#Behavioral Economics

[thepowerisyouth]

MONEY / FINANCE STRESS CONTENT WARNING, this next line is unfortunately quite stressful about money so this was an important warning for me to add:

This is also less for the random strangers on the internet who have no reason to trust my advice but more for the 10-15 people I know personally who trust my money advice based on prior experience and Ive sent them my blog link in the last month or two

US stock market is about to tank. On a global perspective its stupidly overpriced because markets like China are hitting 5 year lows (as in we've increased our stock market over 2x since "COVID lows", but their market is even lower than it was then.

Timing is hard but it is entirely possible yesterday was the peak of the market. Might also not tank for 6 months.

Market psychology is fucking weird tho so please absolutely dont 'short' anything, which is basically the same as 'buying puts'. Michael Burry nearly bankrupted all his friends, family, and random investors by insisting on 'shorting' things based on knowledge of impending crisis.

Just sell everything. I mean literally everything. Bond etfs might go up but youd have to have eyes glued to the charts to sell in time. Gold wont do, neither will bitcoin. Their negative correlation to stocks isnt really a thing anymore.

Get every etf, stock, whatever into cash in the brokerage account, then move it out of the banks/brokerage firms and into something physically in front of you because we are, in fact, in another 'historical period of bank runs' its just not quite at the peak yet.

Not trying to increase anxiety beyond nessecary-- its just that any, single bank can immediately freeze your money-- leaving it up to the Federal Government to pay you back-- and it might possibly be the case that youd have to rely on whats called a "bank bail in" to see your savings again.

Not a fun situation to be in, even if it wont happen to most people its just safe practice to do this during a "historical period of bank runs"

----------------

This blog is basically my diary of my thoughts (suprise suprise). But Im an open book, privileged (but poor) little white boy with complex societal/generational abuse and very little home problems so lets fucking go theres a whole mormon cargo van to unpack

Definitely recommend tags Im terrible at them.

---

To those reading this, if you have ever met me in real-life or on the internet than you have taught me varying degrees of information which can be randomly retrieved by my brain at any time depending on current CPU performance. Thoughts of my loving husband have occupied my headspace probably 95% of my time since 14 so he has absolutely taught me at least 100x more than anyone else in the world.

When I say "I", oftentimes Im thinking about "me and my husband", or even sometimes "me and my friends/family", or even sometimes "me and society"--- but I am not always 100% aware of the current headspace environment and/or beliefs of the minds of those around me without feedback

---

There are currently over 8 billion individual varieties of the global human language spoken within the mind. Lets start translating them all. Misunderstood words become mean labels.

I fucking hate mean labels

"Math wiz" = racism and/or classism and/or gender shit. Fuck that shit

When a person is niched off into one part of an 8 billion population human society, it becomes impossible to not "live in a bubble". Bubbles change in size constantly even if not visibly observed. Bubbles can be different sizes depending on your current day-to-day thoughts of your own society. Bubbles must pop. Enlightenment implies life only gets better the more times ya pop and lock it

My path away from purely mathematics, logic, and scientific theory began when I met my husband, and for the first time in my life it became important to me not to be an asshole to everyone around me

Ive been told (only after I started dating my traumatized husband tho and helped him heal a lot) that I'm a natural communicator-- and all my life I found myself listening and learning to everything and everyone around me trying to understand both their and my own motivations-- then I like to garble them up and spit 'em out. My memory recall ability is wonky tho and fluctuates highly with nutrient intake-- I'll get into that later

I wish I could have a million years to read every blog on tumblr. I really do. Connecting & communating is extremely important for understanding one another but it takes time

I had an extremely unique childhood (who hasnt lol), enough so to isolate myself quite a lot through sheer dumb luck. My mom is also everyone's favorite school teacher so of course I was learning a lot from a young age. Luckily I glued myself to the first person who wanted to glue themselves to me equally & we grew exponentially closer to eternity

If its still not clear: my husband and I are bored and love chatting with people, but like most internet loving freaks my mouth don't work sometimes well but my fingies do. My ears got fluff a lot but I got eyes for LEDs like a hawk. Wish they werent LED tho

I also have a naturally short sleep cycle (i.e. extra time for this), and I really wont be offended or weirded out by someone reading through and liking 20+ or whatever of my posts at once randomly. Stories are supposed to be read in chunks, and I think of this blog as a story & also workspace for my thoughts that Id love to see which chapters everyone has read through. Also I love (and only respond positively to) positive feedback, yet also suggestions for ways to improve my "theorums". As in, good faith discussions are totally welcome on any post.

For my 50 year old parents reading my blog so lovingly in their limited evening time-- you can sort by tags to see what topics your familiar with, if you play around with the search function while on my page. Mom. Show dad how to do it

In the very, very bottom of my blog I dont even think I managed to tag shit properly-- but its the roughdraft workings of the philosophy, as well as my own logical framework for answering lifes questions. Its 2 months ago so I might not even be writing according to my own works down there anymore idk I change fast sometimes

Last thing for now here is that I was always criticized by teachers for not showing my work, and for not reviewing my tests before turning in, and I pushed back hard because nearly every time I went over and corrected a mistake-- I saw I most often got it right the first fucking time on a pure hunch. I act on impulse when I'm not meditating mostly for efficiency purposes because I believe I'm correct, but remain open to emotionally positive feedback so I can help remove all doubt.

-------

This might turn into my 'life story' post, as its already going there. Heres what I have so far in the way of my knowledge of my family before I was brought into existence, and my "earliest memories":

Family context:

I dont know jack shit. Nobody talks about it at all.

Here's my own observations Ive made using the framework and perceptive filters I was given--

My whole family is white Texans.

Ancestory is slaveowners of course, further back is a very likely direct parent-child descendent line from the most famous inbred british royalty of the 13th century i.e. King John, whose brother was the arab genociding Richard.

I would call my immediate family as upper poverty class. Its more like poverty with extra privileges cause mental health stigma was the only thing holding them back not other shit too.

