophy
Bryan Caplan
Thanks for many thoughtful comments on "If You Don't Like It." A few that particularly grabbed me:Tom P:I think we can give a friendlier interpretation to Roehling's terms. "Bargaining power": you spend many years working for a firm, developing human... MORE
June 4, 2012
Behavioral Economics and Rationality
Bryan Caplan
Thanks to EconLog readers, I've finally located some real empirics on what I call "firing aversion" (see here, here, and here). My favorite piece so far: "Cultural Influences on Employee Termination Decisions" (European Management Journal, 2001). The authors analyze a... MORE
May 31, 2012
Economics of Education
Bryan Caplan
Last night I heard Robert Lerman of American University make the case for apprenticeships as an alternative to standard academic education. He got considerable pushback from the audience. Some of the leading complaints: 1. Unlike standard academic education, which prepares... MORE
May 30, 2012
Behavioral Economics and Rationality
Bryan Caplan
I'm having trouble finding any pre-existing academic literature on firing aversion. Google Scholar has two hits for "firing aversion" and zero hits for "hirer's remorse." Anyone know of any relevant research under another name?P.S. Much oblige to kenneth and steve... MORE
May 25, 2012
Behavioral Economics and Rationality
Bryan Caplan
After watching Carlos - a dramatization of the life of notorious terrorist Carlos the Jackal - I had an epiphany. Carlos supposedly turns to terrorism because the wicked bourgeois imperialists don't understand any language but violent resistance. But the only... MORE
May 21, 2012
Behavioral Economics and Rationality
Bryan Caplan
Right-leaning people typically believe that (a) markets work, and (b) organic food is a scam. I definitely fit the profile. As a result, my every trip to the grocery store inspires cognitive dissonance. Organic food isn't merely on the shelves;... MORE
May 19, 2012
Books: Reviews and Suggested Readings
Bryan Caplan
Ethos (Credibility), or ethical appeal, means convincing by the character of the author. We tend to believe people whom we respect. One of the central problems of argumentation is to project an impression to the reader that you are someone... MORE
May 18, 2012
Behavioral Economics and Rationality
Bryan Caplan
People occasionally say that "Democracy and open borders are incompatible." If they're talking about national democracy, they're right. But suppose we actually lived up to the democratic "one man, one vote ideal" by having a world plebiscite on open borders. ... MORE
May 17, 2012
Cost-benefit Analysis
Bryan Caplan
Life is full of suffering. At least that's what the Buddha tells us - and if you're a glass-half-empty kind of person, you'll find endless confirmation. In a statist society, our response often seems to be, "If there's a problem,... MORE
May 11, 2012
Behavioral Economics and Rationality
Bryan Caplan
Scott Beaulier and I argue that behavioral economics explains a lot about poverty; indeed, the poor deviate from neoclassical assumptions to an unusually large degree. Consider, for example, the fact that the poor are far more likely to be single,... MORE
May 8, 2012
Behavioral Economics and Rationality
Arnold Kling
Or something like that. Justin Fox writes, We all like to think we can evaluate information and arguments rationally, regardless of where they come from. But we don't. As Yale Law School's Dan Kahan, who has studied this stuff a... MORE
April 28, 2012
Behavioral Economics and Rationality
Bryan Caplan
Thanks to the half dozen people who sent me copies of Cowen's "Does Technology Drive the Growth of Government?" The paper's even better than I remember. Highlights:The puzzle, courtesy of the great Tullock:I start with what Gordon Tullock (1994) has... MORE
April 26, 2012
Books: Reviews and Suggested Readings
Arnold Kling
In this long essay, I write I examine the problem of moral reasoning and offer three proposals for mitigating its damaging effects. The first is to take opposing points of view at face value, rather than attempt to analyze them... MORE
April 21, 2012
Books: Reviews and Suggested Readings
Arnold Kling
Concerning Paul Seabright's War of the Sexes, Tyler Cowen writes, Paul is a splendid writer and thinker, and of course this is a topic of importance. That is almost word-for-word Tyler's definition of self-recommending. A subset of self-recommending books are... MORE
April 18, 2012
Books: Reviews and Suggested Readings
Arnold Kling
Imagine: How Creativity Works, by Jonah Lehrer. The worst thing I can say about it is that it seems to promise too much. That is, it seems to suggest that neuroscience has made great strides in understanding creativity. More like... MORE
April 15, 2012
Behavioral Economics and Rationality
Arnold Kling
He wrote, Egalitarian/Communitarians, who are always eager to rein in what they regard as the unjust excesses of technological progress and commerce, see carbon rationing as an effective tool to achieve that goal. Not surprisingly, Hierarchical/Individualists are highly suspicious when... MORE
April 13, 2012
Behavioral Economics and Rationality
Bryan Caplan
In my defense of labels, I claimed that, "Will's implicit label is "label-avoidism." Adam Ozimek at Modeled Behavior explains the unique intellectual dangers of this label:[T]o define oneself as, for example, "of no party or clique", as Andrew Sullivan does,... MORE
April 11, 2012
Behavioral Economics and Rationality
Bryan Caplan
I never heard of John Derbyshire until a few days ago, but The Nation's inventory of his earlier controversies got my attention. The most interesting: The Nation accuses Derbyshire of "defending Mel Gibson's racist comments." A more accurate summary is... MORE
April 10, 2012
Behavioral Economics and Rationality
David Henderson
Commenter Ken B's positive comment on Tyler Cowen's TED talk motivated me to watch the whole thing. I agree that it's excellent. The talk is about 15 minutes long and moves along at a good pace. The basic message: don't... MORE
April 9, 2012
Behavioral Economics and Rationality
Bryan Caplan
I'm a libertarian, a natalist, an atheist, a credentialist, an economist, an optimist, a behavioral economist, an elitist, a public choicer, a dualist, a Szaszian, a moral realist, an anti-communist, a pacifist, a hereditarian, a Masonomist, a moral intuitionist, a... MORE
April 8, 2012
Behavioral Economics and Rationality
Arnold Kling
Will Wilkinson writes, It turns out politics not only makes us stupid. It also makes us callous. He cites a study showing that we are less likely to project our own feelings on those with whom we have political disagreements.... MORE
April 7, 2012
Economics of Education
Arnold Kling
The economists were asked about the statement The main drawback to allowing all public school students to take the government money (local, state, federal) currently being spent on their own education and turning that money into vouchers that they could... MORE
April 6, 2012
Behavioral Economics and Rationality
David Henderson
President Obama recently called a House Republican budget plan "thinly veiled social Darwinism." This, incidentally, from a man whose own budget plan was voted down last week in the House by a vote of 0-414. (The vote was on a... MORE
April 2, 2012
Behavioral Economics and Rationality
Arnold Kling
Jason Collins offers a reading list. I have read most of the books but few of the articles. I will want to pursue the articles.... MORE
March 31, 2012
Behavioral Economics and Rationality
Bryan Caplan
Thinking about being old and sick is no fun. It's tempting to simply refuse to ponder the unpleasant future. But notice: Whether people give into this temptation depends heavily on whether they're thinking personally or politically.Personally, almost everyone at least... MORE
March 28, 2012
Behavioral Economics and Rationality
Bryan Caplan
"Why haven't they been fired?" Lots of great, non-dogmatic answers in the comments. Everyone sees a lot of deadwood, though I'm puzzled by the repeated suggestion that "The next person might be worse." If that's the concern, why not just... MORE
March 26, 2012
Behavioral Economics and Rationality
Bryan Caplan
Three questions:1. What fraction of your co-workers are paid 125% or more of their true marginal product?2. What fraction of these overpaid/incompetent co-workers can you personally identify?3. Has the boss failed to fire these overpaid/incompetent workers because he doesn't know... MORE
Behavioral Economics and Rationality
Bryan Caplan
One of my rules of thumb is: "Human heterogeneity is bigger than you think." At Less Wrong, Yvain explains it better than I ever have. Lead-in:There was a debate, in the late 1800s, about whether "imagination" was simply a turn... MORE
March 20, 2012
Economic Philosophy
Bryan Caplan
Jonathan Haidt kindly let me read an earlier version of The Righteous Mind last June. Here are the comments I sent him. I haven't seen the final version, so perhaps he revised the book in response.Hey Jonathan, I finally finished... MORE
March 14, 2012
Behavioral Economics and Rationality
Bryan Caplan
Steve Sailer has a revealing comment on my Bubble post:Of course, if there were a big war, it would be nice to be defended by all those dreary Americans you despise. And, the irony is, they'd do it, too, just... MORE
March 12, 2012
Behavioral Economics and Rationality
Bryan Caplan
During Arnold's video conference on Coming Apart, Brink Lindsey pointed out the curious fact that Charles Murray wrote three different books about poverty, each with a different explanation.* Losing Ground says that the welfare state gives the poor perverse incentives. ... MORE
March 5, 2012
Behavioral Economics and Rationality
Bryan Caplan
Arnold writes:Think tanks, like universities, may be ripe for disintermediation. Although I think my writing for Cato helped my personal brand, I would rather be viewed as an independent scholar. I view scholars as personal brands, and I do not... MORE
February 21, 2012
Behavioral Economics and Rationality
Bryan Caplan
Arnold says:I challenge any supporter of the sticky-wage story (Bryan? Scott?) to write a 500-word essay explaining how this graph does not contradict their view. If employment fluctuations consisted of movements along an aggregate labor demand schedule, then employment should... MORE
Behavioral Economics and Rationality
Bryan Caplan
Did the financial crisis of 2008 refute capitalism once and for all? I was just on Al Jazeera to debate this question. My opponents - and, I suspect, my host - thought so. Obviously I disagreed about capitalism. But even... MORE
February 18, 2012
Behavioral Economics and Rationality
Bryan Caplan
Ben Bernanke was my teacher, and a major influence on my macroeconomic thinking. When he became Fed chairman, I expected the best of him. I was sorely disappointed. His behavior as Fed chairman seemed utterly disconnected from his lectures and... MORE
February 16, 2012
Behavioral Economics and Rationality
Bryan Caplan
Imagine the following scenario: Recipients of food stamps, unemployment insurance, Medicaid, and student loans suddenly start expressing daily heartfelt gratitude to the taxpayers who provide for them. The eager proponents of these programs stop angrily demanding more. Instead, they spend... MORE
February 14, 2012
Behavioral Economics and Rationality
Bryan Caplan
Krugman makes fascinating concessions to David Brooks:David says,I don't care how many factory jobs have been lost, it still doesn't make sense to drop out of high school.True enough. But suppose we apply the same logic to another problem, say... MORE
February 13, 2012
Behavioral Economics and Rationality
Bryan Caplan
When people complain about politics, they rarely focus on bad ideas, bad policies, or even bad situations. Instead, the typical complainer focuses on bad people. Every now and then, these bad people have proper names, like "Bush" or "Obama." But... MORE
February 7, 2012
Behavioral Economics and Rationality
David Henderson
But, say the critics, Iran is different. They have all those mad mullahs over there who don't care about life on earth and simply want to destroy -- fill in the blank -- Israel, the United States, or Israel and... MORE
February 5, 2012
Behavioral Economics and Rationality
David Henderson
Relax. That's my summary of an article by Pamela Druckerman in today's Wall Street Journal by an American woman who noticed that French kids tend not to be brats to the same degree that American kids are. It's more grist... MORE
Behavioral Economics and Rationality
Bryan Caplan
In fiction (and "reality" television), firing workers almost seems fun. How many times has Mr. Burns gleefully hissed, "Fire than man, Smithers!"? In the real world, though, bosses dislike being the bearer of bad news. They feel guilty when they... MORE
January 12, 2012
Behavioral Economics and Rationality
Bryan Caplan
People often estimate probabilities based on how easy it is to think of examples. Tons of examples pop into your head: High probability. Zero examples come to mind despite brow-furrowing: Low probability. This is known as the "availability heuristic." I've... MORE
January 10, 2012
Behavioral Economics and Rationality
Bryan Caplan
Here's another revelation from Kahneman's Thinking, Fast and Slow, from his chapter on "Answering an Easier Question." The lead-in:A remarkable aspect of your mental life is that you are rarely stumped. True, you occasionally face a question such as 17... MORE
January 9, 2012
Behavioral Economics and Rationality
Bryan Caplan
Critics of The Myth of the Rational Voter often attack it as psychologically implausible. (See especially Bennett and Friedman's critique in Critical Review). If, as I maintain, rationality responds to incentives, doesn't this mean that people make conscious decisions... MORE
December 29, 2011
Behavioral Economics and Rationality
Bryan Caplan
Wired has a nice piece on the psychiatric in-fighting behind the new Diagnostic and Statistical Manual of Mental Disorders. Highlights:1. The arbitrariness of psychiatric diagnoses:The authority of any doctor depends on their ability to name a patient's suffering. For patients... MORE
December 28, 2011
Behavioral Economics and Rationality
Bryan Caplan
People occasionally accuse my colleague Robin Hanson of extreme dogmatism. But they don't know him like I do. When I first met Robin Hanson, he earnestly believed that voters were rational and selfish. He rejected any model that violated these... MORE
December 15, 2011
Behavioral Economics and Rationality
Bryan Caplan
When Keynesians want to gloat, they often point to the overwhelming empirical evidence in favor of nominal wage rigidity. For the latest example, see Krugman on the Irish labor market. Their unemployment is 14.5%, but the nominal wage index has... MORE
December 8, 2011
Central Planning vs. Local Knowledge
Arnold Kling
My latest essay weaves together Daniel Kahneman and Jeffrey Friedman. Suppose you were to ask yourself how well you understand the world around you. How accurate is your map of reality? If you interrogate System Two, it might reply, "There... MORE
December 6, 2011
Books: Reviews and Suggested Readings
Bryan Caplan
I recently talked my sons into reading Orwell's Animal Farm as their bedtime story. [Warning: spoilers.] They loved it - my asides on the Soviet allegory included. Most of the book shows how the pigs twist the egalitarian animal revolution... MORE
November 27, 2011
Behavioral Economics and Rationality
Bryan Caplan
Robin Hanson recently discussed research finding that atheists are widely disliked because people see them as less trustworthy. He then posed a logical followup question: "So are atheists actually less trustworthy?" and offered a tentative answer: "I'd guess that they are, but... MORE
November 4, 2011
Behavioral Economics and Rationality
Arnold Kling
Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance. That is from Daniel Kahneman, Thinking Fast and Slow, p. 201. The chapter is called "The illusion of... MORE
November 1, 2011
Behavioral Economics and Rationality
Bryan Caplan
Right-wingers should spend a lot more time reading left-wing ethnography of the poor. It may seem strange, but when leftist social scientists actually talk to and observe the poor, they confirm the stereotypes of the harshest Victorian. Poverty isn't about... MORE
October 24, 2011
Behavioral Economics and Rationality
Arnold Kling
From the Harvard Business Review blog: Men were more confident across all age groups, with 70% of males having high or very high levels of self-confidence, compared to 50% of the women surveyed. Half of women managers admitted to feelings... MORE
October 22, 2011
Behavioral Economics and Rationality
Bryan Caplan
David made me think a second time about second-best immigration policy. My thoughts on his:1. I think Bryan drastically understates the ability of even fairly low-skilled workers to come up with a substantial five-figure admission fee. (I'm assuming the fee... MORE
October 21, 2011
Labor Mobility, Immigration, Outsourcing
Bryan Caplan
As a half-way measure, pro-immigration economists often argue in favor of charging immigrants an admission fee. It's better than not letting them in at all. But there are two big problems:1. Admission fees are especially hard on low-skill immigrants. Even... MORE
October 20, 2011
Behavioral Economics and Rationality
David Henderson
One of the deepest scars of my early youth was etched when my teacher told me, "You do not want that," after I had told her that I did. I would not have been so upset if she had said... MORE
Books: Reviews and Suggested Readings
Arnold Kling
The book is called Thinking, Fast and Slow and for me it is one of the best five books of the year. No, he is not attempting to break new ground. It is more like a summing up of his... MORE
October 18, 2011
Politics and Economics
Arnold Kling
From an article in the Chronicle of Higher Education. The process is what scholars of anarchism call "direct action." For example, instead of petitioning the government to build a well, members of a community might simply build it themselves. It... MORE
October 17, 2011
Behavioral Economics and Rationality
Bryan Caplan
Great hard-to-summarize post by Scott Sumner. Highlights:I'd like to make some observations about inequality. First as a person, then as an economist. These are based on 56 years of observing all kinds of people, in all sorts of different situations. [After... MORE
October 6, 2011
Behavioral Economics and Rationality
Arnold Kling
Robin Hanson writes, Now try to imagine a world where everyone actually tried to follow this advice. And notice that we have an awful lot of things that need doing which are unlikely to be anyone's dream job. So a... MORE
October 3, 2011
Behavioral Economics and Rationality
Arnold Kling
I have been reading Is There Anything Good About Men? by Roy Baumeister (co-author of the newer book, Willpower.). A few remarks here, with more below the fold. 1. If you are a zero-tolerance reader ("I stopped reading on page... MORE
September 28, 2011
Behavioral Economics and Rationality
Arnold Kling
Bruno S. Frey and Margit Osterloh give a number of reasons to question the effectiveness of performance-based compensation systems. One of the reasons should be familiar to readers of this blog. It would be naïve to assume that the persons... MORE
Behavioral Economics and Rationality
Bryan Caplan
Democracy is also a form of religion. It is the worship of jackals by jackasses. - MenckenAlmost everyone likes to make fun of politicians. But Don Boudreaux has an amazingly clear argument confirming that politicians deserve our derision. Consider, Don... MORE
September 26, 2011
Behavioral Economics and Rationality
Bryan Caplan
In my view, low conscientiousness is a major cause of poverty. Laziness and impulsiveness lead to low marginal productivity. Sooner or later the market notices and gives you your just deserts. A smug, self-satisfied view, I know, but I'm only... MORE
September 20, 2011
Behavioral Economics and Rationality
Bryan Caplan
From The Wealth of Nations, via Dan Klein:The laws concerning corn* may every-where be compared to the laws concerning religion. The people feel themselves so much interested in what relates either of their subsistence in this life, or to their... MORE
Behavioral Economics and Rationality
Arnold Kling
1. Mike Munger. The problem is that our last two Presidents, first GWB and now BHO, are freakishly overconfident even by the standards of human males. Neither is capable of imagining that anyone actually disagrees with them, unless the disagreer... MORE
September 15, 2011
Books: Reviews and Suggested Readings
Arnold Kling
That is the title of a new would-be hit pop-sci book by Roy F. Baumeister and John Tierney. I liked it better than Freakonomics, which is faint praise. It probably deserves more praise than that. Definitely worth reading, but then... MORE
September 9, 2011
Behavioral Economics and Rationality
Arnold Kling
A couple of readers have raised this issue. If news media are so biased, why does the market not correct this? My first thought is that there probably is no market for unbiased media. There is definitely a market for... MORE
September 8, 2011
Behavioral Economics and Rationality
Bryan Caplan
Two of the most popular complaints about immigrants:1. They take our jobs.2. They're all on welfare.There's a major tension between the two complaints: Are the immigrants stealing jobs, or loafing? Contradictions aside, though, you have to wonder: Which complaint do... MORE
September 3, 2011
Behavioral Economics and Rationality
Bryan Caplan
The original Pinnochio's take on medicine is amusingly Hansonian: One after another the doctors came, a Crow, and Owl, and a Talking Cricket. "I should like to know, signori," said the Fairy, turning to the three doctors gathered about Pinocchio's... MORE
September 1, 2011
Behavioral Economics and Rationality
Arnold Kling
Frances Woolley writes, Once you fall down the rabbit hole, you just have to keep on going. If people's choices are not a reliable guide to their well-being, you have to turn to something else. Ask people how happy they... MORE
August 31, 2011
Behavioral Economics and Rationality
Arnold Kling
Megan McArdle writes, What bias does--in science, in media, in any situation where information is gathered--is affect what questions you ask. McArdle suggests that you tend to be skeptical of findings that go against your point of view, but you... MORE
Behavioral Economics and Rationality
Bryan Caplan
Krugman:Think of the government budget as involving tradeoffs similar to those an individual household makes. On one side, there are all kinds of things the government could be doing, from dropping freedom bombs to providing children with dental care; think... MORE
August 23, 2011
Behavioral Economics and Rationality
Arnold Kling
David McRaney writes one of the most insightful paragraphs I have ever read. In a political debate you feel like the other side just doesn't get your point of view, and if they could only see things with your clarity,... MORE
Behavioral Economics and Rationality
Bryan Caplan
Nominal wages rarely fall - even when there's high unemployment. Part of the reason is regulation, of course. But even under laissez-faire, employers have to cope with human psychology. Almost all workers think that nominal wages cuts are unfair. And... MORE
August 22, 2011
Behavioral Economics and Rationality
Bryan Caplan
More golden advice from Douglas Detterman:[I]f you want people to learn something, teach it to them. Don't teach them something else and expect them to figure out what you really want them to do.From "The Case for the Prosecution: Transfer... MORE
August 19, 2011
Politics and Economics
Bryan Caplan
On Monday, Brad DeLong told us that two months in the Clinton administration convinced him that...America's best hope for sane technocratic governance required the elimination of the Republican Party from our political system as rapidly as possible.I'm tempted to say,... MORE
August 16, 2011
Behavioral Economics and Rationality
Bryan Caplan
If people envy people richer than themselves, I say we should fight envy, not inequality. A number of people have objected that "Envy is 'hard-wired.'" They're right - but it doesn't matter.Why not? Most, if not all, of our emotions... MORE
Behavioral Economics and Rationality
Bryan Caplan
From Noah Smith's review of my review of The Happiness Equation:Caplan's solution probably wouldn't work. Michael Lewis describes something like this in Liar's Poker, in which no one at his company ever mentions money, bonuses are kept secret, etc. The... MORE
August 15, 2011
Behavioral Economics and Rationality
Bryan Caplan
From my WSJ review of Nick Powdthavee's The Happiness Equation: Mr. Powdthavee deserves credit for concluding his book with some of the big questions: "Is happiness overrated?" "Should government force people to be happy?" But he neglects the many ways... MORE
August 8, 2011
Behavioral Economics and Rationality
Bryan Caplan
At this year's GenCon, I discovered a thought-provoking game: "Are You a Werewolf?" - a.k.a. "Mafia." The game's a brilliant exploration of cheating, cheater detection, and democratic information aggregation. The basic set-up:1. There are 15 players and a moderator. 2.... MORE
August 2, 2011
Labor Market
Bryan Caplan
Both nominal wages and nominal housing prices are what economists call "downwardly inflexible." In most markets, falling demand swiftly leads to falling prices, and surpluses don't last long. But in labor and housing markets, market adjustment to negative demand shocks... MORE
July 14, 2011
Behavioral Economics and Rationality
Bryan Caplan
My sons and I read some sad stories together. Most recently, we shared Maus, Art Spiegelman's transcendent graphic novel about how his father survived Holocaust. In the process, I've noticed something: My sons' preferred response to evil is always "fighting... MORE
Behavioral Economics and Rationality
Bryan Caplan
A question that came up at the Silver Diner after last night's debate:What fraction of police brutality could have been avoided if the victims has simply been respectful and submissive vis-a-vis the police?The question isn't intended to "blame the victim,"... MORE
July 13, 2011
Business Economics
Arnold Kling
At Cato Unbound, He writes, Finally, consider next the many functions and roles of managers, both public and private. By being personally impressive, and by being identified with attractive philosophical positions, leaders can inspire people to work for and affiliate... MORE
July 11, 2011
Books: Reviews and Suggested Readings
Arnold Kling
Uncharitable, by Dan Pallotta. Recommended by Amy Willis with regard to my discussion of nonprofits. So far (I am less than 1/4 through), the book says the following: 1. Organizations that seek to achieve charitable ends should be permitted to... MORE
July 9, 2011
Economics of Education
Bryan Caplan
I won't deny that there's a lot of interesting material in "Priceless: The Nonpecuniary Benefits of Schooling" (Oreopoulos and Salvanes 2011, Journal of Economics Perspectives). The theme, of course, is that the benefits of schooling go far beyond mere extra... MORE
July 8, 2011
Behavioral Economics and Rationality
Arnold Kling
David French writes, In this category are all the things you do when a person typically thinks of "fighting poverty." Serve in a soup kitchen. Donate canned goods. Sponsor a child. Fight for the right candidates and public policies. Volunteer... MORE
July 7, 2011
Behavioral Economics and Rationality
David Henderson
Automatic enrollment appears to be a win-lose approach to changing 401(k) savings behavior. The win aspect is that automatic enrollment dramatically increases 401(k) participation, with particularly large effects among the groups who would otherwise tend to have the lowest participation... MORE
June 24, 2011
Finance: stocks, options, etc.
