Ethics of behavioral economics: Nudges or manipulation?

The field of behavior economics includes the study of how and why people make the decisions they do and consequently, it’s the study of how to change people’s decisions to push them in different directions. Governments have used these techniques and findings to promote positive behaviors like not littering and not smoking but also to increase the number of people paying their taxes. Private companies have used these techniques to increase the sales of their products and services. People employing these techniques often say they provide a “nudge.” At what point do these nudges become manipulation? Does it matter if the behavior being promoted is one we agree is positive like quitting smoking? How does the use of language affect our perception of ideas and things?

What is also interesting about this field is that some traditional economists resent the term “behavioral economics” and don’t consider it to be part of their field. They were further annoyed when a behavioral economist and self identified psychologist, Daniel Kahneman, won the Nobel Prize for economics.

Below are a couple of articles about this field.

1. Manipulate Me: The Booming Business in Behavioral Finance

“Many behavioral interventions work, whether at reducing litter and power usage or boosting savings rates and organ donations. Yet these successes aren’t the whole story. Even after rigorous experimentation and data analysis, the best-intentioned nudges can fall flat or backfire. Some may be behavioral band-aids that don’t address deeper structural problems such as stagnating wages. Nevertheless, consumers have jumped on the bandwagon, eager to be manipulated into the best version of themselves, and businesses are rushing to meet the demand.”

http://www.bloomberg.com/news/articles/2014-04-07/manipulate-me-the-booming-business-in-behavioral-finance

2. What was I thinking?

The latest reasoning about our irrational ways

“Why do people do things like this? From the perspective of neoclassical economics, self-punishing decisions are difficult to explain. Rational calculators are supposed to consider their options, then pick the one that maximizes the benefit to them. Yet actual economic life, as opposed to the theoretical version, is full of miscalculations, from the gallon jar of mayonnaise purchased at spectacular savings to the billions of dollars Americans will spend this year to service their credit-card debt. The real mystery, it could be argued, isn’t why we make so many poor economic choices but why we persist in accepting economic theory.”

http://www.newyorker.com/magazine/2008/02/25/what-was-i-thinking

3. Why Behavioral Economics Is Cool, and I’m Not

“It happens to me regularly: I’m an organizational psychologist, but I get introduced at least once a week as a behavioral economist. The first time this happened before a speech, I attempted to set the record straight, telling the executive that all of my degrees were in psychology. His response: ‘Your work sounds cooler if I call you a behavioral economist.'”

http://www.huffingtonpost.com/adam-grant/why-behavioral-economics_b_5491960.html

Radiolab Podcasat: The Trust Engineers

“When we talk online, things can go south fast. But they don’t have to. Today, we meet a group of social engineers who are convinced that tiny changes in wording can make the online world a kinder, gentler place. So long as we agree to be their lab rats.

Ok, yeah, we’re talking about Facebook. Because Facebook, or something like it, is more and more the way we share and like, and gossip and gripe. And because it’s so big, Facebook has a created a laboratory of human behavior the likes of which we’ve never seen. We peek into the work of Arturo Bejar and a team of researchers who are tweaking our online experience, bit by bit, to try to make the world a better place. And along the way we can’t help but wonder whether that’s possible, or even a good idea.”

http://www.radiolab.org/story/trust-engineers/

LANGUAGE AND THOUGHT: EXAMINING LINGUISTIC RELATIVITY

“The Sapir-Whorf Hypothesis has changed the way many people look at the relationship between language, thought and cultural perception of reality.  It has influenced many scholars and opened up large areas of study.  While many like Edward Sapir and Benjamin Whorf support the notion that language strongly influences thought and others argue that language does not influence thought, the evidence from research indicates that language does influence thought and perception of reality to a degree but language does not govern thought or reality.”

http://www.ttt.org/linglinks/StacyPhipps.htm

South Park Episode: “The F Word”

An interesting episode that delves into the meaning of words and what gives them power. Who gets to decide what a word means? What determines whether a word is insulting?

A thought provoking episode but there is a lot of foul language. The episode makes its point in the way that South Park usually does. If you can tolerate obscenity and offensive language, you might find this interesting.

https://www.cc.com/video/prdntl/south-park-south-park-1312-the-f-word-act-1

http://southpark.cc.com/full-episodes/s13e12-the-f-word

Book: 1984 by George Orwell

A link to some famous and interesting quotes from the book.

http://www.alternativereel.com/cult_fiction/display_article.php?id=0000000008

“Written in 1948, 1984 was George Orwell’s chilling prophecy about the future. And while 1984 has come and gone, Orwell’s narrative is timelier than ever. 1984 presents a startling and haunting vision of the world, so powerful that it is completely convincing from start to finish. No one can deny the power of this novel, its hold on the imaginations of multiple generations of readers, or the resiliency of its admonitions—a legacy that seems only to grow with the passage of time.”

http://www.amazon.com/1984-Signet-Classics-George-Orwell/dp/0451524934/ref=sr_1_1?ie=UTF8&qid=1422391373&sr=8-1&keywords=1984&pebp=1422391374808&peasin=451524934

Has a remote Amazonian tribe upended our understanding of language?

“The Pirahã, Everett wrote, have no numbers, no fixed color terms, no perfect tense, no deep memory, no tradition of art or drawing, and no words for “all,” “each,” “every,” “most,” or “few”—terms of quantification believed by some linguists to be among the common building blocks of human cognition. Everett’s most explosive claim, however, was that Pirahã displays no evidence of recursion, a linguistic operation that consists of inserting one phrase inside another of the same type, as when a speaker combines discrete thoughts (“the man is walking down the street,” “the man is wearing a top hat”) into a single sentence (“The man who is wearing a top hat is walking down the street”). Noam Chomsky, the influential linguistic theorist, has recently revised his theory of universal grammar, arguing that recursion is the cornerstone of all languages, and is possible because of a uniquely human cognitive ability.”

http://www.newyorker.com/magazine/2007/04/16/the-interpreter-2