Bryan Caplan and David Henderson

Behavioral Economics and Rationality

A Category Archive (944 entries)
Anarchy in the UK? Not so much. Scottish voters have decided to stay in the UK, and Justin Wolfers calls this "a loss for pollsters and a win for betting markets." I agree: betting markets produce a much higher signal-to-noise... MORE

Start!

Behavioral Economics and Rationality
David Henderson
Over at marginalrevolution.com, Tyler Cowen has posted some excellent rules for managing your time. I won't repeat them here--they're short enough--but I want to add an important one, comment on a few, and add a final one. Here's the one... MORE

Tribal Desire

Behavioral Economics and Rationality
Bryan Caplan
On Twitter, Mark Krikorian opined that, "Desire for membership in a tribe is as inherent to the human personality as some form of body covering."  He's not exactly wrong, but omits three essential caveats.1. Desire for tribal membership varies widely. ... MORE

The Logic of Gilensian Activism

Behavioral Economics and Rationality
Bryan Caplan
Martin Gilens' Affluence and Influence argues that when America's rich disagree with their fellow citizens, American democracy heeds the rich.  His evidence is hardly airtight, but by the standards of social science, it's fairly compelling.  To me, he provides an... MORE

A Szaszian Take on Conformity Signaling

Behavioral Economics and Rationality
Bryan Caplan
From The Sheepskin Psychosis by John Keats:By what standards do the college psychiatrists judge [would-be drop-outs] to be immature?  A psychiatrist is prone to measure maturity by the degree to which an individual adapts or adjusts to, or accepts or... MORE

Silent Citizenism

Behavioral Economics and Rationality
Bryan Caplan
Topher Hallquist effectively preaches cosmopolitanism to the Effective Altruism community:Can you imagine a politician advocating free trade on the grounds that, while it might hurt the politician's own country a little, it would have enormous benefits for people living in... MORE

Where I Dissent from Nathan Smith

Behavioral Economics and Rationality
Bryan Caplan
My former student Nathan Smith has published a gracious critique of yours truly.  Since he begins his critique with generous praise, let me do the same: Nathan Smith is probably the most brilliant Ph.D. student I've ever had the pleasure... MORE

EconLog reader Meretta Marks sent me the following request:Would you consider the following topic for your EconLog blog: "What every high school junior should know before thinking of going to college" Suppose.....it's the beginning of the school year in high... MORE

Yellen is a Good Keynesian

Behavioral Economics and Rationality
Bryan Caplan
From: My Department of Credit Where Credit Is DueI've previously insisted that when there's high unemployment, all good Keynesians should say "Wages must fall!"  I'm delighted to learn, then, that Janet Yellen is one of the good Keynesians.The stagnation in... MORE

The Sweet Spot of Freedom

Behavioral Economics and Rationality
Bryan Caplan
No one needs a political philosophy to tell them how to treat people they personally know.  Once human beings forge personal bonds, they understand what to expect from each other.  The main point of political philosophy is to tell people... MORE

The Veil of Implausibility

Behavioral Economics and Rationality
Bryan Caplan
The veil of ignorance is arguably 20th-century political philosophy's most successful new meme.  On one level, it's easy to see the appeal.  Political philosophy seems morally deadlocked.  The veil of ignorance provides a meta-norm to break this deadlock: We should... MORE

What's the Use of Crying Over Spilled Blood?

Cost-benefit Analysis
Bryan Caplan
The U.S.-led invasion of Iraq in 2003, you may recall, was dubbed Operation Iraqi Freedom.  Eleven years and over 100,000 civilian deaths later, the name is dark comedy.  The replacement Shiite-dominated government is a close ally of the Iranian theocracy,... MORE

Our Poverty and Theirs

Behavioral Economics and Rationality
Bryan Caplan
I regularly praise Nicholas Kristof's courageous essay on Third World poverty.  While First World immigration policies and Third World economic policies cause enormous harm, the global poor exacerbate their woes with grotesquely irresponsible behavior.  Kristof:[I]f the poorest families spent as... MORE

Haidt and the Moral Foundations of the Welfare State

Behavioral Economics and Rationality
Bryan Caplan
Great questions from Sebastian Nickel:I recently asked whether accusations of excessive "selfishness" are to be understood as accusations of insufficient "altruism", or rather as accusations of insufficient "groupishness". A related question: When Jon Haidt asks questionnaire respondents questions meant to... MORE

Common Sense: As True As It Seems

Behavioral Economics and Rationality
Bryan Caplan
Scott once again scoffs in the face of common sense economics:Common sense is almost useless in the field of economics. Never dismiss an economic theory because the assumptions about human behavior don't sound plausible.Notice, though, how Scott tries to persuade... MORE

My Life of Appeasement

Cost-benefit Analysis
Bryan Caplan
Morally speaking, I think taxation is theft.  The government has a lot of bad excuses for taking my money without my consent, but no really good reasons.  Still, every year, I pay my taxes.  Why don't I stand up for... MORE

Immigrants Are Good for Cosmopolitan Tolerance

Behavioral Economics and Rationality
Bryan Caplan
When I debated Mark Krikorian, he bemoaned immigrants' effect on Americans' patriotic solidarity.  I think he's making a mountain out of a molehill, but Mark's concerns were much on my mind during my recent visit to New York City.  I... MORE

What Do Constitutions Do? Star Trek Edition

Behavioral Economics and Rationality
Bryan Caplan
Political scientist and game designer Chris McGlothlin has a neat Facebook post on Star Trek and the Constitution, building off the classic episode "The Omega Glory."  Here's Chris, reprinted with his permission:As both a political science professor and a Trekkie,... MORE

A Non-Conformist's Guide to Success in a Conformist World

Behavioral Economics and Rationality
Bryan Caplan
I've been a non-conformist for as long as I can remember.  "All the other kids love sports" never seemed like a good reason why I should feel - or pretend to feel - the same way.  "None of the other... MORE

Evolution and Moral Intuition

Behavioral Economics and Rationality
Bryan Caplan
When backed into a corner, most hard-line utilitarians concede that the standard counter-examples seem extremely persuasive.  They know they're supposed to think that pushing one fat man in front of a trolley to save five skinny kids is morally obligatory. ... MORE

What to Learn from The Catcher in the Rye

Books: Reviews and Suggested Readings
Bryan Caplan
I recently re-read J.D.Salinger's 1951 classic, The Catcher in the Rye, prompting Tyler to do the same.  My top reactions:1. Other than losing his brother Allie, Holden has no external problems.  He is a rich kid living in the most... MORE

Some Empirics of Moral Philosophy

Behavioral Economics and Rationality
Bryan Caplan
From the noble Jason Brennan:This reminds me further of a talk I saw at a recent free market conference. The presenter was talking about how most philosophers are nihilists who believe that morality is bogus nonsense. I said, "You'll be... MORE

Endogenous Sexism Explained

Behavioral Economics and Rationality
Bryan Caplan
Several people in the comments got the point of my endogenous sexism scenario.  Namely: Friends pass a stricter selection filter than spouses of friends.  If you think poorly of someone, you won't be their friend.  But if you think poorly... MORE

Your Big Doubts About the 10,000 Hour Rule Are Well-Founded

Behavioral Economics and Rationality
Bryan Caplan
Ericsson, Krampe, and Tesch-Romer's "The Role of Deliberate Practice in the Acquisition of Expert Performance" (Psychological Review 1993) isn't just one of the most famous articles in the history of academic psychology.  Thanks to Malcolm Gladwell's Outliers, the article's bullet... MORE

Free Intentions

Behavioral Economics and Rationality
Bryan Caplan
I quite enjoyed Alfred Mele's Free: Why Science Hasn't Disproven Free Will (available for pre-order now).  It's a great exercise in the debunking of debunking.  My favorite case: Many psychologists (and laymen) argue that consciousness is epiphenomenal.  In layman's terms,... MORE

The Weak-Willed Do-Gooder

Behavioral Economics and Rationality
Bryan Caplan
Imagine Smith sees a problem in the world.  He knows how to fix the problem.  He's got the resources to implement this remedy.  He sincerely wants to do good.  If he decides to fix the problem, is there any reason... MORE

Kant just went up a full notch in my eyes.  From The Critique of Pure Reason, via David Gordon, via Wlodek Rabinowicz.The usual touchstone, whether that which someone asserts is merely his persuasion -- or at least his subjective conviction,... MORE

How I Teach When I Really Want My Students to Learn

Behavioral Economics and Rationality
Bryan Caplan
A month ago, my eleven-year-old sons still didn't know how to tie their shoes.  I volunteered to teach them.  As a professional educator, I was tempted to teach shoe-tying the same way I teach econ: With a scintillating lecture.  Since... MORE

21 Short Claims About Political Motivation

Behavioral Economics and Rationality
Bryan Caplan
Yesterday I wrote:If you want lots of X, but are too ignorant to evaluate X's indirect effects, you probably just really love X.  If you want lots of ice cream, but are too ignorant to evaluate ice cream's effect on... MORE

Henderson on Thaler and Sunstein

Behavioral Economics and Rationality
David Henderson
Another issue on which TS [Thaler and Sunstein] are silent--and should not be--is the issue of income tax withholding. The U.S. federal government moved to withholding during World War II because that was when it changed the income tax from... MORE

Why Does High-Pressure Salesmanship Work?

Behavioral Economics and Rationality
Bryan Caplan
[Warning: Minor spoilers].Just finished The Wolf of Wall St.   Though based on a true story, the ugly facts are usually easy to minimize: Most investment firms aren't run by stoned sociopaths, and most investment firms' customers make money.  But one... MORE

A Hardy Weed: How Traditionalists Underestimate Western Civ

Behavioral Economics and Rationality
Bryan Caplan
Last month, I debated Stephen Balch from Texas Tech's Institute for the Study of Western Civilization.  As I perused their website, I realized that despite our differences on immigration, we had a lot of common ground.  This jumped out at... MORE

The Missing Arguments

Behavioral Economics and Rationality
Bryan Caplan
Libertarians have a reputation for silly absolutism.  While there's truth in the stereotype, libertarians are at least as likely to make intellectually lazy exceptions to their general principles.  This is especially true when the people losing their liberty are foreigners... MORE

Myth of the Rational Voter: The Complete Animated Series

Behavioral Economics and Rationality
Bryan Caplan
All five of my Learn Liberty videos are now up.  The complete series:1. Intro. (thanks to Art for the shout-out).2. Anti-market bias.3. Anti-foreign bias.4. Make-work bias.5. Pessimistic bias.... MORE

Why Sailer Scares

Behavioral Economics and Rationality
Bryan Caplan
The full text of Steve Sailer's response to my Eugenic Experiment post reads: According to Gregory Clark's research on wills in England from 1200 to 1800, that's pretty much how English society worked: the richer you were, the earlier you... MORE

A Eugenic Experiment

Behavioral Economics and Rationality
Bryan Caplan
Imagine a Eugenic America where citizens who earn less than median income are forbidden to have children.  Enforcement isn't perfect, so 5% of all kids born are "illegals."  Over time, this leads to a substantial stock of people who weren't... MORE

Dear Nationalism

Behavioral Economics and Rationality
Bryan Caplan
Dear Nationalism,We've grown up together.  In a sense, you and I have been together our whole lives.  In a deeper sense, though, we've never been together.  I've tried to let you down easy a hundred times.  But subtlety doesn't work... MORE

