Although economists (barring Richard Layard) have not really started believing in happiness research, there is a lot to learn from psychological randomized experiments that have taken place of late.
Often it’s said that artificial happiness is not of the same quality as natural happiness. I listened to a lecture by Dan Gilbert who says that synthetic happiness is the same as natural happiness. Long term happiness is not a function of events that we perceive would make us happy, like elections or winning lotteries or passing exams. Our minds seem to have automatic stabilizers that kick in whenever we encounter failures or are unable to achieve our goals. This usually takes place in the shape of altering the world view – “It happened for the good” or “This was destined to happen” or “We should learn to accept this”. These statements are examples of psychological immune systems that make us feel less miserable than what we might think would happen after a huge loss.
Another talk on the psychology of happiness that is worth listening to is by Martin Seligman. He finds that there are three channels of achieving happiness – leading the pleasant life, the good life and the meaningful life. The first one deals with the sensory pleasures. The second one with social engagement, relationships with family and friends and how much satisfaction you get from work (Karma-yoga in Sanskrit). The third one is about having a goal bigger than oneself. The meaningful life and the good life seem to be the significant contributors to long-term happiness with sensory happiness only the icing on the cake. But it seems that in ancient Hindu scriptures avoiding sensory pleasures was one of the goals to reach long-term sustained happiness or enlightenment. This would be the next frontier for happiness research. How much are the goals of the first life conflicting with those of the second and more importantly the third life.
Showing posts with label psychology. Show all posts
Showing posts with label psychology. Show all posts
Monday, 5 January 2009
Monday, 29 December 2008
Why do we like stereotyping?
Liberty has dawned upon many societies but there are always restrictions. Free thinking abstains from such stereotypes. Free thinking is when you do not judge people before you meet them. Even after meeting people a hundred times, it is difficult to judge them – they may have certain dominant traits that they may show you – but how these can be generalized into a universal law of personal hatred and biases is surprising. Can I explain this using survival of the fittest? Or is it historical factors that our fathers have witnessed that have placed biases in the minds of the people? How does it matter if I call my God Allah and the other Christ? Try to take out differences so that our religion may look bigger better and more sophisticated than other religion or our colour looks better. My Hindi teacher once said that Indians were special because they were the only race whose colour was the colour of the soil. What soil is he talking about? The soil on the beach is white…there is black soil too and yellow soil….And even if it is so, how does that make one special? If there were green people would they become special because they were the colour of grass and trees? Self justification and persistence of these biases lies underneath the so-called rational thinking of so-called free thinkers. Why can’t people let people be? Why do we need to impose our forefathers thoughts on rational minds? When shall we become enlightened?
Tuesday, 23 December 2008
What does your gut say?
I happened to listen to the podcast of the Gerd Gigerenzer (henceforth GG) talk at LSE on 20th October, 2008. He spoke about Gut Feelings: better shortcuts to decision-making.
I have often wondered about why when taking exams our first intuition is always correct. Often, when we change our answer, it turns out to be wrong. Intuition is a set of quick thoughts that arise from the subconscious mind to affect our actions. How do people take decisions? Are they rational as economists like to think? Or do they take short-cuts based on rules of thumb? GG spoke about heuristics: the ability of man to ignore certain information that is not useful for getting the required result. An example is that of a baseball or cricket fielder who is about to catch a ball. He says that only three things matter for catching the ball when it is already in the air. First, keeping one’s eyes on the ball, second, running and third, keeping the angle between himself and the ball constant. All other information, such as where the ball was hit, how it was hit, etc… is not required by the brain to catch the ball. This is where heuristics kick in and help us focus on only the relevant part of the information. How does an airport customs officer find out if the person is a drug courier or not? A drug courier is a person who comes into a city with a bag full of money and goes back with a bag full of drugs. A woman was caught with $200,000 worth of money in a black suitcase by an officer. On later asking the officer how he found out that it was her, he said he only had a gut feeling. He was looking for people who were looking for him!
