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‘Farsighted’ Review: How to Make Up Your Mind - WSJ
By David A. Shaywitz
Sept. 11, 2018

..mission planners first systematically widened their thinking to define their options as broadly as possible, seeking a “full-spectrum appraisal of the state of things and a comprehensive list of potential choices.” Then they coned down the alternatives by playing out multiple scenarios, exploring all the ways the mission could go wrong........When faced with complex choices we tend to frame problems in a narrow fashion. participation from as broad and diverse a group as possible.....a diversity of viewpoints isn’t enough. Citing the legal scholar Cass Sunstein, Mr. Johnson observes that, although “groups often possess a rich mix of information distributed among their members,” when they assemble “they tend to focus on shared information.” Thus it is important to design a process that exposes “unshared information”—by meeting individually with stakeholders, for instance, instead of merely convening a town hall. Similarly, he cites research revealing that two-thirds of organizational decisions never contemplate more than a single option. There is a “gravitational pull toward the initial framing of the decision.” To overcome it, he suggests considering what might be done if the presumptive path forward were suddenly blocked....“Uncertainty can’t simply be analyzed out of existence,” ...What scenarios and simulations can offer is a way to “prepare you for the many ways that the future might unexpectedly veer.”..... Linear value modeling, for example, weighs the relative importance of different goals, while a bad-outcomes approach examines worst-case possibilities........given the challenges of making high-stakes global decisions. How should we respond, as a planet, to the challenges of addressing climate change, communicating with alien life forms or managing computers with superintelligence? The answer seems to be: by convening diverse experts and hoping for the best. ....... Great novels matter [JCK; great novels = *fiction*] because “they let us experience parallel lives, and see the complexity of those experiences in vivid detail.”........ fundamentally, choices concern competing narratives, and we’re likely to make better choices if we have richer stories, with more fleshed-out characters, a more nuanced understanding of motives, and a deeper appreciation of how decisions are likely to reverberate and resound.
books  book_reviews  Cass_Sunstein  choices  decision_making  far-sightedness  fiction  howto  narrow-framing  novels  presumptions  scenario-planning  shared_experiences  Steven_Johnson  systematic_approaches  thinking_tragically  uncertainty  unshared_information  wide-framing  worst-case 
november 2018 by jerryking
Globe editorial: Does Ottawa have a plan to keep our elections safe from meddling? - The Globe and Mail
There is scant evidence that narrow-cast propaganda delivered via Facebook has a decisive effect at the ballot box. But that’s not the same as saying it can’t condition electoral, political and social environments. And that’s a real problem.

There is no easy way for users to sort through and identify millions of micro-targeted ads, messages and “news” items on Facebook. To rely on Silicon Valley’s public-spiritedness is to be in a very bad place. Plus, technology makes it simple for would-be propagandists to set up shop under a new, anonymous guise. Pick your metaphor for trying to stop them: Sisyphus’s stone or Whack-a-Mole.

And social networks create hothouse conditions for the spread of pernicious disinformation. The now-shuttered political consultancy Cambridge Analytica needed only 270,000 Facebook users to gain access to 50-million profiles......Here at home, the intelligence community has issued repeated warnings over the past year that malign foreign actors could attempt to influence our elections. Elections Canada has announced it is shoring up cybersecurity and preparing a public awareness campaign.