Myth of the Rational Voter: The Animated Series, Part 4

Behavioral Economics and Rationality
Bryan Caplan
My Learn Liberty video on anti-foreign bias is now up.  It's the last of the series, probably the best, and certainly the most important.... MORE

Cartoon Introduction to Climate Change: Rejoinder to Yoram Bauman

Behavioral Economics and Rationality
Bryan Caplan
Here is my (delayed) rejoinder to Yoram's response to my review of his Cartoon Introduction to Climate Change.  He's in blockquotes, I'm not.As with most academics, Bryan keeps his words of praise to a minimum and instead focuses on criticisms.... MORE

Myth of the Rational Voter: The Animated Series, Part 3

Behavioral Economics and Rationality
Bryan Caplan
I'm back from vacation, and my Learn Liberty video on anti-market bias is up.  Enjoy.... MORE

Myth of the Rational Voter: The Animated Series, Part 2

Behavioral Economics and Rationality
Bryan Caplan
The second video in my Learn Liberty series is now up.  Rejoice in the folly of pessimistic bias!  Yes, Louis C.K. said it better, but humans learn by varied repetition.... MORE

Exploring Elitist Democracy: The Latest from Gilens and Page

Behavioral Economics and Rationality
Bryan Caplan
In light of the attention my Gilens posts are getting, now's a perfect time to examine his latest research on who actually runs America.  Co-authored with Benjamin Page, "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens," (Perspectives... MORE

Me, Gilens, and Salon

Behavioral Economics and Rationality
Bryan Caplan
Last year I wrote a series of posts (here, here, and here) arguing that Martin Gilens' evidence on the disproportionate influence of the rich on U.S. public policy is very good news indeed.  Long story short:I find Gilens' results not... MORE

Myth of the Rational Voter: The Animated Series

Behavioral Economics and Rationality
Bryan Caplan
Learn Liberty is doing a four-video series on The Myth of the Rational Voter's four big economic biases.  Production values are very high, and the animators used so many of my visual ideas that I can now justifiably re-classify my... MORE

Demagoguery Explained

Behavioral Economics and Rationality
Bryan Caplan
In the dictionary, "demagogues" are bad by definition.In Merriam-Webster, a demagogue is "a political leader who tries to get support by making false claims and promises and using arguments based on emotion rather than reason."In the Oxford Dictionary, he's "a... MORE

Where Does All the Booze Go?

Behavioral Economics and Rationality
James Schneider
In a recent post, Bryan wrote about how people do not accurately report how much tobacco they purchase. If they did, then the survey data would be consistent with tobacco sales. However, surveys report less than half of the actual... MORE

Farewell, James Schneider

Behavioral Economics and Rationality
David Henderson
Our guest blogger James Schneider will post his last entry tomorrow. Because his friend Bryan Caplan posted the welcome, I have asked for--and have been granted--the honor of writing his farewell. I met James at a Liberty Fund seminar on... MORE

Ayn Rand in the Happy Lab

Behavioral Economics and Rationality
Bryan Caplan
Ayn Rand made many uncharitable claims about her philosophical opponents, but this passage from Galt's Speech in Atlas Shrugged takes the cake:They do not want to own your fortune, they want you to lose it; they do not want to... MORE

Cowen and Crisis Reconsidered

Behavioral Economics and Rationality
Bryan Caplan
Robert Higgs famously blames the growth of government on crises - especially wars and depressions.  I firmly believed in this story for over a decade until I read Tyler Cowen's critique:The ratchet effect becomes much stronger in the twentieth century... MORE

Too Many

Behavioral Economics and Rationality
Bryan Caplan
"There are too many X" is usually a socially acceptable complaint.  With one key exception: If the X's are people.  Declaring, "There are too many blacks" makes you a racist.  Announcing, "There are too many Jews" makes you an anti-Semite. ... MORE

Social Desirability Bias: How Psych Can Salvage Econo-Cynicism

Behavioral Economics and Rationality
Bryan Caplan
The strongest evidence against the economic way of thinking is the way that people describe their own behavior.  People rarely announce, "I'm looking out for number one."  Businesses rarely advertise, "Our own profit is our top priority."  Students rarely declare,... MORE

Tourists Welcome

Cost-benefit Analysis
Bryan Caplan
Almost everyone wants to heavily restrict immigration.  Foreigners will take our jobs, go on welfare, poison our culture, and vote for socialism.  But there's one kind of foreigner almost every country welcomes: tourists.  Sure, locals gripe about their cluelessness and... MORE

Try Harder or Do Something Easier?

Behavioral Economics and Rationality
Bryan Caplan
A friend tells you, "I'm thinking of starting a restaurant.  Advise me."  You know that about 60% of new restaurants fail in their first three years - and have no reason to think that your friend would be anything other... MORE

Smoking, Social Desirability Bias, and Dark Matter

Behavioral Economics and Rationality
Bryan Caplan
At the IEA blog, Kristian Niemietz points out that expenditure surveys fail to detect most of the tobacco sales visible in national product accounts.  For most goods, the two show broadly the same pattern: with small errors, what people profess... MORE

Divorce and Motivated Reasoning in the WaPo

Behavioral Economics and Rationality
Bryan Caplan
In The Economic Naturalist, Robert Frank remarks: Normal 0 false false false MicrosoftInternetExplorer4 Psychologist Tom Gilovich has suggested that someone who wants to accept a hypothesis tends to ask, "Can I believe it?"  In contrast, someone who wants to reject... MORE

Kids and Happiness: The State of the Art

Behavioral Economics and Rationality
Bryan Caplan
Nelson, Kushlev, and Lyubomirsky's "The Pains and Pleasures of Parenting: When, Why, and How Is Parenthood Associated With More or Less Well-Being?" (forthcoming in the Psychological Bulletin) is a great survey of research on parenthood and happiness.  Quick version: Contrary... MORE

Crude Self-Interest: Why Kids Go to College

Behavioral Economics and Rationality
Bryan Caplan
Economists tend to dogmatically reduce human behavior to crude self-interest.  They're often deeply wrong.  Sometimes, though, the shoe fits.  UCLA's Higher Education Research Institute has been asking kids why they're going to college for a long time.  In recent decades,... MORE

Water Runs Downhill, and School Is Boring

Behavioral Economics and Rationality
Bryan Caplan
Lately I've been reading everything I can on how people feel when they're in school.  The evidence is thin, but confirms the obvious: Most people find school super-boring.  The High School Survey of Student Engagement is probably the single best... MORE

Nudging consumers and regulators

Behavioral Economics and Rationality
Alberto Mingardi
About one year ago, the British Financial Conduct Authority (FCA) -- which also regulates consumer credit -- published an Occasional Paper aimed at explaining how it is going to take advantage of the insights of behavioral economics. For one thing,... MORE

The Market for Less

Behavioral Economics and Rationality
Bryan Caplan
Guest blogger James Schneider makes a thought-provoking point about the market for self-control:The market is often better at abetting good habits than it is at discouraging bad habits. Imagine an alternate world in which a lot of people aspired to... MORE

The Worst They Can Do

Behavioral Economics and Rationality
Bryan Caplan
All modern governments do terrible things during wartime.  Most deliberately murder innocents; the rest at least recklessly endanger innocents.  Morally speaking, all sides in any serious military conflict are led by war criminals.Unfortunately, however, these genuine insights often lead my... MORE

Immigration: My Eyes Work Fine

Behavioral Economics and Rationality
Bryan Caplan
Critics of my open borders advocacy often accuse me of intellectual blindness, of living in a fantasy world of my own creation.  So rather than rehash any of my arguments or review the academic evidence yet again, I'm going to... MORE

Blame the Republicans

Behavioral Economics and Rationality
Bryan Caplan
When I blame people for their problems, Democrats and liberals are prone to object at a fundamental level.  One fundamental objection rests on determinism: Since everyone is determined to act precisely as he does, it is always false to say,... MORE

40 Years on the Status Treadmill

Economic History
Bryan Caplan
The General Social Survey has spent four decades asking Americans about their self-perceived status:If you were asked to use one of four names for your social class, which would you say you belong in: the lower class (=1), the working... MORE

The Happiness of the Richest

Behavioral Economics and Rationality
Bryan Caplan
Over lunch, Justin Wolfers mentioned a hard-to-believe fact: In a data set with an unusually high maximum income category, 100% of the richest people were "very happy."  I decided to track down the data.  Despite my incredulity, Justin's description was... MORE

What Say You? The Intuitive Case Against the Minimum Wage

Behavioral Economics and Rationality
Bryan Caplan
Don Boudreaux asks minimum wage supporters to answer two questions they should have asked themselves long ago.Question #1:Name some other goods or services for which a government-mandated price hike of 25 percent will not cause fewer units of those goods and services... MORE

Wolfers Responds on Happiness

Behavioral Economics and Rationality
Bryan Caplan
Justin Wolfers kindly responded to my recent post.  His thoughts, reprinted with his permission. Interesting, fun, provocative, and well written.  Your math looks to be right to me. Some thoughts: 1. I'm not sure that controlling for confounds necessarily would... MORE

Crude Materialism versus the Wolfers Equation

Behavioral Economics and Rationality
Bryan Caplan
Suppose you're a crude materialist who believes that money is the secret to happiness.  You're estimating an equation of the form: Happiness (in Standard Deviations) = a + b * ln(income) How big should you expect b to be?  Well,... MORE

For Crying Out Loud, Dineen: Dealing with Long-Held Views that are Wrong

Behavioral Economics and Rationality
David Henderson
At first, you might think this post is just about hockey. But it's not. There's a moral to the story about how we can make the mistake of falling in love with our views simply because they have become part... MORE

Erik Prince on Collective Punishment

Behavioral Economics and Rationality
David Henderson
Co-blogger Bryan's post, "Desert versus Identity," has got me thinking. Bryan writes: War crimes are a stark example. Suppose a soldier from group X plainly murdered ten innocent civilians from group Y. What do the people of X say? "It... MORE

Desert versus Identity

Behavioral Economics and Rationality
Bryan Caplan
When moderns read the Old Testament, they're often horrified by the gruesome collective punishments.  Mankind falls into wickedness, so God sends a flood to drown every man, women, and child on earth?*  Before the book is over, though, the prophets... MORE

Evolutionary Psychology on Crusonia

Behavioral Economics and Rationality
Bryan Caplan
Suppose two 20-year-olds wash up on a the desert island of Crusonia.  One is male, the other female.  They are both from the same country, but are otherwise randomly selected.  Both are convinced they have no hope of escaping the... MORE

The Futility of Quarreling When There Is No Surplus to Divide

Behavioral Economics and Rationality
Bryan Caplan
Imagine two people have the following relationship options:Option A: DateOption B: Be FriendsOption C: Stop Seeing Each OtherPerson #1's preference ordering is: {A, C, B}.  In English, #1 most prefers to date, and least prefers to just be friends.Person #2's... MORE

What the Swiss Vote Really Shows

Behavioral Economics and Rationality
Bryan Caplan
The Swiss just passed a referendum to restrict immigration from the EU.  Tyler thinks this shows that open borders is a hopeless cause.  When immigration gets too high, public opinion naturally turns against immigration. Normal 0 MicrosoftInternetExplorer4 In my view... MORE

