Psychology – Page 44 – artdiamondblog.com

Simple Heuristics Can Work Better than Complex Formulas

(p. C4) Most business people and physicians privately admit that many of their decisions are based on intuition rather than on detailed cost-benefit analysis. In public, of course, it’s different. To stand up in court and say you made a decision based on what your thumb or gut told you is to invite damages. So both business people and doctors go to some lengths to suppress or disguise the role that intuition plays in their work.
Prof. Gerd Gigerenzer, the director of the Max Planck Institute for Human Development in Berlin, thinks that instead they should boast about using heuristics. In articles and books over the past five years, Dr. Gigerenzer has developed the startling claim that intuition makes our decisions not just quicker but better.
. . .
The economist Harry Markowitz won the Nobel prize for designing a complex mathematical formula for picking fund managers. Yet when he retired, he himself, like most people, used a simpler heuristic that generally works better: He divided his retirement funds equally among a number of fund managers.
A few years ago, a Michigan hospital saw that doctors, concerned with liability, were sending too many patients with chest pains straight to the coronary-care unit, where they both cost the hospital more and ran higher risks of infection if they were not suffering a heart attack. The hospital introduced a complex logistical model to sift patients more efficiently, but the doctors hated it and went back to defensive decision-making.
As an alternative, Dr. Gigerenzer and his colleagues came up with a “fast-and-frugal” tree that asked the doctors just three sequential yes-no questions about each patient’s electrocardiographs and other data. Compared with both the complex logistical model and the defensive status quo, this heuristic helped the doctors to send more patients to the coronary-care unit who belonged there and fewer who did not.

For the full commentary, see:
By MATT RIDLEY. “MIND & MATTER; All Hail the Hunch–and Damn the Details.” The Wall Street Journal (Sat., December 24, 2011): C4.
(Note: ellipsis added.)

A couple of Gigerenzer’s relevant books are:
Gigerenzer, Gerd. Gut Feelings: The Intelligence of the Unconscious. New York: Penguin Books, 2007.
Gigerenzer, Gerd. Rationality for Mortals: How People Cope with Uncertainty. New York: Oxford University Press, USA, 2008.

Hero Was Oblivious to What Others Thought

Author Eyal Press. Source of photo: online version of the NYT review quoted and cited below.

(p. C26) Maybe the refined intellectual, engaged with ideas, manages to think herself above petty concerns like nationalism? That was what Mr. Press suspected he would find in Aleksander Jevtic, the Serb who pulled many Croatians from a line of men destined to be tortured or killed in 1991.

“Aleksander Jevtic had somehow avoided internalizing this us-versus-them thinking,” Mr. Press writes, “which I assumed had something do with his education and intellect, a rare skepticism and levelheadedness that enabled him to see past the blinding passions and compellingly simple ideas that drove the logic of hate.”
But when Mr. Press at last meets Mr. Jevtic, he finds not a Balkan Isaiah Berlin, nor a soldier-philosopher like Orwell. This lifesaver, this ethical prince among men, turns out to be a slovenly couch potato living off rents he collects from a building he owns: “He also liked sleeping late, hanging out with friends, and watching sports” on his “giant flat-screen television.”
Mr. Press surveys the findings of social scientists and neuroscientists, but none of them have entirely figured out where bravery comes from. Every beautiful soul is different.
Mr. Jevtic’s wife is Croatian, which certainly helped him think of the enemy as human. But Mr. Jevtic is also a misanthrope, and his natural social isolation helped him hear the call of an instinctive decency; he didn’t care what his fellow Serbians, including his commanding officers, might think.
He “wasn’t in the business of making good impressions,” Mr. Press writes. “His obliviousness to what others thought wasn’t necessarily his most becoming feature. But it had served him well in 1991.”

For the full review, see:

MARK OPPENHEIMER. “BOOKS OF THE TIMES; The Loneliness in Doing Right.” The New York Times (Fri., February 24, 2012): C26.
(Note: the online version of the review is dated February 23, 2012.)

