The blind leading the blind

I occasionally help teach an interdisciplinary course that touches on some of the work of Tversky and Kahneman. The reading this time around includes a Scientific American article, "The Psychology of Preferences," from January 1982. (Sadly, much of it is too difficult for the students.) Here are a couple of excerpts:

Some properties of decision weights can be explored by the following informal experiment. Imagine that you can improve your chances to win a very desirable prize. Would you pay as much to raise your chance of winning from 30 to 40 percent as you would to raise your chance from 90 percent to certainty? it is generally agreed that the former offer is less valuable than the latter. it is also agreed that an increase from impossibility to a probability of 10 percent is more significant than an increase from 30 to 40 percent. Thus the difference between certainty and possibility and the difference between possibility and impossibility loom larger than comparable differences in the intermediate range of probability.

My first reaction: Hey, can I buy certainty? No, wait, I mean, can I buy possibility? How much should I be willing to pay in time and money for the increase in DIUI success probability from injectables? Dr. Brash says it's 15-18 percent, vs. 12-15 percent with just Clomid, although I don't know if those are his numbers for DIUI or for all IUIs (scroll down for the relevant graphs at a clinic on another continent). I've seen references to papers that claim 23 percent success for DIUI with injectables. But it's both more money and more monitoring. Oh: we could also spend more, lots more, on IVF elsewhere. But would it help?

My second reaction: who are all those people staring at me? Are they listening? Am I lecturing? Whoops. Let's move on.

The winning number in a lottery was 865304. Three individuals compare the ticket they hold to the winning number. John holds 361204; Mary holds 965304; Peter holds 865305. How upset are they respectively?

There is general agreement that the experience is devastating for Peter, quite severe for Mary and very mild for John. Here again the ranking corresponds to the degree to which the individuals can be described as having "come close" to winning the prize.

An individual's exerience of pleasure or frustration may therefore depend on an act of imagination that determines the reference level to which reality is compared [...] Imagination appears to be governed by rules, and the rules of imagination affect our experience of reality by controlling the alternatives to which it is compared.

What runs through my brain:

• John and Mary learn from a testicular biopsy that John is truly azoospermatic. Whoops!

• Alice stims so poorly that the cycle is cancelled before retrieval.

• Lucy manages three eggs, but none fertilize, even with ICSI.

• Only two of Susan's eggs fertilize, and the embryos stall before day 3.

• Carol's lovely embryos make it to day 3, but her first beta is negative.

• Jean has a chemical pregnancy; the second beta is lower that the first.

• Et cetera. (I probably shouldn't try too hard to make this list comprehensive.)

So: just who is coming closer to that prize, hmm? Hmm? What does the imagination provide as a basis for comparison? And won't someone sell us certainty? Or possibility? Or something, someday? (After class is over, of course.)

A REQUEST: if anyone reading this entry can recommend an accessible account of choice theory, or prospect theory, or whatever the heck it's called—behavioral economics, maybe?— I'd be extremely grateful. I'd like to understand why people care a little deeper than the engaging-anecdote, let's-make-fun-of-really-naive-rational-choice-theory level where reading this, and a couple of similar articles, has left me.

Comments

[Katherine]

hi . . . followed a link to your site and had an odd synchronicity. I'm taking a course in holistic nutrition and just finished a book that had the most facinating section on women who are having intense trouble getting pregnant. I don't want to bang you over the head with unwanted advice so if you want more info just drop me a line :) Katherine

[Brad DeLong]

Alas, "the engaging-anecdote, let's-make-fun-of-really-naive-rational-choice-theory level where reading this, and a couple of similar articles, has left me" level is about where behavioral economics is right now. You're state-of-the-art.

[bj]

Here's a cite for decision making.

http://www.cns.nyu.edu/~glimcher/BOOK/reviews.htm

It might not be exactly what you're looking for, 'cause it's neuroscience/brain oriented, but it discusses some of the issues that you mention about the current re-evaluations of rational choice theories. There's a confluence of neuroscience and behavioral economics that's making this a "hot" subject. It's a bit weird that it's hot, because psychologists have known for a long time that the brain works in mysterious ways, and the economists are just discovering it (and re-discovering things the psychologists already knew).

BTW, I'm dying to know exactly what your field is. I got to your site via the chronical of higher education, and am also a faculty member (my field is neuroscience). I'm not tenured, and am at a research 1 university, where I'm required to have an active research program (i.e. > 250K of outside funding/year). So, we're not the same, but I've been finding your musings interesting. I'm particularly interested because I have graduate students who are interested in working at teaching institutions, but am at a loss on how to advise them.

I would like to hear more from you and would welcome an e-mail if our fields overlap enough that you might be interested in talking to me.

bj