Schoolteachers, Sumo Wrestlers, and Choice

1
Schoolteachers, Sumo Wrestlers, and Choice
Happiness
2
Incentives Day Care Prostitution

• An incentive (negative or positive) is simply a
  means of urging people to do more of a good thing
  and less of a bad thing.
• Three basic flavors (1) economic, (2) social,
  and (3) moral
• Economic day care center in Haifa, Israel and
  fining tardy parents.
• After the 3 fine went into effect, the number
  of late child pickups promptly went? Also,
  3-per-pack sin tax for cigarettes.
• Social banning of cigarettes in restaurants,
  prostitution busts
• http//www.chicagopolice.org/ps/list.aspx
• Moral parental guilt over late child pick-ups
  at day care center

3
Moral/Social Incentives and Modern Life

• The Chicago Police Department in conjunction
  with the Mayor's office have now made
  prostitution solicitors' information available
  online. By using this website, you will be able
  to view public records on individuals who have
  been arrested for soliciting prostitutes or other
  related arrests. The following individuals were
  arrested and charged for either patronizing or
  soliciting for prostitution. It is not a
  comprehensive list of all individuals arrested by
  the Chicago Police Department for patronizing or
  soliciting for prostitution. The names,
  identities and citations appear here as they were
  provided to police officers in the field at the
  time of arrests.

                       DOE/SMITH, CARLOS M/31
165XX BRENDEN LN. OAKPARK 1102 N CICERO AVE
2005/10/01 720 ILCS 5.0/11-15-A-1
DOE/SMITH, JOSE M/37 54XX S ROCKWELL ST
CHICAGO 1102 N CICERO AVE 2005/10/02 720 ILCS
5.0/11-15-A-1
DOE/SMITH, JOHN M/54 28XX W 38TH PL CHICAGO
2500 S CALIFORNIA BLVD 2005/09/06 720 ILCS
5.0/11-15-A-1
DOE/SMITH, ALEX M/28 22XX MAGNOLIA CT WEST
BUFFALO GROVE 1102 N CICERO AVE 2005/10/02
720 ILCS 5.0/11-15-A-1
4
Economic Incentives and Modern Life

• - Australian prison ships in the early 1900s
• - April 15, 1987 and the disappearance of
• of 7 million American children
• - frequent flyer miles (loyalty programs)

5
Incentives Cheating

• Teachers cheating and high stakes testing
• - How did the teachers cheat?
• - How was their cheating discovered?
• - How did administrators confirm their
  discovery?
• Do Sumo wrestlers cheat?
• - When? Why? 15 bouts per tournament and 7-7
  wrestlers

6
Cheating and the Bagel Man

• Paul F.s bagel business is essentially an
  honor-system commerce scheme
• Not paying for a bagel (or doughnut) is a form of
  white-collar crime, for which it is much harder
  to collect data than street crime. Why?
• In his own research business, payment rates
  averaged 95

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What the Bagel Man Saw

• Payment rate among all of his clients is
  approximately 87-89
• 87 before 9/11 (89 after 15 reduction in
  theft)
• What has Paul F. learned about honesty?

8
What the Bagel Man Saw

• Telecoms companies and law firms?
• Executives vs. administrative workers?
• Places where security clearance was required?
• Two great predictors of a companys honesty?

9
What the Bagel Man Saw

• Relationship between payment rates and local
  unemployment rate?
• Effect of weather?
• High-cheating holidays vs. Low-cheating holidays?
• Paul F.s sobering belief Honest people are
  honest, and cheaters will cheat regardless of the
  circumstance.
• Based on his data, is that accurate?
• Englands toll-collector strike

10
The Paradox of Choice the Futile Pursuit of
Happiness

• food samples at grocery stores, MedicareChoice
  for seniors, 401k plans for retirement law of
  diminishing marginal utility (key)
• applying to college today, 1997 DTC ruling
  regarding the advertising of prescription drugs
• choosing a major (or majors and minors) with
  cross-listed courses
• paralysis of choice A majority of people want
  more control over the details of their lives, but
  a majority of people also want to simplify their
  lives. There you have itthe paradox of our
  times.
• As the number of choices for individuals
  increase, so too does the responsibility for and
  regret over failure. Nothing is ever settled!
• 30-somethings struggling, not to find a career
  and/or a mate, but to choose one

11
If Only The Problem of Regret

• Choices follow similar utility principles as
  chocolate bars and increases in wealth the
  utilitythe increase in happinessfrom the first
  couple is large and infinitely better than no
  choices, but . . .
• Excessive Choice is often burdensome. Why?
• Increases burden of information gathering to make
  a wise decision
• Doing all the cost-benefit/expected utility
  calculations is exhausting
• Increases expectations about how good the
  decision will be
• People often assemble an idealistic composite of
  all the options foregone
• Which increases the likelihood that they will
  regret the decision they make
• And increases the chance that they will blame
  themselves when a decision fails to live up to
  expectations.
• Perhaps colleges/universities offer too many
  choices now, which
• might help explain double-, triple-majoring,
  etc. (e.g., Spiderbytes)
• Maximizers are uniquely prone to excessive
  anticipated and postdecision regret.