The book under review is:
Press, Eyal. Beautiful Souls: Saying No, Breaking Ranks, and Heeding the Voice of Conscience in Dark Times. New York: Farrar, Straus and Giroux, 2012.

Source of book image:
http://jacketupload.macmillanusa.com/jackets/high_res/jpgs/9780374143428.jpg

“Amazed by the Short-Term Psychology in the Market”

(p. A1) Even after European leaders appeared to have averted a chaotic default by Greece with an eleventh-hour deal for aid, worries persist that a debt disaster on the Continent has merely been delayed.

The tortured process that culminated in that latest bailout has exposed the severe limitations of Europe’s approach to the crisis. Many fear that policy makers simply don’t have the right tools to deal with other troubled countries like Italy, Spain, Ireland and Portugal, a situation that could weigh on the markets and the broader economy.
“I don’t want to be a Cassandra, but the idea that it’s over is an illusion,” said Kenneth S. Rogoff, a professor of economics at Harvard and co-author of “This Time Is Different: Eight Centuries of Financial Folly.” “I am amazed by the short-term psychology in the market.”
. . .
(p. B3) “I don’t think we’re anywhere near the endgame,” Professor Rogoff of Harvard said.

For the full commentary, see:
PETER EAVIS. ” NEWS ANALYSIS; For Greece, a Bailout; for Europe, Perhaps Just an Illusion.” The New York Times (Weds., February 22, 2012): A1 & B3 (sic).
(Note: ellipsis added.)
(Note: the online version of the commentary is dated February 21, 2012.)

Rogoff and Reinhart’s thought-provoking and much-praised book is:
Reinhart, Carmen M., and Kenneth Rogoff. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.

Study Finds Lack of Control at Office Is Deadly for Men

(p. C12) . . . Israeli scientists found that the factor most closely linked to health was the support of co-workers: Less-kind colleagues were associated with a higher risk of dying. While this correlation might not be surprising, the magnitude of the effect is unsettling. According to the data, middle-age workers with little or no “peer social support” in the workplace were 2.4 times more likely to die during the study.
But that wasn’t the only noteworthy finding. The researchers also complicated longstanding ideas about the relationship between the amount of control experienced by employees and their long-term health. Numerous studies have found that the worst kind of workplace stress occurs when people have little say over their day. These employees can’t choose their own projects or even decide which tasks to focus on first. Instead, they must always follow the orders of someone else. They feel like tiny cogs in a vast corporate machine.
Sure enough, this new study found that a lack of control at the office was deadly–but only for men. While male workers consistently fared better when they had some autonomy, female workers actually fared worse. Their risk of mortality was increased when they were put in positions with more control.
While it remains unclear what’s driving this unexpected effect, one possibility is that motherhood transforms control at the office–normally, a stress reducer–into a cause of anxiety. After all, having a modicum of control means that women must constantly navigate the tensions between work and family. Should they stay late at their job? Or go home and help take care of the kids? This choice is so stressful that it appears to increase the risk of death.

For the full summary, see:
JONAH LEHRER. “HEAD CASE; Your Co-Workers Might Be Killing You; Hours don’t affect health much–but unsupportive colleagues do.” The Wall Street Journal (Sat., August 20, 2011): C12.
(Note: ellipsis added.)

The paper referred to in the quote from Lehrer’s summary is:
Shirom, Arie, Sharon Toker, Yasmin Alkaly, Orit Jacobson, and Ran Balicer. “Work-Based Predictors of Mortality: A 20-Year Follow-up of Healthy Employees.” Health Psychology 30, no. 3 (May 2011): 268-75.

Evidence that IQ Is Half Nature and Half Nurture

(p. C4) Hardly any subject in science has been so politically fraught as the heritability of intelligence. For more than a century, since Francis Galton first started speculating about the similarities of twins, nature-nurture was a war with a stalemated front and intelligence was its Verdun–the most hotly contested and costly battle.
So would it not be rather wonderful if a scientific discovery came along that called a truce and calmed all the fury? I think this is about to happen. Call it the Goldilocks theory of intelligence: not too genetic, not too environmental–and proving that intelligence is impossible to meddle with, genetically.
The immediate cause of this optimism is a recent paper in Molecular Psychiatry, which confirms that genes account for about half of the difference in IQ between any two people in a modern society, but that the relevant genes are very numerous and the effect of each is very small.

