Posts Tagged ‘Common Sense’

The Ultimatum Game

July 30, 2014

An important point made in Watts’ Everything Is Obvious is that common sense varies from culture to culture. A good example can be found in the ultimatum game. The game begins with two people. One of them is given a sum of money, say $100. That person is instructed to split the money with the second person. The split can vary from nothing to the entire monetary bundle. The second player gets to accept the offer or to reject it. If the second player accepts the offer, they both leave with their agreed upon splits. If the second player refuses the offer, then they both walk away with nothing. Now from a strictly rational perspective the first player could keep $99 and offer the second player $1 and the second player would agree as $1 should be better than nothing. But the second player does, and the first player should, have some notion of fairness. In research done in the industrialized countries researchers have found that most players propose a fifty fifty split and that offers of less than $30 are typically rejected.

When researchers replicated this game in fifteen small-scale preindustrialized countries across the five continents the results were not replicated. The Machiguenga tribe in Peru tended to offer about a quarter of the total amount and virtually none of these offers were refused. However, the Au and Gnau tribes of Papua New Guinea tended to make offers that were even better than fifty fifty and these hyperfair offers tended to get rejected as often as the unfair offers.

Now if the players from the respective communities were asked why they did what they did, they likely responded that it was a matter of common sense.

Common Sense as a Plausible Narrative

July 23, 2014

We human beings have a compelling need to make sense of the world. When provided with a statement or a possible fact, we can frequently come up with an explanation for it. Say, for example, you were told that men with rural backgrounds were usually in better spirits during army life than men from city backgrounds. You could come up with the narrative that rural men were accustomed to harsher living standards and more physical labor than city men, so army life was easier for them. This is a reasonable explanation, one that conforms to commonsense, correct? Now suppose you were told that it was city men who were usually in better spirits during army life. You could probably just as easily come up with the narrative that city men are more used to working in crowded situations, and in corporations with chains of command, strict standards of clothing and social etiquette. Again, this sounds like common sense, correct? (actually the second narrative is more in correspondence with the facts at least during World War 2) What is regarded as common sense usually is a plausible narrative that has been generally accepted. This narrative conceals the true explanation.

Another example coming from Watts Everything is Obvious is an exercise Duncan Watts did with his students. In one country 12% of its citizens had signed up for organ donation after they died. In another country 99.9% of the citizens had signed up for organ donation. Watts asked what could account for this difference. His class was agile and creative in coming up with explanations. There were narratives regarding differences in their legal or educational systems. Or that something had happened in one country that galvanized organ donation. Now the two countries were Germany and Austria, countries that are quite similar to each other. Austria had the 99.9% rate and Germany the 12% rate. The difference between the two questions is that in Austria the option was to opt out of organ donation, with the default being organ donation. In Germany the option was to opt for organ donation, with the default being to not choose organ donation.

This is a common finding that being that the default option is strongly preferred. This has been found with respect to pension programs and other benefits, not only for donations or deductions. Indeed, this is a strategy for nudging people to take the desirable option. The reason is that the default is the easier option. Opting in or out requires thought and effort.

Everything is Obvious* How Common Sense Fails Us

July 20, 2014

The asterisk in the title points to “once you know the answer.” This is the title of an interesting and important book by Duncan J. Watts. Duncan majored in physics as an undergraduate and finished with a Ph.D, in engineering. His dissertation was on the mathematics of small-world networks. However, after finishing his formal education he came to the conclusion that most of the important problems that needed to be addressed were in the social sciences.

I certainly agree with Dr. Watts. In the past I’ve written how it was a mistake to exclude psychology from the STEM (Science, Technology, Engineering, and Math) disciplines. Unfortunately when the sciences are mentioned people tend to think of the hard sciences and engineers wearing lab coats. Indeed in 2006 Senator Kay Bailey Hutchinson proposed to cut the entire social science budget of the National Science Foundation. So she was, in effect, recommending that the NSF budget be cut where it is most needed.

Everything is Obvious is divided into two parts: Part One is titled “Common Sense,” Part Two is titled “Uncommon Sense.” One of the problems is that too many people think of the social sciences as dealing with problems that can be solved with common sense. Moreover, common sense has favorable connotations. Dr. Watts disabuses us of this notion, showing how common sense is often wrong, and that many problems remain unsolved because of mistaken notions regarding common sense. Dr. Watts elaborates on the difficulties of most important problems and the difficulties involved in making accurate predictions. Finally, he discusses approaches for dealing with these apparently intractable problems.

Everything is Obvious should be a must read not only for the sciences, but for anyone interested in any activity, be it politics, business, marketing, philanthropy, that involves understanding, predicting, changing, or responding to the behavior of people.

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