Cass Sunstein

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pages: 399 words: 155,913

The Right to Earn a Living: Economic Freedom and the Law by Timothy Sandefur

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barriers to entry, big-box store, Cass Sunstein, clean water, collective bargaining, corporate governance, corporate social responsibility, Edward Glaeser, housing crisis, joint-stock company, Joseph Schumpeter, labour mobility, minimum wage unemployment, positional goods, price stability, profit motive, race to the bottom, Ralph Nader, RAND corporation, rent control, Silicon Valley, The Wealth of Nations by Adam Smith, trade route, transaction costs, Upton Sinclair, urban renewal

Cass Sunstein, “Lochner’s Legacy,” Columbia Law Review 87 (1987): 873–919; Laurence Tribe, “The Curvature of Constitutional Space: What Lawyers Can Learn from Modern Physics,” Harvard Law Review 103 (1989): 1–39; and Laurence Tribe, Constitutional Law, 2nd ed. (Mineola, NY: Foundation Press, 1988), p. 578. 136. Cass R. Sunstein, “Free Speech Now,” University of Chicago Law Review 59 (1992): 268. 137. Cass R. Sunstein, Democracy and the Problem of Free Speech (New York: Free Press, 1993), p. 30: “[A] major problem with the pre–New Deal framework was that it treated the existing distribution of resources and opportunities as prepolitical and presocial . . . when in fact it was not. . . . [The] private or voluntary private sphere . . . was actually itself a creation of law and hardly purely voluntary. When the law of trespass enabled an employer to exclude an employee from ‘his’ property unless the employee met certain conditions, the law was crucially involved.

Balkin, “Populism and Progressivism as Constitutional Categories,” Yale Law Journal 104 (1995): 1956. Balkin was actually discussing Cass R. Sunstein, who abuses Madison’s name in the same way as Bork. I owe this reference to Eugene Volokh. 132. James Madison, “Charters,” in Madison: Writings, ed. Jack Rakove (New York: Library of America, 1999) p. 502. 133. Robert H. Bork, Coercing Virtue (Washington: American Enterprise Institute, 2003), pp. 11–12. 134. Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996) (Souter, Ginsburg, and Breyer, JJ., dissenting). 135. Ibid. at 166. See also College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, 527 U.S. 666, 701 (1999) (Breyer, Stevens, Souter, and Ginsburg, JJ., dissenting). Cass Sunstein, “Lochner’s Legacy,” Columbia Law Review 87 (1987): 873–919; Laurence Tribe, “The Curvature of Constitutional Space: What Lawyers Can Learn from Modern Physics,” Harvard Law Review 103 (1989): 1–39; and Laurence Tribe, Constitutional Law, 2nd ed.

City of New Orleans, 96 U.S. 97, 102 (1877) (“Can a State make any thing due process of law which, by its own legislation, it chooses to declare such? To affirm this is to hold that the prohibition to the States is of no avail, or has no application where the invasion of private rights is effected under the forms of State legislation.”). 54. See also Kermit Roosevelt III, The Myth of Judicial Activism: Making Sense of Supreme Court Decisions (New Haven, CT: Yale University Press, 2006), p. 120; and Cass R. Sunstein, “Naked Preferences and the Constitution,” Columbia Law Review 84 (1984): 1692. 55. Hurtado v. California, 110 U.S. 516 (1884). 56. Ibid. at 535–36 (quoting Daniel Webster’s Dartmouth College argument). 57. Ibid. 58. Twining v. State of New Jersey, 211 U.S. 78 (1908). 59. Ibid. at 100. 60. Ibid. at 101. 61. Sunstein, “Naked Preferences,” 1689–732. 62. As Richard Epstein has written, “The Constitution is very much a natural law document” in that “[u]nlike many modern statutes, the Constitution does not contain a definition section, although there are many terms, including ‘contract,’ that cry out for some definition.


pages: 324 words: 92,805

The Impulse Society: America in the Age of Instant Gratification by Paul Roberts

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, accounting loophole / creative accounting, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, corporate governance, corporate social responsibility, crony capitalism, David Brooks, delayed gratification, double helix, factory automation, financial deregulation, financial innovation, full employment, game design, greed is good, If something cannot go on forever, it will stop, impulse control, income inequality, inflation targeting, invisible hand, job automation, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, new economy, Nicholas Carr, obamacare, Occupy movement, oil shale / tar sands, performance metric, postindustrial economy, profit maximization, Report Card for America’s Infrastructure, reshoring, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, shareholder value, Silicon Valley, speech recognition, Steve Jobs, technoutopianism, the built environment, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, Walter Mischel, winner-take-all economy