But given the latest Facebook revelations, Ottawa needs a more comprehensive plan to safeguard the 2019 federal vote. Now would be a good time to tell Canadians about it.
cyber_security  disinformation  elections  Elections_Canada  Facebook  narrow-framing  political_influence  propaganda  rogue_actors 
august 2018 by jerryking
[1405.1254] Time-Inconsistent Planning: A Computational Problem in Behavioral Economics
"In many settings, people exhibit behavior that is inconsistent across time --- we allocate a block of time to get work done and then procrastinate, or put effort into a project and then later fail to complete it. An active line of research in behavioral economics and related fields has developed and analyzed models for this type of time-inconsistent behavior.
Here we propose a graph-theoretic model of tasks and goals, in which dependencies among actions are represented by a directed graph, and a time-inconsistent agent constructs a path through this graph. We first show how instances of this path-finding problem on different input graphs can reconstruct a wide range of qualitative phenomena observed in the literature on time-inconsistency, including procrastination, abandonment of long-range tasks, and the benefits of reduced sets of choices. We then explore a set of analyses that quantify over the set of all graphs; among other results, we find that in any graph, there can be only polynomially many distinct forms of time-inconsistent behavior; and any graph in which a time-inconsistent agent incurs significantly more cost than an optimal agent must contain a large "procrastination" structure as a minor. Finally, we use this graph-theoretic model to explore ways in which tasks can be designed to help motivate agents to reach designated goals. "
jon.kleinberg  present-bias  narrow-framing  to:have-a-look-at  *** 
march 2018 by MarcK
Recursive Preferences | SpringerLink
"Recursive preferences characterize the trade-offs between current and future consumption by summarizing the future with a single index, the certainty equivalent of next period’s utility. Recursive utility functions are built from two components. A risk aggregator encodes trade-offs across the outcomes of a static gamble and, hence, defines the certainty equivalent of future utility. A time aggregator encodes trade-offs between current consumption and the certainty equivalent of future utility. We suggest functional forms for time and risk aggregators with desirable properties for applications in economics and finance, such as the standard intertemporal consumption/portfolio problem, which we solve using dynamic programming."
narrow-framing  recursive-utility  ** 
march 2018 by MarcK
Myopic separability - ScienceDirect
"In the classic certainty multiperiod, multigood demand problem, suppose preferences for current and past period consumption are separable from consumption in future periods. Then optimal demands can be determined from the standard two stage budgeting process, where optimal current period demands depend only on current and past prices and current period expenditure. Unfortunately this simplification does not significantly reduce the informational requirements for the decision maker since in general the expenditure is a function of future prices. Recent behavioral evidence strongly suggests that frequently individuals significantly simplify intertemporal choice problems. We derive necessary and sufficient conditions such that the current period's expenditure and hence optimal current demands are independent of future prices. Since this preference property is a special case of separability, it is referred to as myopic separability. One well known special case of myopic separability is log additive (or equivalently Cobb–Douglas) utility. However, this form of utility is overly restrictive, especially given the general aversion of Fisher (1930), Hicks (1965) and Lucas (1978) to requiring preferences to be additively separable. Myopic separability requires neither additive separability nor logarithmic period utility. As an application, we derive simple restrictions on equilibrium interest rates which are necessary and sufficient for utility to take the myopic separable form. These conditions are arguably less restrictive than those implied by additively separable preferences."
narrow-framing  narrow-bracketing  to:read  larry.selden  economic-papers 
february 2018 by MarcK
As an Investor, Do You Suffer from ‘Narrow Framing’? - WSJ
By Shlomo Benartzi
June 11, 2017

Many of the financial mistakes people make are caused by a fundamental shortcoming: They can’t see the big picture.

In behavioral economics circles, this is known as “narrow framing”—a tendency to see investments without considering the context of the overall portfolio. Many people are vulnerable to it.
investors  behavioural_economics  narrow-framing  the_big_picture  portfolio_management 
june 2017 by jerryking
The Choice Explosion - The New York Times
David Brooks MAY 3, 2016

