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Showing posts with the label Behavioral Economics

Fear is Good

Gordon Gekko famously quipped “ greed is good ” in his iconic Wall Street 80's movie. The phrase came in the middle of an era of deregulation and liberalization. A phase where "shoot for the fences" was the name of the game. Financial markets then became more of a cumulative distillation of the collective psychological state of its participants. And now, just as then, greed-dominated markets engender euphoria, happiness and (even if only fleeting and paper-based) great wealth. Fear-induced markets are the mirror image of the former, degenerating into panics, wealth destruction and (in some tragic cases) even death .  Fear is connected to the negative. It’s why policemen shoot first and find out later. It's how some autocrats gain power over a very fearful electorate. Why politics have become so toxic as of late, and why the youngest generation these days is  despairing and gloomy  (where 60% of them "experience persistent feelings of sadness or hopelessness"...

Schrödinger People

Another cycle around our star and we're still stuck in the same rut. Still talking about dealing with uncertainty; about counting your blessings; about stopping and smelling the roses because  life is short  and it's better to appreciate the small things when a virus can snatch your life away any second should you dare step outside. Is Omicron deadlier? More contagious? Resistant to Pfizer? To Moderna? How many mutations did you say it had? Does it evade natural immunity? But it doesn't affect your smell? Oh, the symptoms are the same as the common cold? But masks still work, right? Oh, but not cloth ones?  The noise is  maddening .  Our hyper-mediatized, over-stimulated minds can't think of nothing other than what's in our handheld screens. And at the same time, our hyper-cynical minds won't believe those very same incessant, flickering alerts, either. Somehow our collective mind has entered a sort of  Schrödinger -like, superposition state. We  ...

Storytime

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We're instinctive animals. We act in accordance to what we feel: anger, happiness, compassion, pain. Your body is an evolution-optimized "soft machine"  whose actions can be traced and explained by specific emotions.  You are cold? You get a blanket. The pain your nerves communicate to your brain prompts you to act and look for warmth. You're angry because somebody flipped you off on your commute to work? Your return the gesture, or even escalate by cutting him/her off at the first chance.   Emotion begets actions. We are slaves to the whims of our feelings. Entire religions and eastern traditions are built around the concept of achieving control over what we feel and emote. Nobel prizes are given to those who invent  new branches of knowledge which merge psychology and economics (“behavioral economics”), based on the idea that our emotions makes us act stupidly.  This is evidently a huge blind spot in all of us. A vulnerability that's been exploite...

Have's vs Have-Too's

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One of the most ironic things about the political revolution that manifested itself with battle cry " Make America Great Again " is its inherent ideological contradiction. Although  Trump supporters   never explicitly explain what " America " they want to bring back, implicit is the notion that they want to see again the dominant, stable U.S. of the post war II period. A country characterized by economic stability, a rising  middle class;  a country where people could pay for their own college education with a waiter's wage, and where corporate employees could rely on the certainty that their corporation looked at them as life partners who deserved to retire with juicy defined benefit pensions.  Where's the contradiction, you ask? Well, the political leaning of the era --the one that allowed stability and prosperity for its middle class--was markedly left-leaning: the New Deal  of FDR, the Great Society of LBJ. Even Republican Eisenhower knew better than go...

We're All Conservatives

We are nothing more than little ants fighting disorder in our immediate environment living in a universe trending towards chaos. From our insignificant, unilateral (human) viewpoint, we are always striving to minimize surprises. That's the brain evolution gifted us . And when surprises appear, we learn , hoping to apply what's learned in our next interaction with our environment, so we hopefully survive. Ok, maybe not "we" , but our genes, because we're really just the vehicle genes use to perpetuate themselves into posterity.  If only us little ants' fight was costless. Every time we strive to reduce disorder locally (reduce entropy), and rearrange our environment so that it's less hostile to us, we actually increase disorder (entropy) in the overall universe. When we chop down forests to dedicate that land for human crops, and we reduce the threat of going hungry (reducing entropy from humans' perspective), we actually increase entropy at the planet...

Don't Be Such A Downer.

I've been told that I am a negative person. And of course, I don't think I am. My motivated reasoning kicks in and immediately tells me that I can't be that negative . But then I stop to think about it and realize that I might be,  after all . Always looking at the phone for the news-break --which are generally negative. Sharing the latest story about a potential pandemic , or about locust swarms blanketing africa , or about the potential WWIII-triggering assassination of an Iranian Commander . Or about the Puerto Rico earth-quake . Reflecting upon that, I've settled upon a couple of ideas. Yes, I pay more attention to the negative stuff. And I share it as soon as I can (at least the significant parts). But I don't think that makes me negative . I think that makes me human. I am, just like everyone else, equipped with a bunch of mental quirks that make me (and you) gravitate towards anything threatening around you. When we are reminded of all the progress that ...

Parasites. Parasites Everywhere!

You could say that parasites are evil creatures. They're selfish, manipulative, and insidious. When they infect a host, they hope they don't kill it while they live within (since killing the host would mean killing itself). In that sense, parasites are tangentially symbiotic with the living things they infect. They existentially need a propagator --a host to help them spread themselves as efficiently as possible. Parasites can even take reign of the infected being's behavior for their own benefit: Sneezing is the common cold virus' effective way to propagate itself. Cuddling is the way an infectious virus makes kids look for closeness, so the infection jumps easily to the next host. The Gordian worm manipulates the brain of an infected cricket into jumping into water in order for the worm to mate. We rarely stop to think about this, but interwoven ideas (Narratives) are parasitic, evil body-less "creatures" too. Like parasites, Narratives can't surviv...