As children we had a lot of very privileged opportunities because my parents made a lot of sacrifices to try and bring us back up the class ladder. Lets look into that generational trauma issue

My dads parents (born in the early 40s, dont know the year exactly. I think '43 or '44) were more upper middle class, pretty high income. Owned an insurance business that was very successful by the early 2000s at least. My grandpa is described to me as a "monster" and "violently abusive". I have a single memory of him screaming at me as a young child and I was cowering under a desk, so I really believe it. No other stories at all to provide context.

-- I gotta split this section off I realized I wrote the next thing about post-me context Ill need to move this part lower down later--

My grandpa got early onset dementia, my dad didnt notice in time, and my grandpa bankrupted his successful company and lost several million of dollars to "scammers and sexy ladies."

My dad found out around 2015-16 or so. He told me a little bit after telling me my grandparents were getting divorced. My dad managed to scrape together about $200,000 which is being sued for by the IRS actively.

(He split that money in two, and entrusted me tell him how to invest half in safe value stocks that I handpicked as well as a calculated risk allocation to bonds which we sold for 30% profit the second the market crashed. He gave the other half to a brokerage advisor. I never met the advisor but saw the results. Dont get me started on how the other dude did with that money-- we started this endeavor in January 2020.)

Personally I also dont believe that its possible to spend an entire fortune on scammers and strippers, so Id love to see his books and figure out what the hell went wrong with that asshole. I have a hunch I know something more than anyone else ("Enron", guys, we're talking about an insurance company in HOUSTON, in the 2000s) but I will never be sure without the books.

----

Back to other family--

I do not know a single thing about my grandma on my dads side. She raised me quite a lot, but yeah I literally have only heard her life described to me as "she was a housewife"

On my moms side, my Mimi (also born 1940s but slightly younger so I think 1946 or 1947) came from a divorced, upper middle class family. In 1964-65, She and her step mom both got knocked up the same year so she watched her divorced dad remarry to said step mom when she was 18-19 and getting a shotgun marriage herself, so you can imagine what that was like. The "biological" of the two moms was a very good mom and very queer from what I hear. She died when I was a baby, from lung cancer. Thats all I know. My mimi raised me quite a lot, nearly equally as much as my mom did

My mom's dad, my Papa, came from a rural farming family in East Texas. Dont know much else of anything, but he and his siblings were named "Billy, Bobby, and Betty". As in, they are what everyone likes to call "hicks"

--

Moving onto my direct parents now. I know a little more about them of course, but since we're getting closer in age to the present-- I think itll be easier to describe my understanding as common stereotypes. If its unclear what I mean definitely feel free to ask, but I'll probably say "I dont really know"

Not much else is relevant other than knowing that my moms family was the mormon one, but that as soon as my dad was love-bombed by the church he joined to. Mormons were also different in the 90s I'm told.

My dad struggled with being one of the "crazy schizos" of the 90s. As in, very traumatized, upset, and gaslit by the government and his parents. Must have done a damn good job dealing with it by the time he was in his late 20s and I popped out cause he was never a "bad dad" to me at all. Definitely yelled and was more angry at times, but less than any other friends parents Ive ever met, and from what I remember he came into my room at night and apologized to me literally every single time within like 5-10 minutes. I know pretty much nothing about him pre-me. He was a tradesman my whole life and specialized in remodeling kitchens & bathrooms (the 'dirty work of construction'). All his initial clientele were the rich people my grandma lived near and was friends with.

My mom would have been extremely queer-presenting and posting on tumblr if born in the year 2000, but was born in early 70s, and was a raegan teen in high-school in Texas during the satanic panic-- she presents completely cis, straight, but has body dysmorphia issues. Thats about you need to know about those issues I'm sure my tumblr folks can assume the rest and be perfectly correct. Cause thats about all I know too and I'm assuming the rest about my own mother

--- Earliest memories

I think a lot of people face doubt about their own earliest memories, maybe hearing the way I connect the images of these events in my head to my emotions I felt will help others do the same.

----

Two disclosers about me & my current healthcare discoveries before moving on

1) My only "major" childhood trauma is loneliness. I have a partner now (started dating early high school, nearing 10 years together now) who was just as lonely and we are glued to each others side constantly, and have made our life work great that way. So don't feel too bad reading this, I'm only able to write it down because Ive healed that trauma and can dig this stuff up with no issues to validate the emotions I felt even as a child

1) I believe I have a genetic trait that is only just getting discovered. There are something like 6 discovered mutations that hold this similar trait so far, and its just basically chronic insomia.

It being a genetic trait tracks with how my mom describes me as never settling into a normal sleep pattern at 6 months old, having absurd amounts of nightmares and death anxiety keeping me up at night as a child, and I still dont sleep at any given time. I average 2 hours less sleep than my husband, who averages 7-8 now that he isnt actively being abused at home.

Going to get sequenced but even if negative I'd probably just be a 7th mutation, as they only found the other 6 genes via case study.

The scientists whove discovered it call it "Familial Natural Short Sleeper", if you desire to look it up. They describe the trait like its the best possible thing in the world. Well... terminally chronic insomia is not the best thing in THIS world thats for sure.

---------

My "earliest memories"

These arent ranked by time accurately of course. Took enough effort digging through my brain to turn them up, not like Ive got a 2003 calendar stuffed in here as well.