Americans have always put great emphasis on individual choice. But even by our own standards we’ve had a choice explosion over the past 30 years.....making decisions well is incredibly difficult....It’s becoming incredibly important to learn to decide well, to develop the techniques of self-distancing to counteract the flaws in our own mental machinery....assume positive intent (i.e. when in the midst of some conflict, start with the belief that others are well intentioned).....People are overly biased by the immediate pain of some choice, but they can put the short-term pain in long-term perspective by asking these questions [Suzy Welch’s 10-10-10 rule. When you’re about to make a decision, ask yourself how you will feel about it 10 minutes from now? 10 months from now? and 10 years from now?]....make deliberate mistakes....our tendency to narrow-frame, to see every decision as a binary “whether or not” alternative. Whenever you find yourself asking “whether or not,” it’s best to step back and ask, “How can I widen my options?” In other words, before you ask, “Should I fire this person?” Ask, “Is there any way I can shift this employee’s role to take advantage of his strengths and avoid his weaknesses?”....It’s important to offer opportunity and incentives. But we also need lessons in self-awareness — on exactly how our decision-making tool is fundamentally flawed, and on mental frameworks we can adopt to avoid messing up even more than we do.
abundance  all-or-nothing  biases  binary_decisionmaking  choices  David_Brooks  decision_making  metacognition  narrow-framing  optionality  scarcity  self-awareness  self-distancing  Suzy_Welch  thinking_deliberatively  wide-framing 
may 2016 by jerryking
Costly Information Acquisition: Experimental Analysis of a Boundedly Rational Model
"The directed cognition model assumes that agents use partially myopic option-value calculations to select their next cognitive operation. The current paper tests this model by studying information acquisition in two experiments. In the first experiment, information acquisition has an explicit financial cost. In the second experiment, information acquisition is costly because time is scarce. The directed cognition model successfully predicts aggregate information acquisition patterns in these experiments. When the directed cognition model and the fully rational model make demonstrably different predictions, the directed cognition model better matches the laboratory evidence. "
xavier.gabaix  david.laibson  option-value  narrow-framing  to:read 
june 2015 by MarcK
Saving and Liquidity Constraints
"This paper is concerned with the theory of saving when consumers are not permitted to borrow, and with the ability of such a theory to account for some of the stylized facts of saving behavior. The models presented in the paper seem to account for important aspects of reality that are not explained by traditional life-cycle models."
liquidity-constraints  narrow-framing  angus.deaton  to:read  papers 
june 2015 by MarcK
Narrow Framing and Long-Term Care Insurance
"We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is distinct from, and much larger than, the effects of risk aversion or adverse selection, and it offers a new explanation for why people underinsure their later-life care needs. "
narrow-framing  health  healthcare  insurance  nber  ** 
may 2015 by MarcK
Theoretical Economics: Is Utility Transferable?
"The transferable utility hypothesis underlies important theoreti-
cal results in household economics. We provide a revealed preference
framework for bringing this (theoretically appealing) hypothesis to
observational data. We establish revealed preference conditions that
must be satis ed for observed household consumption behavior to be
consistent with transferable utility. We also show that these conditions are testable by means of integer programming methods."
narrow-framing  bram.deRock  afriat  revealed.preference 
march 2014 by MarcK
Publications and Papers
“Decentralization and Increasing Returns: The Robinson Crusoe Economy Revisited”, (with D.Ray); in Economic Theory and Policy (eds. Dutta,Gangopadhyaya,Mookerjee and Ray); Oxford University Press, (1990), pp 50-78.

“Decentralization Intertemporal”, (with T.Mitra) Cuadernos Economics, Vol .46, (1990), pp 61-102.
decentralisation  narrow-framing  to:read  majumdar 
march 2014 by MarcK
ingentaconnect Are Risk Aversion and Impatience Related to Cognitive Ability?
"This paper investigates whether there is a link between cognitive ability, risk aversion, and impatience, using a representative sample of roughly 1,000 German adults. Subjects participate in choice experiments with monetary incentives measuring risk aversion, and impatience over an annual horizon, and conduct two different, widely used, tests of cognitive ability. We find that lower cognitive ability is associated with greater risk aversion, and more pronounced impatience. These relationships are significant, and robust to controlling for personal characteristics, education, income, and measures of credit constraints. We perform a series of additional robustness checks, which help rule out other possible confounds. "

Apparently contains something on narrow framing.
armin.falk  risk-and-time  narrow-framing 
february 2014 by MarcK
The Psychology of Residential Developers
"Researchers have repeatedly observed satisficing by residential developers. The phenomenon has been attributed to their bounded rationality. In response, policy makers have designed policies that reduce risks to assist developers in overcoming bounds on their rationality. However, after decades of such policies, there is little evidence that developers have stopped satisficing. This article argues that bounded rationality is an insufficient explanation for satisficing by small developers. Lessons from behavioral economics suggest additional reasons for satisficing by developers. Satisficing is common because developers bracket projects one at a time, bracket each investment decision in isolation of others, create nonfungible investment accounts, establish self-imposed liquidity constraints, and temporally space projects. Policies that group risks to developers are likely to be the most effective. However, additional land-market-specific research is required to design policies that address these psychological traits. Academicians also need to design better survey instruments to investigate developer decision making. "
february 2014 by MarcK

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