Kent Gibbons, “Advanced Advertising: Obama Campaign Showed Valueof Targeting Viewers,” MultichannelNews, Nov. 13, 2012, http://www.multichannel.com/mcnbc-events/advanced-advertising-obama-campaign-showed-value-targeting-viewers/140262. 9. C. Duhigg, “How Companies Learn Your Secrets,” New York Times Magazine, Feb. 16, 2012. 10. Cass R. Sunstein, Republic.com 2.0: Revenge of the Blogs (Princeton, NJ: Princeton University Press, 2007), p. 5. 11. Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (New York: Oxford University Press, 2006), p. 95. 12. Cass R. Sunstein, Why Societies Need Dissent (Oliver Wendell Holmes Lectures) (Cambridge, MA: Harvard University Press, 2003), cited in Bishop p. 67. 13. Interview with author. 14. Putnam, Bowling Alone, p. 332. 15. “Community connectedness linked to happiness and vibrant communities” Social Capital Community Benchmark Survey John F.

Subtler efforts, drawing on behavioral science to help us compensate for our obsolete neural wiring, show some promise. Walter Mischel, the researcher behind the famous “marshmallow study” from the 1970s, has developed effective strategies to train impatient children to be patient—an important success, given that impatient children have a high likelihood of growing up to be impatient adults.14 There are other potentially fruitful ventures, such as what Richard Thaler (of the two-self model) and coauthor Cass Sunstein call “choice architecture.” The term refers to carefully designed technologies, infrastructure, and other pieces of the built environment that subtly “nudge” us to act with more patience and long-term thought. An example: smartphone apps that automatically track our daily expenses and warn us when we’re exceeding our budget. But such efforts are swimming upstream against a current of world-historic proportions.

For even the most civic-minded citizen, diversity takes effort, involves risk, and requires compromise—precisely the sort of inefficiencies our consumer culture and self-centered ideologies now demean. Yet these discomfiting inefficiencies are essential to the process of balancing personal interest and social interest. They are fundamental to democracy and to community, two institutions that are inefficient by definition. As Cass Sunstein (the University of Chicago legal scholar we met in chapter 3) argues,* a functioning democratic culture requires the messiness and awkward potentialities of “unplanned encounters” where citizens are “exposed to materials that they would not have chosen in advance [and to] topics and points of view that [they] have not sought out and perhaps find quite irritating.”10 But as we’ve seen, unplanned encounters, unexpected ideas, and irritating people are precisely the things we feel increasingly entitled to filter out of our customized lives and experiences.


pages: 654 words: 191,864

Thinking, Fast and Slow by Daniel Kahneman

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Albert Einstein, Atul Gawande, availability heuristic, Black Swan, Cass Sunstein, Checklist Manifesto, choice architecture, cognitive bias, complexity theory, correlation coefficient, correlation does not imply causation, Daniel Kahneman / Amos Tversky, delayed gratification, demand response, endowment effect, experimental economics, experimental subject, Exxon Valdez, feminist movement, framing effect, hindsight bias, index card, job satisfaction, John von Neumann, libertarian paternalism, loss aversion, medical residency, mental accounting, meta analysis, meta-analysis, nudge unit, pattern recognition, pre–internet, price anchoring, quantitative trading / quantitative finance, random walk, Richard Thaler, risk tolerance, Ronald Reagan, The Chicago School, The Wisdom of Crowds, transaction costs, union organizing, Walter Mischel, Yom Kippur War

Whether laypeople and even experts might fail to recognize the correct relationship even in those cases is an interesting question. “wags the rational dog”: Jonathan Haidt, “The Emotional Dog and Its Rational Tail: A Social Institutionist Approach to Moral Judgment,” Psychological Review 108 (2001): 814–34. “‘Risk’ does not exist”: Paul Slovic, The Perception of Risk (Sterling, VA: EarthScan, 2000). availability cascade: Timur Kuran and Cass R. Sunstein, “Availability Cascades and Risk Regulation,” Stanford Law Review 51 (1999): 683–768. CERCLA, the Comprehensive Environmental Response, Compensation, and Liability Act, passed in 1980. nothing in between: Paul Slovic, who testified for the apple growers in the Alar case, has a rather different view: “The scare was triggered by the CBS 60 Minutes broadcast that said 4, 000 children will die of cancer (no probabilities there) along with frightening pictures of bald children in a cancer ward—and many more incorrect statements.