Bryan Caplan
Here's the best Ezra Klein post ever. And here's the best sentence of the best Ezra Klein post ever:What's remarkable about the financial crisis isn't just how many people got it wrong, but how many people who got it wrong... MORE
June 21, 2011
Behavioral Economics and Rationality
Bryan Caplan
If your work has a tip jar, conventional wisdom tells you to "seed" it. Before your first customer shows up, put some of your own money in the jar. When the marginal person sees money in the jar, he'll feel... MORE
June 17, 2011
Behavioral Economics and Rationality
Bryan Caplan
Daniel Treisman's NBER paper on "The Geography of Fear" is full of entertaining facts, like:[P]redispositions to fear vary systematically across countries, and map the geography of fearfulness, concentrating on Europe for which data are most plentiful. I show that variation... MORE
May 30, 2011
Behavioral Economics and Rationality
Bryan Caplan
The gold standard of modern social science is the bona fide experiment, also known as a "random controlled trial." "The stuff going on at the Poverty Action Lab" is the modal answer to the standard GMU lunch question, "What's the... MORE
May 28, 2011
Behavioral Economics and Rationality
Bryan Caplan
Tim Harford's behavioral political economy from Adapt:Our instinctive response, when faced with a complicated challenge, is to look for a leader who will solve it. It wasn't just Obama: every president is elected after promising to change the way politics... MORE
May 13, 2011
Behavioral Economics and Rationality
Arnold Kling
says having a confirmation bias makes complete sense. When you're trying to convince someone, you don't want to find arguments for the other side, you want to find arguments for your side. And that's what the confirmation bias helps you... MORE
Family Economics
Bryan Caplan
My favorite parts from my Cato Unbound reply to Betsey Stevenson:2. My own research confirms Betsey's first key point: Higher-income and older parents have a smaller happiness deficit. And she is correct to claim that these are precisely the parents... MORE
May 1, 2011
Family Economics
Bryan Caplan
The media have run me ragged for the last two weeks. But I'm not complaining; it's a great experience, and I'm learning as I go. The single best point I've heard boils down to "nudge for kids." It goes something... MORE
April 28, 2011
Behavioral Economics and Rationality
Bryan Caplan
Here's a position even I consider too strong. But as poetry, it's hard to beat. From Henrik Ibsen's An Enemy of the People:The majority never has right on its side. Never, I say! That is one of these social lies... MORE
April 18, 2011
Behavioral Economics and Rationality
Bryan Caplan
The video from my 2007 debate with my lovable nemesis Donald Wittman is now up. P.S. If you enjoy it, thank Liya Palagashvili and the GMU Econ Society.... MORE
April 17, 2011
Behavioral Economics and Rationality
Bryan Caplan
Not very, unfortunately. Here's the WSJ on Heaney & Rojas:many antiwar Democrats saw the election of President Barack Obama as a sufficient victory for their cause and withdrew from the streets. The researchers conducted 5,398 surveys at 27 antiwar protests... MORE
April 14, 2011
Economic Philosophy
Bryan Caplan
While you're waiting for Jason Brennan's The Ethics of Voting to arrive in the mail, check out his new article in The Philosophical Quarterly. In the book, Brennan merely argues that uninformed and irrational voters should voluntarily abstain. In the... MORE
March 31, 2011
Behavioral Economics and Rationality
Bryan Caplan
At the most general level, Tyler's recent posts on what he calls the "Fallacy of Mood Affiliation" are excellent. Except... I know from lunch that he sees me as a great example of the Fallacy. When he speaks of...People who... MORE
Behavioral Economics and Rationality
Arnold Kling
If I were a card-carrying progressive, I would not stoop to being a lapdog for Wall Street and the real estate industry, playing the violin for "affordable housing" and low-down-payment mortgages. True, if somebody buys a house with little money... MORE
March 30, 2011
Labor Market
Arnold Kling
According to Gallup, American workers who are emotionally disconnected from their work and workplace -- known as "actively disengaged" workers -- rate their lives more poorly than do those who are unemployed. Forty-two percent of actively disengaged workers are thriving... MORE
March 24, 2011
Behavioral Economics and Rationality
Bryan Caplan
How many of you don't find the following passage from the NYT utterly bizarre?Admiral Hueber also said that the coalition was communicating with rebel forces. But later, when he was pressed on whether the United States was telling rebels not... MORE
March 15, 2011
Behavioral Economics and Rationality
David Henderson
On Facebook today, a friend posed the following question that he had heard in a sermon: Would you rather have $100K for your own use OR $1M to be given away (anonymously to a good cause with whom you have... MORE
March 11, 2011
Behavioral Economics and Rationality
Arnold Kling
He writes, computers still are not meta-rational. They do not understand what they do not understand very well But could one argue that Watson is Meta-rational, in that it assigns a probability to having the correct answer? Perhaps this feature... MORE
March 5, 2011
Behavioral Economics and Rationality
Bryan Caplan
By and large, I think news is a waste of time. If I want to increase my factual knowledge, I read history - or Wikipedia. News, I like to say, is the lie that something important happens every day. Most... MORE
March 2, 2011
Behavioral Economics and Rationality
Bryan Caplan
From Caplan-Crampton-Grove-Somin's new working paper:Earlier researchers have already identified some systematic biases that undermine retrospective voting. Voters myopically reward and punish politicians for recent economic performance. (Bartels 2010; Achen and Bartels 2008, 2004a) Partisanship heavily distorts voters' attributional judgments. (Marsh... MORE
March 1, 2011
Behavioral Economics and Rationality
Bryan Caplan
My co-authors and I finally have a working paper based on our 2008 survey of the general public and political scientists. Many thanks to all the EconLog readers who helped along the way. Here's the basic idea from the intro. ... MORE
February 28, 2011
Behavioral Economics and Rationality
Bryan Caplan
Negative reviews of Amy Chua's Battle Hymn of the Tiger Mother often begin by praising her earlier book, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability. I was inspired to read it - and... MORE
February 27, 2011
Behavioral Economics and Rationality
Bryan Caplan
Me being intentionally provocative on Twitter:The poor rarely understand the causes of poverty; if they did, they wouldn't stay poor for long.I'm aware of the obvious counter-examples, but the basic argument is simple: 1. Most people don't like being poor.2.... MORE
February 10, 2011
Behavioral Economics and Rationality
Bryan Caplan
From David Wessel's Honduran charter cities piece in the WSJ:"A good idea from an economic point of view," says Antonio Tavel Otero, a Honduran businessman. "But I don't think you can sell this: Telling Hondurans our laws are so bad... MORE
February 8, 2011
Behavioral Economics and Rationality
Bryan Caplan
"Behavioral Economics and Perverse Effects of the Welfare State," my 2007 Kyklos paper with Scott Beaulier, has been getting belated attention lately thanks to Karl Smith. Check out comments from Mike Konczal (Rortybomb), M.S. (the Economist), and James Kwak (Baseline... MORE
February 1, 2011
Microeconomics
Arnold Kling
This MIT symposium. In the first session, Jerry Hausman winds up talking about a paper he did on the demand for energy-efficient air conditioners. For what it's worth, I was the research assistant for that paper. He found that consumers... MORE
January 31, 2011
Behavioral Economics and Rationality
Arnold Kling
1. (no ungated version found) Kevin S. Milligan and David A. Wise on factors affecting labor force participation of the elderly, an important issue relative to Social Security. 2. Justine Hastings and Olivia S. Mitchell on how savings behavior and... MORE
January 20, 2011
Behavioral Economics and Rationality
Bryan Caplan
Question: Why is bias in the media so much more on our minds than bias in the schools? Both the media and schools are largely in left-wing hands - and the content reflects this fact. But consider the stark contrast... MORE
January 18, 2011
Behavioral Economics and Rationality
Bryan Caplan
Will immigrants from dysfunctional countries move to the West, become citizens, then vote to kill the goose that lays the golden eggs? I've addressed this common fear before - see here, here, and here for starters. But recently, I discussed... MORE
January 13, 2011
Behavioral Economics and Rationality
Bryan Caplan
David says I "overstate" the extent of human cowardice. If, per the title of his post, I claimed that people "always" avoid war, he'd be right. But these are my original words:Yes, the man in the street often says he's... MORE
January 12, 2011
Behavioral Economics and Rationality
Bryan Caplan
Here's a passage from the discussion section I'm writing for "Systematically Biased Beliefs About Political Influence": Normal 0 MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New... MORE
January 11, 2011
Behavioral Economics and Rationality
Bryan Caplan
Albert Jay Nock's classic essay "Peace the Aristocrat" begins promisingly: The peace advocates are notably disposed to rest their case with proving that war is irrational, illogical, horrible, and costly; and they appear to think it quite enough to do... MORE
December 30, 2010
Behavioral Economics and Rationality
Bryan Caplan
In an extended post on economics and mental illness, Tyler remarks: I disagree with Bryan Caplan's argument that mental illness is a false category; he is making an odd turn toward behaviorism. That the behavior can be reduced to preferences... MORE
December 29, 2010
Behavioral Economics and Rationality
Bryan Caplan
Several responses in the comments dispute my premise that the two issues conservatives are most passionate about are immigration and war. I'd be happy to be proven wrong, but it's hard to believe. The conservatives that I know can't stop... MORE
December 28, 2010
Behavioral Economics and Rationality
Bryan Caplan
Wilson and Brekke's justly famous article also contains an eye-opening survey of the empirics of "mental correction," better known at GMU as overcoming bias. While I'm sure the sub-field has advanced since 1994, it's amazing how much was already known at... MORE
December 27, 2010
Behavioral Economics and Rationality
Bryan Caplan
[Update: Link fixed.] The following discussion from Wilson and Brekke's "Mental Contamination and Mental Correction" was a revelation for me. I abhor unedited blockquoting, but this passage is so compactly informative it's hard to cut a word: As noted by... MORE
December 25, 2010
Behavioral Economics and Rationality
Bryan Caplan
It just occurred to me that there's a serious tension between two common psychological observations: 1. People are mentally stubborn, explaining the ubiquity of long-lasting disagreement. 2. People are easy to manipulate because they are extremely vulnerable to "mental contamination."... MORE
December 21, 2010
Behavioral Economics and Rationality
David Henderson
Here is the most succinct criticism I have heard of many of the public-policy views of those who embrace behavioral economics: Why in the world do behavioral economists who study our flaws and irrational quirks advocate centralized power in the... MORE
December 17, 2010
Behavioral Economics and Rationality
Bryan Caplan
"How can the author of The Myth of the Rational Voter favor open borders?" I've heard the question dozens of times. Once you admit that (a) democracy does what voters want, (b) voters irrationally oppose markets and liberty, (c) voters... MORE
December 15, 2010
Behavioral Economics and Rationality
Bryan Caplan
Here's the full text of "Is Profit Evil?" Enjoy.... MORE
Behavioral Economics and Rationality
Bryan Caplan
I just read a fascinating new working paper by Penn's Amit Bhattacharjee, Jason Dana, and Jonathan Baron (henceforth BDB). The title: "Is Profit Evil? Associations of Profit With Social Harm." The paper is not yet publicly available, but I have... MORE
December 11, 2010
Behavioral Economics and Rationality
Bryan Caplan
Like David and Robert Higgs, I'm a fan of Ralph Raico. Just one stand-out section of Raico's new book explains the evolution of Cobden's pacifist political economy. He began like an orthodox public choice economist, blaming special interests for wars... MORE
November 27, 2010
Behavioral Economics and Rationality
Bryan Caplan
The Wall St. Journal carefully summarizes our work on IQ and economic beliefs: The authors found that intelligence supplanted education as the primary predictor of whether one took an economist's typical point of view. Education moved into second place, followed... MORE
November 6, 2010
Behavioral Economics and Rationality
Bryan Caplan
Bloodlands documents the most horrifying single example of group-serving bias I've ever read. Fair warning: This is not for the faint of heart.In October 1941, Mahileu became the first substantial city in occupied Soviet Belarus where almost all Jews were... MORE
November 5, 2010
Behavioral Economics and Rationality
Arnold Kling
David points to an example in which Madeleine Albright is willing to see Iraqi children die, presumably because of American policy. That may be cruel, but it is not an example of the pathology that I was describing. What Angelo... MORE
November 4, 2010
Behavioral Economics and Rationality
Bryan Caplan
This view of democracy is less cheery than the romantic alternatives, and thus less appealing. Its skepticism raises a host of new questions. And it may impose an obligation on those who propound it to make normative sense of the... MORE
November 3, 2010
Behavioral Economics and Rationality
Bryan Caplan
I just finished V.O. Key's 1966 classic, The Responsible Electorate. It's a seminal work in the retrospective voting literature. Key tries to convince his fellow political scientists that democracy works well because the electorate rewards success and punishes failure. He's... MORE
November 1, 2010
Behavioral Economics and Rationality
Bryan Caplan
While I think we have a duty to believe what is true, it's possible for widespread errors to have good consequences. Attempting to murder someone doesn't cause your head to explode. But the world would be a better place if... MORE
October 28, 2010
Behavioral Economics and Rationality
Bryan Caplan
Michael Marsh and James Tilley's "The Attribution of Credit and Blame to Governments and Its Impact on Vote Choice" (British Journal of Political Science 2009) has two exceptionally compelling figures. The first is for Britain voters, the second for Irish... MORE
October 26, 2010
Behavioral Economics and Rationality
Arnold Kling
Matt Ridley discusses a paper that uses "behavioral economics" to assess regulators. The paper is by Slavisa Tasic, and I believe that it can be found here. Tasic writes, In the context of political economy, overconfidence takes the form of... MORE
October 17, 2010
Behavioral Economics and Rationality
Bryan Caplan
I just returned from a Liberty Fund conference on nationalism. The point I kept returning to: Even non-human primates have group identities. Chimps clearly identify with their small bands, showing in-group amity and out-group enmity. What's amazing about humans, however,... MORE
October 12, 2010
Income Distribution
Arnold Kling
If Greg Mankiw did not know that his latest column on the incentive effects (on Greg) of higher marginal tax rats would be ill-received, then he is somewhere along the autism spectrum. Tyler Cowen tries to return the discussion to... MORE
September 30, 2010
Political Economy
Arnold Kling
I think it is fair to say that my free-market views are more extreme than most. Non-economists do not appreciate how well markets work. Most other economists do not, in my opinion, appreciate how poorly government works. Naturally, I expend... MORE
September 14, 2010
Growth: Consequences
Bryan Caplan
I finally got around to reading Matt Ridley's The Rational Optimist. Highlights:1. Ehrlich's errors were worse than I realized:In March of that year India issued a postage stamp celebrating the wheat revolution. That was the very same year the environmentalist... MORE
August 31, 2010
Behavioral Economics and Rationality
Arnold Kling
James Lewis argues that fascism involves the political use of sadism to recruit millions of followers in a campaign of pleasurable punishment against a scapegoated person or group. I found the essay provocative, which is a term I apply when... MORE
August 30, 2010
Business Economics
Arnold Kling
They discuss motivation and incentives. Very enjoyable conversation. If anything, it is a little too fast-paced. One point is that people seek autonomy, mastery, and purpose. I think that is very true in people's avocations, or hobbies. I think, though,... MORE
August 23, 2010
Alternative Economics
Arnold Kling
Mike Gibson points to a sequence of posts by D.S. Wilson. They start here (with some broken links in the first paragaph--I needed to use Google to follow up on one of them), and proceeds rather slowly for my taste.... MORE
Finance: stocks, options, etc.