For the full commentary, see:
MATT RIDLEY. “MIND & MATTER; A Truce in the War Over Smarts and Genes.” The Wall Street Journal (Sat., August 20, 2011): C4.

The paper refereed to in the quote from Ridley’s commentary is:
Davies, G., A. Tenesa, A. Payton, J. Yang, S. E. Harris, D. Liewald, X. Ke, S. Le Hellard, A. Christoforou, M. Luciano, K. McGhee, L. Lopez, A. J. Gow, J. Corley, P. Redmond, H. C. Fox, P. Haggarty, L. J. Whalley, G. McNeill, M. E. Goddard, T. Espeseth, A. J. Lundervold, I. Reinvang, A. Pickles, V. M. Steen, W. Ollier, D. J. Porteous, M. Horan, J. M. Starr, N. Pendleton, P. M. Visscher, and I. J. Deary. “Genome-Wide Association Studies Establish That Human Intelligence Is Highly Heritable and Polygenic.” Molecular Psychiatry 16, no. 10 (October 2011): 996-1005.

More Options Can Result in Focus on Quality Instead of Choice Paralysis

(p. C4) Much of the research on decision-making focuses on the “choice paralysis” commonly thought to result from having too many options. But new research suggests that instead of being a debilitating factor, having many options actually sharpens our focus on quality.

For the full summary, see:
DAVID DISALVO. “Commerce; Choosing the Very Best.” The Wall Street Journal (Sat., August 20, 2011): C4.

The paper summarized is:
Bertini, Marco, Luc Wathieu, and Sheena S. Sethi-Iyengar. “The Discriminating Consumer: Product Proliferation and Willingness to Pay for Quality.” SSRN eLibrary (2010).

Personal Risk Lovers Make Better CEOs?

(p. C4) Chief executives with a penchant for personal risk-taking are also corporate risk-takers who take on more debt, aggressively pursue mergers and acquisitions, and make bold equity plays. But, in general, they are also more effective leaders who create more value in their organizations than their less risk-loving counterparts. And they do so, the researchers add, without additional incentives; they imprint their risk-loving natures on their companies because it’s simply who they are.

For the full summary, see:
DAVID DISALVO. “Management; For Effective CEOs, Look Up.” The Wall Street Journal (Sat., August 20, 2011): C4.

The article summarized is:
Cain, Matthew D., and Stephen B. McKeon. “Cleared for Takeoff? CEO Personal Risk-Taking and Corporate Policies.” SSRN eLibrary (2011).

What We Eat Affects Our Feelings and Choices?

But since we choose what we eat, we have the power to control how food affects our feelings and choices?

(p. C12) As the neuroscientist Antonio Damasio writes, “The mind is embodied, not just embrained.”

The latest evidence comes from a new study of probiotic bacteria, the microorganisms typically found in yogurt and dairy products. While most investigations of probiotics have focused on their gastrointestinal benefits–the bacteria reduce the symptoms of diarrhea and irritable bowel syndrome–this new research explored the effect of probiotics on the brain.
The experiment, led by Javier Bravo at University College Cork in Ireland, was straightforward. First, he fed normal lab mice a diet full of probiotics. Then, Mr. Bravo’s team tested for behavioral changes, which were significant: When probiotic-fed animals were put in stressful conditions, such as being dropped into a pool of water, they were less anxious and released less stress hormone.
How did the food induce these changes? The answer involves GABA, a neurotransmitter that reduces the activity of neurons. When Mr. Bravo looked at the brains of the mice, he found that those fed probiotics had more GABA receptors in areas associated with memory and the regulation of emotions. (This change mimics the effects of popular antianxiety medications in humans.)