Syverud, “Getting to No: A Study of Settlement Negotiations and the Selection of Cases for Trial,” Michigan Law Review 90 (1991): 319–93. the frivolous claim: Chris Guthrie, “Framing Frivolous Litigation: A Psychological Theory,” University of Chicago Law Review 67 (2000): 163–216. 30: Rare Events wish to avoid it: George F. Loewenstein, Elke U. Weber, Christopher K. Hsee, and Ned Welch, “Risk as Feelings,” Psychological Bulletin 127 (2001): 267–86. vividness in decision making: Ibid. Cass R. Sunstein, “Probability Neglect: Emotions, Worst Cases, and Law,” Yale Law Journal 112 (2002): 61–107. See notes to chapter 13: Damasio, Descartes’ Error. Slovic, Finucane, Peters, and MacGregor, “The {r, n>: C. A Affect Heuristic.” Amos’s student: Craig R. Fox, “Strength of Evidence, Judged Probability, and Choice Under Uncertainty,” Cognitive Psychology 38 (1999): 167–89. focal event and its: Judgments of the probabilities of an event and its complement do not always add up to 100%.

classic on consumer behavior: Richard H. Thaler, “Toward a Positive Theory of Consumer Choice,” Journal of Economic Behavior and Organization 39 (1980): 36–90. taboo tradeoff: Philip E. Tetlock et al., “The Psychology of the Unthinkable: Taboo Trade-Offs, Forbidden Base Rates, and Heretical Counterfactuals,” Journal of Personality and Social Psychology 78 (2000): 853–70. where the precautionary principle: Cass R. Sunstein, The Laws of Fear: Beyond the Precautionary Principle (New York: Cambridge University Press, 2005). “psychological immune system”: Daniel T. Gilbert et al., “Looking Forward to Looking Backward: The Misprediction of Regret,” Psychological Science 15 (2004): 346–50. 33: Reversals in the man’s regular store: Dale T. Miller and Cathy McFarland, “Counterfactual Thinking and Victim Compensation: A Test of Norm Theory,” Personality and Social Psychology Bulletin 12 (1986): 513–19.


pages: 484 words: 131,168

The Big Sort: Why the Clustering of Like-Minded America Is Tearing Us Apart by Bill Bishop, Robert G. Cushing

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1960s counterculture, affirmative action, big-box store, blue-collar work, Cass Sunstein, citizen journalism, cognitive dissonance, David Brooks, demographic transition, desegregation, Edward Glaeser, immigration reform, income inequality, Jane Jacobs, knowledge economy, meta analysis, meta-analysis, Milgram experiment, music of the spheres, New Urbanism, post-industrial society, Post-materialism, post-materialism, Ralph Nader, Richard Florida, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, superstar cities, The Death and Life of Great American Cities, union organizing, War on Poverty, white flight, World Values Survey

David Myers and Helmut Lamm, "The Group Polarization Phenomenon," Psychological Bulletin 83, no. 4 (1976): 602–3. 21. Serge Moscovici and Marisa Zavalloni, "The Group as a Polarizer of Attitudes," Journal of Personality and Social Psychology 1, no. 2 (1969): 125–35. 22. David G. Myers, Social Psychology (New York. McGraw-Hill Educational, 2004), pp. 308–24. 23. Cass R. Sunstein, Why Societies Need Dissent (Cambridge, MA: Harvard University Press, 2003), pp. 166–78; Cass R. Sunstein and David A. Schkade, "Judging by Where You Sit," New York Times, June 11, 2003, p. A31. 24. Myers, Social Psychology, pp. 313–16. 25. Robert Baron, interview with author, 2004. See also R. Baron, S. I. Hoppe, C. F. Kao, B. Brunsman, B. Linneweh, and D. Rogers, "Social Corroboration and Opinion Extremity"Journal of Experimental Social Psychology 321 (1996): 537–60. 26.

