Tim Harford responds to Dan Ariely

[diffonyahoo]

Tim,

you wasted a lot of time for this simple question, which you eventually did ask at the end of the video. Instead of saying Dan's experiments are 'only in the lab' and so not true/practical ( which is what you suggest ), just ask how can they be applied to real life? People would have taken you more seriously then.

[MrBeumel]

I think you got some good points, as well as the other one. Good thought experiment on racism, too bad it seems not many people understood it (and i think it fits reality quite well)

[Icecoldpoker]

Computer simulations is quite the opposite of empirical.... its theoretical

[Icecoldpoker]

I dont think that proves racism - it merely shows prejudices caused by cognitive biases can infleunce decision making....

That has nothing to do with racism

[Yagmilner]

the whole "argument" between the two sides is fundamentally flawed. Economics is by its very definition the study of systems involving more factors than can be quantified and so "big picture" thinking is a must, on the other hand "facts oriented" thinking can be used to adjust the big picture. Step out of the dichotomous outlook and use the best of both.

[Tradd20]

LOL. This guy is a moron. Am I the only one that thinks so.

[timjohan]

Tim you lost to Dan Ariely

[mate6mty]

Racisim is taught ..children are not born in a chosen race.

[1980PintoMan]

Easy to disprove the statement that everything must be proven in a lab, just prove that statement in a lab. It's a self-refuting statement you don't need to waste any time on. Also, no one system can find out everything. I can make it rain literal cats and dogs in a computer simulation.

[Maoribrotha]

Of course people are irrational. It's part of our psyche and what makes us who we are as humans. And moreover, we like to defend the right to do dumb things like smoke, drive drunk, overeat and over consume etc. But more than that, markets like it, and salesmen like it. Which is why they have invented ways that trick us into buying stuff we do not need - like bottled water. And heaven forbid we start to 'nudge' people, becos the illusion of free choice is exactly what companies need!

[Tradd9]

LOL. So the guy's point is that lab experiments cannot always be extrapolated to a real world situation? Yeah, this is something that every scientist knows. Dan Ariely knows it as well. Dude is going round in circles. People are mostly rational? Has Harford never met a woman before?

[RockleShmocks]

I think Dan was saying that you can only prove causation with a true experiment, otherwise you're just showing correlation.

[wildlillie]

Sorry, but I don't care much for this "debate" the rebuttal seems rather weak! I'd prepare more if I were to take on such a topic, specifically for a counter position. But nice try! After all, everyone is entitled to their own opinion. In the end both logic & irrationality are both relative

Peace ;-)

[JoeAtheist]

Tim,

For as much as I want to take your Rational\Logical side, I think it would benefit us if we looked at the latest neuroeconomic research. fMRI research is painting a rather "emotional" picture of our decision making processes. Even when we "think" we are behaving rationally, we often are using the "emotional" brain structures. Yikes! Loved your book.

[QwartoBlogspotCom]

Black people did not choose in the US, they were forced in most of the cities during centuries to live withing certain borders in cities. They could not buy property outside.

[joetaxpayer2]

Tim - I've read your book, and Dan's. The "Lab factor" is well stated. There are "statistics" showing that people spend some percent more on credit cards. Those states come from lab experiments. In the real world, I suggest there are those who avoid carrying month to month balances and do not spend more because of the cards. The original experiment true or not does not reflect real world.

To srcaps - Tim is well known within this book genre.

[cristianfcao]

This seems a very sterile debate. First and foremost: we can't generalize and say people ARE rational or irrational. They are both and some conditions make them more or less rational. On the other hand: yes, many lab experiments don't translate in the real world, but many do and, as a methodology, lab exp. tend to be a better alternative to real world exp. (which are expensive, non practical or less controllable) or computer simulations, which are FAR less generalizable.