A Question of Organizational Literacy

Behavioral Economics and Rationality
Bryan Caplan
What fraction of Americans can correctly explain the difference between a business and a corporation?Please show your work.... MORE

The Sucker Tax

Behavioral Economics and Rationality
James Schneider
When people refer to humans as "sheep," it frequently sets my neck hair on edge. Mostly because I'm a speciesist, but also because people lump together a wide variety of disparate behaviors to imply that people "mindlessly" follow social norms.... MORE

Gochenour-Nowrasteh on the Political Externalities of Immigration

Behavioral Economics and Rationality
Bryan Caplan
Does immigration expand the welfare state by increasing the share of voters that benefit from government programs?  Or does immigration contract the welfare state by undermining voters' sense of national identity?  Critics of the welfare state tend to think the... MORE

I'm Too Busy Fighting Tyranny to Feed My Family

Behavioral Economics and Rationality
Bryan Caplan
Suppose your Facebook friend, John, is a political junkie.  Every day, he floods your Newsfeed with the latest political news and op-eds.  He provides play-by-play coverage of protests and rallies around the globe.  He travels hundreds of miles every week... MORE

Self-Harm is a Luxury

Behavioral Economics and Rationality
Bryan Caplan
From Cutler and Lleras-Muney, "Understanding Differences in Health Behaviors by Education" (Journal of Health Economics 2010):Differences in prices or in response to prices are a second potential reason for education-related differences in health behaviors. This shows up most clearly in... MORE

In Praise of Passivity

Behavioral Economics and Rationality
Bryan Caplan
"In Praise of Passivity" is another gem from Mike Huemer, my favorite philosopher.  Thesis:Voters, activists, and political leaders of the present day are in the position of medieval doctors. They hold simple, prescientific theories about the workings of society and... MORE

Predicting the Popularity of Obvious Methods

Behavioral Economics and Rationality
Bryan Caplan
Imagine a Question in social science.  The Question can be analyzed using an Obvious Method - a simple, standard approach that social scientists have used for decades.  The Question has a Welcome Answer  - an answer that the typical social... MORE

Some historians argue that colonialism was an outgrowth of nationalism.  Once the people in the leading industrial powers started to strongly identify as British, French, German, American, or Japanese, they fell in love with the idea of planting their national... MORE

Why So High? Economics and the Value of Life

Behavioral Economics and Rationality
Bryan Caplan
Economists are widely-seen as heartless.  Their use of the phrase "value of life" is often seen as damning confirmation of this heartlessness.  Nice people say, "You can't put a value on a human life" and change the subject!What's striking, though,... MORE

Drowning Redheads is Wrong Even Though Water is Wet

Behavioral Economics and Rationality
Bryan Caplan
Suppose we lived in a society split between the following intellectual package deals:Package #1: Water is wet, so we should drown redheads.Package #2: Water isn't wet, so we shouldn't drown redheads.What would happen if a lone voice of common sense... MORE

The Prudence of the Poor

Behavioral Economics and Rationality
Bryan Caplan
Ari Fleisher in the WSJ:Given how deep the problem of poverty is, taking even more money from one citizen and handing it to another will only diminish one while doing very little to help the other. A better and more... MORE

The Discipline of Dismissal

Behavioral Economics and Rationality
Bryan Caplan
Tyler has some dismissive observations about the practice of dismissal: One of the most common fallacies in the economics blogosphere -- and elsewhere -- is what I call "devalue and dismiss."  That is, a writer will come up with some... MORE

Sitting on an Ocean of Hypotheticals

Behavioral Economics and Rationality
Bryan Caplan
David senses a weakness in my "Sitting on an Ocean of Talent": But I don't think people's opposition to more immigration is that different from how they would react to those who would prevent them from getting at precious resources.... MORE

Self-Help: The Obvious Remedy for Academic Malemployment

Behavioral Economics and Rationality
Bryan Caplan
Megan McArdle surveys the harsh realities of academic malemployment, then despairs:A substantial fraction -- maybe the majority -- of PhD programs really shouldn't exist.But of course, this is saying that universities, and tenured professors, should do something that is radically... MORE

Tell Me How It Feels to Be a Bad Student

Behavioral Economics and Rationality
Bryan Caplan
Being a bad student must be a miserable experience.  Teachers, parents, and other kids point out your failings day after day.  Even if they sugarcoat their negative feedback ("Billy needs to improve in... everything"), that's gotta hurt.Why then do we... MORE

The Orange Moon

Behavioral Economics and Rationality
Bryan Caplan
When I was around 4 years old, my family took a trip to Nevada.  While there, I saw my first orange moon.  I couldn't believe my eyes.When I returned home, I told my best friend, Adam, what I'd seen.Me: In... MORE

Will on Somin on Judicial Review

Behavioral Economics and Rationality
Bryan Caplan
George Will shines a spotlight on Ilya Somin's Democracy and Political Ignorance.  Highlight:Political ignorance, Somin argues, strengthens the case for judicial review by weakening the supposed "countermajoritarian difficulty" with it. If much of the electorate is unaware of the substance... MORE

The Prideful Worker Effect

Behavioral Economics and Rationality
Bryan Caplan
Both economists and laymen often claim that unemployment statistics paint an overly rosy picture of the labor market.  Why?  Because they refuse to count discouraged workers as "unemployed."  To qualify as "unemployed," you have to look for a job.  But... MORE

Grow the Respect Pie

Behavioral Economics and Rationality
Bryan Caplan
I second David's praise for Noah's piece on respect.  But why talk about "redistributing respect" rather than "showing more respect"?  In econ jargon, why not increase the size of the respect pie instead of squabbling over the size of the... MORE

Who These Kids Are

Behavioral Economics and Rationality
Bryan Caplan
Fab Rojas' response to my last post, reprinted with his permission. I just read your post about the 10% of students who do nothing in a college course. They don't attend, take exams or other appear in any other capacity.... MORE

Who Are These Kids?

Behavioral Economics and Rationality
Bryan Caplan
About 10% of my enrolled undergraduate students literally do nothing in my class.  They attend zero lectures, do zero homework, and fail to show up for the midterm or the final.  Yet when I'm handing out grades, the official roster... MORE

Gifts, Efficiency, and Social Desirability Bias

Behavioral Economics and Rationality
Bryan Caplan
Is cash the only efficient gift?  Pure economic theory points to two contradictory answers:1. Yes, because of the receiver's demonstrated preference.  Suppose gift X costs $100.  If you gave the receiver $100, would he still have spent the money on... MORE

Farewell to Bart Wilson, For Now

Behavioral Economics and Rationality
Bryan Caplan
Guest blogger Bart Wilson is signing off, for now.  He's been one of my favorite experimental economists for the last decade, and I've been pleased to see him bring his unique perspective to EconLog over the past month.  Out of... MORE

Some Explanations for the Curious Absence of Socially Conservative Economics

Behavioral Economics and Rationality
Bryan Caplan
Ross Douthat provides an array of explanations for the curious absence of socially conservative economics.  His top stories:1. There's more socially conservative economics than meets the eye.The first is that social conservatives actually do make such arguments, even if the... MORE

Ambition

Behavioral Economics and Rationality
Bryan Caplan
Most researchers oversell their results.  After re-reading Dale and Krueger's latest piece on the selectivity premium, however, I suspect that they are greatly underselling their results.  They haven't just undermined the value of academic selectivity; they've confirmed the value of... MORE

Phase-In: A Demagogic Theory of the Minimum Wage

Behavioral Economics and Rationality
Bryan Caplan
Increases in the minimum wage are usually "phased-in."  Instead of raising the minimum wage overnight, the law usually specifies a series of steps.  The Fair Minimum Wage Act of 2007 increased the prior $5.15 minimum wage in three steps:  ...to... MORE

Illusory Bubbles

Behavioral Economics and Rationality
Bryan Caplan
Scott Sumner succinctly explains how illusory bubbles can appear in a world ruled by the Efficient Markets Hypothesis:How should Bitcoin be priced?  If there is a 95% chance that it will soon be worthless and a 5% chance that it... MORE

Means-Testing and Behavioral Econ

Behavioral Economics and Rationality
Bryan Caplan
I'm a big fan of means-testing (see here, here, and here for starters).  Analytically, though, stringent means-testing is indistinguishable from high marginal tax rates.  In both cases, the government takes away a big chunk of every dollar you earn.  Philosophers... MORE

Economics and The Rapture

Behavioral Economics and Rationality
Art Carden
Economists are fond of calling environmental doomsayers' bluffs by challenging them to invest in oil futures if they're really afraid we're going to run out of oil within the next few years. I've done this before (here, for example, is... MORE

Hobbesian Misanthropy in The Purge

Behavioral Economics and Rationality
Bryan Caplan
Remember my Hobbesian thought experiment?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... MORE

Would Buy-and-Hold Cut Finance Down to Size?

Behavioral Economics and Rationality
Bryan Caplan
The U.S. financial sector is now 8.4% of GDP.  It grew from about 2% of GDP in the late 1940s to about 8% in 2000; it's been roughly flat since.  From the Wall St. Journal:My question: Suppose buy-and-hold investment strategies... MORE

The Learning of the Wise

Behavioral Economics and Rationality
Bryan Caplan
Non-economists often advertise their ignorance of economics.  Debate opponent Ron Unz is the latest to cross my path:Now, you know, I'm laboring under a disadvantage in this debate because not only am I not a trained economist, I've never even... MORE

Best. Comment. Ever.

Econlog Administrative Issues
Art Carden
A quote from reader Tom West's comment on Saturday's post about why bad stories stick: Deprived of a narrative when given a bunch of facts, humans will use the facts they're given to compose a narrative, and then adjust the... MORE

Why Do Incorrect Stories Stick?

Behavioral Economics and Rationality
Art Carden
I want to give up on college sports. I can't. While it doesn't carry national championship implications for LSU, today's Alabama-LSU game is still a pretty big deal. In 2011, they met in the "Game of the Century" that was... MORE

At risk of sounding like a sore loser, I've claimed that many Intelligence Squared participants initially voted metaphorically.  The resolution said "Let Anyone Take a Job Anywhere," but many attendees voted For simply because they are pro-immigration by mainstream American... MORE

The Naik Strategy

Behavioral Economics and Rationality
Bryan Caplan
An interesting Facebook post by the noble Vipul Naik, reprinted with his permission.  Vipul:I think Bryan Caplan could have won the Intelligence Squared debate by pandering to his audience in the following ways: (1) Stated that "America is a nation... MORE

Do We Work Too Much?

Behavioral Economics and Rationality
Art Carden
A student sent me a link to this article claiming that we would be better off with a thirty-hour as opposed to forty-hour workweek. I'm sympathetic to the argument: I think a lot of us are on the wrong side... MORE

Trust, Diversity, Credit Cards, and E-Commerce

Behavioral Economics and Rationality
Bryan Caplan
Modern social scientists are in love with trust.  Economists, sociologists, and political scientists all eagerly explain that high-trust societies work, and low-trust societies don't.  Trust is so beloved that many leftist social scientists have started to sound like social conservatives. ... MORE

Why Not Compulsory College?