I did do my best to sort by first memory but it also might be sorted by the order at which I recovered the memories as being one of my "earliest" when I was a child and asked such things

1. Pure emptiness. I can only describe it as dissociation. I can remember nothing about the environment around me, except feeling suddenly sucked out of it, seeing only darkness, feeling almost a ringing in my ears and the deepest dread possible. This same feeling followed me in life for a little while, but started to take more visual shape when I was an adolescent, until at some point I would see myself sitting in a chair alone in a room that is infinitely sized but that slowly gets darker the further out you go. I cant remember what exact "real-world" event caused this feeling to ever happen each time it did. I just can remember having it happen occasionally when I was awake and doing things. Definitely dissociation. (If you are willing to believe me further I think its just probably "lights out" and being scared of that)

1. Riding a mattress down the stairs. I kind of remember two images, one is the tunnel vision of going high speed down the stairs and the other would be from looking back up at the stairs when I was done going down. Totally fun, probably my first rollar coaster ride. I might remember my siblings laughing too but it wouldnt be because I can remember the actual laughing-- but I can remember feeling the joy of being in a group of people laughing. At the time, my parents were selling the house so thats why I also remember it being a completely empty carpeted room that we were riding down into

2. My brother smashing his head repeatedly into the refrigerator for 'fun' and someone saying "wow he has a hard head" or something along those lines. I was learning english I cant remember exactly what they said but that was definitely the meaning I took from their words. I think this memory is strong, because I was truly very curious as to why my brother was just running at full speed, head down, and headbutting a hard surface. The words someone said after that must have been one of my first 'answers'

3. Watching my siblings play in rare Houston snow. Not much remembering there actually. Probably just thought it was mezmorizing to watch as I just really remember a picture and feeling peace

4. Will add more later.

[omegaphilosophia]

The Relationship Between Temporal Discounting and Ethics

Temporal discounting is a cognitive phenomenon where people tend to value immediate rewards more highly than future ones. This tendency to devalue rewards as they move further into the future has significant implications for decision-making, especially in the context of ethical behavior and moral reasoning. Understanding how temporal discounting influences ethical choices can shed light on why individuals might prioritize short-term gains over long-term ethical principles and the broader impact on society.

Understanding Temporal Discounting

Temporal discounting is the preference for smaller, immediate rewards over larger, delayed ones. It is a well-documented phenomenon in psychology and behavioral economics, reflecting how individuals often struggle with self-control and long-term planning. The degree to which individuals discount future rewards can vary, with some showing a stronger preference for immediacy than others.

Ethics and Temporal Discounting

Immediate Gratification vs. Long-term Consequences: Ethical decisions often involve weighing immediate benefits against long-term consequences. For instance, cheating on a test may provide immediate academic success but can undermine personal integrity and trust in the long run. Temporal discounting can lead individuals to prioritize immediate gratification, ignoring the ethical implications of their actions over time.

Environmental Ethics: Temporal discounting significantly impacts environmental ethics. Decisions that favor short-term economic benefits, such as overfishing or deforestation, can have devastating long-term environmental consequences. Ethical considerations require valuing the future health of the planet and the well-being of future generations, which temporal discounting can undermine.

Financial Ethics: In financial contexts, temporal discounting can explain why individuals might engage in unethical behaviors like fraud or embezzlement to gain immediate financial rewards. These actions can lead to severe long-term repercussions, including legal consequences and damaged reputations, highlighting the ethical tension between short-term gains and long-term integrity.

Health and Well-being: Health-related decisions are also influenced by temporal discounting. For example, indulging in unhealthy behaviors for immediate pleasure can lead to long-term health problems. Ethical decision-making in this context involves recognizing and valuing the future health consequences of present actions.

Public Policy and Governance: Policymakers often face ethical dilemmas where short-term political gains are weighed against long-term societal benefits. Temporal discounting can lead to policies that favor immediate results, such as tax cuts or deregulation, while neglecting the long-term ethical considerations of economic stability and social welfare.

Addressing Temporal Discounting in Ethical Decision-Making

Education and Awareness: Increasing awareness about the effects of temporal discounting can help individuals recognize their biases and make more informed ethical decisions. Education programs that highlight the long-term consequences of actions can encourage a more future-oriented perspective.

Incentive Structures: Designing incentive structures that reward long-term ethical behavior can counteract the effects of temporal discounting. For example, offering financial incentives for sustainable practices or long-term health goals can align immediate rewards with ethical principles.

Cognitive Behavioral Strategies: Techniques such as mindfulness and cognitive behavioral strategies can help individuals manage impulsive tendencies and consider long-term consequences more effectively. These strategies can support ethical decision-making by reducing the impact of temporal discounting.

Policy Interventions: Governments and organizations can implement policies that promote long-term ethical behavior. For example, regulations that enforce environmental protections or corporate governance standards can help mitigate the influence of temporal discounting on unethical practices.

The relationship between temporal discounting and ethics underscores the challenges individuals face in balancing immediate desires with long-term ethical principles. By understanding this cognitive bias and its implications, we can develop strategies to promote ethical decision-making that values future consequences. Whether through education, incentive structures, cognitive strategies, or policy interventions, addressing temporal discounting is crucial for fostering a more ethically responsible society.

[wat3rm370n]

Value-based care is a red flag that a healthcare CEO was not thinking things through.

Everyone else notices how this “value-based care” idea will lead to grotesquely perverse incentives, right? Physicians for a National Health Program at least recognized the problem.

People - Wife of Murdered UnitedHealth CEO Brian Thompson Says He Received Threats and She's 'Trying to Console' Their Children - the wife of slain CEO Brian Thompson, said her husband did not alter his travel plans in spite of the threats. By Liam Quinn Published on December 4, 2024, 12:38 PM EST. Part of the text is highlighted with a marker, the part highlighted is “did not alter his travel plans in spite of the threats”.

I’m sorry if this seems like victim blaming, but I do think this demonstrates that people who become CEOs of giant healthcare corporations should definitely not be assumed to be particularly clever or insightful, I also think they shouldn’t be trusted with responses to disasters or “innovations” to any systems for that matter. It does seem like common sense that the CEO of a health insurance company that spends all its time and resources to avoid paying for people’s healthcare should’ve shown a little less hubris. (Of course elites always panic about the wrong things, even if it hurts their own interests, this is a known pattern.) I would’ve assumed that a person in that situation would be aware that the company is likely on the shitlist of any number of wronged and angry patients. But wait, there’s more - while some major media outlets have repeated the idea that this guy kept a “low profile” (do better, AP and PBS!), in fact in a newsletter from Payday Report, Mike Elk reported that this guy was being sued by Hollywood Firefighters union, saying “The union sued Thompson for failing to reveal that United Healthcare was under DOJ investigation. As a result, the pension fund lost $25 billion in value. Meanwhile, Thompson had cashed out over $15 million in stock while selling the stock to pension funds like those of the Hollywood Firefighters union.” and pointing to Ken Klippenstein’s report. So the list of people with axes to grind is numerous. Not what I’d describe as a low profile, but whatever.