Prentice, "Some Consequences of a Belief in Group Essence: The Category Divide Hypothesis," in Cultural Divides: Understanding and Overcoming Group Conflict, ed. Dale T. Miller and Deborah A. Prentice (New York: Russell Sage Foundation, 1999), pp. 216, 230 10. Diana C. Mutz, Hearing the Other Side. Deliberative Versus Participatory Democracy (New York: Cambridge University Press, 2006). 11. Ibid., p. 31. 12. Bruce Ackerman and James S. Fishkin, Deliberation Day (New Haven, CT: Yale University Press, 2004). 13. David Schkade, Cass R. Sunstein, and Reid Hastie, "What Happened on Deliberation Day?" (AEI-Brookings Joint Center for Regulatory Studies Working Paper 06–19, July 2006), http://aei-brookings.org/admin/authorpdfs/redirectsafely.php?fname=../pdffiles/phpb7.pdf. 14. Ibid., p. 2. 15. See also Eddie Gibbs and Ryan K. Bolger, Emerging Churches. Creating Christian Community in Postmodern Cultures (Grand Rapids, MI: Baker Academic, 2005). 16.

The Anatomy of Buzz. New York: Doubleday, 2000. Saxenian, AnnaLee. "Lessons from Silicon Valley." Technology Review, July 1994, pp. 42–51. ———. Regional Advantage: Culture and Competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press, 1994. Schachter, Stanley. "Deviation, Rejection, and Communication." Journal of Abnormal and Social Psychology 46 (1951). Schkade, David, Cass R. Sunstein, and Reid Hastie. "What Happened on Deliberation Day?" AEI-Brookings Joint Center for Regulatory Studies Working Paper 06–19, July 2006. http://aei-brookings.org/admin/authorpdfs/redirect-safely, php?fname =../pdffiles/phpb7.pdf. Schmitt, Mark. "The Legend of the Powell Memo." American Prospect, April 27, 2005. http://www.prospect.org/cs/articles?articleId=9606. Schudson Michael. The Good Citizen A History of American Civic Life.


pages: 500 words: 145,005

Misbehaving: The Making of Behavioral Economics by Richard H. Thaler

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Albert Einstein, Amazon Mechanical Turk, Andrei Shleifer, Apple's 1984 Super Bowl advert, Atul Gawande, Berlin Wall, Bernie Madoff, Black-Scholes formula, capital asset pricing model, Cass Sunstein, Checklist Manifesto, choice architecture, clean water, cognitive dissonance, conceptual framework, constrained optimization, Daniel Kahneman / Amos Tversky, delayed gratification, diversification, diversified portfolio, Edward Glaeser, endowment effect, equity premium, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, George Akerlof, hindsight bias, Home mortgage interest deduction, impulse control, index fund, invisible hand, Jean Tirole, John Nash: game theory, John von Neumann, late fees, law of one price, libertarian paternalism, Long Term Capital Management, loss aversion, market clearing, Mason jar, mental accounting, meta analysis, meta-analysis, More Guns, Less Crime, mortgage debt, Nash equilibrium, Nate Silver, New Journalism, nudge unit, payday loans, Ponzi scheme, presumed consent, pre–internet, principal–agent problem, prisoner's dilemma, profit maximization, random walk, randomized controlled trial, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Silicon Valley, South Sea Bubble, statistical model, Steve Jobs, technology bubble, The Chicago School, The Myth of the Rational Market, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, ultimatum game, Walter Mischel

The Retirement Security Project, Brookings Institution. Available at: http://www.brookings.edu/research/papers/2010/01/07-retire ment-savings-john. Johnson, Eric J., and Daniel G. Goldstein. 2004. “Defaults and Donation Decisions.” Transplantation 78, no. 12: 1713–6. Johnson, Steven. 2010. Where Good Ideas Come From: The Natural History of Innovation. New York: Riverhead. Jolls, Christine, Cass R. Sunstein, and Richard Thaler. 1998. “A Behavioral Approach to Law and Economics.” Stanford Law Review 50, no. 5: 1471–550. Kahneman, Daniel. 2011. Thinking, Fast and Slow. New York: Macmillan. ———, Jack L. Knetsch, and Richard H. Thaler. 1986. “Fairness and the Assumptions of Economics.” Journal of Business 59, no. 4, part 2: S285–300. ———. 1991. “Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias.”

“Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice.” Management Science 36, no. 6: 643–60. ———, and Sherwin Rosen. 1976. “The Value of Saving a Life: Evidence from the Labor Market.” In Nestor E. Terleckyj, ed., Household Production and Consumption, 265–302. New York: National Bureau for Economic Research. ———, and Hersh M. Shefrin. 1981. “An Economic Theory of Self-Control.” Journal of Political Economy 89, no. 2: 392–406. ———, and Cass R. Sunstein. 2003. “Libertarian Paternalism.” American Economic Review: Papers and Proceedings 93, no. 2: 175–9. ———. 2008. Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven, CT: Yale University Press. ———, Amos Tversky, Daniel Kahneman, and Alan Schwartz. 1997. “The Effect of Myopia and Loss Aversion on Risk Taking: An Experimental Test.” Quarterly Journal of Economics 112, no. 2: 647–61. ———, and William T.

., 311, 314–15, 343 Treisman, Anne, 36, 185 Tversky, Amos, 21, 22–23, 24, 29, 103n, 104, 105n, 125, 157, 162, 176, 201, 221, 261, 353, 357 and “as if” critique of behavioral economics, 46 in behavioral economics debate, 159–60 in Behavioral Economics Roundtable, 181 on changes in wealth, 30–31 equity premium puzzle studied by, 197–98 on extreme forecasts with flimsy data, 218, 219, 223 hypothetical choices defended by, 38, 82 illness and death of, xiii–xv, 187 on importance of stories, xiv–xv, 10 and “invisible handwave” argument, 51 lack of incentives in experiments of, 47–48 and “learning” critique of behavioral economics, 49 on long-shot odds, 80–81 Thaler’s first meeting with, 36–37 unambiguous questions studied by, 295–96 Wanner given advice by, 177 Tversky, Barbara, 36 Tversky, Oren, xiv–xv Tversky, Tal, xv Twain, Mark, 355 “two-pocket” mental accounting, 81–82 two-system view of mind, 103, 109 Uber, 136–38, 200n Ultimatum Game, 140–41, 142, 160, 182, 261, 301 revised version of, 266–67 unemployment rate, 47 United Kingdom, 10, 11, 330–45 tax revenue in, 334–35 university endowment, 197–98 urinals, 326 USA Today, 328 utility, 28–29, 28 acquisition, 59–63, 66 transaction, 59–63, 66, 118 utility functions, 161 value function, 30–32, 31, 34, 58–59, 85 value managers, value investing, 214–15, 220–21, 222, 227–28 “Value of a Life, The” (Thaler), 12, 14–15 value of a life, 12–15, 21, 35 “Value of Saving a Life, The” (Thaler and Rosen), 15, 42 van den Assem, Martijn, 296, 300, 301 van Dolder, Dennie, 300, 301 variability of stock prices, 230–33, 231, 367 Varian, Hal, 170 Viñoly, Rafael, 270, 276 Vishny, Robert, on limits of arbitrage, 249 von Neumann, John, 29 wages, sticky, 131–32 Waldmann, Robert, 240 Wall Street Journal, 121–22, 135, 232 Walmart, 62n, 63 Wanner, Eric, 177–78, 181, 184 as founding funder of behavioral economics, 184 Washington Redskins, 279, 288–90 Washington Wizards, 19 Wason problem, 171–72 “Watching Scotty Die” (song), 177 wealth: fungibility of, 98, 193n levels of vs. changes in, 30–31 mental accounting of, 76–79 Wealth of Nations, The (Smith), 7, 87 Weber-Fechner Law, 32–33 Weil, Roman, 70 well-defined preferences, 48–49 What Works Network, 341 White, Jesse, 328–29 White House Social and Behavioral Sciences Team (SBST), 344 Williams, Ricky, 279, 280, 282–83 willow tree, and Coase theorem, 268 willpower, 87–99, 258, 363 effort required by, 108 Wilson, Russell, 290 windfalls, 311 wine, 17, 34, 46, 68–71, 72–73, 257 winner’s curse, in NFL draft, 280, 295 Winner’s Curse, The (Thaler), 175 World Cup, 326 Wright, Frank Lloyd, 270 Yahoo, 248n Yao Ming, 271n Zamir, Eyal, 269 Zeckhauser, Richard, 13–14, 178 in behavioral economics debate, 159 Zingales, Luigi, 274 ALSO BY RICHARD H. THALER Quasi-Rational Economics The Winner’s Curse: Paradoxes and Anomalies of Economic Life Nudge: Improving Decisions About Health, Wealth, and Happiness (with Cass R. Sunstein) Copyright © 2015 by Richard H. Thaler All rights reserved First Edition For information about permission to reproduce selections from this book, write to Permissions, W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, NY 10110 For information about special discounts for bulk purchases, please contact W. W. Norton Special Sales at specialsales@wwnorton.com or 800-233-4830 Book design by Chris Welch Production manager: Louise Mattarelliano The Library of Congress has cataloged the printed edition as follows: Thaler, Richard H., 1945– Misbehaving : the making of behavioral economics / Richard H.