Behavioral Economics and Rationality
Bryan Caplan
A few nay-saying libertarians and unschoolers aside, almost everyone favors compulsory K-12 education.  Yet virtually no one favors compulsory college.  It's quite a mystery.  If mandatory education is a great idea at the primary and secondary levels, why would it... MORE

Pick Your Poison

Cost-benefit Analysis
Bryan Caplan
Suppose you need a helper, but face two imperfect candidates:1. A smart person who only cares about himself.2. A stupid person who only cares about you.Under what conditions would you prefer #1?  Under what conditions would you prefer #2?  Why? ... MORE

Why Do Firms Prefer More Able Workers?

Behavioral Economics and Rationality
Bryan Caplan
Academics habitually tax the public's patience with stupid questions.  It's easy to see why practical folk ignore us.  Every now and then, though, an academic asks a truly profound question that seems stupid on the surface.  Case in point: David... MORE

The Iron Laws of Pedagogy

Behavioral Economics and Rationality
Bryan Caplan
Everyone who's ever been a student can vouch for what I call the Iron Laws of Pedagogy:First Iron Law: Students learn only a small fraction of what they're taught.Second Iron Law: Students remember only a small fraction of what they... MORE

Giving Writers the Benefit of the Doubt

Behavioral Economics and Rationality
Art Carden
It's been said that libertarian philosophers love Murray Rothbard as an economist and historian, but not as a philosopher. Libertarian historians love Murray Rothbard as an economist and philosopher, but not as an historian. Libertarian economists love Murray Rothbard as... MORE

Reclaiming Fairness as a Precept of Commerce

Politics and Economics
Bart Wilson
Fairness isn't an end commonly associated with markets. If anything, our empathetic instincts often lead us to view the outcomes of competition in the marketplace as unfair. But fairness as it relates to markets wasn't always such a hazy concept.... MORE

Why Not Protect Workers from Customers?

Behavioral Economics and Rationality
Bryan Caplan
Most countries have a long list of "worker protection" laws.  Laws protect workers against low pay, lack of benefits, discrimination, sexual harassment, overtime at normal pay, and much much more.  Basic labor economics teaches us to view these laws with... MORE

A Challenge for Anti-Keynesians

Behavioral Economics and Rationality
Bryan Caplan
Many of my favorite people are strident anti-Keynesians.  In their eyes, Keynesianism isn't just false; it's incoherent pseudo-science, a blight on our fair economics profession.  Those who think of Keynesianism as pseudo-science generally hold all Keynesians in one dim view. ... MORE

A Cheap, Inoffensive Way to Make Democracy Work Better

Cost-benefit Analysis
Bryan Caplan
Experts agree: The typical voter knows next to nothing about politics, economics, or policy.  In a democracy, this has major negative externalities.  Existing civics education is supposed to deal with these externalities, but it's been an abject failure: Students learn... MORE

Morbid Thinking

Behavioral Economics and Rationality
Bryan Caplan
We often accuse each other of wishful thinking.  Only rarely, though, do we accuse each other of the opposite cognitive vice: morbid thinking.  The disparity could be purely linguistic, but it probably isn't.  We have tons of synonyms for "wishful... MORE

The Error of Utilitarian Behavioral Economics

Behavioral Economics and Rationality
Bart Wilson
If you hang around economists long enough, you're bound to hear the word utility. They don't mean it in the original (at least 500 years old), usefulness sense of the word, as in the utility of electric power to wash... MORE

Would Obamacare Have Saved Walter White's Soul?

Behavioral Economics and Rationality
Bryan Caplan
[Warning: Non-Finale Breaking Bad Spoilers]The Daily Beast's Jamelle Bouie claims that Obamacare would have ruined the premise of Breaking Bad:Remember, the instigating action of the series is White's cancer diagnosis--in order to pay for his treatments and leave a nest... MORE

The Great Malemployment Debate

Behavioral Economics and Rationality
Bryan Caplan
From an early age, my father warned me that if I refused to major in engineering, I could easily end up driving a taxi.  As I matured, I discovered that his over-the-top warnings had a firm basis in fact.  Many... MORE

The Homage Statism Pays to Liberty

Economic Philosophy
Bryan Caplan
Here's an odd thought for a libertarian: The government very rarely tells me to do anything.  Once per year, the IRS orders me to pay federal income taxes.  Once per year, the state of Virginia forces me to pay state... MORE

What Bewley Learned

Behavioral Economics and Rationality
Bryan Caplan
I mistrust prescient empirical researchers.  If you claim that your research confirms your predictions in every detail, you might be a genius, but you're probably just extremely unobservant.  One of the reasons I so greatly admire Truman Bewley's Why Wages... MORE

Why Don't Wages Fall During a Recession?: Q&A With Me Channeling Truman Bewley

Behavioral Economics and Rationality
Bryan Caplan
I finally got around to reading Truman Bewley's Why Wages Don't Fall During a Recession cover-to-cover.  The book is a miracle - easily one of the five best empirical economics books I've ever read, and possibly the best of the... MORE

My posts last week explained why the government should regulate, if not prohibit outright, meals cooked at home as a matter of public health and also as a matter of employment and prosperity (1, 2). Here's another idea. You require... MORE

The We in Wealth

Behavioral Economics and Rationality
Bart Wilson
The first economic experiment in our Humanomics class is based upon my research article with Sean Crockett and Vernon Smith. The idea for the project came from an honors course that Vernon and I have co-taught using experiments to teach... MORE

Incentives in Foreign Policy

Behavioral Economics and Rationality
David Henderson
One of the issues I emphasized in my speech last night, "The Economic, Moral, and Constitutional Case for a Non-Interventionist Foreign Policy," was the role of incentives. Here's part of what I said: Now consider the incentive problem. Neither the... MORE

The Gratitude of Bryan Cranston

Behavioral Economics and Rationality
Bryan Caplan
Breaking Bad star Bryan Cranston knows the secret of happiness: gratitude.I think if you believe in past lives, I must have been an extremely deprived being.  I must have been mistreated, beaten, and forced into indentured servitude because this life... MORE

Life Extension: Economists vs. the Public

Behavioral Economics and Rationality
Bryan Caplan
Earlier this year, Pew surveyed Americans' beliefs about life extension.  I was appalled by their nihilistic responses.  Worst of the bunch:Asked about the consequences for society if new medical treatments could "slow the aging process and allow the average person... MORE

Business, Lobbying, and the Big Picture

Behavioral Economics and Rationality
Bryan Caplan
When the sugar industry lobbies for sugar tariffs, economists are quick to cry "Rent-seeking!"  A concentrated interest lobbies for a concentrated benefit, paid for by a diffuse public - nothing mysterious.  Strangely, though, businesses also often lobby for Big Picture... MORE

Motivated Numeracy and the Enlightenment

Behavioral Economics and Rationality
Bryan Caplan
Kevin Drum and Chris Mooney have already posted excellent summaries of this neat study of motivated numeracy.  You should read them.  But if you prefer the digest version: Even unusually numerate people take off their thinking caps when the numbers... MORE

Economics as a Branch of Literature

Behavioral Economics and Rationality
Bart Wilson
Shortly before arriving at Chapman University in 2008 I discovered some essays by Frank Knight. Every graduate student in economics learns about or, at least, has heard references to Frank Knight, one of the original members of the "Chicago school... MORE

Who Is Tyler's Reference Group?

Behavioral Economics and Rationality
Bryan Caplan
As soon as I saw Tyler's latest post on "Why the Theory of Comparative Advantage is Overrated," I asked myself, "Overrated by whom?"  The theory clearly isn't overrated by the 95%+ of American adults who have no idea what the... MORE

The Tears of Termination

Behavioral Economics and Rationality
Bryan Caplan
Earlier this year, I argued that Casey Mulligan's theory of labor market contradicts introspection:Ask yourself:When someone gets laid-off, what is his main emotional reaction likely to be?  Sorrow.When someone gets a nominal wage cut, what is his main emotional reaction... MORE

Lake Wobegon on the Job

Behavioral Economics and Rationality
Bryan Caplan
Neat stuff from Baker, Jensen, and Murphy's "Compensation and Incentives: Practice vs. Theory" (Journal of Finance, 1988):The lack of financial incentives reported by Medoff and Abraham [32] and summarized in  able I is surprising, but even more surprising is the... MORE

Yesterday's post on what I've read recently provoked two interesting comments on the title of Michael Adams' Letters to a Young Progressive, one from ThomasH, the other from none other than David Friedman (!!). They made me wonder: which group... MORE

The People of Economath

Behavioral Economics and Rationality
Bryan Caplan
Paul Krugman graciously responds to my economath post, but demurs:It turned out -- and still turns out -- that people's economic intuition, if untutored by models, missed a major possibility that is in fact probably the main story.My question for... MORE

Economath Fails the Cost-Benefit Test

Behavioral Economics and Rationality
Bryan Caplan
Paul Krugman responds to Noah Smith's tale of disillusion with mathematical economics:I share much of his cynicism about the profession, but I think he's missing the main way (in my experience) that mathematical models are useful in economics: used properly,... MORE

Expressive Voting, Emigration, and Alsace-Lorraine

Behavioral Economics and Rationality
Bryan Caplan
In 1871, the German Empire annexed the French territory of Alsace-Lorraine, known to the Germans as Elsass-Lothringen.  The inhabitants were overwhelmingly German-speaking, but most clearly resented absorption into the new German Empire.  What is striking, however, is how differently this... MORE

Sunstein Goes Straight to Coercion

Regulation
David Henderson
Time out from posting on Galbraith to note a current discussion. My next post on Galbraith will appear this afternoon. Co-blogger Bryan Caplan has posted recently and cogently about libertarian paternalism and outright coercion. As it happens, I have a... MORE

What Happens to Women Who Are Denied Abortions?

Behavioral Economics and Rationality
Bryan Caplan
In Joe Colucci's thoughtful response to my "Nudge and Abortion," he writes:[D]ata saying that women are generally happy with their children, even after unplanned pregnancies, are unlikely to be representative of the population we're. More relevant evidence comes from the... MORE

Nudge and Abortion Followup

Behavioral Economics and Rationality
Bryan Caplan
"Nudge and Abortion" has sparked a lively Twitter debate.  Leigh Caldwell has most thoughtful reaction:Leigh: @BafMacro but: @bryan_caplan's arg holds IF his preference premise is true. Regretting NEVER having kids != regretting an abortion @R_ThalerMy response to Leigh: I didn't... MORE

Nudge and Abortion

Behavioral Economics and Rationality
Bryan Caplan
Here's my ongoing Twitter exchange with Richard Thaler: Thaler: As @CassSunstein and I say repeatedly in Nudge, the goal is to improve outcomes for people AS JUDGED BY THEMSELVES, not policy maker's tasteMe: .@R_Thaler @ATabarrok @CassSunstein So what existing *hard*... MORE

Why No Slippery Slope? Because Paternalists Start at the Bottom

Behavioral Economics and Rationality
Bryan Caplan
If libertarian paternalism is a slippery slope, why aren't we sliding?  Don Boudreaux provides the obvious answer: Because almost all paternalism is coercive from the get-go:One reason why the empirical record isn't more full of nudges turning into diktats is... MORE

Sympathy for the Citizenist

Behavioral Economics and Rationality
Bryan Caplan
Citizenists strike me as extraordinarily angry people.  But I have to admit: If I were them, I'd be angry too.  Consider their intellectual situation: Every orthodox moral theory - utilitarianism, Kantianism, egalitarianism, libertarianism, wealth maximization, Rawlsianism, Christianity, and Marxism for... MORE

Tribalism, Misanthropy, and the Lesser Evil

Behavioral Economics and Rationality
Bryan Caplan
I've long attacked tribalism and misanthropy as grave evils.  Only recently, though, have I had two epiphanies:1. Tribalism without misanthropy is fairly harmless.  If you're optimistic about the potential of the typical human, you'll see out-groups as opportunities for mutually... MORE

Do Wage Cuts Reduce Communal Purchasing Power?