Arnold Kling
Anthropologist Lionel Tiger says, in general I think it's the case that females don't go for that kind of money because they don't want to. I have said on a number of occasions that if someone put me in charge... MORE
August 12, 2010
Behavioral Economics and Rationality
Bryan Caplan
Like Conan O'Brien, I don't tan in the sun; I burst into flames. The most painful moments in my life have been due to sunburn. I was burned so bad in 1981 that I didn't get another until 1994 -... MORE
August 8, 2010
Behavioral Economics and Rationality
Bryan Caplan
My casual observation of American politics suggests that national political mood follows a four-year cycle that syncs with the presidential electoral cycle. Here's how I see the cycle running:Election Year: StridentInauguration Year: HopefulSecond Year: DisappointedThird Year: Boredand then back to...Election... MORE
August 2, 2010
Behavioral Economics and Rationality
Arnold Kling
But Jonathan Haidt sounds like them. The answer, according to Mercier and Sperber, is that reasoning was not designed to pursue the truth. Reasoning was designed by evolution to help us win arguments. That's why they call it The Argumentative... MORE
Macroeconomics
Arnold Kling
The previous installment was here. The installment below covers behavioral economics. Recall that the ultimate approach in the Doubtbook will be to stitch together the history of macroeconomic thought with the history of macroeconomic episodes. The opening chapter looks at... MORE
July 22, 2010
Behavioral Economics and Rationality
Bryan Caplan
The Libertarian Missionary remarked:It's possible that immigrants will vote to destroy the system that attracted them, but unlikely. Immigrants come here because they prefer life here to life at home. It wouldn't take a marketing genius to win them over... MORE
July 19, 2010
Behavioral Economics and Rationality
David Henderson
In his post earlier today, Bryan writes: It's possible that immigrants will vote to destroy the system that attracted them, but unlikely. Immigrants come here because they prefer life here to life at home. It wouldn't take a marketing genius... MORE
July 15, 2010
Behavioral Economics and Rationality
Arnold Kling
The British Psychological Society blog reports, Among the most strong and intriguing correlations were: Neuroticism correlated with use of 'irony' and negatively correlated with 'invited'; Extraversion correlated with 'drinks' and negatively correlated with 'computer'; Openness correlated with 'ink'; Agreeableness with... MORE
July 2, 2010
Behavioral Economics and Rationality
Bryan Caplan
This piece in American Psychologist documents five weaknesses of the "hedonic treadmill" hypothesis:First, individuals' set points are not hedonically neutral. Second, people have different set points, which are partly dependent on their temperaments. Third, a single person may have multiple... MORE
June 29, 2010
Behavioral Economics and Rationality
Arnold Kling
He writes, It sees to me that while people do vary in conformity, this variation is less in how much folks care about others' evaluations, and more about which others they care about. "Conformists" tend to care about a common... MORE
June 25, 2010
Behavioral Economics and Rationality
Arnold Kling
Bruce Charlton writes, Libertarians are intrinsically and on principle cowardly and hedonistic loners who will not suffer privation, take risks or undergo personal suffering either for the good of the group or for transcendental goals (unless they subjectively, arbitrarily happen... MORE
June 22, 2010
Books: Reviews and Suggested Readings
Arnold Kling
Notwithstanding my disagreements with Paul Seabright on political economy, the revised edition of The Company of Strangersis one of the best economics books to come out so far this year. I strongly recommend it, particularly if you did not read... MORE
June 16, 2010
Behavioral Economics and Rationality
Bryan Caplan
The Atlantic's got an incredible profile of Paul Romer. The highlight is yet another example of how anti-foreign bias blocks paths to progress. Romer seemed close to getting two charter cities in Madagascar, then things went pear-shaped:Barely a year after... MORE
June 14, 2010
Behavioral Economics and Rationality
Bryan Caplan
Most libertarians and free-market economists are surprised when I tell them that more educated people are more libertarian and more pro-market than the general population. I think they're in the grip of two illusions:1. Sampling bias. Well-educated leftists cling to... MORE
June 13, 2010
Behavioral Economics and Rationality
Bryan Caplan
Arnold approvingly cites the new Buturovich-Klein study finding that people who went to college know less about economics than those who didn't. But if you read the original piece, the authors graciously distance themselves from this very conclusion!In commenting on... MORE
May 3, 2010
Behavioral Economics and Rationality
Arnold Kling
Russ Roberts interviews Nassim Taleb in a fast-paced discussion. They kick around a number of interesting ideas. One of them is that leverage is linked to overconfidence. When you believe you can predict the future, you borrow a lot. When... MORE
April 26, 2010
Behavioral Economics and Rationality
Bryan Caplan
Last week, Jeff Ely remarked:The underlying problem here is that California is simply a beautiful place to live. It's not just the climate, or the people, or the geography. It's that something floating around in the air that just makes... MORE
April 25, 2010
Behavioral Economics and Rationality
Bryan Caplan
To my sorrow, I missed my chance to meet Julian Simon. He lived just minutes away from me, but died during my first year at Mason. I don't think he would have won the Nobel Prize even if he lived... MORE
April 14, 2010
Behavioral Economics and Rationality
Bryan Caplan
The video of the 2008 Public Choice Society symposium on my book is now up on Youtube, courtesy of the noble Zac Gochenour. On the panel: me, Randy Holcombe, Geoff Brennan, Mike Munger, and Art Carden. Enjoy.... MORE
April 9, 2010
Behavioral Economics and Rationality
Bryan Caplan
In the comments, chipotle quotes my adage that "Non-profits are crazy," then fires back: Remind me, Dr. Caplan, precisely who your principal employer is and what their relation is to the profit motive?Surely, you could find a nice position at... MORE
Behavioral Economics and Rationality
Bryan Caplan
Robin's remarks on libertarian paternalism take me back to the great Balan-Hanson "Paternalistic Policy: Altruism or Arrogance?" debate. While I agreed with Robin's position, I found his arguments extremely frustrating. Why? Because Robin avoided specifics paternalisms (e.g. banning cocaine) in... MORE
Behavioral Economics and Rationality
Bryan Caplan
I'd like to thank David for pointing out my oversights on Nudge, and apologize to Sunstein and Thaler for failing to give credit where credit is due. I based my criticisms on shorter versions of their arguments, rather than the... MORE
April 8, 2010
Behavioral Economics and Rationality
David Henderson
Co-bloggers Arnold and Bryan have posted recently on their view that "libertarian paternalism" would be more attractive if its advocates pushed to replace existing paternalist policies with softer "nudging" paternalist policies. Scott Sumner has said something similar. But as I... MORE
April 7, 2010
Behavioral Economics and Rationality
Arnold Kling
Richard Thaler writes, we advocate policies that maintain people's freedom to choose at as low a cost as possible. My question is this: why is it that soft paternalism is always applied to areas where the nudgers want more government... MORE
March 28, 2010
Behavioral Economics and Rationality
Bryan Caplan
I'm a big fan of means-testing the welfare state, but many of my favorite people disagree. I've got a challenge for these hold-outs. Here goes:Right now we already means-test a lot of programs, such as Medicaid, food stamps, and housing... MORE
March 23, 2010
Behavioral Economics and Rationality
Bryan Caplan
I just came across another fine essay by Brink Lindsey. Highlight:First, partisanship undermines clear thinking. Second, it undermines moral integrity. In both cases, the root cause is the same: the conflation of friend and foe with right and wrong. Consider... MORE
March 17, 2010
Behavioral Economics and Rationality
Bryan Caplan
I was thrilled to publish "The Economics of Szasz" in Rationality and Society, and even more thrilled to win a Szasz Prize as a result. But I can't say the paper had much influence on the economics profession. I'm very... MORE
March 14, 2010
Growth: Consequences
Arnold Kling
Since Bryan is impressed with people who bet on their ideas, I thought I would remind folks about longbets, a site that encourages exactly that, focused on long-term predictions. For example, Kevin Kelly writes, The biggest driver of the shift... MORE
March 12, 2010
Behavioral Economics and Rationality
Bryan Caplan
For the past few years, social scientists have been arguing over the One True Measure of consumer welfare. Most economists still cling to the Demonstrated Preference Standard: If A buys X, then X makes A better off by definition. Psychologists... MORE
March 10, 2010
Behavioral Economics and Rationality
Bryan Caplan
Time/happiness diaries just got a lot easier: There's now a Track Your Happiness app for the iPhone. How does it work? Answer a few questions First we'll ask you some questions for statistical purposes. This will take about 10 minutes.... MORE
March 3, 2010
Behavioral Economics and Rationality
Arnold Kling
He speaks here. He raises a number of issues with self-reported happiness. An example he gives is someone moving to California because he thinks he will be happier there. If you ask him if he is happier in California, he... MORE
February 27, 2010
Energy, Environment, Resources
Bryan Caplan
Like me, Tyler Cowen often believes that people's beliefs are irrational and their motives are expressive. But unlike me, he doesn't think that low stakes are an important reason for these tendencies. In fact, he delights in the counter-intuitive view... MORE
February 23, 2010
Behavioral Economics and Rationality
Bryan Caplan
This may be Mankiw's career-topping one-liner: Maybe President Obama should instead follow in President Ford's footsteps and start wearing a WHINE button on his lapel, for Whip Healthcare Inflation Now, Egads! He adds, "Feckless would be one step better than counterproductive." ... MORE
February 19, 2010
Behavioral Economics and Rationality
Bryan Caplan
Last night in my graduate Public Choice class, Peter Twieg suggested that people have a fixed mental budget of fear to allocate. An implication, I suggested, is that non-terrorist fears would decline right after 9/11. Today I checked. At least... MORE
February 18, 2010
Behavioral Economics and Rationality
Arnold Kling
These are posts that I recommend, without providing excerpts. Robin Hanson offers an illustration of the theory that prestige-status is less threatening to people than dominance-status. So do people perceive the wealth of Bill Gates as conferring prestige-status (not so... MORE
February 8, 2010
Macroeconomics
Bryan Caplan
Sumner writes:I'm not convinced mood swings are as obvious as they might seem. I've argued that the stock market crash of 1929 was a rational response to the sudden awareness that we were rushing headlong into Depression. I wonder if... MORE
February 5, 2010
Behavioral Economics and Rationality
Bryan Caplan
When Tyler accused my critique of Eggers and O'Leary (E&O) of being "surprisingly meliorist," I felt a sudden need to check the definition of the word:me·lio·rism Pronunciation: \ˈmēl-yə-ˌri-zəm, ˈmē-lē-ə-\Function: noun Date: 1877 : the belief that the world tends to... MORE
February 3, 2010
Behavioral Economics and Rationality
Bryan Caplan
I just noticed this comment by philosopher Rod Long:As a wise man once said: when the price of irrationality is low, people buy more of it. My suggested corollary is that when the price of irrationality is difficult to determine,... MORE
Behavioral Economics and Rationality
Bryan Caplan
Scott Sumner eloquently stretches the limits of our empathy:[A]s you become better known, you don't seem to have any more influence than before. I used to wonder why Krugman always seemed to downplay his influence. He's got the best blogging... MORE
Behavioral Economics and Rationality
Bryan Caplan
James Buchanan often expresses admiration for Italian political thought - and, by extension, the wisdom of the Italian in the street. Why? Because they take it for granted that politics is a corrupt game, and that all the flowery talk... MORE
January 27, 2010
Behavioral Economics and Rationality
Bryan Caplan
Lenore Skenazy's Free-Range Kids has 58 5-star reviews on Amazon - and only one 1-star review. But Olga, the book's lone detractor, makes a striking argument: The real innumerates are not paranoid parents, but people like me and Skenazy who... MORE
January 26, 2010
Behavioral Economics and Rationality
Arnold Kling
A reader emails: I am low on agreeableness with people at my place of work...I am interested in knowing what you have learned about how to get along with co-workers and overcome low Agreeableness. I think that people who are... MORE
January 19, 2010
Books: Reviews and Suggested Readings
Arnold Kling
Their new book is called Identity Economics, and they think it's a pretty big deal.On p. 114: we can explain a large number of phenomena, including the nature of African-American poverty, the reasons why students drop out of school, the... MORE
January 4, 2010
Behavioral Economics and Rationality
David Henderson
This is not to say that people are "perfectly rational." "Perfect rationality" as a statement of human nature, as distinguished from a theoretical device, makes for evolutionary nonsense. Had hominids sought to achieve perfect rationality in their decisions, they would... MORE
January 2, 2010
Behavioral Economics and Rationality
Arnold Kling
Anthony Stevens and John Price wrote depression is an adaptive response to losing rank and conceiving of oneself as a loser. The adaptive function of the depression, according to rank theory, is to facilitate losing and to promote accommodation to... MORE
December 26, 2009
Behavioral Economics and Rationality
Arnold Kling
In Rand's study...There were more than two hundred grocer's cartons, each divided into sections and filled to the brim with colored stones Rand had collected and sorted. This is from Anne C. Heller's biography of Ayn Rand. Based on... MORE
Behavioral Economics and Rationality
Arnold Kling
from Razib: More often when you strip away adherence to theology you do not get atheism, you get animism. Ponder his whole post.... MORE
December 25, 2009
Behavioral Economics and Rationality
Arnold Kling
The New Republic has a list of successful progressive reforms that conservatives opposed. It focuses on quotes from conservatives that today look bad. My guess is that one could comb through the back issues of their magazine and find quotes... MORE
December 24, 2009
Behavioral Economics and Rationality
Arnold Kling
Time consistency is one of those terms that economists throw around, and it has come up several times recently on this blog. It might be worth defining/explaining. The situation arises when someone makes a commitment to take an action in... MORE
December 23, 2009
Behavioral Economics and Rationality
Bryan Caplan
The Self-Interested Voter Hypothesis (SIVH) is a poor predictor of political views in the modern U.S. In his interview in FP2P, Joel Mokyr claims that the SIVH has been a flop for centuries: My forthcoming book is called The Enlightened... MORE
December 14, 2009
Behavioral Economics and Rationality
Bryan Caplan
Now that Robin knows what philosophers think, he likes them more. I recently received a thoughtful email from Ph.D. philosophy student Matthew Skene that makes the opposite case. Here's the full message, reprinted with permission. My name is Matt Skene,... MORE
December 4, 2009
Behavioral Economics and Rationality
Arnold Kling
Bill Easterly and Laura Freschi point to a study showing that foreign aid increases happiness--for the donor countries. For the recipients, not so much. I have not read the study, but I doubt that I would find the research methods... MORE
December 3, 2009
Behavioral Economics and Rationality
Arnold Kling
the new genetics will reveal much less than hoped about how to cure disease, and much more than feared about human evolution and inequality, including genetic differences between classes, ethnicities and races. That is Geoffrey Miller, who you may... MORE
Behavioral Economics and Rationality
Bryan Caplan
Today the renowned political scientist Arthur Lupia visited GMU. His mission: Attack the quality of academic research on voter competence. His arguments changed my mind, but in the opposite of the intended direction. Given Lupia's intelligence, expertise, and effort, his... MORE
November 22, 2009
Macroeconomics
Arnold Kling
Robert Shiller writes, Consider this possibility: after all these months, people start to think it's time for the recession to end. The very thought begins to renew confidence, and some people start spending again -- in turn, generating visible signs... MORE
November 11, 2009
Behavioral Economics and Rationality
Bryan Caplan
In chapter 4 of Selfish Reasons to Have More Kids, I show that - objectively speaking - kids today are safer than ever. And I'm far from the first social scientist to point out the public's systematically biased beliefs about... MORE
November 6, 2009
Behavioral Economics and Rationality
Arnold Kling
Both feature Tyler Cowen. Here (or perhaps you should start here), he talks about stories. It is classic Tyler, playing cat and mouse games with your head. Basically, he is saying that stories have an advantage in that they serve... MORE
November 5, 2009
Behavioral Economics and Rationality
Bryan Caplan
I'm a firm believer that (a) all publicity is good publicity, (b) the more attention my memes get, the better - even if if I get no credit. And in the past, The New Yorker has done me nothing but... MORE
November 2, 2009
Growth: Consequences
Arnold Kling
Edge devotes its latest symposium to how humans will process information in the current era. Tyler Cowen's latest book speaks to that issue, but he is nowhere to be found on the symposium. Still, I believe that Nick Bilton does... MORE
October 30, 2009
Behavioral Economics and Rationality
Arnold Kling
What causes people to change their minds? On this blog, I have argued that people do not change their minds on ideological issues. I have argued that econometric regression results typically do not change people's minds. Why is that?... MORE
October 28, 2009
Behavioral Economics and Rationality
Arnold Kling
He writes, Humans overwhelmed by the social complexities of helping a bum nearby think they know enough about societies far away, so that ethics becomes the main concern there... Beware the easy confidence of advising worlds far from your knowledge... MORE
October 20, 2009
Behavioral Economics and Rationality
Bryan Caplan
In chapter 4 of Selfish Reasons to Have More Kids, I try to help parents overcome their pessimistic bias. Kids over the age of 1 have long been the safest people in our society, we're all much safer than we... MORE
October 19, 2009
Behavioral Economics and Rationality
Arnold Kling
A comment on my last post on political dispositions: The real reason people with high IQs lack common sense is neurological. You can't be cerebral without sacrificing cunning. It takes real live brain matter to support each. Unless you've got... MORE
October 18, 2009
Behavioral Economics and Rationality
Bryan Caplan
As a loss-leader for her new book against positive thinking, Barbara Ehrenreich is lashing out at Stevenson and Wolfers' work on declining female happiness. Wolfers responds here. Some remarkable features of the Ehrenreich-Wolfers exchange:1. Ehrenreich should be happy to learn... MORE
October 12, 2009
Behavioral Economics and Rationality
Arnold Kling
Eric Falkenstein watched the Youtube of the Caplan-Boettke debate on Austrian economics. Falkenstein concludes, What is needed is something constructive, something the Austrians, Post-Keynesians, or Taleb, have failed to do. Let me place this in the context of my introduction... MORE
October 10, 2009
Behavioral Economics and Rationality
Arnold Kling
Humans clearly attend closely to status, an important part of status is dominance, and a key way we show dominance is to tell others what to do. Whoever gets to tell someone else what to do is dominating, and... MORE
September 29, 2009
Behavioral Economics and Rationality
Arnold Kling
One of the themes in the second of my forthcoming books is that power is becoming concentrated while knowledge is becoming specialized. David Carr muses about how hard it is to know everything nowadays. In terms of what I call... MORE
Behavioral Economics and Rationality
Arnold Kling
FuturePundit on the finite supply of willpower.... MORE
September 16, 2009
Behavioral Economics and Rationality
Bryan Caplan
It almost sounds like Posner's jumping on the personality-and-economics bandwagon:Optimism is also a personality trait, and, as it happens, one essential to human progress. As I have argued elsewhere with reference to our current economic situation, what Keynes called "animal... MORE
September 15, 2009
Behavioral Economics and Rationality
Arnold Kling
My best guess is that most insurance is bought not to reduce risk but instead to signal prudence and caring. The first life insurance companies had a terrible time selling "bets on their death," and only succeded when they... MORE
September 13, 2009
Behavioral Economics and Rationality
Bryan Caplan
From his rebuttal to Krugman: Krugman is trying to say that a cabal of obvious crackpots bedazzled all of macroeconomics with the beauty of their mathematics, to the point of inducing policy paralysis. Alas, that won't stick. The sad fact... MORE
August 21, 2009
Behavioral Economics and Rationality
Arnold Kling
Matt Yglesias wonders why politicians are not more strongly motivated by higher ideals. Selling the public good down the river to bolster your re-election chances isn't like stealing a loaf of bread to feed your starving children. The welfare rolls... MORE
August 19, 2009
Behavioral Economics and Rationality
Arnold Kling
Robin Hanson pulls together various threads and concludes, So it seems the US has a finance and policy elite defined by college ties and related social connections, an elite with a strong sense that only people in their circle can... MORE
July 31, 2009
Behavioral Economics and Rationality
Bryan Caplan
Years ago, I thought about writing a piece called "Totalitarian Political Entrepreneurship." The premise: While guys like Lenin, Hitler, and Mao were hopelessly deluded about many things, their beliefs about how to win and hold power were probably correct. After... MORE
July 28, 2009
Behavioral Economics and Rationality
Bryan Caplan
Mankiw riddles Krugman this:Over the past eight years, Paul has tried to convince his readers that Republicans are stupid and venal. History suggests that Republicans will run the government about half the time. Does he really want to turn control... MORE
July 24, 2009
Behavioral Economics and Rationality
Bryan Caplan
In the thirties, governments had Four Year Plans. Today, they have Four Year from Now Plans - big policies that basically don't kick in until the next election. Waxman-Markey lets emissions grow normally until 2012. When I criticized the House's... MORE
July 12, 2009
Behavioral Economics and Rationality
Bryan Caplan
(Go here for the intro to this series on the realist theory of international relations). The behavior of individual voters is far from selfish. The main reason, I've often argued, is that voting against your objective self-interest is practically free,... MORE
July 6, 2009
Behavioral Economics and Rationality
Bryan Caplan
Is it just me, or does Larry Summers damn his boss with faint praise?"When I've heard him talk about economic issues--with the exception of NAFTA, where I just hope he doesn't believe what he says--he seems intelligent and serious. I... MORE
Economic Methods
Arnold Kling
Bryan writes, Suppose someone had the personality least favorable to economic conservatism: a 0 on Extraversion, 1 on Agreeableness, 0 on Conscientiousness, 0 on Stability, and 1 on Openness. According to the same regression referenced earlier, this person is expected... MORE
June 29, 2009
Behavioral Economics and Rationality
Bryan Caplan
A word to the wise: If you have a theory and want it to spread far and wide, call it "realism." Who could be against realism? Case in point: The so-called "realist" theory of international relations. According to this view,... MORE
June 28, 2009
Behavioral Economics and Rationality
Arnold Kling
From Scientific American: One group that does not value perceived losses differently than gains are individuals with autism, a disorder characterized by problems with social interaction. When tested, autistics often demonstrate strict logic when balancing gains and losses, but this... MORE
Behavioral Economics and Rationality
Bryan Caplan
The complete videocast of the AEI mini-conference on geoengineering is now up, including Scott Barrett's target speech, Thomas Schelling's comments, and my comments. Like Bart Simpson, I'm my own toughest critic, but I was pleased as punch with my extension... MORE
June 24, 2009
Behavioral Economics and Rationality
Bryan Caplan
Voters literally know less than zero about economic policy - we would have better policies if they just voted randomly. But people who believe in "retrospective voting models" often retort that voters' policy incompetence doesn't matter. They don't have to... MORE
June 19, 2009
Behavioral Economics and Rationality
Bryan Caplan
Remember the so-called "fundamental attribution error"? According to some psychologists and the economists who love them, we have a strong tendency to overestimate the importance of individual differences and underestimate the importance of circumstances. I've questioned its fundamentality and erroneousness... MORE
June 18, 2009
Behavioral Economics and Rationality
Arnold Kling
He writes, a boss who has known you for years may not promote you unless you get a better degree, even if that teaches you nothing useful for your job. He might not hire you without that degree, even if... MORE
Behavioral Economics and Rationality
Bryan Caplan
When Robin Hanson arrived at GMU ten years ago, he was a hard-line rational choice political economist. (See his job market paper). For every political phenomenon, he insisted on "a story without fools." Not anymore. After a couple years of... MORE
June 17, 2009
Behavioral Economics and Rationality
Bryan Caplan
My social intelligence is a lot higher than it used to be. I still wouldn't say that I'm "good with people." But in my youth, I was truly inept. In junior high, I had one real friend, and many overt... MORE
June 15, 2009
Behavioral Economics and Rationality
Arnold Kling
Bryan recently put up two interesting posts, one on personality, the other on econometrics. On personality, he points to some analysis saying that the correlation is higher between certain personality traits and life outcomes than it is between socioeconomic status... MORE
Behavioral Economics and Rationality
Bryan Caplan
From Time, of all places, comes this column by Joel Stein:It turns out that letting me vote on stuff is a bad idea, for much the same reason that giving me a credit card was a bad idea: I love... MORE
June 14, 2009
Behavioral Economics and Rationality
Bryan Caplan
I finally found the time to read "The Power of Personality: The Comparative Validity of Personality Traits, Socioeconomic Status, and Cognitive Ability for Predicting Important Life Outcomes." [new working link!] It's a meta-analysis, so you've really got to trust the... MORE
June 12, 2009
Behavioral Economics and Rationality
Bryan Caplan
Quoth David Neumark:The accumulated evidence undermines the case for minimum wages even in the best of times. I recognize that there is continuing debate about some of the effects of minimum wages, and that strong public support for higher minimums... MORE
June 3, 2009
Behavioral Economics and Rationality
Bryan Caplan
I've been arguing for years that non-economists suffer from pessimistic bias. They underestimate the recent past, present, and future performance of the economy. A new piece in the Journal of Economic Psychology is consistent with my thesis: When you ask... MORE
June 2, 2009
Behavioral Economics and Rationality
Bryan Caplan
From my chairman, Don Boudreaux:This afternoon you interviewed a pundit who claims to be "inspired" by the way that Bill and Hillary Clinton, having been so critical of Barack Obama during the presidential primary campaign, now work so agreeably with... MORE
May 29, 2009
Books: Reviews and Suggested Readings
Arnold Kling
A commenter recommended Daniel Nettle's book on Personality. It was a good recommendation. Various lines of evidence suggest that our interest in money--and the material goods it buys--is mainly as a marker of comparative social status. Some more notes and... MORE
May 27, 2009
Books: Reviews and Suggested Readings
Arnold Kling
He writes, many of the new-fangled types of intelligence that have become popular recently...boil down to general intelligence plus some combination of the Big Five personality traits. Social intelligence...seems rather well predicted by a combination of general intelligence and extraversion,... MORE
May 21, 2009
Books: Reviews and Suggested Readings
Arnold Kling
Geoffrey Miller writes, Many products are signals first and material objects second. I am only a little way past the introduction to Spent. Tyler has already read it. So has Robin. So far, Miller hasn't told me anything that Robin... MORE
May 14, 2009
Behavioral Economics and Rationality
Bryan Caplan
Politicians break their promises because voters don't rationally punish political promise-breaking. But why do politicians want to break their promises in the first place? What's the point of promising X, then backing out?The simplest answer is just that circumstances change... MORE
Books: Reviews and Suggested Readings
Arnold Kling
Rightly or wrongly, autistics are often seen as staking out their independence from the group and from group norms. They're seen as questioning the psychological power of the leaders and bullies and indicating that they do not, within their... MORE
May 11, 2009
Behavioral Economics and Rationality
Arnold Kling
Russell Hardin describes an economic theory of what people "know" (I keep wanting to substitute "believe" for "know"). we can explain bits of knowledge that a given person has as being substantially affected by the costs and benefits of obtaining... MORE
May 4, 2009
Behavioral Economics and Rationality
Bryan Caplan
Obama's already breaking his campaign promises. But you don't really need to read the news to know that, do you? Virtually all successful politicians break their promises.When you think about it, though, politicians' penchant for promise-breaking is puzzling. If making... MORE
April 26, 2009
Behavioral Economics and Rationality
Arnold Kling
I was on travel, including my health care debate in Vermont (Robert Kuttner was sick, and David Corn filled in). Now, I have galleys of two books to go over. One is something I wrote quite a while ago with... MORE
April 24, 2009
Behavioral Economics and Rationality
David Henderson
"I'll be miserable for five years as long as you make me wealthy." I've always been a fan of Richard Epstein's thinking. I hadn't known, however, that he had thoughts on the "happiness" literature. I learned a lot about much... MORE
Behavioral Economics and Rationality
Bryan Caplan
When I'm 89, I'll be grateful if I have a quarter of Szasz's insight and writing ability. Here's his latest - the fascinating tragedy of mathematician and AI pioneer Alan Turning:In 1951 Turing... confessed to his homosexual affair and was... MORE
April 23, 2009
Behavioral Economics and Rationality
Arnold Kling
Tyler Cowen finds research suggesting that the more highly you think of your morals, the less altruistic you are. I could think of so many things to say about this, and how it explains who gives to charity and who... MORE
April 13, 2009
Behavioral Economics and Rationality
Arnold Kling
In chapter one of his economics textbook Hidden Order, David Friedman writes, Economics is that way of understanding behavior that starts from the assumption that individuals have objectives and tend to choose the correct way to achieve them. ...For a... MORE
April 11, 2009
Behavioral Economics and Rationality
Arnold Kling
Don Boudreaux writes, progress necessarily involves freeing individuals from their status stations -- freeing persons from stations assigned by circumstances such as skin color, family name, genitalia, sexuality, nationality -- and thereby allowing individuals to determine as best as each... MORE
April 10, 2009
Behavioral Economics and Rationality
Bryan Caplan
I had a strange feeling reading the latest Cato Unbound. I find Patri Friedman completely convincing when he writes:Our brains have many specific adaptations tuned for the hunter-gatherer environment in which we evolved, which in some ways differs wildly from... MORE
March 20, 2009
Behavioral Economics and Rationality
Arnold Kling
In Be the Solution, Michael Strong writes (p. 66-69), Are altruists occupationally prone to anger? Well,, it turns out that they are, in fact, biologically inclined to be angry and punitive toward those who they perceive to be not being... MORE
March 19, 2009
Behavioral Economics and Rationality
Bryan Caplan
From Megan McArdle:Life is rather too short to spend it getting angry at remote strangers.To which I'd add: It's also too short to spend it getting angry at petty slights, not-so-remote strangers, friends, family...You might say, "Unfortunately, it's impossible not... MORE
March 18, 2009
Finance: stocks, options, etc.