The lack of judgement that stood out to me though was in another article which mentioned that: “At an investor meeting last year, he outlined UnitedHealth's shift to "value-based care," paying doctors and other caregivers to keep patients healthy, rather than focusing on treating them when they get sick.”

Who is Brian Thompson, the UnitedHealthcare CEO shot dead in Manhattan? By Megan Cerullo Edited By Anne Marie Lee Updated on: December 4, 2024 / 8:22 PM EST / CBS News For a top executive at a $562 billion company that affects how millions of Americans get health care, Thompson kept a relatively low profile. At an investor meeting last year, he outlined UnitedHealth's shift to "value-based care," paying doctors and other caregivers to keep patients healthy, rather than focusing on treating them when they get sick.

This “value based care” sounds quite obviously like a recipe to get doctors to fail to notice or even note any signs of serious disease. It sounds like an incentive to not document anything well, and to deliberately not notice any problems. Instead of being paid to cure and treat illness and relieve suffering, they would be incentivized to have patients with no sickness documented. Just sweep it under the rug! And if the patient dies, so be it because then they’re not a patient anymore and not covered by health insurance anymore, so they wouldn’t count in the metrics. And try to recruit mostly healthy people into your patient pools, and avoid taking on patients with chronic illness or any serious condition. Similar to the madness of “high risk pools” in privatized insurance. And already we have this problem with networks where some providers that are in-network are begrudging about it, and have their clerical staff make it as hard as possible to make an appointment if they have the “undesirable” insurance. I can’t prove this happens but it sure seems like it does since I’m not the only person who’s talked about running into this type of treatment and runaround when a specialist seems like they don’t want you as a patient even though they’re accepting new patients and supposedly are in-network.

Obviously an optimistic person might think that there would be an incentive just because not all patients die outright, and surely to mitigate downturns would be desirable. But that’s where loss aversion comes in, and also that market incentives are known for absolutely stinking at long-term goals, seemingly always favoring the short term. Andt if the patient takes a huge downturn and becomes disabled because of a preventable condition doctors failed to document, report, or treat, the patient will likely be shoved off the private healthcare insurance when they lose their job, and into Medicaid and maybe eventually Medicare, so then, again, not the problem of the private health insurance company. It’s all about socializing the losses and privatized profits.

I was astonished that this concept could be taken seriously given this glaringly obvious flaw. It’s so obvious that this would NOT be an improvement. Especially in the system we have that’s rife with perverse incentives already. I was relieved to find that Physicians for a National Health Program recognize the problem, and that there’s a published article from 2016 on the “countervailing incentives” and behavioral economics involved, and it articulates how the cognitive bias of loss aversion works so that people are more motivated to avoid loss than to seek gain. They didn’t articulate the gruesome corruption that I just envisioned. But anyone who’s worked in or adjacent to any kind of healthcare or health insurance in the trenches will know how the violence of the system plays out. It’s quite obvious this scheme would benefit the most lurid and ruthless of healthcare providers, and it would force even decent caring doctors into morally injurious situations as they would be pressured by employers to hide disease more than to prevent it or maintain health in patients. We already see how this works in these bureaucracies. If they’re looking for a solution to “upcoding”, which is a legitimate problem in the current payment system, then I suggest better oversight by patient advocacy oriented regulation makes sense. There’s no market solution here that would “naturally” benefit patients with the “invisible hand” they set up.

We need not just to let go of that idea, but to call it out, and reject it outright.

Lawsuit Against Murdered CEO - Firefighters pension accused UnitedHealthcare CEO of fraud, insider trading Ken Klippenstein Dec 04, 2024 In May, the Hollywood Firefighters’ Pension Fund had filed a lawsuit against Thompson, alleging he had sold over $15 million of UnitedHealth stock despite being aware of an active Justice Department antitrust investigation into the health insurance company that he did not disclose to investors or the public. Though UnitedHealth, the lawsuit alleges, was aware of the Justice Department investigation since at least October 2023, the public would only learn of the case when the Wall Street Journal published a story about it on February 27, 2024. When news of the investigation broke, it erased almost $25 billion in shareholder value. But by that time, Thompson had already cashed out, selling over $15 million in personally held UnitedHealth shares, per the suit. If true, the account affirms the countless internet memes’ depiction of Thompson as a rapacious health insurance executive fat cat. Literally none of the news media coverage I’ve seen about the murder has included this context, instead tugging at heart strings about the two sons he’ll be leaving behind. Members of Congress have likewise issued anguished statements about the tragic loss of life, remarks that decline to mention the allegations against him or the vast sums of money the company he oversaw has contributed to them and other politicians.

Behavioral economics and countervailing incentives in value-based payment - By Daniel R. Arnold Healthcare, May 17, 2016 But there is mounting evidence that extrinsic rewards can undermine intrinsic motivation. Of the numerous findings that relate to the crowd-out of intrinsic motivation, two seem particularly relevant to physicians: (1) negative effects of monetary rewards are strongest for complex cognitive tasks and (2) motivational crowd-out spreads to work that is not directly incentivized. With respect to complex cognitive tasks, even very large financial incentives undermine performance. For example, rural villagers in India offered half their annual money income experienced worsened performance on complex memory and puzzle-solving tasks. The spread of motivational crowd-out to work not directly incentivized has been observed in England. In 2004, the U.K. government introduced a pay-for-performance scheme with 136 indicators for family practices. By 2007, improvement for incentivized measures had plateaued, and quality deteriorated for two measures that were not incentivized.