Behavioral Economics and Rationality
Bryan Caplan
I'm frankly stunned that Krugman would approvingly quote the following passage from Keynes:[I]f a particular producer or a particular country cuts wages, then, so long as others do not follow suit, that producer or that country is able to get... MORE

Libertarianism as Moral Overlearning

Economic Philosophy
Bryan Caplan
"Overlearning" is a key idea in educational psychology.  One good explanation:Overlearning is a pedagogical concept according to which newly acquired skills should be practiced well beyond the point of initial mastery, leading to automaticity.In experiments, researchers often test the effects... MORE

Immigration, Misanthropy, and the Holocaust

Behavioral Economics and Rationality
Bryan Caplan
The Museum of Jewish Heritage in NYC features an outstanding exhibit on European Jewry's struggle to escape from Hitler's clutches.  Throughout the 1930s, the Nazis officially encouraged Jewish emigration.  The catch: By definition, every emigrant from Nazi territory had to... MORE

Business Brainwashing and Vocational Education

Behavioral Economics and Rationality
Bryan Caplan
I'm a huge fan of child labor, also known as "vocational education."  Almost everyone would be better off if students in the bottom half of their class began full-time apprenticeships after elementary school.  If you hate sitting still and you're... MORE

Who's Second-Guessing

Behavioral Economics and Rationality
Bryan Caplan
The issue from yesterday post was... drug policy.  The author, Scott Morgan, is reacting to Mark Kleiman's disinterest in the legalization option.  Kleiman:But there are things we can do about drug policy that would reduce the number of people in... MORE

Nudge, Policy, and the Endowment Effect

Behavioral Economics and Rationality
Bryan Caplan
Last week, Maxim Lott solicited my thoughts on Obama's "nudge team."  Here's what I would have told him if I hadn't been on vacation:"Nudging" is a great idea.  We should start by ending existing hard paternalism in favor of gentle... MORE

Guess Who's Second-Guessing

Cost-benefit Analysis
Bryan Caplan
A single-issue website laments:It is just depressing to witness academics confining the discussion of complex issues within the parameters of pre-existing public opinion. What's the point of possessing vast knowledge of any subject if one chooses to then limit themselves... MORE

Gintis on the Evolution of Private Property

Behavioral Economics and Rationality
Bryan Caplan
Herb Gintis' "The Evolution of Private Property" (Journal of Economic Behavior and Organization, 2007) is one of the most fascinating articles I've read in years. (ungated draft)  I'm slightly jealous because I've planned to write a similar piece for a... MORE

Vegetarianism and Moral Self-Deception

Behavioral Economics and Rationality
Bryan Caplan
Vegetarianism is plagued by apostates as well as hypocrites:[A]ccording to a 2005 survey by CBS News, three times as many American adults admit to being "ex-vegetarians" than describe themselves as current vegetarians. This suggests that roughly 75% of people who... MORE

Vegetarianism and Social Desirability Bias

Behavioral Economics and Rationality
Bryan Caplan
Economists love to dismiss surveys: "You can't believe what people say.  You have to look at what they actually do."  Yet we rarely bother to actually demonstrate the unreliability of surveys.  Economists may be pleased to know, then, that two... MORE

Betting Therapy

Behavioral Economics and Rationality
Bryan Caplan
A great practical idea from Eliezer Yudkowsky:Betting Therapy" should be a thing. You go to a betting therapist and describe your fears - everything you're afraid will happen if you do X - and then the therapist offers to bet... MORE

Althaus on War and Informed Opinion

Behavioral Economics and Rationality
Bryan Caplan
Sam Wilson's results on war and income don't surprise me, but I think Art is misinterpreting them.  Income is a decent proxy for political knowledge, and Scott Althaus ably summarizes the subtleties of political knowledge and foreign policy in his... MORE

The Roots of Signaling Denial

Behavioral Economics and Rationality
Bryan Caplan
The signaling model of education fits first-hand experience.  It fits the psychology of learning.  It explains otherwise very puzzling facts like the sheepskin effect.  There are few theories in economics harder to doubt.  But many economists continue to do so. ... MORE

Numeracy and Risk in Air Travel: A Personal Account

Behavioral Economics and Rationality
David Henderson
Months ago, my wife and I made plans to fly from San Francisco to Honolulu on Sunday, July 7. Of course, we didn't know that the day before there would be a big airline crash in San Francisco. Should that... MORE

Last summer, during one of my first meals at Samford University, I thought I had stumbled upon clever choice architecture at one of the drink dispensers. You can get water by pushing your cup against a lever, but getting soda... MORE

The Mosquito Bite Analogy

Behavioral Economics and Rationality
Bryan Caplan
Free-market economists often lament the difficulty of communicating their ideas to a popular audience.  Why?  Because the free-market prescription is often, "Government should leave the problem alone.  Trying to fix it only makes it worse."  How is anyone supposed to... MORE

A Bet I'd Hate to Win, A Bet Bryan Would Love to Lose

Behavioral Economics and Rationality
Art Carden
I've been influenced by Julian Simon, Robin Hanson, and our own Bryan Caplan when it comes to putting your money where your mouth is, and I've come to agree with Alex Tabarrok that "A Bet is a Tax on Bull****."... MORE

Market Distortions Are Lower Bounds

Behavioral Economics and Rationality
Art Carden
A few days ago, I blogged from the Mall of America and asked whether it is "the most bourgeois place on Earth." One commenter pointed out that it's subsidized and actually policed by the Bloomington PD. Neither really surprise me... MORE

New at the IHS Kosmos Blog: My Productivity Bookshelf

Books: Reviews and Suggested Readings
Art Carden
One of my favorite organizations in the world is the Institute for Humane Studies. This isn't because I do contract work for them or because I won their 2013 Alum of the Year Award. I do contract work for them... MORE

Bets, Portfolios, and Belief Revelation

Behavioral Economics and Rationality
Bryan Caplan
Adam Ozimek just reminded me that I still need to refute the Tyler Cowen/Noah Smith view that "portfolios reveal beliefs, bets reveal personality traits and public posturing."  Smith's version:It's a mistake that most people make (myself often included!), and that... MORE

Henderson on Kunruether et al

Economics of Health Care
David Henderson
But Kunreuther, Pauly, and McMorrow show that when insurance regulators themselves don't cause adverse selection, it tends not to happen. They write: Where adverse selection does potentially occur, and to a serious degree, is in markets where regulation prevents insurers... MORE

Parental Economics and Risk: A Couple of Reading Suggestions

Behavioral Economics and Rationality
Art Carden
Last week, I raised a few proverbial glasses to my wife and two of my kids. It's only proper that I continue with a few words on parenting. While I've basically given up Facebook (I'm still cleaning out my friends... MORE

Debate: Does Democracy Work?

Behavioral Economics and Rationality
Bryan Caplan
Last week I did an online debate for Learn Liberty with philosopher Helene Landemore.  The topic: Does democracy work?  Here's my opening statement.Democracy clearly works if you set the bar low enough.  Is democracy better than dictatorship?  Of course.  Does... MORE

Efficiency, Equity, and Ideology: What "Other Values" Matter?

Behavioral Economics and Rationality
Art Carden
Here's a puzzle I've noticed: criticize government intervention on efficiency grounds, and you will be quick to be told that there are "other values" (equity, for example) that a good society should consider in addition to efficiency. Perhaps you will... MORE

A Hawk-Dove Ideological Turing Test

Behavioral Economics and Rationality
Bryan Caplan
In Stereotype Accuracy, Clark McCauley describes a fascinating Ideological Turing Test from 1972:Dawes, Singer, and Lemons (1972)... recruited students who were "hawks" and "doves" with regard to the Vietnam War and asked them to write opinion statements that the typical... MORE

Quotable

Political Economy
Bryan Caplan
From Shikha Dalmia:[T]he GOP has managed to alienate not just Hispanics allegedly collecting welfare and living below the poverty level. With a few exceptions like Cuban and Vietnamese Americans, it has alienated every ethnic minority: high- or low-skilled; Asian or... MORE

Bastards and Stereotype Accuracy

Behavioral Economics and Rationality
Bryan Caplan
I'm a firm believer in stereotype accuracy.  I just finished re-reading my favorite chapters from Lee, Jussim, and McCauley's excellent Stereotype Accuracy: Toward Appreciating Group Differences.  The book was published in 1995; Jussim's recent summary brings us up to date. ... MORE

What Does Education Signal? The Case of Edward Snowden

Behavioral Economics and Rationality
Bryan Caplan
A striking biographical fact about NSA whistleblower Edward Snowden:By his own admission, he was not a stellar student. In order to get the credits necessary to obtain a high school diploma, he attended a community college in Maryland, studying computing,... MORE

Better Living Through Economics: Using Incentives to Get Fitter

Behavioral Economics and Rationality
Art Carden
My latest article at Forbes.com explains the set of self-imposed constraints I'm using to eat better and exercise. I'm threatening myself with a very sharp stick; for every goal I don't meet, I have to give the Democratic Party $5... MORE

Your Sort Is Prohibited: A Licensing Dialog

Behavioral Economics and Rationality
Bryan Caplan
When you shop online, vendors usually give you a bunch of different ways to sort your options.  Take Amazon:One popular sorting option - especially for customers with low income - is "Price: Low to High."  You've probably used it yourself... MORE

The Myth of the Rational Voter: Experimental Edition

Behavioral Economics and Rationality
Bryan Caplan
I've long argued (here, here, and here for starters) that weak incentives are a major cause of political irrationality, but I've failed to convince Gerry Mackie, Jeff Friedman, Tyler Cowen, and many other critics.  So I was delighted to discover... MORE

Misanthropy by Numbers

Behavioral Economics and Rationality
Bryan Caplan
Suppose you're a self-doubting misanthrope.  You want to malign a group of people, but don't feel up to the job.  I'm here to help.  If you stick to the following four easy steps, you can and will craft a rhetorically... MORE

Feeds and Follows: My RSS Feeds and Twitter Follows

Behavioral Economics and Rationality
Art Carden
I got a lot of great suggestions from readers when I asked which blogs I should be reading. I'm conflicted: on one hand, blogs bring a lot of great new ideas to my attention, and they have created an amazing... MORE

The Subprime Crisis: Why Asymmetric Information Didn't Save Us

Behavioral Economics and Rationality
Bryan Caplan
Foote, Gerardi, and Willen's subprime manifesto is theoretically enlightening as well as empirically edifying.  Unlike many economists, they understand asymmetric information on an unusually deep level.  Standard adverse selection models suggest that the market for iffy mortgage-backed securities would never... MORE

Intelligence, Common Sense, and Subprime

Behavioral Economics and Rationality
Bryan Caplan
Conjecture: Financial experts' strange combination of astute calculation and elementary error on subprime lending is one of history's most important examples of the contrast between intelligence and common sense.Discuss.... MORE

Shorting Housing

Behavioral Economics and Rationality
David Henderson
Thanks to Bryan Caplan for his excellent post this morning. In the Comments section, people discussed the difficulty of shorting housing even if you thought it was overpriced. I'll tell two stories of two friends who saw what was happening.... MORE

Conditional Insight, Unconditional Disaster

Behavioral Economics and Rationality
Bryan Caplan
I just read Foote, Gerardi, and Willen's subprime facts manifesto.  Twice.  In the process, I learned more about the subprime crisis than I learned in the last five years put together.  If you're going to read one piece on this... MORE

Commuting, Chronic Stress, and Costs That Are Harder to See

Behavioral Economics and Rationality
Art Carden
This morning, I tweeted the following: Spend extra $ to cut your commute. I read (in @rdobelli's book?) that we underestimate commuting costs.— Art Carden (@artcarden) May 22, 2013 We've tried to model it. When we lived in Memphis, we... MORE

"Craziness" and Immigration Policy: A Dialog with Brad Trun

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

You Will Know Them By Their Unpopular Views

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

Facebook: So Long. Sort of.

