Author: Claire Hill

1

The Pervasive Effect of Priors: Part Four

A New York Times front page last week prominently featured a story, U.S. Opens Spigot After Farmers Claim Discrimination, that shows many people in a very bad light indeed.   A small, focused program intended to compensate a small number of people, true victims of discrimination in farm lending, has mushroomed for various reasons into a huge money pit, “compensating” those who may very well not have suffered discrimination.

Even those who generally think well of government would, I think, be hard pressed not to be distressed by this story.   Government responded to political pressures to include more and more people, and require less and less documentation, resulting in a multi-billion dollar giveaway. I want to focus here on views of those taking “advantage” of the compensation scheme to seek compensation when they were not injured.

Different people have different views as to how people respond to incentives in general and monetary incentives in particular.  Some think anyone would ‘do anything for a buck’ – including have children, get/not get married, get more healthcare, or file specious discrimination claims.   Some people might think some subset of people (‘greedy’? ‘rational’? more on that later) would do anything for a buck.  Some people might think that incentives matter ‘at the margin’ but that someone could not be persuaded to do something very much ‘against his nature.’

There’s also a role for self-deception here: a person who is motivated by a monetary incentive may not want to admit this, and therefore might convince herself that she was doing the incentivized act because it was right/what she really wanted to do, not because of the incentive.  Which view a person has depends in part on how she sees herself: what does she see herself as being willing to do for money? It may also depend on her broader view as to whether ‘being willing to do many things for money’ is a bad thing or a good (“rational”) thing.

With respect to what motivates somebody else, a person may think ‘this person is like me—one of ‘us.’  ‘If she is doing x, her motivation is probably what mine would be.’  Obviously, people are not monolithic, and equally obviously, there will be enormous differences in the monetary opportunities people have and how they experience and react to them.  There are many things nobody would do no matter how much money was being offered.      Read More

4

The Pervasive Effect of Priors: Part Three

Last week’s marathon bombings got me thinking about how people form narratives about bad events, both big and small.

My partner Eric and I were traveling in Portugal in a rented car.  The car only took diesel fuel, and we had difficulty figuring out whether particular pumps dispensed diesel.   Eric tried to use one pump, which didn’t seem to fit.  We asked an attendant, who seemed quite surly.  He shoved the ill-fitting pump into the car.  About 20 minutes later, on the highway, the car stopped working.   The repair people who came to help us told us that the car had been filled with regular fuel.

Eric and I decided that the attendant had disliked us, perhaps because we were American, and had done this on purpose.  My sister heard this story; her take was that surely the attendant just made a mistake. She asked ‘don’t you prefer to think of it that way’?  Eric and I didn’t, but she did.

One suggestion that’s been made about the marathon bombings is that they could have been stopped given what the FBI knew or had reason to know about the elder brother.    Is this comforting—or not?  Do we prefer to think somebody knew enough, but didn’t act on their knowledge? Or would we prefer to think that it could not have been stopped? Read More

2

The Pervasive Role of Priors: Part Two

Continuing the thread from my previous post, available here, on how prior beliefs and ways of viewing the world affect one’s conclusions:

One person who commented on my prior post noted that people have priors as to how much justification is needed for government action.  I completely agree with this.  I think that in many cases, that prior is importantly related to, and to some extent caused by, another prior, about what sort of people are in government.

I was brought up thinking that people who went into government were generally “good” – that they went into government to do what they thought of as the right thing, and that in many cases, what they thought was the right thing was pretty good.  I recall watching the Alan Alda movie The Seduction of Joe Tynan, which I remember as being about a “good” politician completely compromising his principles to retain power, and feeling both sad and startled.

In a sense, my prior has stayed with me, even though I know of many-probably thousands at this point- examples to the contrary.  I recall reading fairly recently (over at Marginal Revolution) about a government decision to keep the speeding limit on a stretch of highway too low.  The low speed limit causes accidents, but yields lots of revenue from speeding tickets, presumably the motivation for keeping the limit as it is.  My reaction was a bit of shock and dismay. Read More

5

The Pervasive Role of Priors: Part One

Thanks to Larry for inviting me to guest-blog. It’s every academic’s dream, I think, to have a built-in audience for her thoughts. And given the caliber of this blog and the readership it attracts, I could scarcely have a better one.

One subject I’ll be blogging on is my general view that people’s prior beliefs and other aspects of how they view and take in the world explain a huge amount, much more than is usually acknowledged. They (people’s priors) help explain why there are so many debates that never get anywhere.  Both sides might have terrific arguments, yet nobody is persuaded.

And people keep on making the same sorts of arguments, even knowing this. Sometimes they wonder why more people aren’t persuaded. It’s a bit like the old joke about the person who goes to a foreign country and doesn’t know the language, so he tries to communicate in his own language and, when he’s not understood, he just tries again, repeating what he said . . . but louder.

I recently went to a very interesting colloquium co-sponsored by the Federalist Society and the Liberty Fund on Behavioral Law and Economics.  One big issue discussed was the relationship between behavioral law and economics and law, including most importantly paternalistic justifications for law that behavioral l & e might provide.  Michael Bloomberg’s attempt to ban sales of large sizes of soda was much on people’s minds.

One thing I very much wanted to get out of the discussion was an understanding of the other participants’ priors as well as my own. Here are some initial thoughts.

Read More