PBS - Hacking Your Mind - Weapons of Influence Episode 102 | Marketers and politicians hack into your autopilot system — learn how to fight back. Aired 08/05/2020 | Expired 09/10/2024 | (transcript) One of the field's key insights is that gut feelings like loss aversion lead consumers to make predictable mistakes, and companies in a market economy make a lot of money by encouraging us to make those mistakes. Until then, the widely accepted view had been that markets actually protect consumers from their mistakes. “And so I would often hear something like the following -- "Yes, yes. I understand that the people in your experiments and some of the people I know do foolish things, but in markets, then -- and then I claim..." They could never quite finish this sentence without literally waving their hands, and the argument is somehow if you choose the wrong career or fail to save for retirement, that the market will somehow push you back toward being rational. There's a reason why no one can make this argument without waving their hands, and that's because the argument is just silly. You know, if you don't save enough for retirement, what happens to you? You're poor when you're old. The market doesn't discipline you. Suppose people have a weakness for gambling. What's going to happen? Will people build casinos, or will they offer programs to help people curb their gambling addiction? Well, people have made a lot more money on casinos than on programs to stop gambling.”

[as-told-by-sura]

[tmarshconnors]

Game Theory and Probability Theory

In mathematics and economics, there is a fascinating crossroads where strategic decision-making meets uncertainty. This intersection is where Game Theory and Probability Theory converge, offering insights into the dynamics of human interaction, strategic behaviour, and the unpredictability of outcomes. Join me as we delve into this captivating domain, exploring how these two fields intertwine and shape our understanding of complex systems.

Understanding Game Theory

At its core, Game Theory is the study of strategic decision-making among multiple interacting agents, aptly referred to as "players." Think of it as the science of strategy, where individuals or entities make choices with the aim of maximizing their own gains while considering the actions of others. Whether it's in economics, political science, biology, or beyond, Game Theory provides a framework for analyzing various scenarios of conflict, cooperation, and competition.

The Elements of Games

To grasp the essence of Game Theory, we need to understand its building blocks. Games are characterized by players, strategies, payoffs, information, and rationality. Each player has a set of strategies to choose from, leading to different outcomes with associated payoffs. Information asymmetry and rational decision-making further complicate the dynamics, making Game Theory a rich field for exploration.

Probability Theory's Role

Enter Probability Theory, the study of random phenomena and uncertainty. In the context of Game Theory, probability comes into play when outcomes are uncertain or stochastic. Whether it's the roll of a dice in a board game or the unpredictability of market fluctuations in economics, probability theory provides the tools to quantify and analyze uncertainty.

Where They Meet

So, how do Game Theory and Probability Theory intertwine? Consider a game like poker, where players must make decisions based on incomplete information and uncertain outcomes. Probability theory allows us to calculate the likelihood of different hands and anticipate opponents' actions, thereby informing strategic choices. In more complex games involving multiple players and intricate strategies, probability theory helps us model the uncertainty inherent in the decision-making process.

Applications and Insights

The applications of this marriage between Game Theory and Probability Theory are vast. From designing optimal auction mechanisms to analyzing voting behavior in elections, the insights gained from this interdisciplinary approach are invaluable. Moreover, in the age of artificial intelligence and machine learning, understanding strategic interactions and uncertain environments is crucial for developing intelligent systems capable of making informed decisions.

Conclusion

In the landscape of mathematical sciences, the synergy between Game Theory and Probability Theory offers a lens through which we can understand and navigate the complexities of strategic decision-making and uncertainty. As we continue to explore this dynamic intersection, we unlock new perspectives and tools for addressing real-world challenges across various domains. So, the next time you find yourself pondering a strategic dilemma or contemplating uncertain outcomes, remember the profound insights that emerge when Game Theory meets Probability Theory.

[convivialdave]

[pococurantesupremediety]

I feel like there's a, like, uncanny valley of cologne prices in the middle range (this applies to other stuff too). Where $300 is both too much to spend on an everyday cologne for yourself, and not enough to spend on cologne for the purposes of conspicuous consumption. Like, there were no $50 bottles or even $5 bottles you liked better? None at all?

The worst part about my beloathed coworker is that I so badly want to hate him less. Whenever I’m gonna work with him I try to think of positives or ways to connect. My life would be more pleasant if we had any common ground.

One day he came in and said, “I’m glad I looked at the schedule and saw I was working with you. I remembered you’re sensitive to my cologne so I didn’t wear it today.”

That was so thoughtful!! Wow! A genuinely nice moment!

I was like, “Oh man, wow, that’s so sweet, thank you!!!”

I moved his mental ranking up to 2/5 stars, it was a lovely gesture.

“Yeah,” he continued, “when I’m working with [Manager] I don’t have to worry, we just geek out about cologne.” He laughed and added, “Not that he could afford the one I wear.”

I crashed back to 0/5 stars. What. Back to square one.

I would later learn the cologne my manager “couldn’t afford” was $300. Like. I’m pretty sure he could waste that much on cologne but chooses not to?

After that I’ve noticed he tries to worm into good graces with gift giving. He gifted a different coworker a new pair of earbuds after noticing the guy was using very old ones. The guy was stoked and thankful but then got roped into listening to a rant about how bad his old ones were that somehow ended up dissing his taste to have had the old ones at all.

Today he showed up with a new mouse for my laptop after I mentioned I needed one.

So thoughtful!! He’d offered weeks ago and I just assumed he’d forgotten!

Then he told me what a great business man Muskrat is and laughed about sexist comments he’d heard while playing Call of Duty. Back to square one.

[mostlysignssomeportents]

The paradox of choice screens

I'm coming to BURNING MAN! On TUESDAY (Aug 27) at 1PM, I'm giving a talk called "DISENSHITTIFY OR DIE!" at PALENQUE NORTE (7&E). On WEDNESDAY (Aug 28) at NOON, I'm doing a "Talking Caterpillar" Q&A at LIMINAL LABS (830&C).