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

Keynesian Bets: What's Out There

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

Tocqueville's Trailers

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

The Grave Evil of Unemployment

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

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

Can Expectations Save Communism?

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

Sundry Observations on Statistical Discrimination and Terrorism

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

Better Living Through Statistics: Muslim Terrorists Edition

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

ZMP, Morale, and Statistical Discrimination

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

What You Say When You Don't Call an Applicant

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

Immigration and Bubbles

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

How I Found Well-Being in a Bubble World

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

Make Your Own Bubble in 10 Easy Steps

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

The Effect of Intelligence on Job Performance is Intuitive

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

On The Effects of Homeschooling: A Bet

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

Blood and Expectations: The Case of the American Liquor Industry

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

Crazy Equilibria: From Democracy to Anarcho-Capitalism

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

Thomas C. Leonard on Nudge

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

Signaling Rules: Today Hollywood, Tomorrow the World

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

Tim Kane and Means-Testing

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

Is Self-Assertion a Free Lunch?

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

Why Are Asians So Democratic? The Respect Motive in Action

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

Economics and Fallibility

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

Some Evolutionary Food for Thought

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

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

Open Borders and Personality Bleg

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

Some Wisdom of Don Corleone

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

Amazing Dan Klein

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

Marshmallow Bleg

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

Why Applicants Don't Volunteer Their Test Scores: Abigail's Insight

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

Society of Lies

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

Sorrow and Anger

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

What Will the Neighbors Say? How Signaling Ossifies Behavior

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

Feeling vs. the Minimum Wage: A Hard-Headed Assessment

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

Feeling vs. the Minimum Wage

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

Two Soul-Searching Questions

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

Wage Rigidity in Of Human Bondage

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

Pax Libertaria

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

Women, Liberty, Marketing, and Social Science

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

If This Be Aspergers

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

How Would We Really Treat Mutants?

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

Payday for Behavioral Economics

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

Blatant Incompetence

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

Immigration Policy and the World Values Survey

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

The Respect Motive

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

Terror Profiling

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

British Democracy and the Death Penalty

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

The False Advertising of the CFTC

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

Hedengren's Dog

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

Modelling the Marriage of High Virtue and Low Cunning

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

When to Trust Your Superiors

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

Free Market Airport Security

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

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

Would the Private Sector Make You Wear an Airplane Seatbelt?

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

What Makes People Think Like Economists About Inflation?

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

We're Going Too Far

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

Reality Check

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

A Bet I Forgot to Make

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

Self-Correction in Markets and Politics

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

Optimal Open-Mindedness

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

Housing Bubble and Fraud

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

Escaping Poverty: Your Friendly Advice

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

Firing Aversion: A Human Resources Perspective

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

Two Verdicts on Two Replies to Two Replies

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

On Human Evil (Economic Experiment Edition)

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

Some Men Just Want to Please the Experimenter

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

"Some Men Just Want to Watch the World Burn"

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

How Stagnant Are We? The Results

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

National Egoism and Vronsky Syndrome

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

Group IQ: One Source of Trustworthiness

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

Markets for Everything: Bumping MIT Students

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

Why Obama Will Be Re-Elected

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

Why Is Democracy Tolerable? Evidence from Affluence and Influence

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

Of Monkeys and Micro

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

Arnold Kling on "Libertarians and Group Norms"

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

Long-Run Unemployment at Low Inflation: Dourado vs. Akerlof-Dickens-Perry

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

Will False Belief in the SIVH Destroy Obama's Candidacy?

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

Will False Belief in the SIVH Destroy Romney's Candidacy?

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

Rafat Channels Tullock, Kuran, and Sunstein

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

The Debiasing Dollar: How to Get Markets in Everything

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

Sumner Channels Yglesias Against Jones

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

How Does Belief in the Signaling Model Affect Educational Attainment?

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

Bubbles: Who to blame?

Finance
Garett Jones
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

Thomas Szasz: A Life Well-Lived

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

Social Desirability Bias vs. Intelligence Research

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

Austrian Myside Bias

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

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

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

The One Blameworthy Lifestyle

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

Reply to Bill Dickens on Poverty: Part 1

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

Bill Dickens Responds on Poverty

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

How Yglesias Channels Bastiat

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

The Subtle Value-Added of Frederic Bastiat

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

Who To Blame: Generalizing Brennan

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

Making Populism Serious: The Case of Social Security

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

The Mind and the Market

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

Who Loves Bastiat and Who Loves Him Not

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

Bastiat's "What Is Seen and What Is Not Seen": Who Says "Meh"?

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

Status Quo Bias and Conformity Signaling

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

The Interaction Between Status Quo Bias and Signaling

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

Nominal Rigidity of What?

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

Bill Dickens on Me on Poverty: A Rejoinder

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

Bill Dickens on Me on Poverty

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

IGM, Economic Consensus, and Partisan Bias

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

The Fallacy of Dulling the Pain of Poverty

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

Poverty and Behavior: Generalizing Yglesias

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

Capital One's Actuals

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

Arnold's Hypotheticals

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

Popular Resistance to Cost-Effectiveness Research: Two Stories and a Challenge

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

The Relevance of the Religious Hypothetical

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

Religion and Consumer Protection

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

Behavioral Politics

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

Would Arnold Support an RFPB?

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

Olivia Fox Cabane on Charisma

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

The Contributions of William T. Dickens

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

David Brooks Repeats Himself

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

Sumner's Common Sense

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

A Thought to Ponder

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

Kahneman on the Crash

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

Nullification or Nothing

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

Gerald Prante on Means-Testing

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

Means-Testing and Political Economy

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

If You Don't Like It: Reply to Some Comments

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

Firing Aversion: A Cross-Cultural Study

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

1>0, and Other Thoughts on Apprenticeships

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

Firing Aversion Bleg

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

The Terrorist Contradiction

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

Market Failure: The Case of Organic Food

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

The Ethos of Arthur Brooks

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

Would a World Plebiscite Lead to Open Borders?

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

Arbitrary Intervention

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

Wax's Behavioral Economics of the Family

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

Group Affiliation Bias

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

Highlights from "Does Technology Drive the Growth of Government?"

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

Feeling the Haidt

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

Self-Recommending could-have-been

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

What I've Been Reading

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

Ron Bailey on Confirmation Bias

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

The Intellectual Danger of Label-Avoidism

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

In Vino Hateful Ranting?

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

Tyler Cowen on Stories

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

Do Labels and Good-versus-Evil Stories Drain IQ?

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

This is Your Mind on Politics

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

Mainstream Views of School Vouchers

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

Obama is a Social Darwinist

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

Evolution and Economics

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

Planning for the Unpleasant Future: Private vs. Public

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

Why They Haven't Been Fired

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

Why Haven't They Been Fired?

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

We Are So Different

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

My Comments for Haidt

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

Reciprocity and Irony: A View from My Bubble

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

Losing Ground, The Bell Curve, and Coming Apart: A Reconciliation

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

Fund-Raising and the Independent Scholar

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

An 84-Word Reply to Arnold

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

Refuted By Events

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

The Mystery of Bernanke Solved

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

Imagine Grateful Welfare Recipients

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

Krugman, Human Weakness, and Desert

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

The Optimal Scapegoat

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

Is Iran a Threat?

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

French versus American Parenting

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

Naming the Puppy: Firing Aversion and the Labor Market

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

Give Me A Dozen Examples

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

Eureka! Economic Illiteracy as Mental Substitution

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

Kahneman, Mental Effort, and the Scary Parole Study

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

Psychiatry's Disorders

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

The Mind of Robin Hanson: The Inside Story

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

"Wages Must Fall!": What All Good Keynesians Should Say

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

Cognitive Hubris

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

Voter Irrationality in Animal Farm

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

Bias Against Speculation?

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

A Quote I Will Use Often

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

Poverty, Conscientiousness, and Broken Families

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

Confirmation for Baumeister's Gender Analysis?

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

David on 2nd-Best Immigration Policy

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

Paying to Immigrate: Admission Fees vs. Surtaxes

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

Abba Lerner on Consumer Sovereignty

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

Daniel Kahneman's Thinking

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

Democracy Without Government

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

The Profound Sumner

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

Steven Jobs as a Baumeister Male Archetype

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

Personality, Gender, and Economics

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

Pay for Performance

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

Jackals in Retirement

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

How Lazy Is the Professoriat?

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

Corn, God, and Smith

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

Cynical about Confidence

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

Willpower

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

Is Media Bias a Market Failure?

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

Wages, Welfare, and Elderly Immigration

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

Medical Skepticism: Children's Classics Edition

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

The Rabbit Hole of Behavioral Economics

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

Media Bias and Asymmetric Insight

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

Krugman, Landsburg, Pangloss, and Fixed Costs

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

Politics and Tribalism

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

Health Insurance, Fairness Norms, and Unemployment

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

The Return of the Voice of Cold, Hard Truth to All Would-Be Educators

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

Republicans and Technocrats

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

Hard-Wired Envy

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

A Review of My Review

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

Freedom for Happiness

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

Deception, Detection, and Democracy at GenCon

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

How Wage Rigidity is Special

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

Fight, Flight, Submission: War and Rhetorical Asymmetry

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

Demeanor and Brutality

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

Robin Hanson on Market Failure

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

What I'm Reading

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

Job Satisfaction, Education, and the Hedonic Treadmill

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

The Soup Kitchen Example

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

Nudged and Stuck

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

Best Ezra Klein Post Ever

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

"Likes" as Tipping

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

Running Scared

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

MalAdaptive: The Political Economy of RCTs

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

How Much Good Can One Intelligent, Wise, Brave Leader Do?

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

Argumentative Theory

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

Two Points on Kids and Happiness

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

Just Try It; or, Nudge for Kids

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

Ibsen Against the Wisdom of Crowds

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

Wittman-Caplan Debate Video

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

How Pacifist Was the Last Anti-War Movement?

