Psychology
On Corruption and Collusion: Immoral acts are more likely when there are others with which to share the blame
They say corruption is ‘infectious,’ and you risk being ‘eaten up by the system’ when you enter government. In this article, we take a look at evidence that reveals how individual morality can be dampened if you have cohorts to share the blame with you, among other factors.
In this photo, a complaint box for corruption lies deserted in India. (Photo: watchsmart/Flickr, CC BY 2.0)
On Maximizing Your Interview Chances: Schedule it right after a break
Researchers find that, all other things equal, people tend to make nicer decisions right after they’ve had a break. (Mart1n/StackXCHNG)
If you have an interview coming up, whether it be for a job, award, or in this particular study, parole, your chances are best when the interviewers are fresh from a break. A group of researchers at the National Academy of Sciences confirmed what we had suspected all along - happy tummies make happy decisions. Read on to find out more!
On that Moment of Choice
No matter how rationally we try to act, that one moment of choice is still a purely emotional exercise.
I was reading this great book, and I found out something which may be useful for economists: that moment when you make a decision among close alternatives, is purely emotional. This is what the book has to say:
It’s purely emotional, the moment you pick. People with brain damage to their emotional centers who have been rendered into Spock-like beings of pure logic find it impossible to decide things as simple as which brand of cereal to buy. They stand transfixed in the aisle, contemplating every element of their potential decision—the calories, the shapes, the net weight—everything. They can’t pick because they have no emotional connection to anything
This is why companies are now starting to limit the variety in their product lines (the consummate example being Apple, of course), because it makes it easier to make an emotional connection and create post-hoc rationalizations about your choice. It may seem a little manipulative but this decision-making heuristic makes our lives easier; one just has to realize their cognitive biases.
It’s quite in line with the bounded rationality of behavioral economics; that people make choices rationally but only up to the extent of what they know and how they think. If this interests you, Predictibly Irrational and other books by Ariely are great reads.
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On Interest Rates and Mortality
A limited time on this earth makes time precious.
I’ve always been puzzled by interest rates. They say it’s the price that relates future goods to present goods. Simply put, it’s a price tag on the ability to consume goods now rather than later (for example, a saver who defers the purchase of his marshmallows will get an interest on his savings for more marshmallows in the future.)
On Stochasticity
Sometimes the noise is more important than the signal.
The ui represents stochasticity in this linear regression.
We all know that letter at the end of the sample regression function: u. It’s the stochastic disturbance term. Peculiarly, it is absent in the population regression function, the form and intensity of which is, according to my professor, only known to God. If you follow this vein of thought, you would eventually come to the conclusion that the u is simply the sum total of our ignorance. I disagree; I believe that the u represents something more than the lack of knowledge; it represents change and freedom. That u actually captures all effects, big or small, that weren’t and cannot be captured in the structured hash of the equation; the chaos in the world, as one might say.
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