It's official: the DOJ has won its case, and Google is a convicted monopolist. Over the next six months, we're gonna move into the "remedy" phase, where we figure out what the court is going to order Google to do to address its illegal monopoly power:

https://pluralistic.net/2024/08/07/revealed-preferences/#extinguish-v-improve

That's just the beginning, of course. Even if the court orders some big, muscular remedies, we can expect Google to appeal (they've already said they would) and that could drag out the case for years. But that can be a feature, not a bug: a years-long appeal will see Google on its very best behavior, with massive, attendant culture changes inside the company. A Google that's fighting for its life in the appeals court isn't going to be the kind of company that promotes a guy whose strategy for increasing revenue is to make Google Search deliberately worse, so that you will have to do more searches (and see more ads) to get the info you're seeking:

https://pluralistic.net/2024/04/24/naming-names/#prabhakar-raghavan

It's hard to overstate how much good stuff can emerge from a company that's mired itself in antitrust hell with extended appeals. In 1982, IBM wriggled off the antitrust hook after a 12-year fight that completely transformed the company's approach to business. After more than a decade of being micromanaged by lawyers who wanted to be sure that the company didn't screw up its appeal and anger antitrust enforcers, IBM's executives were totally transformed. When the company made its first PC, it decided to use commodity components (meaning anyone could build a similar PC by buying the same parts), and to buy its OS from an outside vendor called Micros-Soft (meaning competing PCs could use the same OS), and it turned a blind eye to the company that cloned the PC ROM, enabling companies like Dell, Compaq and Gateway to enter the market with "PC clones" that cost less and did more than the official IBM PC:

https://www.eff.org/deeplinks/2019/08/ibm-pc-compatible-how-adversarial-interoperability-saved-pcs-monopolization

The big question, of course, is whether the court will order Google to break up, say, by selling off Android, its ad-tech stack, and Chrome. That's a question I'll address on another day. For today, I want to think about how to de-monopolize browsers, the key portal to the internet. The world has two extremely dominant browsers, Safari and Chrome, and each of them are owned by an operating system vendor that pre-installs their own browser on their devices and pre-selects them as the default.

Defaults matter. That's a huge part of Judge Mehta's finding in the Google case, where the court saw evidence from Google's own internal research suggesting that people rarely change defaults, meaning that whatever the gadget does out of the box it will likely do forever. This puts a lie to Google's longstanding defense of its monopoly power: "choice is just a click away." Sure, it's just a click away – a click, you're pretty sure no one is ever going to make.

This means that any remedy to Google's browser dominance is going to involve a lot of wrangling about defaults. That's not a new wrangle, either. For many years, regulators and tech companies have tinkered with "choice screens" that were nominally designed to encourage users to try out different browsers and brake the inertia of the big two browsers that came bundled with OSes.

These choice screens have a mixed record. Google's 2019 Android setup choice screen for the European Mobile Application Distribution Agreement somehow managed to result in the vast majority of users sticking with Chrome. Microsoft had a similar experience in 2010 with BrowserChoice.eu, its response to the EU's 2000s-era antitrust action:

https://en.wikipedia.org/wiki/BrowserChoice.eu

Does this mean that choice screens don't work? Maybe. The idea of choice screens comes to us from the "choice architecture" world of "nudging," a technocratic pseudoscience that grew to prominence by offering the promise that regulators could make big changes without having to do any real regulating:

https://verfassungsblog.de/nudging-after-the-replication-crisis/

Nudge research is mired in the "replication crisis" (where foundational research findings turn out to be nonreplicable, due to bad research methodology, sloppy analysis, etc) and nudge researchers keep getting caught committing academic fraud:

https://www.ft.com/content/846cc7a5-12ee-4a44-830e-11ad00f224f9

When the first nudgers were caught committing fraud, more than a decade ago, they were assumed to be outliers in an otherwise honest and exciting field:

https://www.npr.org/2016/10/01/496093672/power-poses-co-author-i-do-not-believe-the-effects-are-real

Today, it's hard to find much to salvage from the field. To the extent the field is taken seriously today, it's often due to its critics repeating the claims of its boosters, a process Lee Vinsel calls "criti-hype":

https://sts-news.medium.com/youre-doing-it-wrong-notes-on-criticism-and-technology-hype-18b08b4307e5

For example, the term "dark patterns" lumps together really sneaky tactics with blunt acts of fraud. When you click an "opt out of cookies" button and get a screen that says "Success!" but which has a tiny little "confirm" button on it that you have to click to actually opt out, that's not a "dark pattern," it's just a scam:

https://pluralistic.net/2022/03/27/beware-of-the-leopard/#relentless

By ascribing widespread negative effects to subtle psychological manipulation ("dark patterns") rather than obvious and blatant fraud, we inadvertently elevate "nudging" to a real science, rather than a cult led by scammy fake scientists.

All this raises some empirical questions about choice screens: do they work (in the sense of getting people to break away from defaults), and if so, what's the best way to make them work?

This is an area with a pretty good literature, as it turns out, thanks in part due to some natural experiments, like when Russia forced Google to offer choice screens for Android in 2017, but didn't let Google design that screen. The Russian policy produced a significant switch away from Google's own apps to Russian versions, primarily made by Yandex:

https://cepr.org/publications/dp17779

In 2023, Mozilla Research published a detailed study in which 12,000 people from Germany, Spain and Poland set up simulated mobile and desktop devices with different kinds of choice screens, a project spurred on by the EU's Digital Markets Act, which is going to mandate choice screens starting this year:

https://research.mozilla.org/browser-competition/choicescreen/

I'm spending this week reviewing choice screen literature, and I've just read the Mozilla paper, which I found very interesting, albeit limited. The biggest limitation is that the researchers are getting users to simulate setting up a new device and then asking them how satisfied they are with the experience. That's certainly a question worth researching, but a far more important question is "How do users feel about the setup choices they made later, after living with them on the devices they use every day?" Unfortunately, that's a much more expensive and difficult question to answer, and beyond the scope of this paper.

With that limitation in mind, I'm going to break down the paper's findings here and draw some conclusions about what we should be looking for in any kind of choice screen remedy that comes out of the DOJ antitrust victory over Google.

The first thing note is that people report liking choice screens. When users get to choose their browsers, they expect to be happy with that choice; by contrast, users are skeptical that they'll like the default browser the vendor chose for them. Users don't consider choice screens to be burdensome, and adding a choice screen doesn't appreciably increase setup time.