Arnold Kling
On AIG, you might wish to read James Kwak. You should definitely read James Hamilton. But more shocking yet, at least if we measure these things in dollars and cents, is the amount of taxpayer funds that have gone to... MORE
March 11, 2009
Behavioral Economics and Rationality
Bryan Caplan
Changeling is another counter-example to my rule that true stories make bad movies. (spoilers ahead) It's a long, sad tale: A child gets abducted, the police say they've found him, the mother says "That's not my son!," the police say... MORE
March 10, 2009
Behavioral Economics and Rationality
Bryan Caplan
Eric Crampton was there with me on opening night for The Fellowship of the Ring. Now this former EconLog guest blogger is a professor in Middle Earth, a.k.a. New Zealand. And he's finally started his own blog, Offsetting Behavior, to... MORE
February 28, 2009
Behavioral Economics and Rationality
Arnold Kling
Only because I am too busy. Grant McCracken on whether restrained consumer spending will be temporary or permanent. Virginia Postrel on the same topic, based on discussions at the Kauffman Foundation Forum. It was great to see her looking so... MORE
Behavioral Economics and Rationality
David Henderson
In this radio interview, Scott Horton interviews me about various current economic issues including: the Obama budget, the Bush-Paulson-Bernanke bailout, why most of the Republicans in Congress have zero credibility in pushing for small government, the economics of imperialism, Adam... MORE
February 27, 2009
Behavioral Economics and Rationality
Arnold Kling
An article in Prospect: A company chairman is told a new project will increase profits but harm the environment. He says, "I don't care about harming the environment. Let's start the new project. I just want to make as much... MORE
February 24, 2009
Behavioral Economics and Rationality
Arnold Kling
Michael Brooks, writing in The New Scientist, says, Bering considers a belief in some form of life apart from that experienced in the body to be the default setting of the human brain. Education and experience teach us to override... MORE
February 19, 2009
Behavioral Economics and Rationality
Bryan Caplan
I officially nominate Greg Mankiw for an Emperor Has No Clothes Award. The Award (it's real!) normally goes to critics of religion. But politics is the premiere religion of the modern world - and where else can you find impious... MORE
Behavioral Economics and Rationality
Bryan Caplan
My co-author Scott Beaulier's now blogging and teaching a course about Atlas Shrugged. He always was lucky... except for that time that he accidentally decapitated himself during his first session of Dungeons and Dragons, but that's another story.Anyway, Scott's class... MORE
February 4, 2009
Behavioral Economics and Rationality
Arnold Kling
George A. Akerlof and Robert J. Shiller do not come to praise mainstream macroeconomics. Keynes' followers rooted out almost all of the animal spirits...that lay at the heart of his explanation for the Great Depression...They...minimized the intellectual distance between The... MORE
January 30, 2009
Behavioral Economics and Rationality
Bryan Caplan
I while back, I discussed some evidence that blaming people for your problems makes you feel worse about them:If and who you blame for bad events matters too. In one study, "[V]ictims of severe accidents who blamed themselves for the... MORE
Behavioral Economics and Rationality
Bryan Caplan
I've occasionally said that if unicorns don't exist, we can't have a real argument about what unicorns are like. But if that's right, how is Szaszian therapy possible? How can you practice psychotherapy if you don't believe in the existence... MORE
January 28, 2009
Behavioral Economics and Rationality
Bryan Caplan
The standard argument against voting for third parties is that "You're throwing your vote away." There's no point voting for someone who can't win.Now consider how this applies to Singapore, where even second parties have no real prospect of winning. ... MORE
January 21, 2009
Business Economics
Arnold Kling
President Obama comes across to me as the Master of the Mixed Signal. It seems unclear how he will set priorities or where he stands on several key issues. I think this goes beyond a calculated effort to try to... MORE
January 14, 2009
Behavioral Economics and Rationality
Bryan Caplan
From Kahneman et al's "Would You Be Happier If You Were Richer?":Strack and colleagues reported an experiment in which students were asked: (i) "How happy are you with your life in general?" and (ii) "How many dates did you have... MORE
January 8, 2009
Behavioral Economics and Rationality
Arnold Kling
Not very well, according to Tyler Cowen. The more we feel out of control, the more our brains imagine patterns that don't really exist. ...Studies show that if people contemplate and reaffirm their most important values, such as honesty and... MORE
Behavioral Economics and Rationality
David Henderson
Joe Nocera has a nice piece on risk management in last Sunday's New York Times magazine. A great line: "The old adage, 'garbage in, garbage out' certainly applies," Groz said. "When you realize that VaR is using tame historical data... MORE
January 6, 2009
Behavioral Economics and Rationality
Bryan Caplan
Here's the latest paper on the puzzle of female protectionism - "Why are Women More Protectionist than Men?" by Eugene Beaulieu and Michael Napier. (For earlier work, see here and here). And here's Beaulieu and Napier's extremely frustrating closing paragraph:Although... MORE
December 26, 2008
Behavioral Economics and Rationality
Arnold Kling
Stephen Greenspan, a psychiatrist who lost money in the Bernard Madoff scam, writes, Gullibility is a sub-type of foolish action, which might be termed "induced-social." It is induced because it always occurs in the presence of pressure or deception by... MORE
December 22, 2008
Behavioral Economics and Rationality
Bryan Caplan
Schools usually try to put twins in different classes. In part, it's for the convenience of the teacher - identical twins can be hard to tell apart. But the main rationale is that if you separate twins, they will make... MORE
December 17, 2008
Behavioral Economics and Rationality
Bryan Caplan
Since 9/11, you've heard it a thousand times: "If you want peace, prepare for war." My question: What about your enemies? If they want peace, should they prepare for war, too?Yes, it's a trick question. Who's going to say, "If... MORE
November 29, 2008
Behavioral Economics and Rationality
Bryan Caplan
I don't know Gary Becker's stand on happiness research, but he clearly thinks that his fellow economists overlook the importance of unhappiness:Economists have underplayed the cost to individuals of mild to severe recessions in part because they have neglected the... MORE
November 14, 2008
Behavioral Economics and Rationality
Bryan Caplan
And here's a scene about the rationality of charitable donors, inspired in part by Landsburg's "giving your all" theorem: d. Charitable GivingBennett and DiLorenzo (1994) argue that due to donors' rational ignorance, the market for charitable giving works poorly. But... MORE
Behavioral Economics and Rationality
Bryan Caplan
The earliest draft of "Rational Ignorance vs. Rational Irrationality," (2001. Kyklos 54, pp. 3-26) was unpublishably long. Here's one of my favorite "deleted scenes": e. JuriesAnglo-American rules of evidence [almost] explicitly assume that jurors are not rational. Judges weigh information's... MORE
November 12, 2008
Behavioral Economics and Rationality
Bryan Caplan
When a Nazi announces that he's had a change of heart, I just don't believe him. Take the infamous David Duke. In his youth, he wore a swastika. Now he has a book that's subtitled a "path to racial understanding." ... MORE
November 7, 2008
Behavioral Economics and Rationality
Bryan Caplan
Paul Krugman says that the American people just ended 14 years of monster rule. If he's right, though, what does that say about the rationality of the American people? I don't see how those who agree with Krugman could draw... MORE
Behavioral Economics and Rationality
Bryan Caplan
Inspired by Pascal Boyer's latest piece in Nature, Robin Hanson reminds us that he's a preacher's son:We feel a deep pleasure from realizing that we believe something in common with our friends, and different from most people. We feel an... MORE
November 6, 2008
Behavioral Economics and Rationality
Bryan Caplan
A few weeks ago, Larry Bartels presented a new paper here arguing that governments around the world spend less than their citizens want. Most of his evidence comes from the international ISSP survey, which asks:Listed below are various areas of... MORE
November 5, 2008
Behavioral Economics and Rationality
Bryan Caplan
The financial crisis was a huge hit for practically everyone. Even if you owned no stock - directly or indirectly - you're still on the hook for the bailout. When the price of gas spiked, in contrast, the typical American... MORE
November 4, 2008
Behavioral Economics and Rationality
Arnold Kling
Will Wilkinson writes, I'm not voting today, but that's simply because I didn't change my registration when I moved. That's no excuse! Right in front of me in line was a man who was illiterate, spoke no English, and was... MORE
October 30, 2008
Behavioral Economics and Rationality
Arnold Kling
I recommend this lecture from Bill Bishop. By the way, I am finding an incredible amount of interesting videos these days. I think that somebody who is motivated to learn and has some good sources of recommendations could get do... MORE
October 29, 2008
Behavioral Economics and Rationality
Bryan Caplan
Brad DeLong sounds like he advocates ostracizing Douglas Holtz-Eakin for (a) working for McCain and (b) calling Obama a "redistributionist." At least that's how I read Brad's approving quotation of an unnamed source saying:Someone needs to tell Holtz-Eakin he can't... MORE
Behavioral Economics and Rationality
Bryan Caplan
The parody of John Stossel "Should Some People Not Vote?" has five times the Youtube count as the original. Why am I not surprised?P.S. I wish I was as persuasive as the guy who's supposed to be me...... MORE
October 28, 2008
Behavioral Economics and Rationality
Bryan Caplan
A standard complaint about libertarians is that they want to commodify the sacred. I've often heard, for example, that selling organs is just plain wrong. Money has no place here (unless "here" is Iran); the only legitimate motive for an... MORE
October 26, 2008
Behavioral Economics and Rationality
Bryan Caplan
According to IQ tests, we're getting smarter. But when I was reading Warren Harding's "Return to Normalcy" speech, it seemed way over the heads of a modern audience. The anomaly inspired me to plug Harding's words into an online grade... MORE
October 25, 2008
Behavioral Economics and Rationality
Bryan Caplan
Unemployment is 6.1%, and we're running around like chickens with our heads cut off. It makes me wonder: What were recessions like during the Cold War? Back in those bad old days, the Worst Case Scenario was truly grim. With... MORE
October 21, 2008
Behavioral Economics and Rationality
Bryan Caplan
Here's an eyebrow-furrowing 1-star review of an anti-Obama book I haven't read. I guess the reviewer is serious, but you tell me:There will always be skeptics and nonbelievers. In "The Obama Nation," Dr. Corsi makes clear he is no believer... MORE
Behavioral Economics and Rationality
Bryan Caplan
What's the best way to scare a kid? You wouldn't just put on an ugly mask and chase him. He might think it was a big joke and start laughing. To be confident of a successful scare, you'd lay some... MORE
October 17, 2008
Behavioral Economics and Rationality
Bryan Caplan
Why did so many people ignore so many warnings of impending economic crisis? Gary Becker's got a nice story: We're usually right to ignore such warnings:While Roubini and others who warned about weaknesses in the mortgage market and other parts... MORE
October 13, 2008
Behavioral Economics and Rationality
Bryan Caplan
Robin Hanson tells us that politics isn't about policy. I think he exaggerates, but in the interest of fair disclosure, here's an amusing Howard Stern clip to back Robin up.HT: Mark Steckbeck... MORE
October 12, 2008
Behavioral Economics and Rationality
Bryan Caplan
Last week was the most plausible example of a psychologically-driven financial panic that I've ever lived through. I have to think that most of the people who sold did so because they were scared by falling prices. Falling prices, in... MORE
October 10, 2008
Behavioral Economics and Rationality
Bryan Caplan
Here's a great question from Chuck in the comments:Do you have a reply to those who might say that the rationality of voters is largely irrelevant since election outcomes can be predicted by macro factors like income and GDP growth?Yes,... MORE
Behavioral Economics and Rationality
Bryan Caplan
My 20/20 segment - or at least part of it - is already up on Youtube. The title: "Should Some People Not Vote." It would have been nice to get more airtime, but it's an honor just meeting Stossel and... MORE
October 2, 2008
Behavioral Economics and Rationality
Bryan Caplan
Here's another section that didn't make it into the final draft of my book:Mutual cancellation of errors does happen on occasion. Beliefs about inflation are my favorite example. Most economists who tally the costs of inflation conclude that - at... MORE
September 29, 2008
Behavioral Economics and Rationality
Bryan Caplan
I was on CTV this morning. As usual, the media wanted to talk about a few obscure paragraphs in my book where I suggest that we reconsider franchise restrictions. A year ago, I might have been scared to say this... MORE
Behavioral Economics and Rationality
Bryan Caplan
"Gov. Palin is merely less skilled in passing off inanities and claptrap as profundities." Ouch! I'm glad the poison pen who said it likes me.... MORE
September 21, 2008
Behavioral Economics and Rationality
Bryan Caplan
Googling "bail-out rich" basically kicks back a bunch of libertarians. Where are the left-wing demagogues denouncing the bail-outs as "welfare for the rich"? Where are the right-wing demagogues denouncing the bail-outs as "foreign aid for the rich"? Whatever demagogues are... MORE
Behavioral Economics and Rationality
Bryan Caplan
Recent events remind me of Cowen and Sutter's 1998's article on "Why Only Nixon Could Go to China." From the abstract: "Right-wing politicians sometimes can implement policies that left-wing politicians cannot, and vice versa. Contemporary wisdom has it that 'only... MORE
September 17, 2008
Behavioral Economics and Rationality
Bryan Caplan
From Shenkman, Just How Stupid Are We?:The economist and liberal columnist Paul Krugman is convinced that the dawn of a new liberal era is upon us. If it is, one can be certain that liberals will stop complaining about the... MORE
September 14, 2008
Behavioral Economics and Rationality
Arnold Kling
Razib has the story. I do want to note the correlations between Openness and the following metrics on the state level: % Arts and entertainment = 0.23 % Computer and mathematical = 0.24 Patent production per capita = 0.28 Of... MORE
September 13, 2008
Behavioral Economics and Rationality
Arnold Kling
David Brooks is not up to them. Shock me, shock me.... MORE
September 11, 2008
Behavioral Economics and Rationality
Bryan Caplan
I'm currently writing replies to eight critiques of my book for a forthcoming issue of Critical Review. In Jon Elster and Helene Landemore's critique, they raise the self-referential objection: Doesn't your book's thesis apply to you? This reminded me that... MORE
Behavioral Economics and Rationality
Bryan Caplan
Yesterday, I was on Canada's CBC Radio's "The Current." Today, I'm at #132 on amazon.ca. In part, I gave my standard spiel about irrational voters. But they also gave me a chance to make an original point. In the podcast,... MORE
September 8, 2008
Behavioral Economics and Rationality
Bryan Caplan
I think that people are a lot more rational (and better-informed) as consumers than they are as voters. Other people disagree. Pointing to existing surveys isn't a very helpful way to resolve this debate: If people get 70% on a... MORE
September 7, 2008
Behavioral Economics and Rationality
Bryan Caplan
A little while back, Greg Mankiw praised Peggy Noonan for "summarizing a key difference between the political parties." As Noonan puts it:Neither party ever gets it quite right, the balance between the taxed and the needy, the suffering of one... MORE
September 2, 2008
Behavioral Economics and Rationality
Bryan Caplan
My wunderkind colleague (and former student) Pete Leeson kicks off his first day at Freakonomics with reflections on the Bigfoot/UFO correlation:States with more U.F.O. sightings also have more Bigfoot sightings. In fact, six of the top ten U.F.O. and Bigfoot... MORE
August 29, 2008
Behavioral Economics and Rationality
Bryan Caplan
Economists and the public systematically disagree; but can they at least agree about which problems are bigger than others? To check, I returned to the Survey of Americans and Economists on the Economy. (Yes, I do talk about this survey... MORE
August 27, 2008
Behavioral Economics and Rationality
Arnold Kling
Concerning campaign smears, Sam Wang and Sandra Aamodt write, Journalists should avoid presenting both sides of a story when one is false - and take into account how readers' brains process the disagreements. The following four rules can guide their... MORE
August 22, 2008
Behavioral Economics and Rationality
Bryan Caplan
Happiness researchers often advise us to follow the Epicurean strategy of lowering our expectations. To quote Tsunami Bomb:Be grateful that you have a brain for thinking, And legs to take you places.But suppose your problem is that you're overweight because... MORE
August 21, 2008
Behavioral Economics and Rationality
Bryan Caplan
I was surprised to hear Arnold say:The way to make yourself really miserable is to compare your salary to that of the most overpaid, incompetent peer or superior. The way to make yourself feel really good is to compare your... MORE
August 11, 2008
Behavioral Economics and Rationality
Bryan Caplan
Here's an especially wise observation by David Balan:So then I asked him whether by "no evidence" he meant that there have been lots of studies directly on this point which came back with the result that more chemo doesn't help,... MORE
August 4, 2008
Behavioral Economics and Rationality
Arnold Kling
He suggests that there are no limits to growth. In a special issue of the American Economic Review about thirty years ago, some physical chemists wrote that once the energy problem is solved, nothing is scarce. If material X is... MORE
Behavioral Economics and Rationality
Bryan Caplan
Two of my best book presentations are now online. Here's a serious, scholarly version (video) at the Collège de France. Here's a funny, popular version (audio only) at the Foundation for Economic Education. Or at least the first is what... MORE
July 28, 2008
Behavioral Economics and Rationality
Bryan Caplan
Here's my favorite paragraph in the first half of the new Global Catastrophic Risks:...I have personally observed what look like harmful modes of thinking specific to existential risks. The Spanish flu of 1918 killed 25-50 million people. World War II... MORE
July 20, 2008
Behavioral Economics and Rationality
Bryan Caplan
Suppose a random person is living on a desert island without hope of rescue. Call him the Initial Inhabitant, or I.I. Another random person unexpectedly washes up on shore, coughing up water. Call him the New Arrival, or N.A. While... MORE
July 16, 2008
Books: Reviews and Suggested Readings
Arnold Kling
Bruno Frey writes, procedural utility has also been found to play a role in consumers' decisions. The first evidence of this was presented by Kahneman, et al., who investigated customers' reactions to a situation where the price of a good... MORE
July 15, 2008
Behavioral Economics and Rationality
Arnold Kling
In Happiness: A Revolution in Economics, Bruno S. Frey writes (p. 30) Human beings are unable and unwilling to make absolute judgments. Rather, they constantly draw comparisons from their environment, from the past, or from their expectations of the future.... MORE
Behavioral Economics and Rationality
Bryan Caplan
Andrew Healy, my favorite new empirical political economist, has written a bold new paper. You might have thought that disasters were "acts of God," but Healy argues that the American voter is a co-conspirator. From the abstract:Using comprehensive data on... MORE
July 14, 2008
Behavioral Economics and Rationality
Bryan Caplan
When we see people making bad decisions - whether as consumers or voters - we often blame the "complexity" of the issues they face. If Ph.D. economists can't figure out the best mortgage to use, how can we expect the... MORE
Behavioral Economics and Rationality
Bryan Caplan
Am I misinterpeting the case for humility? Maybe the point of humility isn't better communication, but better understanding. It's hard to learn if you think you already know everything. This sounds good. But if your goal is better understanding, your... MORE
Behavioral Economics and Rationality
Bryan Caplan
My week at the IHS seminar in Chicago returned a long-lived libertarian meme to my field of vision. The meme: Humility. If libertarians want to communicate with a broader audience, we've got to stop being so full of ourselves. So... MORE
July 12, 2008
Behavioral Economics and Rationality
Bryan Caplan
Strange as it sounds, firms often give stuff away. Sometimes the reason is that the good is so cheap that it's not worth charging charging for it. See: water at restaurants. Other times, though, firms give stuff away to appease... MORE
July 7, 2008
Behavioral Economics and Rationality
Arnold Kling
Will Wilkinson and Robin Hanson have at it. When Tyler Cowen says "self-recommending," does that mean he recommends it without watching it? Anyway, a few issues. 1. Hanson says that people have a propensity to disagree, just to be contrary.... MORE
July 2, 2008
Behavioral Economics and Rationality
Arnold Kling
Peter Orszag recommends a talk by David Brooks at the Aspen Ideas Festival. The web site for the conference says that full video will be available, but for now there are only short clips. Go here and look for the... MORE
June 30, 2008
Behavioral Economics and Rationality
Bryan Caplan
I was in a bad equilibrium last night. I felt a little agitated when I went to bed, which made it a little hard to fall asleep, which made me more agitated, and which made it even harder to sleep...... MORE
June 28, 2008
Behavioral Economics and Rationality
Bryan Caplan
Drew Westen's The Political Brain is largely a how-to manual for inspiring political emotions. But to be honest, the main emotion is inspired in me was disgust. Here's the passage to which I had the strongest reaction:[T]he Kerry campaign simply... MORE
June 27, 2008
Behavioral Economics and Rationality
Bryan Caplan
"Nothing is more irrational than spending our lives trying to fend off mortality when no one has ever escaped that fate." (Westen, The Political Brain) You could just as easily say, "Nothing is more irrational than going to the movies... MORE
