Monthly Archives: April 2022

In thrall to games?

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Hidden Games: The surprising power of game theory to explain irrational human behaviour by Moshe Hoffman and Erez Yoeli does exactly what it says on the cover. It’s an interesting strategy (ahem): irrational behaviour turns out to be rational after all! When being over-optimistic about our own abilities, fooling ourselves by only believing social media comments that reinforce our prior beliefs, spinning the truth, or over-spending on costly luxury goods, all these and more behavioural phenomena can be explained as dominant strategies in appropriately described games. It’s all about the Nash equilibria, stupid.

I enjoyed the book on the whole. It’s a breezy introduction to game theory applications, written with a light touch and plenty of anecdotes. An early chapter sets the scene with the classic evolutionary explanation for observed sex ratios, moving on then to the Hawks and Doves game, and of course the Prisoners’ Dilemma features extensively too.

It has always astonished me how few people think strategically at all, such that a read of the classic (1993) Thinking Strategically on how to apply game theory by Avinash Dixit and Barry Nalebuff would help almost anybody. I can remember once observing in a committee meeting (all economists) what the Nash equilibrium in a certain policy situation involving all EU member countries would be, which did my reputation among those colleagues a power of good as this made it obvious what decision our (UK) politicians would take, regardless of any economic advice we delivered.

Hidden Games does some of the same groundwork as Thinking Strategically in its first half, throwing in a brief explanation of Bayes theorem en passant. I found it less compelling when it gets to the second half, explaining the ‘irrational’ as Nash equilibria in various games. Perhaps this is because there are already pretty powerful models, whether cognitive – eg the rule-of-thumb argument about conserving brain energy in making decisions – or economic – classic signalling models. The application of game theory seems more interesting in contexts of collective choices (as in Kaushik Basu’s wonderful The Republic of Beliefs) than in individual decision-making.

Having said that, if you don’t mind the trope about rationalising the irrational, Hidden Games is a very nice introduction to applying game theory to life, an enjoyable read.

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Spending our time, the ultimate scarce resource

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On the face of it, The Internet Is Not What You Think It Is: A History, A Philosophy, A Warning by Justin Smith and Four Thousand Weeks: Time Management for Mortals by Oliver Burkeman are pretty different. The former a philosophical disquisition on the parallels (and differences) between historical communication networks and today’s internet of disinformation. The latter a self-help guide to being less busy and happier.

What they have in common is identifying digital platforms as the cuplrit gobbling up our time and attention through addictive design – that familiar ‘swipe down to refresh’ for a dopamine hit – and a business model that requires human fodder. One travels by way of classical Indian philosophers and the Enlightenment, the other via useful advice from popular psychology. Both have at their heart a concern with the manipulation of how we spend our time. I read them one after the other and enjoyed both – and both with more useful insight than the much-hyped Surveillance Capital doorstop.

Have I stopped scrolling so much? Not yet. I will be trying to take some of Burkeman’s advice in the hope of stopping feeling constant pressure to empty that inbox, tick off the whole to do list. As we’re stuck with the internet, it makes sense to resist the way it manages us humans. I don’t think Smith would reckon much for my chances. Wish me luck.

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The experiment has started so let’s make it work

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An optimistic book about the future of liberal democracies – surely not? But yes, that’s what Yascha Mounk has delivered with The Great Experiment: How to Make Diverse Democracies Work. It’s a book of three parts, the first of which is all about why diverse societies generally fail, starting with the innate human tendency to divide into us and them.

After this gloomy start, which is what we now expect from books about democracy, Mounk notes that this is too bad as most OECD (and other) countries now have diverse populations, and despite populism it is hard to conceive that going back to the more homogenous mid-20th century is possible. So the book goes on in the second part to set out a vision of what a diverse liberal democracy might look like. It argues strongly for “the core commitment of philosophical liberalism,” namely that the state has a responsibility to respect the moral autonomy of its citizens, which means setting limits to its own authority and also protecting individuals from the “cage of norms”, restrictions on autonomy set by their own religious or ethnic group. It also advocates for cultural patriotism, rather than nationalism or the civic patriotism of shared values. I like this alternative very much – it seems to me we are brought together by language, landscape, tv shows, sport, the way buildings and shops look etc. I’d add humour, very distinctive between different countries.

The final part starts with “reasons for optimism” – one of which is that actually, most of the diverse democracies are slowly making progress toward better integration, accepting that people have diverse and multiple identities. The book also argues that optimism is important because it will affect actions and outcomes. It acknowledges what it terms the ‘Chapter 10 problem’ – the generally unsatisfying list of policies at the end of a book, as demanded by publishers and indeed readers. It doesn’t really provide this so much as a few general reflections, concluding: “Constructing diverse democracies that command the enthusiastic support of the great majority of their citzens is going to be hard.” But what choice do we have other than to try? The Great Experiment is already well under way.

So I liked the upbeat message. I don’t think there’s much that’s new here for readers of the death of democracy genre, but the arrangement of the argument into an optimistic outlook is very welcome.

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Calling economics PhD students

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Thanks to a couple of train journeys – upcoming travel is going to be so good for my work-related reading! – I read again The Economist’s Craft: An Introduction to Research, Publishing and Professional Development by Michael Weisbach. Again, because I looked at a copy in draft a while ago.

I highly recommend this book for economics PhD students and their supervisors. As my blurb for it says, it’s the book I needed when I was starting out. It’s full of advice both wise and practical. It starts with the selection of a research topic, which is surprisingly hard – getting from a broad area of interest to an addressible specific question or hypothesis is something a lot of people struggle with. There are five chapters about writing papers/chapters, which might seem a lot except Professor Weisbach argues researchers should think of writing the paper as part of the research process rather than a dreaded add-on at the end. So this section integrates doing research with writing it, and incorporates sound advice such as not obsessing about statistical significance at the expense of meaning and actual significance. I wholeheartedly agree with all this. The competition to publish is intense and writing good papers is fundamentally important. It’s how disciplinary knowledge progresses.

There is then a section about presentations (don’t put too much on one slide! don’t prepare 50 slides for a 20 minutes slot! don’t stand looking at the display with your back to the audience! A lot of senior academics could do with paying attention), circulating papers and the publication process. The final section is about being a good academic, winding up with becoming a good thesis advisor and planning a research trajectory. Pretty much every page has some points to take on board.

In short, aimed at a specific audience, but for all of its target readers, very well worth buying and reading.

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