There are some nuances to this. Users like choice screens during device setup but they don't like choice screens that pop up the first time they use a browser. That makes total sense: "choosing a browser" is colorably part of the "setting up your gadget" task. By contrast, the first time you open a browser on a new device, it's probably to get something else done (e.g. look up how to install a piece of software you used on your old device) and being interrupted with a choice screen at that moment is an unwelcome interruption. This is the psychology behind those obnoxious cookie-consent pop-ups that website bombard you with when you first visit them: you've clicked to that website because you need something it has, and being stuck with a privacy opt-out screen at that moment is predictably frustrating (which is why companies do it, and also why the DMA is going to punish companies that do).

The researchers experimented with different kinds of choice screens, varying the number of browsers on offer and the amount of information given on each. Again, users report that they prefer more choices and more information, and indeed, more choice and more info is correlated with choosing indie, non-default browsers, but this effect size is small (<10%), and no matter what kind of choice screen users get, most of them come away from the experience without absorbing any knowledge about indie browsers.

The order in which browsers are presented has a much larger effect than how many browsers or how much detail is present. People say they want lots of choices, but they usually choose one of the first four options. That said, users who get choice screens say it changes which browser they'd choose as a default.

Some of these contradictions appear to stem from users' fuzziness on what "default browser" means. For an OS vendor, "default browser" is the browser that pops up when you click a link in an email or social media. For most users, "default browser" means "the browser pinned to my home screen."

Where does all this leave us? I think it cashes out to this: choice screens will probably make a appreciable, but not massive, difference in browser dominance. They're cheap to implement, have no major downsides, and are easy to monitor. Choice screens might be needed to address Chrome's dominance even if the court orders Google to break off Chrome and stand it up as a separate business (we don't want any browser monopolies, even if they're not owned by a search monopolist!). So yeah, we should probably make a lot of noise to the effect that the court should order a choice screen, as part of a remedy.

That choice screen should be presented during device setup, with the choices presented in random order – with this caveat: Chrome should never appear in the top four choices.

All of that would help address the browser duopoly, even if it doesn't solve it. I would love to see more market-share for Firefox, which is the browser I've used every day for more than a decade, on my laptop and my phone. Of course, Mozilla has a role to play here. The company says it's going to refocus on browser quality, at the expense of the various side-hustles it's tried, which have ranged from uninteresting to catastrophically flawed:

https://www.fastcompany.com/91167564/mozilla-wants-you-to-love-firefox-again

For example, there was the tool to automatically remove your information from scummy data brokers, that they outsourced to a scummy data-broker:

https://www.theverge.com/2024/3/22/24109116/mozilla-ends-onerep-data-removal-partnership

And there's the "Privacy Preserving Attribution" tracking system that helps advertisers target you with surveillance advertising (in a way that's less invasive than existing techniques). Mozilla rolled this into Firefox on an opt out basis, and made opting out absurdly complicated, suggesting that it knew that it was imposing something on its users that they wouldn't freely choose:

https://blog.privacyguides.org/2024/07/14/mozilla-disappoints-us-yet-again-2/

They've been committing these kinds of unforced errors for more than a decade, seeking some kind of balance between monopolistic web companies and its users' desire to have a browser that protects them from invasive and unfair practices:

https://www.theguardian.com/technology/2014/may/14/firefox-closed-source-drm-video-browser-cory-doctorow

These compromises represent the fallacy that Mozilla's future depends on keeping bullying entertainment companies and Big Tech happy, so it can go on serving its users. At the same time, these compromises have alienated Mozilla's core users, the technical people who were its fiercest evangelists. Those core users are the authority on technical questions for the normies in their life, and they know exactly how cursed it is for Moz to be making these awful compromises.

Moz has hemorrhaged users over the past decade, meaning they have even less leverage over the corporations demanding that they make more compromises. This sets up a doom loop: make a bad compromise, lose users, become more vulnerable to demands for even worse compromises. "This capitulation puts us in a great position to make a stand in some hypothetical future where we don't instantly capitulate again" is a pretty unconvincing proposition.

After the past decade's heartbreaks, seeing Moz under new leadership makes me cautiously hopeful. Like I say, I am dependent on Firefox and want an independent, principled browser vendor that sees their role as producing a "user agent" that is faithful to its users' interests above all else:

https://pluralistic.net/2024/05/07/treacherous-computing/#rewilding-the-internet

Of course, Moz depends on Google's payment for default search placement for 90% of its revenue. If Google can't pay for this in the future, the org is going to have to find another source of revenue. Perhaps that will be the EU, or foundations, or users. In any of these cases, the org will find it much easier to raise funds if it is standing up for its users – not compromising on their interests.

Community voting for SXSW is live! If you wanna hear RIDA QADRI and me talk about how GIG WORKERS can DISENSHITTIFY their jobs with INTEROPERABILITY, VOTE FOR THIS ONE!

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/08/12/defaults-matter/#make-up-your-mind-already

Image: ICMA Photos (modified) https://www.flickr.com/photos/icma/3635981474/

CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0/

[nwhrgy]

appreciate how and when people go wrong

[omegaphilosophia]

Theories of the Philosophy of Microeconomics

The philosophy of microeconomics encompasses various theories and approaches that seek to understand the principles, assumptions, and implications of individual decision-making within the context of markets and economic systems. Some key theories in the philosophy of microeconomics include:

Rational Choice Theory: Rational choice theory posits that individuals make decisions by maximizing utility or satisfaction given their preferences, constraints, and available information. It assumes that individuals act in their self-interest and make choices that maximize their well-being.

Marginalism: Marginalism examines how individuals make decisions at the margin, weighing the benefits and costs of small changes or incremental units of goods and services. It emphasizes the importance of marginal analysis in determining optimal decision-making and resource allocation.

Utility Theory: Utility theory explores the concept of utility as a measure of satisfaction or happiness derived from consuming goods and services. It investigates how individuals allocate their limited resources to maximize utility, subject to budget constraints and preferences.

Consumer Choice Theory: Consumer choice theory analyzes how consumers make decisions about what goods and services to purchase based on their preferences, budget constraints, and the prices of goods in the market. It explores consumer behavior, demand curves, and the determinants of consumer choice.