Behavioral Economics and Rationality
Bryan Caplan
How often have you heard the old saying, "If you're not a liberal at 20, you have no heart; if you're still a liberal at 30, you have no brain"? Right or wrong, Drew Westen's The Political Brain gives me... MORE
Behavioral Economics and Rationality
Arnold Kling
Reviewing Bruno Frey's latest book, Alan Wolfe writes, Frey proposes what he calls "positive Constitutional economics." ...Federalism would be strengthened by decentralizing power, not to the states but to an entirely new political element that would have limited and defined... MORE
June 24, 2008
Behavioral Economics and Rationality
Bryan Caplan
Here's another great book review by Herbert Gintis. The book: Dan Ariely's Predictably Irrational. Its biggest flaw:Ariely is a creative experimenter with zero capacity to deal with economic theory. By accepting the behavioral paradigm ("people are not logical, they are... MORE
June 20, 2008
Behavioral Economics and Rationality
Bryan Caplan
Remember the famous study showing that women hate taking care of their kids? The standard soundbyte is that childcare is barely more enjoyable than housework. Here's Will Wilkinson* favorably quoting Arthur Brooks, who cites the original study in Science by... MORE
June 8, 2008
Behavioral Economics and Rationality
Bryan Caplan
It's pretty hard to find an economist who doesn't scoff at the Senate's latest hearings on oil price manipulation. But these hearings raise an awkward question for me: Since I've praised the gas tax cut (in print and on t.v.)... MORE
June 5, 2008
Behavioral Economics and Rationality
Bryan Caplan
Robin Hanson has written the one piece that everyone on earth should read before they post comments on a blog:Writing is hard in part because words have many associations that vary among readers. Even when we use carefully choose our... MORE
June 3, 2008
Behavioral Economics and Rationality
Bryan Caplan
Arthur Brooks says that political extremists are happier than moderates. While he tells an interesting story, this seems like a case where overall life evaluations might yield a very different answer than time diaries or beeper studies. Consider this striking... MORE
May 31, 2008
Behavioral Economics and Rationality
Bryan Caplan
How would people's preferences change if they knew more? Political scientists usually attack this question using the so-called "Enlightened Preference" method. (See Scott Althaus' Collective Preferences in Democratic Politics for a fantastic survey of this large literature). The gist of... MORE
May 28, 2008
Behavioral Economics and Rationality
Arnold Kling
David Boaz writes, Messrs. Obama and McCain are telling us Americans that our normal lives are not good enough, that pursuing our own happiness is "self-indulgence," that building a business is "chasing after our money culture," that working to provide... MORE
May 26, 2008
Behavioral Economics and Rationality
Arnold Kling
One of the examples that comes up in the Robin Hanson podcast concerns dating. If the point is to signal to the person that you are healthy, wealthy, and intelligent, why not just bring your health records, your bank statement,... MORE
Behavioral Economics and Rationality
Arnold Kling
This podcast is typical Robin Hanson. You don't have time to absorb one of his ideas before he is on to the next. You probably need to listen two or three times.... MORE
May 12, 2008
Behavioral Economics and Rationality
Arnold Kling
He writes, Me, I want to believe whatever is true even if that makes me unhappy. And with that attitude, I doubt attending church would make me happier. More generally, even if happiness researchers found that on average "People who... MORE
May 11, 2008
Behavioral Economics and Rationality
Bryan Caplan
Arthur Brooks, of Gross National Happiness fame, is now guest blogging for Freakonomics. So this seems like the perfect time to disclose his hidden secrets of happiness - the "a-ha" surprises you'll find on a close reading of his book:... MORE
May 6, 2008
Behavioral Economics and Rationality
Arnold Kling
John Tierney writes, We may not slaughter animals anymore to ward off a plague, but we think buying health insurance will keep us from getting sick. Our brains may understand meteorology, but in our guts we still think that not... MORE
April 28, 2008
Behavioral Economics and Rationality
Bryan Caplan
Why do countries and groups within countries engage in large-scale violent conflict? Social scientists' knee-jerk impulse is to look for objective conflict of interest: It's about land, oil, or whatever. But if you watch a standard news channel like CNN,... MORE
April 21, 2008
Behavioral Economics and Rationality
Arnold Kling
Tyler Cowen recently solicited topics, and I peeked. Here was one: More "meta" stuff -- how to read, how to think, how to write, etc. Tyler's tricks on being a prolific, successful academic. My tip is to pay attention to... MORE
April 18, 2008
Behavioral Economics and Rationality
Bryan Caplan
A petition at the Economist's View accuses ABC of insulting the intelligence of the American people. I'd like to respond by accusing the petition's signatories of complimenting the intelligence of the American people. And at least ABC seems to have... MORE
Behavioral Economics and Rationality
Bryan Caplan
Thaler and Sunstein's latest piece provides a perfect illustration of what's wrong with "sophisticated" critiques of laissez-faire. They begin sensibly enough:In the past 20 years, there has been a growing interest in cutting-edge research that has come to be called... MORE
April 17, 2008
Regulation and Subsidies
Arnold Kling
Richard H. Thaler and Cass R. Sunstein write, government would achieve simplified transparency by requiring all lenders to provide borrowers with an electronic file that contains, in standardized form, information on every feature of the contract. Instead of fine print,... MORE
April 15, 2008
Behavioral Economics and Rationality
Bryan Caplan
Is support for organ markets in the blood? One of the world's most articulate defenders of organ markets is a second-generation Iranian - and guess what else?Only one country in the world has eliminated the shortage of transplant kidneys. Only... MORE
April 6, 2008
Behavioral Economics and Rationality
Bryan Caplan
Once again, Arnold is going overboard in his opposition to happiness research. It's one thing to say that (a) "happiness" has more than one meaning, or (b) that there's more to life than happiness, or (c) that a longer time... MORE
Behavioral Economics and Rationality
Arnold Kling
Will Wilkinson writes, I just got Arthur Brooks’ new book Gross National Happiness in the mail. Brooks quite rightly points out that happiness research doesn’t really do much to support conventional liberal policies, and he gives it a right-wing spin,... MORE
April 4, 2008
Behavioral Economics and Rationality
Arnold Kling
Sandra Aamodt and Sam Wang write, In the short term, you should spend your limited willpower budget wisely. For example, if you do not want to drink too much at a party, then on the way to the festivities, you... MORE
April 2, 2008
Behavioral Economics and Rationality
Bryan Caplan
A reader sent me an excerpt from a fascinating interview with Hitler (by one Major Josef Hell) on why he singled out the Jews for extermination:When I now broached the question of what the source of his so strongly felt... MORE
April 1, 2008
Behavioral Economics and Rationality
Bryan Caplan
This speech by Robert Higgs has a remarkable discussion of Hermann Göring's analysis of war and public opinion:This account comes to us from Gustave M. Gilbert, the German-speaking prison psychologist who had free access to all of the prisoners during... MORE
March 28, 2008
Behavioral Economics and Rationality
Bryan Caplan
More educated people almost always have more sensible beliefs than less educated people. I've said it many times. But this Wednesday at lunch, Erik Snowberg from Stanford pointed out an interesting counter-example: Less educated people have less biased beliefs about... MORE
March 25, 2008
Behavioral Economics and Rationality
Bryan Caplan
Sunday's Simpsons re-run was new to me, and I laughed so hard my I couldn't get out the words to explain the joke to my sons:Homer [mockingly]: Ooh, the PATRIOT Act is so terrible! The government might find out what... MORE
Behavioral Economics and Rationality
Bryan Caplan
Yesterday I did a 10-minute interview in my office with self-experimentalist and diet guru Seth Roberts. Today he blogged it:My self-experimentation inspired Bryan Caplan to do his own self-experiment: Could he lose weight by eating less without discomfort? He did... MORE
March 6, 2008
Behavioral Economics and Rationality
Bryan Caplan
I just finished re-reading The Nurture Assumption by Judith Harris. It holds up like few other books do. But perhaps the weakest part is her discussion of counter-examples - Traits where parenting does seem to make a big difference. The... MORE
February 27, 2008
Behavioral Economics and Rationality
Arnold Kling
Nicholas A. Christakis says, We found that weight gain in a variety of kinds of people you might know affected your weight gain — weight gain in your friends, in your spouse, in your siblings and so forth. Moreover, people... MORE
Behavioral Economics and Rationality
Bryan Caplan
Behavioral Economics and Rationality
Bryan Caplan
From the comments:Buzzcut writes: Troy, discipline is hard. People are lazy. My guilty pleasure is "Supernanny". Last week, she had a family with 6 kids to deal with (Supernanny said less than 2% of families have 6 or more kids).... MORE
February 9, 2008
Behavioral Economics and Rationality
Bryan Caplan
Here's a great passage from Herb Gintis' review of Avner Offer's The Challenge of Affluence:The great American vaudeville singer Sophie Tucker remarked, "I've been rich and I've been poor---and believe me, rich is better." This book... contrasts Sophie Tucker's widely... MORE
February 8, 2008
Behavioral Economics and Rationality
Bryan Caplan
Greater Good: The Science of a Meaningful Life features a truly funny joint review of my The Myth of the Rational Voter and Drew Westen's The Political Brain. This is probably the only published review that I consider unfair. But... MORE
February 5, 2008
Behavioral Economics and Rationality
Bryan Caplan
At the end of every semester, GMU students evaluate their courses on a scale of 1-5. As I've discussed before, 5 ("excellent") is the standard response. So I was shocked this morning to see that students at GMU have suddenly... MORE
January 18, 2008
Behavioral Economics and Rationality
Bryan Caplan
Tim Besley's Principled Agents? is supposed to get a full issue's worth of attention from The Review of Austrian Economics in the near future. Here's my review essay, and here's my favorite part (endnotes and references omitted):[P]olitical agency problems are... MORE
Behavioral Economics and Rationality
Arnold Kling
David Brooks writes, In reality, we voters — all of us — make emotional, intuitive decisions about who we prefer, and then come up with post-hoc rationalizations to explain the choices that were already made beneath conscious awareness. “People often... MORE
January 17, 2008
Behavioral Economics and Rationality
Bryan Caplan
Remember the scene in the first Austin Powers movie where Dr. Evil tries to hold the country hostage for one million dollars? That's how silly the presidential candidates' "economic stimulus packages" sound to me. And that's what I got to... MORE
Behavioral Economics and Rationality
Bryan Caplan
Is lack of self-control a problem in your life? Or just a convenient excuse? If it's the former, stickK.com is now happy to take your money to solve your problem - whether its losing weight, stopping smoking, exercising regularly, or... MORE
January 13, 2008
Behavioral Economics and Rationality
Arnold Kling
Helen Johns and Paul Ormerod write, One could conclude from the lack of correlation over time between aggregate happiness and almost any other socioeconomic variable of interest one of two things. Either that attempting to improve the human lot through... MORE
January 9, 2008
Political Economy
Arnold Kling
I started to write this as a blog post this morning, but I turned it into an essay, and TCS quickly ran it. So, I still have not defined "cult." For now, let's say that you are in a cult... MORE
January 8, 2008
Behavioral Economics and Rationality
Bryan Caplan
Punishing politicians for bad weather seems like the height of illogic. But punishing politicians for responding poorly to bad weather makes perfect sense. The governor of Louisiana doesn't create hurricanes, but he can deal with a hurricane well or poorly.... MORE
Behavioral Economics and Rationality
Arnold Kling
Edward Castronova talks about World of Warcraft, Second Life, and such with Russ Roberts on the latest econtalk. I used to play bridge quite a bit, but I stopped when I went to grad school. At that point, the last... MORE
January 5, 2008
Behavioral Economics and Rationality
Bryan Caplan
Of course I'm going to like an animated movie based on an autobiographical graphic novel about the Iranian Revolution. But virtually every critic who's seen this movie agrees: Persepolis is excellent. Don't miss it. My favorite part is when the... MORE
January 1, 2008
Behavioral Economics and Rationality
Arnold Kling
Robin Hanson will like this one.... MORE
Behavioral Economics and Rationality
Arnold Kling
This year's "Edge" question is What Have You Changed Your Mind About? Why?. Fifteen years ago, Brockman wrote, the traditional American intellectuals are, in a sense, increasingly reactionary, and quite often proudly (and perversely) ignorant of many of the truly... MORE
December 31, 2007
Behavioral Economics and Rationality
Bryan Caplan
The LA Times recently ran a front-page story on Tiffany Sitton, a 23-year-old schizophrenic girl. Its official position, of course, is that Sitton is a victim of a disease. But the details of the story paint a different - and... MORE
Behavioral Economics and Rationality
Arnold Kling
Cass Sunstein and Ed Glaeser: we suggest that social learning is often best characterized by what we call Credulous Bayesianism. Unlike perfect Bayesians, Credulous Bayesians treat offered opinions as unbiased and independent and fail to adjust for the information sources... MORE
December 19, 2007
Behavioral Economics and Rationality
Bryan Caplan
Scott Althaus is the leading scholar of "enlightened preferences." In his book, he provides a massive body of evidence showing that people who know more about politics have systematically different policy preferences - even controlling for a long list of... MORE
December 12, 2007
Behavioral Economics and Rationality
Arnold Kling
Kwame Anthony Appiah writes, Edouard Machery, a philosopher of science at the University of Pittsburgh by way of the Sorbonne, told subjects about a man named Joe who visits the local smoothie shop and asks for the largest drink available.... MORE
December 11, 2007
Behavioral Economics and Rationality
Bryan Caplan
Forget "the Best of 2007"; Philip Tetlock's Expert Political Judgment may well be the best book ever written on political psychology. (See here for an earlier discussion). I say this even though I'm a big defender of experts, and Tetlock's... MORE
December 8, 2007
Behavioral Economics and Rationality
Bryan Caplan
Sometimes I think I could spend the rest of my life reading War and Peace, then Anna Karenina, then starting over with War and Peace. Here's another thought-provoking passage from AK:'What do they want to argue for? No one ever... MORE
December 4, 2007
Behavioral Economics and Rationality
Bryan Caplan
Eliezer at Overcoming Bias has a thoughtful post that manages to work in my very favorite passage from the Bible. P.S. The Legos say it better than I ever could.... MORE
December 3, 2007
Behavioral Economics and Rationality
Bryan Caplan
I'm setting up a panel on my book for the 2008 Public Choice meetings. If you're going and want to publicly criticize The Myth of the Rational Voter, please let me know. In fact, I'd consider it a personal favor.... MORE
November 27, 2007
Behavioral Economics and Rationality
Bryan Caplan
Earlier this month, I received the most amazing feedback yet on my book. A successful politician wrote me the following letter. I reprint it, redacted, with his explicit permission. (If you find the inline version too hard to read, here's... MORE
November 23, 2007
Behavioral Economics and Rationality
Bryan Caplan
Here's the childless-by-choice Lionel Shriver, in Maybe Baby:[A] recent New York Times Magazine article cited research documenting that while marriage makes people on average happier, parenthood makes them less so. And you'd think that someone like me would seize on... MORE
November 19, 2007
Behavioral Economics and Rationality
Bryan Caplan
The modern world's most prominent proponent of torture has to be 24's Jack Bauer. How many fictional lives has he saved by bringing on the pain? But let's not give Bauer too much credit. He's building on the shoulders of... MORE
November 17, 2007
Behavioral Economics and Rationality
Bryan Caplan
Yesterday I spoke at the University of Virginia's Miller Center (video coming to local PBS in about two weeks) as well as its Department of Economics. The cost: I had to wake up at the ungodly hour of 7 AM.... MORE
November 12, 2007
Behavioral Economics and Rationality
Bryan Caplan
I've previously argued that much - perhaps most - talk about "self-control" problems reflects social desirability bias rather than genuine inner conflict:Part of the reason why people who spend a lot of time and money on socially disapproved behaviors say... MORE
Behavioral Economics and Rationality
Bryan Caplan
If you want to publish obvious results, it really helps to scan some brains first. Case in point: "This is Your Brain on Politics," an op-ed in Sunday's NYT:In anticipation of the 2008 presidential election, we used functional magnetic resonance... MORE
November 10, 2007
Books: Reviews and Suggested Readings
Arnold Kling
Is called The Logic of Life. I hated the introduction. At one point, Harford writes, Might there not be such a thing as a rational blowjob? I don't think of myself as a prude, but I wound up muttering to... MORE
November 5, 2007
Behavioral Economics and Rationality
Bryan Caplan
After Nobel prize-winner James Watson publicized his views on African IQ, there was an angry backlash. Before long, he took most of it back and begged forgiveness. If this sounds familiar, it should; the same thing happened when Larry Summers... MORE
October 31, 2007
Behavioral Economics and Rationality
Arnold Kling
Tyler Cowen will be one of the protagonists at the Economist debate in New York on November 10th. The proposition is "America is failing at the pursuit of happiness." For the affirmative will be Jeff Sachs and Betsey Stevenson. For... MORE
October 23, 2007
Behavioral Economics and Rationality
Bryan Caplan
My basic model of children is that they are extremely honest adults. They say what they think, not what they are supposed to think. So what am I to make of the following incident? The scene: Sunday night at 8:10... MORE
October 20, 2007
Behavioral Economics and Rationality
Bryan Caplan
Has Gary Becker re-discovered what the Chicago School is all about? Here's Becker turning his back on Milton Friedman back in 1976:I find it difficult to believe that most voters are systematically fooled about the effects of policies like quotas... MORE
October 19, 2007
Behavioral Economics and Rationality
Arnold Kling
Daniel Kahneman, the psychologist who won an economics Nobel, talked at Edge.org. Transcript. it turns out that experience utility can be defined in at least two very different ways. One way is when a dentist asks you, does it hurt?... MORE
October 18, 2007
Behavioral Economics and Rationality
Bryan Caplan
A reader calls this the "most bizarre form of make-work bias I have ever seen," and I have to agree: NAJAF, Iraq — At what's believed to be the world's largest cemetery, where Shiite Muslims aspire to be buried and... MORE
October 17, 2007
Behavioral Economics and Rationality
Arnold Kling
What do the following beliefs have in common? A. Belief that Kerry won in 2004, and that a vote-counting conspiracy took place. B. Belief that men have more sex partners than women. C. Belief that epidemiology is equivalent to a... MORE
October 13, 2007
Behavioral Economics and Rationality
Bryan Caplan
Rationalization #787 why trade with China is bad: "They're infringing our copyrights! Their government is doing nothing to stop it. We've got to impose sanctions until they get tough." When Americans infringe American copyrights, we throw up our hands. "What... MORE
October 11, 2007
Behavioral Economics and Rationality
Bryan Caplan
Tim Kane has launched a new blog, and it looks promising. Kane's the primary author of the 2007 Index of Economic Freedom (which finds its way into Greenspan's new book), a Garett Jones co-author, and a comic book fan to... MORE
October 4, 2007
Behavioral Economics and Rationality
Arnold Kling
Garett Jones writes, Are more intelligent groups of people better at cooperating? Repeated prisoner’s dilemma (RPD) experiments run at numerous universities since 1959 may hold the answer. Overall, the tendency is clear: Students at schools with higher average SAT and... MORE
October 2, 2007
Behavioral Economics and Rationality
Bryan Caplan
Harold James:Nor, following the fastest five-year period of economic growth in human history, are collapsing prices endangering the financial system, as they did during the Great Depression. (emphasis mine)I just lived through the fatest-growing five years in economic history, and... MORE
September 23, 2007
Behavioral Economics and Rationality
Bryan Caplan
This cracked me up:SAT scores have been interpreted in a number of different ways, both by the test's designers themselves (Educational Testing Service) and by college administrators, high school counselors, the popular press, and researchers in fields such as education... MORE
September 21, 2007
Behavioral Economics and Rationality
Bryan Caplan
I've never been to a reunion, and don't plan to start. Compared to my present, my past is very depressing. But perhaps I'm just not as resourceful as Michael Blowhard, who has a long post of pithy observations on the... MORE
September 19, 2007
Behavioral Economics and Rationality
Arnold Kling
Jonathan Haidt writes The normal person (once animated by emotion) engages in moral reasoning to find ammunition, not truth; the normal person attacks the motives and character of her opponents when it will be advantageous to do so. The scientist,... MORE
September 16, 2007
Behavioral Economics and Rationality
Bryan Caplan
One of Donald Wittman's most intriguing claims during last week's debate is that the public suffers not just from an anti-market bias (as I claim), but from an anti-government bias as well. His main argument, if I recall correctly, is... MORE
September 15, 2007
Behavioral Economics and Rationality
Arnold Kling