12
If Only The Problem of Regret

• Omission bias The belief that we will regret
  actions that dont turn out well MORE than we
  will regret failures to take actions that would
  have turned out well.
• e.g., switching toll lanes or grocery store
  aisles that turn out to be worse than if we had
  stayed where we were
• Depends on the timeframe
• short timeframes actions that did not turn out
  well are often the ones people report regretting
  the most (e.g., breaking up with boyfriends and
  girlfriends)
• long timeframes non-actions are often the ones
  that people report regretting the most (e.g., not
  studying abroad)

13
The Paradox of Choice

• Utility maximizing vs. satisficing e.g.,
  graduate school experience
• Harvard photography class experiment and
  telecommuting
• B. Schwartz In the past, the default options
  were so powerful (career, spouse, home) that few
  perceived themselves to be making choices.
• Choosing our identities As with marriage,
  choice of identity has been moving from a state
  in which the default option was extremely
  powerful and the fact of choice had little
  psychological reality to a state in which choice
  is very real and salient. e.g., school
  shootings
• Every second of every day, we are choosing, and
  there are always alternatives. Think about what
  you do when you wake up in the morningyour
  routine. During the week, youre an automaton.
  This is a very good thing.
• Areas of everyday life that dont need intense
  analysis and evaluation every day free up areas
  that do. But it is the cumulative effect of
  these added choices that is causing substantial
  distress.
• We are increasingly trapped to varying degrees in
  the tyranny of small decisions.

14
Why Decisions Sometimes Disappoint

• key role of hedonic adaptation to good things
  and resilience to bad things
• - our psychological immune system (a sort of
  emotional thermostat)
• e.g., remember when you got your first dial-up
  14,400 baud modem?
• - standards of comfort change (e.g., A/C in the
  dorms), and study abroad
• Winning the lottery and hedonic thermometers

15
If Only The Problem of Regret

• Near Misses
• Responsibility Who chose this movie/restaurant,
  etc.?
• Importance of downward counterfactuals
• e.g., internships at local hospitals, at-risk
  schools, etc.
• As hard as it often is, let sunk costs go when
  making new decisions
• e.g, President Bush on Iraq (Aug. 22, 2005)
• We owe them something fallen soldiers. We
  will finish the task they gave their lives for,"
  the president said. We will honor their sacrifice
  by staying on the offensive.
• (not primarily WMD, national security, Iraq-Al
  Qaeda/911 ties, etc.)

16
Why Decisions Sometimes Disappoint

• How does happiness vary with income? Studies show
  that when incomes rise for everybody, well-being
  doesnt change much.
• Consider the example of Japan
• Or take the U.S. GDP per person (capita) since
  1946when formal surveys of happiness startedhas
  tripled with former luxuries (jet-travel,
  long-distance phone calls, etc.) now necessities,
  but Americans no happier.
• One exception the Amish report some of the
  highest levels of happiness
• Mispredicting Satisfaction utility estimation
  errors made in hot and cold states of
  rationality
• e.g., Rick James Super Freak dance
  experiment, unsafe sex,
• angry emails
• e.g., college students in California and Midwest
  and the weather
• e.g., college tours for prospective students
• Almost every decision involves a prediction
  about future emotional responses, which are much
  harder to get exactly right than we usually
  expect.

17
Combating the Paralysis of Choice

• Helpful countermeasures
• (1.) Group Decision-Making
• Political Scientist Paul Johnsons research
• - He asks his classes of roughly 25 students to
  predict who will win the Academy Award in several
  leading categories.
• - He has consistently found that the group
  predictions are better than the predictions of
  any one individual. In 1998, the group picked 11
  of 12 winners, while the average individual in
  the group picked only 5 of 12 winners (and the
  single best individual picked only 9 winners).
• (2.) Pro-Actively Limit Choices to 1st order,
  2nd order, 3rd order, etc.
• (3.) Counterfactual Downward
• (4.) Make Some Decisions Nonreversible (e.g.,
  Harvard photography class)
• (5.) Anticipate Adaptation
• (6.) Learn to Love Constraints (Say No) and
  to Move On w/a Distraction
• (7.) Consider the value of Choosing the Right
  Pond relative position