Production Theory: Production theory examines the behavior of firms and producers in allocating resources to produce goods and services. It analyzes the relationship between inputs (such as labor and capital) and outputs, the concept of production functions, and the factors influencing production decisions.

Market Equilibrium: Market equilibrium theory explores the interaction of supply and demand in determining prices and quantities exchanged in markets. It examines how markets reach equilibrium through the adjustment of prices and quantities to balance supply and demand.

Game Theory: Game theory studies strategic interactions between rational decision-makers, such as individuals, firms, or governments, in competitive or cooperative settings. It analyzes the outcomes of strategic interactions, including the Nash equilibrium, cooperation, and competition.

Information Economics: Information economics investigates the role of information and uncertainty in economic decision-making. It examines how individuals gather, process, and act on information in markets, the impact of asymmetric information on market outcomes, and the role of signaling and screening mechanisms.

Behavioral Economics: Behavioral economics integrates insights from psychology and economics to study how cognitive biases, heuristics, and social factors influence economic behavior. It challenges the assumptions of rationality and explores deviations from standard economic models.

Welfare Economics: Welfare economics evaluates the efficiency and equity of resource allocation in economic systems. It assesses the welfare implications of market outcomes, including market failures, externalities, income distribution, and the role of government intervention.

These theories and approaches in the philosophy of microeconomics provide frameworks for understanding individual decision-making, market dynamics, and the allocation of resources in economic systems.

[mostlynotwork]

In ‘Sludge’, Cass Sunstein sets out to explore the ways in which both the government and private sector cause harm through processes that create unnecessary obstacles to people achieving their goals.

Cass Sunstein is probably best known for co-authoring ‘Nudge’, one of the most well known and influential books in behavioral economics. Where ‘Nudge’ is centred around the ways that people can be helped to make better choices, ‘Sludge’ looks at the frictions that can be put in the way of people achieving these goals. Sometimes this friction has a legitimate public policy goal. But as ‘Sludge’ illustrates with numerous examples, often this friction imposes massive costs and can cause significant harm to vulnerable groups within society. 

Key points I took away from this book:

Sludge is the needless frictions that get in the way of people achieving what they want to do. E.g. long and complicated forms, unnecessary and inefficient queuing. 

Sludge can sometimes be deliberate, serving as a rationing tool or a way of making it difficult for people to achieve an outcome. There may be political debate over whether making it difficult to access something is good or bad. Sludge related to obtaining an abortion is an example of this.

Much sludge is not deliberate. It’s a byproduct of other processes or legitimate goals. In this case there should be broad support for the end goal of removing as much sludge as possible. 

Sludge can disproportionately impact already disadvantaged communities. (e.g. complex processes for voter registration or applying for social assistance may disproportionately impact groups already at a social disadvantage.)

Deliberate use of sludge by the private sector may in certain situations warrant regulatory scrutiny. (e.g. subscription traps where it’s easy to sign up and difficult to quit, dark patterns linked to manipulation of opt-out and opt-in, prefilling of forms.) 

There’s big savings and potential for a massive impact on people’s lives by taking a hard line on sludge. Paperwork (physical or digital) must be scrutinised to assess if each requirement is really necessary.

‘Sludge’ felt less an academic text and more like a call to action for a crackdown on harmful frictions in people’s lives. If you’re involved in government or private sector bureaucracy, ‘Sludge’ is a short read (or listen) that will serve as an important reminder of the value of making things simple.

[gwmac]

Does 'Common Sense' Actually Exist?

The Conversation That Started It All A few nights ago, I found myself on the phone with a good friend discussing something entirely unrelated when he casually dropped the phrase, ��Well, it’s just common sense.” That simple remark derailed our entire conversation for the next 30 minutes. I asked him to define what he meant by “common sense.” He couldn’t. Not really. He gave some vague examples,…

[willowsearth]

Why do smart people make dumb financial decisions? The psychology of risk reveals we’re wired to fear losses more than we value gains. Learn how this cognitive bias affects your choices—and how to stop it from sabotaging your success. #BehavioralScience #Psychology #Risk #DecisionMaking #EmotionalIntelligence

[captaingimpy]

The Credit Score Illusion: How the System Manufactures Control and Calls It Trust

By Ronald Brady | Philosophy, Finance, and the Bullshit in Between Let’s cut through the noise. Credit scores are not a reflection of financial health. They’re not a badge of responsibility, and they’re not a path to freedom. They’re a system of behavioral control, engineered to simulate risk, nudge compliance, and generate revenue for the banks that created them. I say this as someone who…

[wat3rm370n]

FAFO tipping point wish-casting is apocalyptic hopium based in libertarian accelerationism fantasy.

There’s no invisible hand of the market, and people rarely learn lessons in time — people often just get harmed.

“And so I would often hear something like the following — “Yes, yes. I understand that the people in your experiments and some of the people I know do foolish things, but in markets, then — and then I claim…” They could never quite finish this sentence without literally waving their hands, and the argument is somehow if you choose the wrong career or fail to save for retirement, that the market will somehow push you back toward being rational. There’s a reason why no one can make this argument without waving their hands, and that’s because the argument is just silly. You know, if you don’t save enough for retirement, what happens to you? You’re poor when you’re old. The market doesn’t discipline you. Suppose people have a weakness for gambling. What’s going to happen? Will people build casinos, or will they offer programs to help people curb their gambling addiction? Well, people have made a lot more money on casinos than on programs to stop gambling.” — Richard Thaler on PBS – Hacking Your Mind

People who know better push for societal solutions to mitigate the worst happening to most. Don’t wait for everybody to push for that.

“Markets can remain irrational longer than you can remain solvent.” — John Maynard Keynes

[firstoccupier]

The Evolution of Economics Education: From Post-War Theory to Contemporary Challenges

In the aftermath of World War II, the landscape of economics education began to take shape, reflecting the pressing needs of a global economy recovering from years of conflict. The late 1940s and early 1950s marked a pivotal point in which schools of thought emerged in response to shifting political, social, and economic climates. A New Dawn: The Influence of Keynesian Economics The 1950s were…