In The Stuff of Thought, Steven Pinker writes, Morality and causative verbs tap the same mental model of human action... That makes the passive a convenient way to hide the agent of a transitive verb and thus the identity of... MORE
Behavioral Economics and Rationality
Arnold Kling
Kerwin Kofi Charles, Erik Hurst, and Nikolai Roussanov write, we show that although, unconditionally, racial minorities and Whites spend approximately the same fraction of their resources on visible consumption, Blacks and Hispanics spend about thirty percent more on visible goods,... MORE
September 12, 2007
Behavioral Economics and Rationality
Arnold Kling
Jonathan Haidt writes Virtues are socially constructed and socially learned, but these processes are highly prepared and constrained by the evolved mind. We call these three additional foundations the binding foundations, because the virtues, practices, and institutions they generate function... MORE
September 10, 2007
Behavioral Economics and Rationality
Arnold Kling
The inner economist talks with Russ Roberts. He points out that you are unlikely to say "no" to your dentist in person. You have given up control--deep in a chair (he says "strapped"), mouth open, and so on. But after... MORE
September 8, 2007
Behavioral Economics and Rationality
Bryan Caplan
One of the main reasons Steven White wrote me up as a "right-wing ideologue" is that my work highlights the irrationality of the electorate. But now he's doing it too - and singling out Democrats in the process. Here's White... MORE
September 5, 2007
Behavioral Economics and Rationality
Bryan Caplan
I've long enjoyed negative-but-fair reviews of my work, but this negative-but-fair review of me personally is even better:This George Mason economist favors free market biases over legitimate democracy, and has more ears in Washington than you might think.Given the number... MORE
Behavioral Economics and Rationality
Bryan Caplan
I wrote the cover story for the latest issue of Reason. And once again, I've been blessed with a fantastic cover artist. Here it is: Pay close attention to the t-shirts. Left-to-right: anti-market bias, anti-foreign bias, make-work bias, and pessimistic... MORE
September 4, 2007
Behavioral Economics and Rationality
Bryan Caplan
A fun survey, with funny results:[R]espondents were asked in a 1998 Newsweek poll: “In the next century, which one of the following current scientific beliefs do you think is most likely to be proved wrong, the theory of evolution, that... MORE
Behavioral Economics and Rationality
Arnold Kling
The Washington Post reports, The conventional response to myths and urban legends is to counter bad information with accurate information. But the new psychological studies show that denials and clarifications, for all their intuitive appeal, can paradoxically contribute to the... MORE
August 30, 2007
Behavioral Economics and Rationality
Arnold Kling
Charles Lambdin writes, Groopman’s position, when his various arguments are gathered and assembled, becomes untenable. He admits doctors suffer from innumerable biases that diminish the accuracy of diagnosis, reducing many diagnoses to idiosyncratic responses fueled by mood, whether the patient... MORE
August 23, 2007
Behavioral Economics and Rationality
Bryan Caplan
Kip Viscusi was kind enough to email me his estimates of the risks of terrorism, and gave me permission to share them. To be more precise, Viscusi told me that, in his judgment, the median number of deaths from domestic... MORE
August 21, 2007
Behavioral Economics and Rationality
Arnold Kling
You've heard about him from Tyler, Bryan, and me. Perhaps you've seen his posts at overcoming bias. Now you can see Robin Hanson give a brief talk as a keynote speaker. In the talk, he says that before you attach... MORE
August 10, 2007
Behavioral Economics and Rationality
Bryan Caplan
"What would you do if Santa Claus turned out to be a Martian?" It's a hypothetical question. It's also a stupid question to ask in a presidential debate. What makes it stupid? First, it's very unlikely to happen. Second, knowing... MORE
Behavioral Economics and Rationality
Bryan Caplan
If I had to evaluate the quality of argument in the presidential debates with one word, it's "simplistic." But the level of simple-mindedness varies by topic. For foreign policy, at least, candidates often propose a policy, consider how other nations... MORE
August 7, 2007
Behavioral Economics and Rationality
Bryan Caplan
Another debate gem: Hillary on energy policy.CLINTON: ...But this issue of energy and global warming has the promise of creating millions of new jobs in America... So it can be a win-win, if we do it right.It's hard to interpret... MORE
Behavioral Economics and Rationality
Bryan Caplan
I've been reading presidential debate transcripts to get some op-ed ideas. Here's my nomination for the most bizarre discussion. It starts off with Mike Gravel saying the obvious:QUESTION: ... My question is for Mike Gravel. In one of the previous... MORE
August 6, 2007
Behavioral Economics and Rationality
Arnold Kling
The Economist reports, Geoffrey Miller is a man with a theory that, if true, will change the way people think about themselves. His idea is that the human brain is the anthropoid equivalent of the peacock's tail. In other words,... MORE
August 5, 2007
Behavioral Economics and Rationality
Bryan Caplan
Lots of bloggers identify with the "reality-based community." At first glance, it's a rather cultish self-description; after all, even the "faith-based community" thinks it's "reality-based." (Ever seen the bumper sticker where the Jesus fish marked "Truth" swallows the Darwinian land-fish?)... MORE
July 25, 2007
Behavioral Economics and Rationality
Bryan Caplan
An omen? Hours before I head down to Comic-Con, I stumbled across a brilliant exchange in Fables: March of the Wooden Soldiers. Background: In this Eisner Award-winning series, legendary figures ("Fables") have been exiled from their native lands to the... MORE
July 16, 2007
Behavioral Economics and Rationality
Bryan Caplan
From the NYT:Representative George Miller, the California Democrat who is chairman of the Committee on Education and Labor, said, “Trade may not be the reason, or the number one reason, they’re losing their jobs, but they [the American people] think... MORE
July 14, 2007
Behavioral Economics and Rationality
Bryan Caplan
I've known Mormons all my life. I was in a Mormon Cub Scout troop because my best friend was Mormon. One of my best friends in grad school was a Mormon, too. But in 35 years, I'd never (knowingly) met... MORE
July 11, 2007
Behavioral Economics and Rationality
Bryan Caplan
I had a stimulating, well-reasoned interview with noted liberal activist and ordained minister Barry Lynn, host of "Culture Shocks." I continue to be surprised by the bipartisan reaction to my book - has Bush inadvertently opened liberal eyes to the... MORE
July 10, 2007
Behavioral Economics and Rationality
Bryan Caplan
Daniel Casse's review of my book in today's Wall Street Journal raises an important objection:As an analysis of how far voters are out of step with settled economic thinking, Mr. Caplan's argument seems irrefutable. Yet as a work of political... MORE
Behavioral Economics and Rationality
Bryan Caplan
If gas prices go up because of business conspiracies, why do they ever come down? In his Daily Kos review of my book, Dean Nut proposes a staggeringly original explanation - and as far as I can tell, he's serious:If... MORE
Behavioral Economics and Rationality
Bryan Caplan
In yesterday's Daily Kos, Dean Nut criticizes my book as filtered through the Economist's review. It turns out that alleged economic illiteracy is just selfish voting:The Americans who most believe that "the economy is seriously damaged by sending jobs overseas"... MORE
July 4, 2007
Behavioral Economics and Rationality
Bryan Caplan
For three out of the four biases I discuss in my book, it's easy to see the connection between economic biases and inefficient policies. Anti-market bias leads to under-use of markets. Anti-foreign bias leads to excessive protection, immigration restrictions, etc.... MORE
June 28, 2007
Behavioral Economics and Rationality
Arnold Kling
At the conference where I gave my talk that mentioned recipes and ingredients, I met Edgar Capen, co-author of a classic paper that coined the term "winner's curse" for auctions. His main theme is that people under-estimate uncertainty. If someone... MORE
June 22, 2007
Behavioral Economics and Rationality
Bryan Caplan
Almost everyone takes this for granted, but it still freaks me out: Audiences in presidential debates applaud just because a candidate says something they agree with. See for example the crowd's reaction when Giuliani scoffs at Ron Paul. You can... MORE
June 20, 2007
Behavioral Economics and Rationality
Arnold Kling
If I were to write an intellectual biography of Tyler Cowen, one topic I would cover would be free variables vs. set points. Something is a free variable if we can set it at whatever level we choose. Something has... MORE
June 15, 2007
Behavioral Economics and Rationality
Bryan Caplan
These days, psychiatrists favorite fig leaf for counter-intuitive claims is to hide behind neuroscience. "You think that serial killers are just evil people? Well, obviously you haven't seen these MRIs showing the serial killers have more/less of some brain chemical."... MORE
June 11, 2007
Behavioral Economics and Rationality
Bryan Caplan
From Sheldon Richman's review of my book: Caplan's solution is to "rely more on private choice and the free market." Good idea, though you'd have to get people to vote for that, so I'm not sure how effective that will... MORE
June 10, 2007
Behavioral Economics and Rationality
Bryan Caplan
One of the topics Landsburg tackles in More Sex is Safer Sex is the puzzle of self-control. Why do people on diets "lock their refrigerator doors"? Landsburg's answer: "a taste for self-control confers a reproductive advantange"; or to put it... MORE
June 9, 2007
Behavioral Economics and Rationality
Bryan Caplan
While I was away, I missed a provocative post by Brad DeLong. Leftists need to study economics, but rightists all-too-often have an adverse reaction: By contrast, the neoclassical toolkit can be absolute poison for people right on center. It functions... MORE
Behavioral Economics and Rationality
Bryan Caplan
If voters are as irrational as I say, isn't political reform a hopeless cause? Will Wilkinson and I discuss this (and many other issues) over at Bloggingheads. Think about it this way: To mitigate the damage of irrational majority rule,... MORE
June 1, 2007
Behavioral Economics and Rationality
Bryan Caplan
One common objection to my theory of rational irrationality is that it is psychologically implausible. Am I really saying that people first figure out the truth, then decide whether the material consequences of disregarding the truth outweigh the psychic costs... MORE
May 30, 2007
Behavioral Economics and Rationality
Bryan Caplan
Tyler misstates one of the conclusions of Burgoon and Hiscox's work on female protectionism. Contrary to Tyler, B&H don't find that educated women are more anti-foreign than other women. Instead, they find that educated women are more anti-foreign than educated... MORE
May 25, 2007
Behavioral Economics and Rationality
Arnold Kling
The latest celebrity death match on the Wall Street Journal site features Richard Thaler and Mario Rizzo. Mario Rizzo writes: I repeat: "Is New Paternalism primarily about advising private individuals and firms? If so, why use a political term --... MORE
May 24, 2007
Behavioral Economics and Rationality
Bryan Caplan
Kevin Grier, guest blogging on Marginal Revolution, makes an argument calculated to offend: In 1957, Venezuela's GDP per capita was 51% of the US, in 2003 it stood at 18.5% of the US. Existing institutions had no credibility with a... MORE
May 10, 2007
Behavioral Economics and Rationality
Bryan Caplan
One of the most common questions I get about my research on systematically biased beliefs about economics is: Yes, but why do people have these biases? Why do people underestimate the social benefits of the market? Why are they particularly... MORE
May 8, 2007
Behavioral Economics and Rationality
Bryan Caplan
I'm guest blogging for the Britannica website. Topic: Economists Agree?!... MORE
May 5, 2007
Behavioral Economics and Rationality
Bryan Caplan
I've never denied it: Some surveys are really stupid: If women ruled the world, stay-at-home moms would earn an annual salary equal to or more than $100,000. That’s according to a new poll from Woman’s Day magazine and AOL.com, which... MORE
May 2, 2007
Behavioral Economics and Rationality
Arnold Kling
Bryan writes, Sincere question: Have you personally reviewed the evidence on smoking, Arnold? I haven't. I believe that smoking causes cancer based on scientific consensus. ...Still, Arnold seems to be saying that you should base all your beliefs on direct... MORE
May 1, 2007
Behavioral Economics and Rationality
Bryan Caplan
Arnold writes: It is not the scientific consensus that makes me believe that there is a link between smoking and cancer. It is the evidence for such a link that is compelling. It is the weakness of the evidence of... MORE
April 27, 2007
Behavioral Economics and Rationality
Bryan Caplan
Here's the best survey I've ever seen on farm policy. Big findings: Farm subsidies are extremely popular. Respondents had to choose between the following positions: A. It is not consistent with the American way to have a whole sector of... MORE
April 19, 2007
Behavioral Economics and Rationality
Bryan Caplan
For every winner, there are ten people saying (perhaps under their breath) that "I'm as good as him. It could have been me." Now Robin links to a clever study showing that this is more than just self-deception: In our... MORE
April 13, 2007
Behavioral Economics and Rationality
Arnold Kling
He writes, the complex biochemistry of good and bad feelings suggests that there are many more than two dimensions even to hedonic well-being, and so trade-offs among them are inevitable. The noise, bustle, and danger of a big city are... MORE
April 12, 2007
Behavioral Economics and Rationality
Bryan Caplan
I just turned 36. But it seems like I was celebrating my 35th birthday three months ago - and asking everyone I knew how old they felt inside. Two universal patterns: 1. Every male I asked feels a lot younger... MORE
April 11, 2007
Behavioral Economics and Rationality
Bryan Caplan
Yes! The correct answer to the ice cream demand question is that sales went up by 200%. Here's the histogram of reader's responses: When people gave a range, I took the midpoint. When they gave a lower or upper bound,... MORE
April 10, 2007
Behavioral Economics and Rationality
Bryan Caplan
People say a lot of silly things about how belief in the importance of intelligence, true or false, is "dangerous." Today I read one of the few pieces that actually presents some thought-provoking evidence on this point: Carol Dweck's chapter... MORE
April 5, 2007
Behavioral Economics and Rationality
Bryan Caplan
Once a teacher admits that his lessons have little or no practical use, he usually retreats to the view that it doesn't matter what his students learn. The important thing is that students are "learning how to learn." One thing... MORE
April 4, 2007
Behavioral Economics and Rationality
Bryan Caplan
Eliezer at Overcoming Bias has an interesting anti-majoritarian piece that is very similar to my "Intellectual Gladiators" argument: You can survive by being popular, or by being superior, but alternatives that are neither popular nor superior quickly go extinct. P.S.... MORE
April 1, 2007
Behavioral Economics and Rationality
Bryan Caplan
I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it.--George Bernard Shaw "The advocates of X are jerks; therefore, X is false" is the classic ad hominem argument. But most of... MORE
March 28, 2007
Behavioral Economics and Rationality
Bryan Caplan
From Eliezer at Overcoming Bias: There is an old Jewish joke: During Yom Kippur, the rabbi is seized by a sudden wave of guilt, and prostrates himself and cries, "God, I am nothing before you!" The cantor is likewise seized... MORE
March 27, 2007
Behavioral Economics and Rationality
Bryan Caplan
Robin Hanson advised me to read Banerjee and Duflo's "The Economic Lives of the Poor" in the latest issue of the Journal of Economic Perspectives, and I wasn't disappointed. Long story short: People who live on $1 a day spend... MORE
March 26, 2007
Behavioral Economics and Rationality
Bryan Caplan
I just had the pleasure of reading Tolstoy's "God's Way and Man's." It's one of the most compelling portraits of revolutionary psychology I've ever read. "God's Way and Man's" is a complex tale, but the last half focuses on imprisoned... MORE
Behavioral Economics and Rationality
Bryan Caplan
As a rule, I don't like movies "based on true stories," but I'll make an exception for Joyeux Noël. It's a trilingual tale of fraternization on World War I's Western front, and nicely shows the contrast between individual decency and... MORE
March 22, 2007
Behavioral Economics and Rationality
Arnold Kling
In the New York Times, Benedict Carey writes, Those with ventromedial injuries were about twice as likely as the other participants to say they would...poison someone with AIDS who was bent on infecting others, or suffocate a baby whose crying... MORE
March 20, 2007
Behavioral Economics and Rationality
Bryan Caplan
Tyler has a podcast about what he calls "the intellectual crisis in libertarianism." Again, I'm baffled. To say we're in a crisis strongly suggests that things used to be better for us. But as far as I can tell, as... MORE
March 11, 2007
Behavioral Economics and Rationality
Bryan Caplan
Hanson and Balan aren't the only sharp tacks at Overcoming Bias: Politicians want voters to have a positively-biased view of themselves. Consequently, voters learn more about politicians from their failings than from their good deeds. Barack Obama, for example, smokes.... MORE
March 8, 2007
Behavioral Economics and Rationality
Bryan Caplan
Brad DeLong is deeply puzzled by a sensible observation over at Free Exchange: The Economist's Free Exchange: Trailing the truth | Free exchange | Economist.com: [P]undits are almost never punished for being wildly wrong about something. Nor are they rewarded... MORE
March 7, 2007
Behavioral Economics and Rationality
Bryan Caplan
A fun time was had by most at the Balan-Hanson debate on paternalism. In the post-debate discussion, someone raised the question of whether men or women are more "paternalistic." Given my earlier work (not to mention casual comparison of lenient... MORE
March 5, 2007
Behavioral Economics and Rationality
Bryan Caplan
David Balan and Robin Hanson, two of the smartest voices on Overcoming Bias, are having a debate on Paternalism this Wednesday evening at GMU. The title: "Paternalistic Policy: Altruism or Arrogance?" Given that this debate will resolve this important question... MORE
February 27, 2007
Behavioral Economics and Rationality
Bryan Caplan
Arnold writes: Every once in a while, I am asked by somebody what I would do to eliminate poverty in America. The first thing that pops into my head is the topic of mental health. A while back I blogged... MORE
February 25, 2007
Behavioral Economics and Rationality
Bryan Caplan
After skewering Obama's views on economic policy, Thomas Sowell (like another guy who bolstered my love of econ when I was a discouraged undergrad) concludes with a ringing denial of voters' rational expectations:But politics is not about facts. It is... MORE
February 22, 2007
Behavioral Economics and Rationality
Bryan Caplan
Tyler relays a Kling-esque critique of happiness research from John Quiggan: Suppose you wanted to establish whether children’s height increased with age, but you couldn’t measure height directly. One way to respond to this problem would be to interview groups... MORE
Behavioral Economics and Rationality
Bryan Caplan
When I was a junior at UC Berkeley, I wasn't sure if I should stick with economics after graduation. Then I started reading a lot of Richard Posner, and my love of econ was reborn. Fifteen years later, he's still... MORE
February 18, 2007
Behavioral Economics and Rationality
Bryan Caplan
It's time to officially declare Ben Casnocha a Wunderkind. Here is his brilliant post on the simplicity of losing weight, becoming a better writing, becoming a better entrepreneur, and being a good parent. The punchline: Note that just because something's... MORE
February 12, 2007
Behavioral Economics and Rationality
Bryan Caplan
Brian Doherty's history of libertarianism reminded me of a pattern that's struck me before : When wars break out, there are far more doves who "sell out" and support the war than hawks who "sell out" and oppose the war.... MORE
February 8, 2007
Behavioral Economics and Rationality
Bryan Caplan
No offense, Econlog contributors, but it's a reaction to Robin's post on deprogramming at Overcoming Bias: The difference between the exit counselors and [famous deprogrammer] Ted Patrick seems to be one of commitment, much like what Pavlov worked on for... MORE
January 26, 2007
Behavioral Economics and Rationality
Bryan Caplan
Robin Hanson begins his health econ class with a heavy dose of disillusion: I teach Health Economics starting today, and every year I start with data assuring students that learning data will not change their health policy opinions. He cites... MORE
January 23, 2007
Behavioral Economics and Rationality
Bryan Caplan
"I'm sure that a Democrat will win in 2008." "Sure? OK, let's bet at 100:1." "Umm, no thanks. But I'll do it for even odds." I've had a bunch of conversations like this. Someone proclaims to know the future with... MORE
January 17, 2007
Behavioral Economics and Rationality
Arnold Kling
Referred by John Tierney (yet another new blog!), I took the survey put up by George Loewenstein and others on whether you are a tightwad or a spendthrift. People who think of themselves as either tightwads or spendthrifts supposedly are... MORE
January 6, 2007
Behavioral Economics and Rationality
Bryan Caplan
I just got back from another vacation in Los Angeles. As they say, it's a "city of contrasts," but the most interesting contrast is rarely mentioned. On the one hand, even pretty ordinary Angelenos - especially the elderly - reside... MORE
Behavioral Economics and Rationality
Bryan Caplan
I was surprised to learn that the Economist thought this little post deserved a broader audience: But as with any argument involving economists, there is more than one side to it. For one thing, many experiences demand a substantial outlay... MORE
December 23, 2006
Behavioral Economics and Rationality
Bryan Caplan
David Balan has joined the august bloggers at Overcoming Bias. Let me tell you about this guy. A couple months ago, he came to GMU to deliver a paper. A crew of GMU profs took him out to lunch beforehand,... MORE
December 20, 2006
Behavioral Economics and Rationality
Bryan Caplan
Well, it shouldn't, explains Robin. Consider the foolish way that the world reacts to new fossils: Fossil hunters have found a winning formula for getting media attention: pretend to believe behavior X appeared around the time of the earliest known... MORE