We apply these rational rules of thumb from finding a wife to raising one’s children. He gives the example of Henry Markowitz who won the Nobel Prize for his study on modeling the financial returns to investing. When he had to invest in the financial market he did not use his own model but instead relied on intuition. He invested equally in the stocks he was interested in instead of calibrating it according to his model that cam up with the highest mean to variance ratios. What GG is interested in is to find out if doing this equal investment in N stocks actually gives higher returns on average than using a fitted model based on mean variance ratios. He finds that if N=50, then it would need data for the past 500 years to make a prediction that would outperform the equal investment thumb rule.
In animals, finding mates is a heuristic decision and he claims it is so even in humans. No one (barring an occasional economist) calculates the highest expected utility by finding probabilities through matching functions and reoptimize using Bayesian rules. There are many misconceptions about heuristics. For instance, they are merely second-best results – optimization is better. Second, it fails to consider the structural environment. A comparison is made of cognition and environment to a pair of scissors ala psychologists and sociologists. But heuristics do take into account both cognition and the environment. It may be rational, then, to rely on first intuition – but only where a person is an expert in the field. Time to decide should be very short according to empirical evidence. However, for amateurs it does not seem to matter. An implication is that if you have experts meeting, keep the time short.
Mechanisms to understand intuition seem to be at an early stage of psychology. How is the brain able to fit past information and predict. Or does it? What separates hindsight and foresight? Fast and frugal heuristic is often the vital difference, but the exact mechanisms will need a little more thought.
I have often wondered about why when taking exams our first intuition is always correct. Often, when we change our answer, it turns out to be wrong. Intuition is a set of quick thoughts that arise from the subconscious mind to affect our actions. How do people take decisions? Are they rational as economists like to think? Or do they take short-cuts based on rules of thumb? GG spoke about heuristics: the ability of man to ignore certain information that is not useful for getting the required result. An example is that of a baseball or cricket fielder who is about to catch a ball. He says that only three things matter for catching the ball when it is already in the air. First, keeping one’s eyes on the ball, second, running and third, keeping the angle between himself and the ball constant. All other information, such as where the ball was hit, how it was hit, etc… is not required by the brain to catch the ball. This is where heuristics kick in and help us focus on only the relevant part of the information. How does an airport customs officer find out if the person is a drug courier or not? A drug courier is a person who comes into a city with a bag full of money and goes back with a bag full of drugs. A woman was caught with $200,000 worth of money in a black suitcase by an officer. On later asking the officer how he found out that it was her, he said he only had a gut feeling. He was looking for people who were looking for him!
We apply these rational rules of thumb from finding a wife to raising one’s children. He gives the example of Henry Markowitz who won the Nobel Prize for his study on modeling the financial returns to investing. When he had to invest in the financial market he did not use his own model but instead relied on intuition. He invested equally in the stocks he was interested in instead of calibrating it according to his model that cam up with the highest mean to variance ratios. What GG is interested in is to find out if doing this equal investment in N stocks actually gives higher returns on average than using a fitted model based on mean variance ratios. He finds that if N=50, then it would need data for the past 500 years to make a prediction that would outperform the equal investment thumb rule.
In animals, finding mates is a heuristic decision and he claims it is so even in humans. No one (barring an occasional economist) calculates the highest expected utility by finding probabilities through matching functions and reoptimize using Bayesian rules. There are many misconceptions about heuristics. For instance, they are merely second-best results – optimization is better. Second, it fails to consider the structural environment. A comparison is made of cognition and environment to a pair of scissors ala psychologists and sociologists. But heuristics do take into account both cognition and the environment. It may be rational, then, to rely on first intuition – but only where a person is an expert in the field. Time to decide should be very short according to empirical evidence. However, for amateurs it does not seem to matter. An implication is that if you have experts meeting, keep the time short.
Mechanisms to understand intuition seem to be at an early stage of psychology. How is the brain able to fit past information and predict. Or does it? What separates hindsight and foresight? Fast and frugal heuristic is often the vital difference, but the exact mechanisms will need a little more thought.
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