[srcaps]

This is the first I'm hearing of this guy. Is it possible Mr. Harford is hoping to hitch on to Dan Ariely's popularity? When you search for Dan Ariely on youtube, Mr. Harford is not too far away. A very popular U.S. radio personality explained the best way to break into a new market is to pick a fight with the current market leader. They respond--all of a sudden they're talking about you.

[fielsjd]

His intuition was confirmed... by computer simulations?

[audiowiz]

I stopped listening when this guy said there are no lab tests showing smoking to be bad for you. I assume the rest of his line was equally dubious

[polvotierno]

I live in Chile where many people work for less than they are worth. This causes lack of productivity. In a department store one sees almost 3 times as many workers as a store in the US. The wages are so low the store can afford to hire too many people.

Rationally you can say that the workers don´t have power to negotiate a real wage. Yet, irrationality shows that people simply accept what is around them. People don´t know what they want. Ultimately this creates irrational behavior.

[jslbrt]

Amazing example, tenderpowder. Saludos.

[israeldjcentral]

interesting response Tim, I really enjoy Dan's ideas as I pretty much think the same however based on what you had to say you basically add a more important dimension to this - I agree with both of you as I do not see a conflict of interest but I do see that a lot of people are already aware of these types of behaviours however not many people know how to or have put it into practice. A great challenge that I would like to see from either Dan, yourself or anyone else. Hope to see more.

[Dayvit78]

Playing othello or something and that proves your point? it's a game, not reality.

[Dayvit78]

what? are you an actual professor?

[1gnoramus]

want proof positive that Tim Harford is bullshiting? 16 seconds in he said "the sun is shining on London."

[1gnoramus]

ok for real this time. the fact alone that there is debate on this subject reveals one truth, there are always two or more apposing realities. Thus validating Dan's origional point, information can be presented in a fashion which is deliberately misleading.

[bankingbluffbravado]

@1gnoramus "[He] is bullshitting--16sec in, he said 'the sun is shining on London'"

It's all relative, Dear. No rain with some visibility could very well be seen by the locals as a sunny day. LA or FLA would both burn and shock them.

[crawfof]

@1gnoramus you dick he's being sarcastic

[paulpembroke]

The statistical information on smokers v. non-smokers reveals quite enough to surmise without a reasonable doubt that 'smoking is bad for us' as you put it.

[Sahmeepee]

While this is true, firmly establishing causality was not as straightforward as many people assume. There are other possible explanations (no prizes for guessing who put them forward) which could only be ruled out via ingenious analysis.

[npolvo]

Hi Tim,

If I am allowed to comment, I think both of you have interesting points (and videos!). In my humble opinion both methods/paradigms are capable of bringing interesting insights to policy makers and people in general. I found ideas on how Behavioral Economics can be applied to practice in academic articles like:

- Benartzi and Thaler, Journal of Political Economy, 2004

- Dana and Loewenstein, JAMA, 2003

- Loewenstein, Brennan and Volpp, JAMA, 2007

Cheers,

Nuno

[matijakasij]

One very important thing there is no noble prize for economy. And economist are far more dogmatic than pope.

[paulpembroke]

I think you meant to say the "Nobel" peace prize instead of assigning the moral judgement of 'noble' to a prize.

Just a thought.

[matijakasij]

no i meant there is only swedish central band prize that passes of as Nobel prize in economics. And about the second part, now i don't think pope is less dogmatic than ecomomists, they are about the same.

[matijakasij]

not band, sorry bank.

[iQing]

TH`s "The Logic of Life" lacks originality and copy+paste stuffs from Freakonomics. The Undercover Economist is a much better work.

[ivanwave]

IMHO the two are complementary books with their own niche. Freakonomics mainly argues that the data, and specifically statistical reasoning, can get at the answers hidden within life. Logic of Life however, is about about human decisions that seem illogical at first glance, but in fact are very rational responses to incentives and probabilities. Freakonomics also uses broader examples (sumo wrestling, classrooms, gangs) while Logic of Life stays within a more personally relevant framework.

[jaaproos]

interesting thanks Tim Harford I love your book!