December 17, 2006
Behavioral Economics and Rationality
Bryan Caplan
The clever Arthur Lupia is launching a multi-pronged contrarian defense of the competence of the average voter. He's got a whole series of new papers (some co-authored) trying to debunk the broad consensus in political science that voters don't know... MORE
December 2, 2006
Behavioral Economics and Rationality
Bryan Caplan
Gary Becker has some interesting thoughts about the economics profession's beliefs about the minimum wage: A recent petition by over 600 economists, including 5 Nobel Laureates in Economics, advocated a phased-in rise in the federal minimum wage to a much... MORE
November 30, 2006
Behavioral Economics and Rationality
Arnold Kling
Columnist Andrew Cassel writes The rules of supply and demand aren't inherently more difficult to fathom than those that apply to, say, politics, or cooking, or sports. Yet while most people have no trouble wrapping their brains around these subjects... MORE
Behavioral Economics and Rationality
Bryan Caplan
Over at Overcoming Bias, the smartest man I know argues that we underestimate the quality of women's lives - and overestimate the quality of men's lives - because the genders have different propensities to complain. Women who complain get a... MORE
November 27, 2006
Behavioral Economics and Rationality
Bryan Caplan
There's a mini-literature on whether the study of economics causes people to become more selfish. Has anything been written on whether the study of happiness causes people to become more happy? My guess is that studying happiness doesn't cause happiness.... MORE
November 22, 2006
Behavioral Economics and Rationality
Bryan Caplan
I usually think that experts are more likely to be right than laymen. But Tyler's blog on "expert advice" on how to make kids eat vegetables gives experts a bad name: 1. Try many times -- fifteen or more --... MORE
November 17, 2006
Behavioral Economics and Rationality
Bryan Caplan
My reply to my critics is up at Cato Unbound, and the followup conversation is now underway. My favorite part: To turn Friedman's argument around, I think that he's the one with an unrealistic, stilted psychology that's "vulnerable to caricature... MORE
November 5, 2006
Behavioral Economics and Rationality
Arnold Kling
One of Bryan Caplan's faves, Michael Huemer, writes, Normally, intelligence and education are aides to acquiring true beliefs. But when an individual has non-epistemic belief preferences, this need not be the case; high intelligence and extensive knowledge of a subject... MORE
November 1, 2006
Behavioral Economics and Rationality
Bryan Caplan
Robert Samuelson launches a pointed attack against the good sense of the American people: The Catch-22 of American democracy is this: A government that mirrors public opinion offends public opinion by failing to do what it promises. People then conclude... MORE
October 19, 2006
Behavioral Economics and Rationality
Bryan Caplan
Here's some well-aged Rothbard: I'm sure I would find neither Hitler, Wilson, Nixon, nor the Ayatollah charming dinner or cocktail party companions. But surely I am not to be permitted to transform these aesthetic judgments into a "value-free science" that... MORE
Behavioral Economics and Rationality
Bryan Caplan
Ten years ago, ultra-mathematical theorists were the kings of the economics profession. Now they seem to be nigh irrelevant. Clever and relatively open-minded empiricists rule the roost. Cementing the trend, few of the students coming out of top programs are... MORE
October 17, 2006
Behavioral Economics and Rationality
Arnold Kling
He writes It is no coincidence that humans are special in their ability to outsmart other animals and plants by cause-and-effect reasoning, and that language is a way of converting information about cause-and-effect and action into perceptible signals. A distinctive... MORE
October 16, 2006
Behavioral Economics and Rationality
Bryan Caplan
Last week, Tyler Cowen blogged on a story about a special ed program that uses electric shocks to make students to behave. His post included the somewhat cryptic remark that "I view this as a reductio ad absurdum on Bryan... MORE
October 10, 2006
Behavioral Economics and Rationality
Arnold Kling
I think that an academic web site should consist of links to papers, not self-promotion. Putnam's page does the reverse. About his latest PR success, it says, Robert D. Putnam gave a talk on this issue as the Skytte Prize... MORE
October 3, 2006
Behavioral Economics and Rationality
Arnold Kling
This article interested me, on many levels. the new vaccines employ the body's natural immune system in an innovative way. Instead of building antibodies to destroy germs as traditional vaccines do, they construct antibodies that lock onto nicotine and cocaine... MORE
September 27, 2006
Behavioral Economics and Rationality
Bryan Caplan
Niclas Berggren of Sweden's Ratio Institute emailed me a quote that would have been fantastic for my book: When there are rational grounds for an opinion, people are content to set them forth and wait for them to operate. In... MORE
Behavioral Economics and Rationality
Arnold Kling
Will Wilkinson writes, At best, neuroeconomics shows that peoples' representation of their best interest shifts from one decision context to the next as the brain shifts its resources from one brain region to another. Neither neuroscience nor economics speaks to... MORE
September 25, 2006
Behavioral Economics and Rationality
Bryan Caplan
Donald Wittman says that it doesn't matter if people have systematically biased beliefs about policy. Why not? Because even if you fixed their misconceptions, their policy preferences would remain unchanged. In an earlier post, I showed that he's wrong for... MORE
September 24, 2006
Behavioral Economics and Rationality
Bryan Caplan
Here's another neat passage from Miller, White, and Heywood's Values and Political Change in Postcommunist Europe: We might expect that public opinion would celebrate the end of dictatorship and the transfer of power to the people. But the normal trajectory... MORE
September 18, 2006
Behavioral Economics and Rationality
Bryan Caplan
People thought I was crazy to to write - let alone try to publish - "The Economics of Szasz." This analysis of the economics of mental illness has got to be the least-publishable article I ever wrote. And now it's... MORE
September 4, 2006
Behavioral Economics and Rationality
Bryan Caplan
Depressed people - what is their problem? Edward Hagen of Humboldt University has a fascinating answer: Getting depressed is a good way to get the people around you to give you more for less. Feel underappreciated? Then mope around non-stop,... MORE
September 2, 2006
Behavioral Economics and Rationality
Arnold Kling
Brad DeLong serves, I'm enough of a touchy-feey sociology-lover to believe that a good chunk of the utility the rich derive from their conspicuous consumption is transferred to them from the poor: the happiness America's working poor and middle class... MORE
September 1, 2006
Behavioral Economics and Rationality
Bryan Caplan
The most intriguing part of Steve Slivinski's Buck Wild is his section on the "Hinckley Effect." I've known about failed assassin John Hinckley since 4th grade. But it's only now that I've learned about the policy effects of his gambit... MORE
August 27, 2006
Behavioral Economics and Rationality
Bryan Caplan
Arnold comes down on the side of paternalistic regulations on investment: To me, an entrepreneur who looks for investors is like somebody who can't swim who finds himself in the middle of a lake. It's dangerous to go near the... MORE
August 20, 2006
Behavioral Economics and Rationality
Bryan Caplan
Walking the halls of Comic-Con and GenCon, I repeatedly heard voices gush: "Snakes on a Plane is going to make a TON of money. Everyone I know is going to see it!!!" The numbers are in: SoaP's domestic gross for... MORE
August 18, 2006
Behavioral Economics and Rationality
Bryan Caplan
I forgot to mention the greatest experience-producing durable good of all: the Digital Video Recorder. You could argue (mistakenly, I think) that you'll soon take a nice t.v. for granted. But the whole point of a DVR is to expand... MORE
August 17, 2006
Behavioral Economics and Rationality
Bryan Caplan
From the WSJ, via Mankiw: "Money itself doesn't make you happy," [Harvard psychology professor Daniel] Gilbert says. "What can make you happy is what you do with it. There's a lot of data that suggests experiences are better than durable... MORE
August 16, 2006
Behavioral Economics and Rationality
Bryan Caplan
Tyler Cowen has been preaching against various intellectual vices. My chairman Don Boudreaux thoughtfully adds the Contrarian Vice to the list: Being contrarian is admirable because it keeps the mind open and exploring; it's of a piece with one of... MORE
August 14, 2006
Behavioral Economics and Rationality
Bryan Caplan
Ubiquitous news reports of airport chaos had even me wondering if I was going to miss my plane. I could have driven back from Indy with friends, but I decided to take my chances at the airport. Total time to... MORE
August 8, 2006
Behavioral Economics and Rationality
Bryan Caplan
I'm skeptical about all predictions of disaster. I'm predictably skeptical about doom-and-gloom predictions used to rationalize big expansions of government power: global warming, overpopulation, avian flu, resource depletion, terrorism, nuclear proliferation, "Mexifornia," etc. But I've also long raised my eyebrow... MORE
August 3, 2006
Behavioral Economics and Rationality
Bryan Caplan
I know less about Los Angeles, the city I grew up in, than any other place I've ever lived. Throughout my childhood, my dad's mantra was, "Goddammit, we're not going to downtown L.A.!" I always assumed drive time was the... MORE
July 31, 2006
Behavioral Economics and Rationality
Bryan Caplan
Will Wilkinson has a great demolition of the New Economics Foundations' Happy Planet Index. The magic formula: "Multiply life expectancy by life satisfaction and divide it by environmental impact." Here's Will: I worry that much of the happiness work is... MORE
July 24, 2006
Behavioral Economics and Rationality
Arnold Kling
Emre Ozdenoren, Stephen Salant, and Dan Silverman write, an agent in our model would strictly prefer to have his “cake” or paycheck doled out to him by a savings club. For if the entire amount were available, resisting spending it... MORE
July 13, 2006
Behavioral Economics and Rationality
Bryan Caplan
One of the clearest facts about economic beliefs is that more educated people think more like economists. A lot of economists say their experience in academia completely contradicts this, but (a) the highly-educated folks who hang around universities are heavily... MORE
July 6, 2006
Behavioral Economics and Rationality
Bryan Caplan
I'm not surprised that Brad DeLong shares my love of the great computer game Civilization: I'm tempted to jump in and head-butt the libertarian: If you were to ask a compulsive gambler if he really wanted to waste his life,... MORE
July 5, 2006
Behavioral Economics and Rationality
Bryan Caplan
I just submitted my latest paper, "The Gender Gap of Economics: Why Do Men Think More Like Economists?" to Social Science Quarterly. Unfortunately, in order to get under SSQ's 30-page limit, I had to cut my favorite figure. Here it... MORE
July 4, 2006
Behavioral Economics and Rationality
Bryan Caplan
I think that brain research is overrated. A lot of it does little more than confirm the obvious points that (a) unusual people have unusual brains; (b) people doing unusual things have unusual brain states. If nuns had unusual brains,... MORE
July 3, 2006
Behavioral Economics and Rationality
Arnold Kling
Michael Shermer writes, During the run-up to the 2004 presidential election, while undergoing an fMRI bran scan, 30 men--half self-described as "strong" Republicans and half as "strong" Democrats--were tasked with assessing statements by both George W. Bush and John Kerry... MORE
June 30, 2006
Behavioral Economics and Rationality
Bryan Caplan
Here's a pretty funny interview (free registration required) with Lord Richard Layard on happiness research. Highlights: Layard's big thing is taxation. He is convinced that paying taxes makes us really happy and that if we paid more we would be... MORE
June 25, 2006
Behavioral Economics and Rationality
Arnold Kling
I have been lucky that my last two book purchases both proved interesting--I think I saw both mentioned on Arts and Letters Daily, so it's not all luck. I have mentioned Frederick Crews' Follies of the Wise. I just finished... MORE
June 22, 2006
Behavioral Economics and Rationality
Bryan Caplan
A couple years ago, someone asked me to write a list of ten interesting ideas. I just stumbled across it again today, and I still like what I wrote. If you like it too, you'll probably enjoy my book. 1.... MORE
June 21, 2006
Behavioral Economics and Rationality
Arnold Kling
I hereby challenge Tyler Cowen and Daniel Gilbert to debate whether happiness research constitutes an empirical science. Tyler pointed to this essay by Gilbert. if the Red Sox and the Yankees were scoreless until Manny Ramirez hit a grand slam... MORE
June 19, 2006
Behavioral Economics and Rationality
Bryan Caplan
Russ Roberts gets Szaszian on the latest EconTalk. The topic: Intermittent Explosive Disorder. Russ speaks better than I could after a lifetime of Toastmasters (no ahs, no umms), but if you'd rather read than listen, go here.... MORE
June 15, 2006
Behavioral Economics and Rationality
Arnold Kling
Tyler Cowen reports on some disturbing research. For example, Donors to charities, it seems, do not behave rationally. Increasing evidence shows that donors often tolerate high administrative costs, fail to monitor charities and do not insist on measurable results Tyler... MORE
June 12, 2006
Behavioral Economics and Rationality
Arnold Kling
I really like this Jaron Lanier essay. The collective is more likely to be smart when it isn't defining its own questions, when the goodness of an answer can be evaluated by a simple result (such as a single numeric... MORE
June 9, 2006
Behavioral Economics and Rationality
Arnold Kling
Randall Parker points to this article. [Erik] Angner, an assistant professor of philosophy at the University of Alabama at Birmingham (UAB), published a paper, “Economists as Experts: Overconfidence in Theory and Practice,” in a recent edition of the Journal of... MORE
May 31, 2006
Behavioral Economics and Rationality
Bryan Caplan
The famed Naked Guy of Berkeley committed suicide in his jail cell. I was an eyewitness to his protest against clothes when we were both students at UC Berkeley. At the time, I often pointed out that the Naked Guy... MORE
May 22, 2006
Behavioral Economics and Rationality
Arnold Kling
John Ford writes, Seth Roberts, a psychologist at UC Berkeley has written a book called The Shangri-La Diet. In it, Roberts described some old obesity rat data and via "self-experimentation" developed a technique for weight loss that he hopes will... MORE
May 18, 2006
Behavioral Economics and Rationality
Bryan Caplan
Tom Cruise got parodied on the season finale of Law and Order: Special Victims Unit. Why is he the only celebrity who is supposed to have a Ph.D. in a subject to have an opinion about it? I'd like to... MORE
May 15, 2006
Behavioral Economics and Rationality
Arnold Kling
Mitchell Zuckoff describes how the Nigerian email scam works. Patiently and persistently, the Nigerians turned Worley’s skepticism into suspension of disbelief, to the point where he seemed to worry that they might not trust him. They made Worley the perfect... MORE
May 12, 2006
Behavioral Economics and Rationality
Bryan Caplan
It's all official. My book, entitled The Myth of the Rational Voter: Why Democracies Choose Bad Policies, will be published by Princeton University Press in early 2007. I put the final version in the mail today. The winner of the... MORE
May 5, 2006
Behavioral Economics and Rationality
Arnold Kling
Tyler Cowen seems quite smitten with psychologist Daniel Gilbert. Tyler justifiably recommends this article about Gilbert, which is from the New York Times three years ago. While walking in Pittsburgh one afternoon, [economist George] Loewenstein tells me that he doesn't... MORE
May 3, 2006
Behavioral Economics and Rationality
Bryan Caplan
Greg Mankiw's learning psych from Steven Pinker, and I'm green with envy. If I could trade places with Mankiw, I'm sure I'd learn a lot - but at the same time, I could get a lot of objections off my... MORE
Behavioral Economics and Rationality
Bryan Caplan
Of course Arnold's right that outrage over rising gas prices reflects anti-market bias. But in my defense, I was trying to explain why people are especially freaked out by rising gas prices. Why do people seem angrier about losing .8%... MORE
April 28, 2006
Behavioral Economics and Rationality
Bryan Caplan
As I've said before, the data show that men think more like economists than women do. But today I came across some new data (or data I once saw and then forgot about?) showing a gender gap that is quite... MORE
April 24, 2006
Behavioral Economics and Rationality
Arnold Kling
Concerning the choice of where to attend collegeTyler Cowen asks, If parents (and their children) are loaded with biases, is behavioral economics useful? I suspect the core bias is parents wanting to feel they have done everything possible to help... MORE
Behavioral Economics and Rationality
Arnold Kling
New Economist points to a lot of articles on the political economy of happiness, including Mark Easton's article in The New Statesman. Easton writes, North of the border, the Scottish Executive supports an organisation called the Centre for Confidence and... MORE
April 23, 2006
Behavioral Economics and Rationality
Bryan Caplan
There's a striking passage in Freakonomics that echoes an argument I've occasionally made myself: Namely, that the death penalty as it is now practiced couldn't have much effect because it is so unlikely to actually be imposed. [G]iven the rarity... MORE
April 19, 2006
Behavioral Economics and Rationality
Arnold Kling
I continue to have philosophical disagreements with "happiness research." My latest essay takes on a recent paper by Alan Krueger and Daniel Kahneman. I write, With research into subjective well-being, economists are making statements about what constitutes the good life.... MORE
April 11, 2006
Behavioral Economics and Rationality
Bryan Caplan
One of the most frustrating things about non-economists is their reluctance to guess. Latest example: Today at the repair shop. Mechanic: The freon's going to leak out unless we replace the compressor. Me: How fast? Mechanic: Don't know. Me: Could... MORE
April 9, 2006
Behavioral Economics and Rationality
Bryan Caplan
Men think more like economists than women do. According to my calculations in "What Makes People Think Like Economists?," (Journal of Law and Economics 44(2), October 2001, pp.395-426) being male has roughly 16% of the effect of a Ph.D. in... MORE
April 7, 2006
Behavioral Economics and Rationality
Arnold Kling
Ed Glaeser writes I present three simple models that show how endogenous cognitive errors increase the advantage of private decisionmaking over public decisionmaking, which suggests that recognizing the limits of human cognition pushes us away, not towards, paternalism. In these... MORE
April 5, 2006
Behavioral Economics and Rationality
Arnold Kling
Inspired by Marginal Revolution's Axel and Tyrone, my evil twin Arlo has a post on happiness research: It's obvious why we need happiness research. Think of the problem of getting from resources to happiness as taking two steps. First, you... MORE
April 3, 2006
Behavioral Economics and Rationality
Arnold Kling
Will Wilkinson writes, The neuroscience shows that satisfaction of the highest ranked preference does not imply the greatest hedonic satisfaction. It does not imply any hedonic satisfaction. Take a look at this paper, “Parsing Reward,” [pdf] by Kent Berridge and... MORE
March 21, 2006
Behavioral Economics and Rationality
Arnold Kling
Craig A. Lambert writes, the Russell Sage Foundation, which devotes itself to research in the social sciences, consistently supported behavioral economics, even when it was in the intellectual wilderness. Current Sage president Eric Wanner, Ph.D. ’69, whose doctorate is in... MORE
March 10, 2006
Behavioral Economics and Rationality
Bryan Caplan
When psychologists introduce economists to happiness research, they usually emphasize the finding that, once people enjoy a modest First World standard of living, additional income doesn't make them much happier. What surprises me is that more economists haven't responded "As... MORE
March 1, 2006
Behavioral Economics and Rationality
Bryan Caplan
Arnold has curtly dismissed happiness research: Books that are based on research designed to predict behavior belong in the Social Science section. Books that tell you how to be happy belong in the New Age/Self-Help section. If we followed this... MORE
February 28, 2006
Behavioral Economics and Rationality
Bryan Caplan
Tyler Cowen discusses an interview with Harvard's Mullainathan, in which he talks about a bank's randomized marketing experiment: “What we found stunned me,” he says. “We found that any one of these things had an effect equal to one to... MORE
February 17, 2006
Behavioral Economics and Rationality
Bryan Caplan
Arnold isn't happy about measuring happiness. His objections, and my replies: Happiness research cannot make behavioral predictions at all. It consists of taking meaningless surveys, and the most it can do is make predictions about the "findings" of other meaningless... MORE
February 15, 2006
Behavioral Economics and Rationality
Bryan Caplan
My co-blogger continues to be unhappy with happiness research. Since no First World happiness researcher would willingly trade places with Third World tribesmen, and Third World tribesmen would willingly trade places with First World happiness researchers, happiness research is "fundamentally... MORE
February 14, 2006
Behavioral Economics and Rationality
Arnold Kling
In an issue that's repetitive, pompous, and boring, Forbes touts happiness research. The best tidbit is in this article. Researchers from the University of Illinois and the University of Pennsylvania proclaim with totemic authority that, in a 1985 survey, respondents... MORE
February 7, 2006
Behavioral Economics and Rationality
Bryan Caplan
So this is why I always hated working in groups!... MORE
February 2, 2006
Behavioral Economics and Rationality
Arnold Kling
In this post, Mark Thoma passes along some research findings from brain scans. The pleasure of orgasm, the high from cocaine, the rush of buying Google Inc. at $450 a share --- the same neural network governs all three I... MORE
February 1, 2006
Behavioral Economics and Rationality
Bryan Caplan
Amy Perfors at the Social Science Statistics Blog asks a great question: Why does repeated lying work? It's a common truism, familiar to most people by now thanks to advertising and politics, that repeating things makes them more believable --... MORE