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

Epistocracy and the Anti-Authority Tenet

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

An Urgent Defense of Optimism

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

Progressive Nudges for Household Savings

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

The New Leisure

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

Absurdist Passages of the Year

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

The Problem with (Some) Experimental Economics

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

Tyler Cowen Explains the "Flash Crash"

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

The Case Against News

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

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

Systematically Biased Beliefs About Political Influence: The Working Paper

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

Reflections on World on Fire

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

Who Understands the Causes of Poverty?

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

Anti-Foreign Bias versus Charter Cities

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

Beaulier-Caplan Links

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

What I'm Watching

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

New from the NBER

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

Media Bias Bias

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

A True Conversation on the Political Externalities of Immigration

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

A Nation of Cowards: The Case of World War II

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

Are Governors and Mayors Scapegoats for the Fed?

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

War: What Is It Here For?

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

Mental Illness and Behaviorism

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

Conservative Passion

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

Overcoming Bias: Some Empirics

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

Bias, Assent, and the Psychological Plausibility of Rational Irrationality

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

Are We Stubborn or Manipulable?

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

John Papola on Behavioral Economics

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

The Political Externalities of Open Borders: Digest Version

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

"Is Profit Evil?" The Complete Paper

Behavioral Economics and Rationality
Bryan Caplan
Here's the full text of "Is Profit Evil?"  Enjoy.... MORE

The Psychology of People Against Profit

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

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

Caplan-Miller in the WSJ

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

Group-Serving Bias: Bloodlands Edition

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

My Sexism

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

Who Said It?

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

Roosevelt and Retrospective Voting

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

Helpful Illusions

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

Blameworthy: How Party Loyalty Corrupts Voter Judgment

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

Technocratic Overconfidence

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

The Flexibility of Identity

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

Work Choices, Money, and Status

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

Outlier Doubts

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

Highlights from The Rational Optimist

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

The Desire to See Others Suffer

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

Russ Roberts and Dan Pink

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

Evolution, Economics, and Education

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

Gender and the Financial Crisis

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

Sunburn, TARP, and the Activist's Fallacy

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

Political Mood Cycles

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

Not Robin Hanson or Tyler Cowen

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

The Macro Doubtbook, Installment 10

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

Marketing Liberty to Immigrants

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

The Rational Voter?

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

Who Are You Calling Agreeable?

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

Bumps on the Treadmill

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

Robin Hanson and Curt Flood

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

Group Solidarity and Survival

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

The Company of Strangers

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

Charter Cities vs. Anti-Foreign Bias

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

Education and Anti-Market Bias: The Illusion of Perversity

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

Economic Enlightenment and Education: Reply to Arnold

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

The Voice of the Outsider

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

The Myth of Californian Happiness

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

The Inner Life of Julian Simon

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

Public Choice Symposium on The Myth of the Rational Voter

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

The Side on Which My Bread is Buttered

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

Meta Excess

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

Nudged

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

What Nudge Really Says

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

My Question for Nudgers

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

Means-Testing and Status Quo Bias

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

Irrational Partisans

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

The Spread of Szaszian Economics

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

A Betting Arena

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

The Consumer Satisfaction Standard

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

The App Most Likely to Make Me Get an iPhone

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

Kahneman on Happiness

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

Expressive Recycling

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

WHINE

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

The Fear Budget Hypothesis

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

Recommended

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

Mood and Macro

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

In Defense of Extreme Meliorism

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

Rod Long's Non Sequitur

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

Sympathy for the Nobelist

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

Why Aren't the Italians Libertarians?

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

The "Zero-Probability Fallacy" Fallacy

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

Getting Along in Business

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

George Akerlof and Rachel Kranton

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

Predictably Irrational or Predictably Rational?

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

Psychological Effects of Status Rank Changes

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

Hmmm

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

A Sentence to Ponder

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

Selective Memory

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

Time Consistency

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

The Ahistoricity of the SIVH

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

Philosophy and Rational Irrationality

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

Hansonian Foreign Aid

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

The Future will not be Civil

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

How Arthur Lupia Changed My Mind

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

Macro and the Organizational Capital Model

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

Exposure Therapy: When Probabilities Fail

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

Two Links

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

Dear New Yorker: I Want My Catch Phrase Back

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

Tyler Without Tyler

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

Changing People's Minds

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

Robin Hanson on Ethics

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

Pessimistic Bias: Crime Edition

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

A Proposal for Masonomics Fieldwork

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

Wolfers, Ehrenreich, Misery, and Feminism

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

Thoughts on Probability and Uncertainty

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

The Pleasure of Telling Others What to Do

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

Unchecked and Unbalanced Watch

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

Inner Economist Watch

Behavioral Economics and Rationality
Arnold Kling
FuturePundit on the finite supply of willpower.... MORE

Posner on Personality

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

Why Get Insurance?

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

Cochrane's Political Economy

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

Status, Greed, and Power

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

Elite Self-Perpetuation

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

Sorel on Totalitarian Political Entrepreneurs

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

Why Liberals Needn't Fear Republican-Run Welfare States

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

Four Year From Now Plans

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

What's Wrong With Realism? What's Right With It? Part 2

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

Hope His Top Advisor Sort of Believes In

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

Personality and Ideology: A Quick Rejoinder

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

What's Wrong With Realism? What's Right With It? Part 1

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

Nobody Tell Tyler Cowen

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

The Political Economy of Geoengineering

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

Retrospective Voting: Worse Than Chance

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

The Not-So Fundamental Attribution Error

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

Robin Hanson on the Signalling Process

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

My Favorite Convert

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

How I Raised My Social Intelligence

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

Personality and Econometrics

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

Myth of the Rational Voter, California Initiative Edition

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

Does Personality Matter? Compared to What?

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

The Myth of the Rational Voter, Minimum Wage Edition

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

Pessimistic Bias Strikes Again?

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

Good Question

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

Grasping the Nettle of Personality

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

Geoffrey Miller on Personality

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

Geoffrey Miller, Masonomist

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

Why Do Politicians Break Their Promises? Part 2

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

Pro-Autistic Economics

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

Costs and Benefits of Beliefs

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

Why Do Politicians Break Their Promises? Part 1

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

What I Have Not Been Blogging

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

Richard Epstein on Happiness, I

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

Szasz on the Turing Tragedy

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

This Looks Important

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

Notes on Masonomics, 1: Reason without Rationality

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

Status and Contract

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

Friedman vs. Doherty: Help Me Take a Side

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

Deception and Signaling

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

Wisest Sentence of the Day

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

Some Morning Links

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

Changeling, Feminism, and Szasz

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

Democracy in Middle Earth

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

Links Without Comment (almost)

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

Me on the Economics of Imperialism

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

Intended or Unintended?

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

Ya Gotta Believe

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

How a Rational Politician Treats Irrational Voters

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

The Resonance of Libertarian Oratory

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

Akerlof and Shiller Heart Higgs?

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

Blame Others, Hurt Yourself

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

What Does a Szaszian Therapist Do?

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

Throw Your Vote Away - Vote for a Second Party

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

Is Obama a type P?

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

Grist for Arnold's Mill

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

How You Think in a Crisis

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

Black Swans

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

Female Protectionism Redux

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

Gullibility, Madoff, and Fiscal Stimulus

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

Separating Twins as Economic Illiteracy

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

If You Want Peace, Prepare for Peace

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

Becker Embraces Unhappiness Research

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

From the Cutting Room Floor: The Rationality of Donors

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

From the Cutting Room Floor: The Rationality of Juries

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

When Do You Disbelieve a "Change of Heart"?

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

Why the Left Should Not Forgive the American Voter

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

In Defense of Rationalist Clubs

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

Reword This Question

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

The Pump, the Pension, and the Pain

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

Voting

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

Politics and Identity

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

If This is Polite Society, What is Rude Society Like?

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

Stossel Parody

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

Corrupt Bargains

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

Where Is the Political Flynn Effect?

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

Recession During the Cold War: What Was It Like? What's Wrong With Us Now?

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

Department of "What?"

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

How to Scare a Kid

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

Becker on the Pundits that Cried "Wolf!"

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

Howard Stern Gets Hansonian

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

Panic Puzzle

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

Chuck's Great Question

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

Stossel and Me

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

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

Canadian Caplania

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

Political Put-Down of the Year

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

Where Are the Demagogues When You Need Them?

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

Why Only Bush Could Bring Socialism to America

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

An Ex Ante Aneurysm

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

U.S. States and Five-Factor Personalities

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

Will Wilkinson's Intellectual Standards

Behavioral Economics and Rationality
Arnold Kling
David Brooks is not up to them. Shock me, shock me.... MORE

A Deleted Scene from MRV

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

In Praise of Corny Canadian Politicians

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

Give Me Some Fair Questions

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

How Dems and Reps Differ: Against the Conventional Wisdom

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

Pete Leeson Guest Blogging at Freakonomics

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

A Deeper Look at Economic Bias

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

News Reporting and Falsehoods

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

Raise Your Standards, Control Yourself

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

Is Arnold Getting Happy?

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

There's No Evidence Like No Evidence

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

Two from Will Wilkinson

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

Two Talks on Voter Irrationality

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

The Misanthropic Magisterium

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

A Hobbesian Thought Experiment

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

The Must-Read Economics Book of 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

Happiness, I Still Can't Get No

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

Disastrous Voting

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

Two Heuristics to Live By When You Don't Know What You're Doing

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

Humility Reconsidered

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

The Case for Libertarian Friendliness

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

Fairness Norms Breaking Down at the Airport - and Good Riddance!

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

Hansonism

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

The Reform Mindset

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

Insomnia and Multiple Equilibria

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

Aren't Voters Disgusting?

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

A Deeply Misguided Sentence

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

Heads, Hearts, Left, Right

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

The Big Tent of Happiness

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

Gintis Reviews Ariely

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

What the "Women Hate Child Care" Study Actually Said

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

Senate Oil Manipulation Hearings: Placebo or Incitement?

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

The Golden Rules of Interpretation

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

Are Extremists Really Happier?: The Case of Katrina vanden Heuvel

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

Extending the Enlightened Preference Approach: Proceed With Caution

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

Public Service Signaling

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

Co-operative Signaling

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

Robin Hanson's View of the World

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

Robin Hanson Refutes Happiness Research

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

Brooks' Hidden Secrets of Happiness

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

Why People Buy Insurance

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

The CNN Model of Violent Conflict

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

Diminishing Returns and Life

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

True Insults and False Compliments

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

Economic Policy for Humans? What Thaler and Sunstein Miss

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

Behavioral Economics Ready for (Sub) Prime Time?

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

The Rationality of Iran

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

Don't Stop, But Look Before You Leap

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

Please Stop

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

The Willpower Muscle

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

Why Hitler Chose the Jews

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

Higgs on Göring on War

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

Education and Beliefs About Campaign Finance: An Exception to the Rule

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

ROTFL

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

The "Too Simple to Write a Book About It" Diet

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

Why Does Nurture Affect Religion?

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

Is Mike Moffatt less than three degrees away?

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

EconLog Enters the Self-Control Market

Behavioral Economics and Rationality
Bryan Caplan
No joke!... MORE

Lax Discipline: Laziness - or Myopia?

