Forecasting fertility is a mug’s game. Here is a picture of fertility forecasts by the US Census Bureau through the baby boom and subsequent fertility drop (from Lee and Tuljapurkar’s Population Forecasting for Fiscal Planning: Issues and Innovations). The dark line is actual, the dotted line the various forecasts. I am not sure that the science of fertility forecasting in developed countries has made substantial progress since any of those forecasts were made.

In a chapter of Robert Sugden’s The Community of Advantage: A Behavioural Economist’s Defence of the Market, he makes some interesting arguments about how we should interpret the results of the trust game. First, what is the trust game: The ‘Trust Game’ was first investigated experimentally by Joyce Berg, John Dickhaut, and Kevin McCabe (1995). … In Berg et al.’ s game, two players (A and B) are in separate rooms and never know one another’s identity.

In my recent post on Robert Sugden’s The Community of Advantage: A Behavioural Economist’s Defence of the Market, I noted a couple of papers in which Sugden and Cass Sunstein debated how to make people better off “as judged by themselves” if they have context dependent preferences. Below is one point and counterpoint that I found useful. In a reply to Sugden’s paper, Cass Sunstein writes: Mary is automatically enrolled in a Bronze Health Care Plan – it is less expensive than Silver and Gold, but it is also less comprehensive in its coverage, and it has a higher deductible.

There are few books critiquing behavioural economics that I find compelling. David Levine’s Is Behavioral Economics Doomed? attacks too many straw men. Gilles Saint-Paul’s The Tyranny of Utility: Behavioral Science and the Rise of Paternalism is more an attack of the normative foundations of economics than of behavioural science. And in most of Gerd Gigerenzer’s books, while making a strong case that many of the so-called “biases” are better described as good decision-making under uncertainty, Gigerenzer often extends his defence of human decision making too far.

Despite the fact that nudges, by definition, do not limit liberty, many people often have a feeling of discomfort about governments using nudges. I typically find it difficult to elicit from them what precisely is the problem, but often it comes down to the difference between freedom and autonomy. In an essay Debate: To Nudge or Not to Nudge (pdf), Daniel Hausman and Bryan Welch do a good job of pulling this idea apart:

Yuval Noah Harari writes: Fears of machines pushing people out of the job market are, of course, nothing new, and in the past such fears proved to be unfounded. But artificial intelligence is different from the old machines. In the past, machines competed with humans mainly in manual skills. Now they are beginning to compete with us in cognitive skills. And we don’t know of any third kind of skill—beyond the manual and the cognitive—in which humans will always have an edge.

Over at Behavioral Scientist, as part of their “Nudge Turns 10” special issue, is my latest article When Everything Looks Like a Nail: Building Better “Behavioral Economics” Teams. Here’s the opening: As someone who became an economist via a brief career as a lawyer, I did notice that my kind had privileged access to the halls of government and business. Whether this was because economics can speak the language of dollars, or that we simply claimed that we had all the answers, the economists were often the first consulted (though not necessarily listened to) on how we priced, regulated, and designed our policies, services, and products.

I have complained before about people being somewhat quick to label poor decisions as being due to “overconfidence”. For one, overconfidence has several distinct forms. It is a mistake to treat each as the same. Further, these forms vary in their pervasiveness. The last time I made this complaint I drew on an article by Don Moore and Paul Healy, “The Trouble with Overconfidence” (pdf). A more recent article by Don Moore and Derek Schatz (pdf) provides some further colour on this point (HT: Julia Galef).

I have been reading Robert Sugden’s book The Community of Advantage: A Behavioural Economist’s Defence of the Market in preparation for an upcoming webinar with Robert about the book, facilitated by Henry Leveson-Gower. The webinar will be help at 1pm London time and 10pm Sydney time on Monday 3 September. Details about the webinar are here and you can register here. A video will be posted after. I’ll also post an in-depth review later, but the book is a mix of philosophy, technical economics, and critique of applied behavioural economics.

For many years I have been influenced by Gerd Gigerenzer’s arguments about the power of simple heuristics and the underlying rationality to many human decisions. But I have contrasting reactions to different parts of Gerd Gigerenzer’s body of work. His published collections of essays - Simple Heuristics That Make Us Smart (with Peter Todd and the ABC research group), Adaptive Thinking and Rationality for Mortals - are fantastic, although some people might find them a touch academic.