January 25, 2006
Behavioral Economics and Rationality
Arnold Kling
The New York Times reports Using M.R.I. scanners, neuroscientists have now tracked what happens in the politically partisan brain when it tries to digest damning facts about favored candidates or criticisms of them. The process is almost entirely emotional and... MORE
January 19, 2006
Behavioral Economics and Rationality
Arnold Kling
Robert H. Frank writes. Mr. Landsburg's argument finesses the important distinction between a "statistical life" and an "identified life." The concepts were introduced by the economist Thomas C. Schelling, who observed the apparent paradox that communities often spend millions of... MORE
January 15, 2006
Behavioral Economics and Rationality
Bryan Caplan
The main finding in Philip Tetlock's awe-inspiring Expert Political Knowledge is that open-minded "foxes" are better predictors than theory-driven "hedgehogs." But toward the end of the book, he has a fascinating chapter about a fascinating exception. Background: There's a whole... MORE
January 11, 2006
Behavioral Economics and Rationality
Bryan Caplan
During my four years at Princeton I can't recall anyone other than myself having the slightest interest in methodology. How the times have changed! Princeton's Faruk Gul and Wolfgang Pesendorfer have put out a lengthy methodological tract, "The Case for... MORE
December 7, 2005
Behavioral Economics and Rationality
Bryan Caplan
Will Willkinson reports that it is. But this conclusion doesn't check out in the General Social Survey. In this data set, the average married person is indeed happier than the average never married person. But people who are only "pretty... MORE
December 2, 2005
Behavioral Economics and Rationality
Bryan Caplan
My impression is that most people suffer from "environmental bias." At least when they are talking about human beings, they overrate the importance of environmental factors, and underrate the importance of genetic factors. Why would they do this? Joseph Buckhalt... MORE
November 26, 2005
Behavioral Economics and Rationality
Bryan Caplan
If you believe the movies, Captain Bligh caused the "mutiny on the Bounty" by being so harsh that his men decided that they had nothing to lose by kicking him off the ship. In other words, Captain Bligh was to... MORE
November 17, 2005
Behavioral Economics and Rationality
Bryan Caplan
The turnout for the Iannaccone-Caplan Debate on Economics of Religion was excellent - about 300 people by my count. That's a striking illustration of interaction effects: as solo speakers either of us would have been lucky to draw 50 listeners!... MORE
November 15, 2005
Behavioral Economics and Rationality
Bryan Caplan
One of the main reasons to study psychological biases is to help us stop making them, but even many specialists don't bother to try to reform their thought processes. But don't give up hope. Jane Galt is a role model... MORE
November 10, 2005
Behavioral Economics and Rationality
Bryan Caplan
I am tooling up for my debate on the economics of religion with Lawrence Iannaccone. Studying data from the General Social Survey, it's clear that people who attend church more are a bit happier. On a three-step scale (very happy/pretty... MORE
November 3, 2005
Behavioral Economics and Rationality
Arnold Kling
I would like to join the chorus of praise for Will Wilkinson's new blog on happiness and public policy. For example, this post: Nesse goes on to point out that a few (of the far too few) longitudinal studies have... MORE
November 2, 2005
Behavioral Economics and Rationality
Bryan Caplan
Will Wilkinson is pointing his rapier wit at happiness research with his new Happiness and Public Policy blog. It's a fascinating subject. Who would have guessed, for example, that quadriplegics are, on average, happy? Incidentally, if you want to see... MORE
October 30, 2005
Public Choice Theory
Arnold Kling
Roger Lowenstein writes The drawback to 401(k)'s, remember, is that people are imperfect savers. They don't save enough, they don't invest wisely what they do save and they don't know what to do with their money once they are free... MORE
October 27, 2005
Behavioral Economics and Rationality
Bryan Caplan
I'm a fan of behavioral economics, but I've got to admit that behavior economists can be painfully condescending. "You only disagree with it because you haven't bothered to read it," is the subtext, and sometimes it's out in the open.... MORE
Behavioral Economics and Rationality
Arnold Kling
Robert H. Frank writes, [Nobel Laureate Thomas] Schelling observed that by skating without a helmet, a player increases his team's odds of winning, perhaps because he can see and hear a little better, or more effectively intimidate opponents. The down... MORE
October 5, 2005
Behavioral Economics and Rationality
Arnold Kling
Or, rather, some amateur sociology about status seeking, in my latest essay. I suspect that the most likely alternative to economic motivation is a worse motive: status-seeking. I believe that is more important to curb our lust for status than... MORE
September 25, 2005
Behavioral Economics and Rationality
Arnold Kling
Co-blogger Bryan Caplan wonders why people make the insurance choices that they do. I think that insurance is one of those topics on which economists and non-economists are out of synch. People buy extended warranties for appliances, but as commenter... MORE
September 23, 2005
Behavioral Economics and Rationality
Arnold Kling
Johan Norberg writes, A classic mystery in the happiness studies is that lottery winners are not much happier than the rest of the population. It’s not just the money that makes high-earners happier than low-earners—more important is their way of... MORE
September 16, 2005
Behavioral Economics and Rationality
Bryan Caplan
I was just notified that the Szasz Prize ceremony has been moved from the Cato Institute in D.C. to the Harper Library at the GMU Law School in Arlington. The day and time remain the same: September 21, 6 PM.... MORE
Behavioral Economics and Rationality
Bryan Caplan
People occasionally ask me what Thomas Szasz's best works are. The optimal introduction is The Untamed Tongue. It's a book of aphorisms that cuts to the heart of his philosophy of mind. If it doesn't make you worry that there's... MORE
September 9, 2005
Behavioral Economics and Rationality
Bryan Caplan
Economists are growing more and more interested in the emotions. My colleague Dan Houser, for example, tells me that interesting experiments on guilt and cooperation are underway, and it wasn't hard for me to track down some examples: see here... MORE
September 1, 2005
Behavioral Economics and Rationality
Arnold Kling
In the latest blogger celebrity deathmatch, Andrew Samwick writes I will start with a theory advanced most eloquently by a former mentor of mine, Christopher Carroll, who is now a professor at Johns Hopkins. According to his Buffer-Stock Theory, the... MORE
August 24, 2005
Behavioral Economics and Rationality
Bryan Caplan
I must gleefully report that I am one of the winners of the 2005 Thomas S. Szasz Award for Outstanding Contributions to the Cause of Civil Liberties, largely for my article "The Economics of Szasz: Preferences, Constraints, and Mental Illness."... MORE
August 10, 2005
Behavioral Economics and Rationality
Bryan Caplan
My musical discovery of the last two years is the punk rock band Bad Religion. Thirteen CDs, all full of great songs - try Supersonic, Suffer, and the music videos for Los Angeles is Burning and Atomic Garden. More amazing... MORE
August 9, 2005
Behavioral Economics and Rationality
Bryan Caplan
Arnold and I have a running debate on the connection between material wealth and happiness. He's skeptical of the whole subject; I'm not. He thinks that people's behavior shows that money brings happiness; I've claimed that the standard conclusion that... MORE
August 3, 2005
Politics and Economics
Bryan Caplan
The latest issue of Econ Journal Watch features the second round of my debate with Donald Wittman. Here's me; here's Wittman.... MORE
August 2, 2005
Behavioral Economics and Rationality
Arnold Kling
The Washington Post reports that some airlines, which do not control airport screening but do control the lines that you wait in, are giving first-class passengers shorter waits. Across the country, "elite" lines are making a comeback at U.S. airports.... MORE
July 29, 2005
Behavioral Economics and Rationality
Bryan Caplan
Bayes' Rules is central to modern economics and modern psychology. According to Bayes' Rule, a rational person starts with some beliefs about probabilities (his "priors") and changes them in a particular way as new information arrives, in order to reach... MORE
July 22, 2005
Income Distribution
Arnold Kling
Catching up on a week's worth of blog reading, the best thing I missed appears to be this post by Will Wilkinson. Richard Layard points out that one's perceived position in the income distribution is a better predictor of self-reported... MORE
July 21, 2005
Behavioral Economics and Rationality
Arnold Kling
The Wall Street Journal reports on a neuroeconomics experiment that compared emotionally-impaired investors with normal investors. The 15 brain-damaged participants that were the focus of the study had normal IQs, and the areas of their brains responsible for logic and... MORE
July 15, 2005
Behavioral Economics and Rationality
Bryan Caplan
Well, they're very good, anyway. The first is a 1999 gem by Philip Tetlock: "Theory-Driven Reasoning About Plausible Pasts and Probable Futures in World Politics: Are We Prisoners of Our Preconceptions?" (American Journal of Political Science 43(2): 335-66). The second... MORE
July 8, 2005
Income Distribution
Arnold Kling
In this essay, I offer some advice for people who care about African poverty. 1. The world is a complex place. The farther you are removed from a situation, the less likely that your intervention there will do good and... MORE
June 4, 2005
Behavioral Economics and Rationality
Bryan Caplan
The last issue of Econ Journal Watch featured my critique of Donald Wittman, followed by his reply to my critique. (For more, see here). I think the most bizarre part of Wittman's reply is his claim that it doesn't matter... MORE
June 2, 2005
Behavioral Economics and Rationality
Arnold Kling
While the press is back to wallowing in Watergate, the big news in economics was a small experiment. In the game, investors were allotted 12 monetary credits, each worth 40 Swiss centimes (32 US cents), and asked to decide how... MORE
May 29, 2005
Behavioral Economics and Rationality
Bryan Caplan
What do you do if someone you don't like tries to give you an expensive present? Homo economicus would happily take it: "It's not like I signed a contract!" But most people would at least think twice before accepting the... MORE
May 21, 2005
Behavioral Economics and Rationality
Bryan Caplan
Economists have heard a fair amount from psychologists about "framing effects." Redescribing your options sometimes changes your choice. Firms would rather advertise the sale of "half-full glasses," than "half-empty glasses," though of course they're the same thing. Aldert Vrij's book... MORE
May 16, 2005
Behavioral Economics and Rationality
Arnold Kling
One of the most interesting survey articles I've seen in a long time came out in the recent Journal of Economic Literature, although apparently it's been kicking around for a couple of years. It is by Colin Camerer, George Loewenstein,... MORE
May 2, 2005
Andrew Chamberlain writes thanks to arbitrage, rational people stand to profit when irrational people let prices and wages stray from efficient levels. That’s what justifies the economist’s assumption of rationality—a small number of rational profit-seekers keep markets rational as a... MORE
April 29, 2005
Behavioral Economics and Rationality
Bryan Caplan
More educated people think more like economists. It's one of the big findings in my piece in the 2001 Journal of Law and Economics. And that's controlling for income, income growth, job security, gender, ideology, and party. It's a big... MORE
April 18, 2005
Behavioral Economics and Rationality
Bryan Caplan
Philip Tetlock may well be my favorite political psychologist. He has a fantastic article surveying his research on political taboos in Elements of Reason, edited by Lupia, McCubbins, and Popkin. Tetlock asks: Are taboo trade-offs "taboo" in the primal Polynesian... MORE
March 30, 2005
Behavioral Economics and Rationality
Bryan Caplan
You may have heard the odd factoid that faith in government drastically increased immediately after 9/11. Impossible, you say? Surely when a great tragedy happens, the organization charged to prevent it will lose credibility, not gain it? The factoid checks... MORE
March 13, 2005
Behavioral Economics and Rationality
Bryan Caplan
Unhappy? My advice is to focus on your work. It helps you forget your woes, and once your life has improved, you've got something to show for your time of troubles. A fascinating passage from Robert Lane's The Loss of... MORE
February 27, 2005
Behavioral Economics and Rationality
Arnold Kling
Richard Layard, the king of "happiness research" is back, and I am not happy. He writes, Divorce and broken homes are ever more common. Research shows that the children of broken homes are more prone to depression in adulthood. To... MORE
January 25, 2005
Behavioral Economics and Rationality
Bryan Caplan
A very interesting paper by Moses Shayo begins by surveying the literature on identity. "People tend to identify more with high status groups than with low status groups," which seems pretty obvious. But I'm not so sure. A major counter-example:... MORE
December 13, 2004
Politics and Economics
Arnold Kling
The issue of why academics lean left has received considerable notice. I am not sure of the answer, but one thing I do not buy is the notion that people become professors out of an unusually strong desire for public... MORE
October 20, 2004
Efficient Markets Hypothesis
Arnold Kling
Stephen Bainbridge judges the contest. As for regulators, because the ECMH [Efficient Capital Markets Hypothesis] is often brought to bear as a justification for deregulation in politically charged policy disputes, such as mandatory corporate disclosure and insider trading, those who... MORE
August 24, 2004
Behavioral Economics and Rationality
Arnold Kling
Steven Johnson reports on some brain scans to detect political differences, ...early data suggested that the most salient predictor of a ''Democrat brain'' was amygdala activity responding to certain images of violence... a recent study by Paul Goren at Arizona... MORE
August 19, 2004
Labor Market
Arnold Kling
Two pieces in the New York Times discuss the labor market. Alan Krueger talks about the issue of defining a "good job." Neoclassical economics hardly recognizes a distinction between good jobs and bad ones. All workers are supposed to be... MORE
August 17, 2004
Behavioral Economics and Rationality
Arnold Kling
Newsweek has a survey of what I think it should have called neuroeconomics. They use the term "behavioral economics," which I think of as looking at cognitive biases in decision making. Neuroeconomics links cognitive biases to brain science. Observing that... MORE
August 5, 2004
Behavioral Economics and Rationality
Arnold Kling
I have an essay on Robert Frank's use of "happiness research" to justify paternalism. Frank is fond of using thought experiments. I have one. Imagine that you could go back a few hundred years and ask people if they are... MORE
July 27, 2004
Behavioral Economics and Rationality
Arnold Kling
Robert H. Frank writes, Considerable evidence suggests that if we use an increase in our incomes, as many of us do, simply to buy bigger houses and more expensive cars, then we do not end up any happier than before.... MORE
June 15, 2004
Economics of Health Care
Arnold Kling
Today's Washington Post contains another op-ed piece by a physician, and of course he is in favor of price controls on prescription drugs. The pharmaceutical industry will intone its familiar mantra: The cost of drugs is a relatively small percentage... MORE
April 25, 2004
Income Distribution
Arnold Kling
Alex Tabarrok points to a paper by Uri Gneezy, Muriel Niederle, and Aldo Rustichini showing that although women solve a particular class of problems about as well as men on average, men improve their scores more than women when there... MORE
April 2, 2004
Behavioral Economics and Rationality
Arnold Kling
Psychologist Daniel Gilbert finds that people tend to erroneously forecast how events will affect their happiness. He argues that people choose to act on the wrong information when they predict, for example, whether they will enjoy a particular vacation spot.... MORE
March 9, 2004
Behavioral Economics and Rationality
Arnold Kling
David Weinberger has some thoughts about eBay. I've lost bids to auction snipers. As a customer, I feel cheated, even though, of course, I could take a sniper's eye-view of the transaction. Even if letting robots game the auction doesn't... MORE
March 8, 2004
Behavioral Economics and Rationality
Arnold Kling
Robert Shiller thinks that people ought to be saving more. According to a recent study by the Organization for Economic Cooperation and Development (OECD), household saving rates declined between 1984 and 2001 in Australia, Austria, Belgium, Canada, Finland, Italy, Japan,... MORE
February 4, 2004
Social Security
Arnold Kling
I have a new essay that argues that we over-estimate the value of collective benefits. Contrary to my training as an economist, I believe that at least some of the preference that workers have for in-kind benefits reflects flat-out irrationality.... MORE
January 17, 2004
Behavioral Economics and Rationality
Arnold Kling
David Friedman uses evolutionary psychology to solve some puzzles in economics. Human beings have a functional module in their minds that deals with exchanges with other human beings. One feature of that module, hard-wired in by evolution, is that human... MORE
January 13, 2004
Behavioral Economics and Rationality
Arnold Kling
I have already given so-called "happiness research" a pretty hard bashing. But Tyler Cowen thinks that there is something to it. He links to a paper that says that people who work for nonprofits are happier than people who work... MORE
January 8, 2004
Behavioral Economics and Rationality
Arnold Kling
Psychologist Barry Schwartz says that we may be worse off with more choice. "As a culture, we are enamored of freedom, self-determination, and variety, and we are reluctant to give up any of our options," he writes with characteristic directness.... MORE
January 4, 2004
Behavioral Economics and Rationality
Arnold Kling
Because it appears in the latest American Economic Review, I got around to reading carefully Daniel Kahneman's Nobel lecture, Maps of Bounded Rationality. He contrasts an intuitive way of processing information with a calculating, rational method. The central characteristic of... MORE
November 4, 2003
Behavioral Economics and Rationality
Arnold Kling
Will Baude brings up the St. Petersburg Paradox, in which a bet with an infinite expected payoff is rejected by the typical individual. Baude points out the problem with trying to resolve the paradox by invoking diminishing marginal utility. here's... MORE
October 9, 2003
Behavioral Economics and Rationality
Arnold Kling
Kevin McCabe says that experimental economics offers three implications for policymakers trying to foster economic growth through the adoption of markets. First, safeguards must be put into place to protect impersonal exchange from our innate desire for personal exchange. Second,... MORE
October 1, 2003
Regulation and Subsidies
Arnold Kling
Posting here will be infrequent until later in October. Meanwhile, here are some links that may be of interest. Is the insecurity of Microsoft software an externality that should be regulated or taxed? An example of professional licensing as rent-seeking... MORE
August 17, 2003
Behavioral Economics and Rationality
Arnold Kling
Paul Zak reports on measuring the level of the hormone oxytocin in experimental subjects after they have played a game involving trust and co-operation. People were recruited and paid $10 for showing up. Then they took seats in a large... MORE
July 3, 2003
Finance: stocks, options, etc.
Arnold Kling
Hal Varian's column cites research on the irrationality of small investors during the dotcom bubble. First, there were significant differences of opinion about the value of Internet stocks, with retail investors tending to be much more optimistic than insiders or... MORE
June 15, 2003
Efficient Markets Hypothesis
Arnold Kling
Columnist James Glassman discusses the Efficient Markets Hypothesis with John Allen Paolos, author of A Mathematician Plays the Stock Market. If you believe in the EMH, you understand that highly successful stock selections are really just lucky guesses... But, to... MORE
May 16, 2003
Revealed Preference
Arnold Kling
On the topic of revealed preference, David Thomson writes, Human beings are neither existentially [n]or psychologically able to endure lives of everyday indolence and unrelenting pleasure seeking. That sounds like the introductory sentence for a thesis in behavioral economics. For... MORE
May 14, 2003
Revealed Preference
Arnold Kling
I take a skeptical view of surveys in this essay. From the standpoint of revealed preference, the [survey evidence] that income over $20,000 does not raise happiness simply falls apart. Observing the fact that even people with very high incomes... MORE
April 4, 2003
Revealed Preference
Arnold Kling
In a previous post, I mentioned Richard Layard's critique of economics, based on survey research. Now, I have written an extended response to Layard. An excerpt: [Layard] is saying that you cannot trust people's behavior as an indicator of their... MORE
March 25, 2003
Behavioral Economics and Rationality
Arnold Kling
Irwin M. Stelzer argues that the shortage of organ donors is due to price controls--in particular, the fact that organ donors do not get paid. if we can begin to think about this issue in a clear-headed way, we might... MORE
March 20, 2003
Behavioral Economics and Rationality
Arnold Kling
Clay Shirky used (coined?) the term mental transaction costs to describe the problem with using micropayments (small payments to download articles or music). I believe that economists tend to over-rate the value of peak-load pricing systems, because they fail to... MORE
March 18, 2003
Revealed Preference
Arnold Kling
Richard Layard uses survey research and some fancy philosophical footwork to argue against conventional wisdom in economics and in favor of a nanny state. Some quotes from the series of three lectures: People in the West have got no happier... MORE
March 13, 2003
Microeconomics
Arnold Kling
Hal Varian compares the potency of two types of incentives to save. One incentive is a tax break for savings. The other is a non-economic incentive, in which it becomes easier for an employee to sign up (or harder not... MORE
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