New, new working paper just out

I've also got a new working paper out with Jinnie Ooi, my brilliant research assistant and co-author. It's about how norms of fairness spread among teenagers. I'll blog in more detail later, but here is just a nice picture to give a taste of the result:

Dishonesty in the US military

This paper is a great sourcebook:

Every contact with the enemy required a storyboard. People did not report enemy contact because they knew the storyboard was useless and they didn’t want to go through the hassle.

It’s odd that in situations that I’ve been in, it’s never been blatant self-interest. It’s never been, “I’m going to get this money so I can buy myself two couches for my office while I’m in Afghanistan.” [Instead], it’s always like—for us, it was hard as hell to get water heaters.... [W]e had to say we’re using this for this, when in fact it was so our guys could have hot showers when they get back off patrol.

I falsified the [traumatic brain injury] report that changed a distance from the IED strike [to where] one person was standing. So that way someone didn’t come back down and stick a finger in my CO’s chest and say, “You need to evac that lieutenant right now!” Because in the middle of [a] RIP, that’s not going to happen. If I do that, I’m going to put my boys in bags because they don’t have any leadership. That ain’t happening. I owe the parents of this country more than that.

A field experiment at LHR

At Heathrow Terminal 2, there is an escalator and a lift to take you from the Underground up to departures. The authorities have put a sign up:

TIME ON ESCALATOR 3 MINUTES

TIME ON LIFT 58 SECONDS

TAKE THE QUICK ROUTE – TAKE THE LIFT

Why has this happened?

1. Standard economics: the sign was a mistake. People already choose the optimal route. (Public choice theory: the sign was not a mistake but a deliberate conspiracy by the elevator company to wear out the lift and make money from replacements.)
2. Social preferences: the sign is a nudge to counter travellers' "lift aversion".
3. Social norms: there is a norm of taking the escalator. People really want to take the lift, but they are afraid what others will think of them.
4. Social heuristics: people mistakenly assume the escalator is faster, as it usually is in their experience. The sign corrects this.

This is a biased choice of example. In other situations, the first three explanations might be more plausible. Still, many lab experiments might be cases of 4, mistaken for cases of 2 or 3.

I first read the term "social heuristics" in this paper.

Free the nipple

Like houses, belief systems have dark corners: patches of wallpaper where reality is showing through; awkward conceptual joins which leave gaps for mice; mouldering old ideas. Mostly we ignore them. Sometimes they get too obtrusive and make us very uncomfortable. This state of discomfort is called thinking.

So, great piece in the Guardian. The body is beautiful, fight repressive, image-policing patriarchy: #freethenipple! Pornography is sexist and demeaning: #boobsarentnews! I can't resolve this dilemma, but it is fun to watch.

Grade inflation

The media has noticed the problem of grade inflation in UK degrees (BBC, Telegraph). There are now twice as many first class degrees being given out as there were ten years ago (for non-UK readers, a “first” is the best degree grade).

The economics of this seems clear. A university that gives better grades to its students benefits them in the job market, and also looks better in league tables that count the number of grades students get. It also devalues that university’s degrees, but, since most UK employers cannot distinguish between universities except perhaps Oxbridge at the top, this devaluation is a “public bad” which is shared with all universities... and also with past and future students, neither of whom the short-term-focused administration cares about. Result: grade inflation.

This story is true as far as it goes, but it misses something important. Grades are given by the academic staff who do marking. None of us benefits directly from inflating our students’ grades. The benefit to the university is a public good for each individual academic: why should I care about my university’s score in the rankings?

The real cause of the change is not pure self-interest, but a combination of “bounded ethicality” and its exploitation. I feel loyal to my colleagues in my department, and to my university; whereas UK education as a whole is too abstract and remote to care about. And then, these feelings are played on by the administration. A memo comes round about “using the top end of the grading system more” so as “not to short-change our students”. Your colleagues knuckle under – after all, everyone else is doing it. If you rock the boat or grade too low, then you are told not to make trouble. In this way, a new norm is developed. We shift our ideas about what constitutes first class work, just a little at first....

This is typical. Selfishness is not just about the breakdown of norms; new norms are also created. As Thucydides put it:

Words had to change their ordinary meaning and to take that which
was now given them. Reckless audacity came to be considered the courage of a loyal ally; prudent hesitation, specious cowardice; moderation was held to be a cloak for unmanliness; ability to see all sides of a question, inaptness to act on any.... (3.82)

The promising side of this is that, in economists’ terms, there are multiple equilibria. Individuals will always be tempted by selfishness; but an organization can only act selfishly if the individuals in the organization tolerate this. When the greater society has a strong claim on people’s affections, it is possible to resist organizational selfishness. Let’s hope that UK academics recognize this, and try harder to uphold our standards in future.