For the full summary/commentary, see:
JONAH LEHRER. “HEAD CASE; The Yogurt Made Me Do It; There’s nothing metaphorical about ‘gut feelings’–bacteria influence our minds.” The Wall Street Journal (Sat., SEPTEMBER 17, 2011): C12.

The paper summarized is:
Bravo, Javier A., Paul Forsythe, Marianne V. Chew, Emily Escaravage, Hélène M. Savignac, Timothy G. Dinan, John Bienenstock, and John F. Cryan. “Ingestion of Lactobacillus Strain Regulates Emotional Behavior and Central GABA Receptor Expression in a Mouse Via the Vagus Nerve.” Proceedings of the National Academy of Sciences (2011).

Happiness Depends Most on Being Free to Choose

(p. 27) Getting richer is not the only or even the best way of getting happier. Social and political liberation is far more effective, says the political scientist Ronald Ingleheart: the big gains in happiness come from living in a society that frees you to make choices about your lifestyle – about where to live, who to marry, how to express your sexuality and so on. It is the increase in free (p. 28) choice since 1981 that has been responsible for the increase in happiness recorded since then in forty-five out of fifty-two countries. Ruut Veenhoven finds that ‘the more individualized the nation, the more citizens enjoy their life.’

Source:
Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

Mackay Warned about Delusions, then Was Deluded by Bubble

(p. B1) Can you spot a bubble?
Ever since 1841, when a Scottish journalist named Charles Mackay published the book known today as “Extraordinary Popular Delusions and the Madness of Crowds,” the answer has seemed clear. If you watch carefully for signs of euphoria, you can sidestep the damage when markets go mad.
But bubble spotting isn’t as simple as Mackay made it sound–even, it turns out, for Mackay himself. Investors should always guard against the glib assertions of pundits who claim they can detect bubbles before they burst.
. . .
But new research tells the untold tale of Mackay’s own behavior in the face of a bubble–and it is a shocker. A mathematician and former cryptographer at Bell Labs named Andrew Odlyzko has spent much of the past decade researching a forgotten stock mania. One of its biggest boosters was none other than Charles Mackay.
A bubble in British railroad stocks began in 1844, only three years after Mackay published his book, and it didn’t start to collapse until late 1845. Even with the history of market folly fresh in his mind, Mackay urged British investors to pile into railway stocks, whose extravagant prices were based on absurdly unrealistic projections of future growth.
The most famous critic of bubbles who ever lived fell like a chump for a craze that was unfolding before his very eyes. On Oct. 2, 1845, Mackay wrote that “those who sound the alarm of an approaching railway crisis have somewhat exaggerated the danger.”
He went on to ridicule anyone who argued that “the Railway mania of the present day” was similar to the devastating bubbles he had described in his own book. “There is no reason whatever to fear” a crash, he concluded.
He couldn’t have been more wrong. From 1845 to the bottom in 1850, railway stocks fell by two-thirds–the equivalent of roughly $1 trillion of losses in today’s money. Mackay never fessed up to his own extraordinary delusion.

For the full commentary, see:
JASON ZWEIG. “THE INTELLIGENT INVESTOR; The Extraordinary Popular Delusion of Bubble Spotting.” The Wall Street Journal (Sat., NOVEMBER 5, 2011): B1.
(Note: ellipsis added.)

Fantasizing about Achieving Goals Has Opportunity Cost in Terms of Energy to Actually Achieve Goals

(p. C4) Fantasizing about achieving goals can make people less likely to achieve them, by sapping the energy required to do the necessary work, a study finds.
. . .
The researchers concluded: “Positive fantasies will sap job-seekers of the energy to pound the pavement, and drain the lovelorn of the energy to approach the one they like.”

For the full story, see:
Christopher Shea. “Week in Ideas; Psychology; Lost in Fantasy.” The Wall Street Journal (Sat., JUNE 4, 2011): C4.
(Note: ellipsis added.)

The article summarized is:
Kappes, Heather Barry, and Gabriele Oettingen. “Positive Fantasies About Idealized Futures Sap Energy.” Journal of Experimental Social Psychology 47 (2011): 719-29.