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

Gintis on Happiness

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

Unfair Humor for the Greater Good

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

Why Did Overall Course Quality at GMU Suddenly Decline?

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

The Red Herring of Principal-Agent Problems

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

Brooks vs. Caplan

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

One Million Dollars!

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

Economists for Self-Improvement

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

Happiness Research

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

Politics and Cults

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

Political Scapegoating: How Farmer-Voters Respond to Bad Weather

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

Virtual Political Economy

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

An Iranian Communist Gets It Right in Persepolis

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

Brockman, Mind-Changing, con't

Behavioral Economics and Rationality
Arnold Kling
Robin Hanson will like this one.... MORE

John Brockman strikes again

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

The Szaszian Gestalt Shift: An Illustration

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

New Working Papers of Interest

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

Erikson, Althaus, and Why I'm Grateful to be in Econ

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

Behavioral Philosophy?

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

My Defense of Experts Against the Leading Expert

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

Tolstoy on Disagreement

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

Eliezer on the Ur-Mistake

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

Attack Me at the Public Choice Meetings

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

Senator X's Amazing Letter to Me

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

A Fertile Criticism of Happiness Research?

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

Sigmund Freud Meets Jack Bauer

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

5 Miles of Economic Illiteracy

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

Selling Self-Control: Will It Take Off?

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

Neuro-Platitudinous

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

Tim Harford's Next Book

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

Watson on Summers: From Strange to Baffling

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

How to Debate Happiness

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

It Wasn't Nurture - Trust Me!

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

Can Becker Save the Chicago School?

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

Kahneman

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

Make-Work Bias of the Macabre

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

Survey Availability Bias

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

Copyright, China, and Anti-Foreign Bias

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

Tim Kane's New Blog

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

Prisoners' Dilemma and The Unmentionable

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

Today's Prize Winner for Overcoming Pessimistic Bias Goes To...

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

The Flight from Intelligence, or That Which Must Not Be Named

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

Happiness Research at a High School Reunion

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

The Haidt Report

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

Does the Public Suffer from Anti-Government Bias?

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

Thoughtful Stuff from Steven Pinker

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

A Signaling Model of Consumer Behavior

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

Moral Psychology

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

Tyler Cowen Interview

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

Should Steven White Brand Himself a "Right-Wing Ideologue"?

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

Guilty as Charged

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

Judge This Magazine By Its Cover

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

Public Opinion About the Future of Science: A Glimmer of Hope

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

Morning Reading

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

Uncertainty and Bias

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

Viscusi Speaks

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

Robin Hanson Video

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

Hypotheticals in Presidential Debates: A Pathetic Aversion

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

Foreign Policy vs. Domestic Policy in the Debates: Dumb and Dumber

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

"Win-Win," as Filtered Through Make-Work Bias

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

Dying in Vain

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

Hide this from Robin Hanson

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

Does It Matter If We're "Reality-Based"?

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

Fabulous Wisdom

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

My Kind of Democrat

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

Garett the Gracious

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

The Rational Liberal Minister

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

Do Voters' Biases Bias Policy?

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

A Creative Conspiracy Theory

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

Daily Kos Falls Into My Trap

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

The Consequences of Pessimistic Bias

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

Overconfidence

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

Boo for Applause

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

Thermostats or Muscles?

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

Neuroscience: Don't Be Intimidated

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

Richman on How to Break the Catch-22

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

Who Wants to Marry Someone with Self-Control Issues?

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

Does Learning Economics Radicalize the Right?

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

Is Voter Irrationality a Catch-22?

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

Mindfulness and Mindlessness

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

Educated Women Don't Like Globalization and Trade as Much as Educated Men

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

Rizzo vs. Thaler on Libertarian Paternalism

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

Who's to Blame for Chavez?

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

Evolutionary Psychology and Economic Bias

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

Me at Britannica Blog

Behavioral Economics and Rationality
Bryan Caplan
I'm guest blogging for the Britannica website. Topic: Economists Agree?!... MORE

Giving Surveys a Bad Name: Women's Day on Mother's Pay

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

I Trust My Statistical Intuition

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

Trust the Experts: A Reasonable, Defeasible Presumption

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

Farm Subsidies: The Dirty Truth

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

I Coulda Been a Contender

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

Will Wilkinson on Happiness Research

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

Subjective Age

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

Do Econlog Comments Pass the Rational Expectations Test?

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

You Can Do Anything You Put Your Mind To: A Noble Lie?

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

Magic Potencies on the Mind as Whole

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

Overcoming Popularity

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

Why Not Wrestle With a Pig?

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

Here is Wisdom

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

Poor Choices

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

Inside the Revolutionary Mind

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

Patriotic Bias

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

How to Increase Support for Free Markets

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

Tyler's Crisis Mentality

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

Bayesian Analysis of Hypocrisy

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

Puzzled by Brad's Puzzlement

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

Make That Maternalism

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

Should There Be Compulsory Attendance for the Balan-Hanson Debate?

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

"Mental Health," Moral Character, and Poverty

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

The Myth of the Rational Voter, Sowell Edition

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

Height and Happiness

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

The Myth of the Rational Voter, Posner Edition

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

Simply Wonderful

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

Asymmetric Sell-Outs

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

The Most Interesting Blog Comment I've Ever Read

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

Hanson's Mistake: Facts, Values, and Experts

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

Beating the Odds: Why Do People Insist on Even Bets?

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

Tightwadism

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

Million Dollar Babies: Economic Fact versus Popular Fancy in L.A.

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

Me in the Economist

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

Teaching Bias

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

Robin Hanson's Intelligence Continues to Amaze Me

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

How Egalitarianism Undermines the Study of Voter Competence

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

Can 600 Economists Be Wrong About the Minimum Wage?

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

Discovering Alan Fiske

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

The Social Psychology of Gender Bias

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

Does Happiness Research Raise Happiness?

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

Do Experts Know More? A Childish Counter-Example

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

Cato Unbound Update

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

Election Prediction: Voting will be Irrational

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

Samuelson: Blame the People

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

Rothbard on Szasz

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

Memetic Suicide

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

I Heart Steven Pinker, continued

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

Reduction to Banality

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

I Distrust Robert Putnam

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

Behavioral Vaccine

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

A Quote that Should Have Been in My Book

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

On Neuroeconomics and Paternalism

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

Policy Beliefs and Policy Preferences: The Case of Guns

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

The Euphoria-Disillusion Cycle

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

They Called Me Mad: "The Economics of Szasz" Gets Published

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

An Evolutionary Model of Depression

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

Envy, Happiness, and Social Policy

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

Beyond Irrational: The Hinckley Effect

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

A Fool and His Money

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

Sampling Bias on a Plane

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

The Experience Machine

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

Durable Experience

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

Au Contraire

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

What, Me Worry? Part II

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

What, Me Worry?

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

Paying for Parking

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

The Joy of Oblivion

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

Willpower as a Scarce Resource

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

Intelligence and Economic Beliefs

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

Self-Control and Civilization

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

The Gender Gap of Economics: Knowledge vs. Interest

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

Political Irrationality and the Brain

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

Confirming Arnold's and Bryan's Biases

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

A Few Good Laughs About Happiness

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

Religion as a Basis for Trust

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

Ten Ideas Worth Thinking About

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

Challenge to Cowen and Gilbert

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

Russ Roberts Gets Szaszian

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

Errors in Charitable Giving

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

Wisdom of Crowds?

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

Economists Overconfident?

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

Naked Guy, RIP

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

The Confirmatory Bias Diet

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

Cruise Control

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

Scam

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

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

Scientific Self-help

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

Is the Fundamental Attribution Error Fundamental or Even An Error?

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

Differential Anti-Market Bias

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

Shocked by the Gender Gap

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

The College Choice

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

Happy Totalitarians

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

Can Psychology Save the Death Penalty?

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

More Unhappiness

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

Take a Guess

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

The Gender Gap of Economics

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

Ed Glaeser on Paternalism

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

Arlo on Happiness Research

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

Revealed Preference vs. Happiness

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

Cognitive Economics?

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

Goods, Bads, Marginal Utility, and Happiness Research

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

Happiness Research: Get Used to It

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

Why Experiments are Misleading

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

Honest Measurement

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

Lighten Up on Happiness, Arnold!

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

A Happiness Experiment

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

Individual Creativity

Behavioral Economics and Rationality
Bryan Caplan
So this is why I always hated working in groups!... MORE

Lust and Greed

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

Fool Me Thrice, and I'll Trust You

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

Confirmation Bias confirmed

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

Valuing Life

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

Mind Wide Open

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

A Verdict on Mindless Economics

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

Is a Bad Marriage Better than None at All?

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

Seven Hypotheses About Environmental Bias

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

Captain Bligh: Bad Economist or Bad Psychologist?

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

The Debate

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

Jane Galt's Self-Criticism

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

Go to Church or Play a Game?

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

Happiness and Evolution

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

Sea Inside of Happiness

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

Pension Bagholders

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

Revenge of the Game Theorist

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

The Hockey Game of Life?

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

The Status of Amateur Sociology

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

Economists, Non-economists, and Insurance

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

On Happiness

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

ATTENTION: Szasz Prize Change of Venue

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

The Best of Szasz

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

Emotionomics

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

Dear Prudence

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

Pleased as Punch

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

Punk Rock Star Finishes His Thesis - And It's Good, Too!

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

Money and Happiness: Double-Check With the GSS

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

Debate With Wittman Continues

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

Unequal Security Screening Waits

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

The Common Sense of Bayesianism

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

An Envy Tax?

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

Emotions and Decisions

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

Two Flawless Articles on Overconfidence

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

fighting African poverty

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

Yes Donald, Beliefs About Economics Do Affect Policy Preferences

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

Real News in Neuroeconomics

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

Don't Do Me Any Favors

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

Framing Effects and Memory

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

Neuroeconomics

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

Learning vs. Persistent Mistakes

Tax Reform
Arnold Kling
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

Education and the Economic Way of Thinking: Another Test Case

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

Tetlock and Taboo

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

"Faith" Means Not Wanting to Believe What is True

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

Coping Classes

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

Layard and Happiness

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

What, Me Rich?

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

Politics and Academia

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

Fama vs. Thaler

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

Political Behavior

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

Are Workers Getting Good Jobs?

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

Neuroeconomics

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

Happiness Police

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

Money and Happiness

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

Rational Decisions and Pharmaceutical Regulation

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

Gender Differences

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

Affective Forecasting Errors

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

eBay, Fun, and Social Waste

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

Why Are Saving Rates Declining?

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

Collective vs. Individual Benefits

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

Economics and Evolution

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

Surveys and Happiness

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

More Choice, Less Satisfaction?

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

A Case for Paternalism?

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

St. Petersburg Paradox

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

Training Economic Man

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

Various Articles

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

Co-operation Hormone?

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

Are Small Investors Irrational?

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

Resisting Efficient Markets

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

Comment of the Week, 2003-05-16

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

Surveys Vs. Revealed Preference, III

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

Surveys Vs. Revealed Preference, II

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

Organ Transplant Market?

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

Peak Load Pricing and Mental Transaction Costs

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

Surveys Vs. Revealed Preference

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

Economic vs. Non-economic Savings Incentives

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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