pages: 411 words: 108,119

The Irrational Economist: Making Decisions in a Dangerous World by Erwann Michel-Kerjan, Paul Slovic

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Andrei Shleifer, availability heuristic, bank run, Black Swan, Cass Sunstein, clean water, cognitive dissonance, collateralized debt obligation, complexity theory, conceptual framework, corporate social responsibility, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-subsidies, Daniel Kahneman / Amos Tversky, endowment effect, experimental economics, financial innovation, Fractional reserve banking, George Akerlof, hindsight bias, incomplete markets, invisible hand, Isaac Newton, iterative process, Loma Prieta earthquake, London Interbank Offered Rate, market bubble, market clearing, moral hazard, mortgage debt, placebo effect, price discrimination, price stability, RAND corporation, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, statistical model, stochastic process, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transaction costs, ultimatum game, University of East Anglia, urban planning

Lichtenstein (Cambridge University Press, 2006). Professor Slovic is a past president of the Society for Risk Analysis and, in 1991, received its Distinguished Contribution Award. In 1993, he received the Distinguished Scientific Contribution Award from the American Psychological Association. In 1995, he received the Outstanding Contribution to Science Award from the Oregon Academy of Science. Cass R. Sunstein, Harvard Law School Cass Sunstein is the Felix Frankfurter Professor of Law at Harvard Law School and the most cited law professor on any faculty in the United States. He currently serves as administrator of the Office of Information and Regulatory Affairs (OMB) at the White House. Professor Sunstein graduated in 1975 from Harvard College and in 1978 from Harvard Law School, both magna cum laude. After graduation, he clerked for Justice Benjamin Kaplan of the Massachusetts Supreme Judicial Court and Justice Thurgood Marshall of the U.S.

The Fundamentals of Making Good Decisions. Palo Alto, CA: Decision Education Foundation. Kleindorfer, Paul, Howard Kunreuther, and Paul J.H. Schoemaker (1993). Decision Sciences: An Integrative Perspective. Cambridge: Cambridge University Press. Russo, J. Edward, and Paul J.H. Schoemaker (2002). Winning Decisions: Getting It Right the First Time. New York: Doubleday. Thaler, Richard H., and Cass R. Sunstein (2007). Nudge. New Haven, CT: Yale University Press. 7 Constructed Preference and the Quest for Rationality DAVID H. KRANTZ WHAT CHOICES ARE WISE? This question has been discussed for millennia. Many proposed answers share a common theme, eloquently expressed by Plato in The Protagoras:What measure is there of the relations of pleasure to pain other than excess and defect, which means that they become greater and smaller, and more and fewer, and differ in degree?

“The Role of Feasibility and Desirability Considerations in Near and Distant Future Decisions: A Test of Temporal Construal Theory.” Journal of Personality and Social Psychology 75: 5-18. Onay, S., and A. Onculer (2007). “Intertemporal Choice Under Timing Risk: An Experimental Approach.” Journal of Risk and Uncertainty 5, no. 34: 2. 14 Dreadful Possibilities, Neglected Probabilities CASS R. SUNSTEIN AND RICHARD ZECKHAUSER Dreadful possibilities stimulate strong emotional responses, such as fear and anxiety.1 Fortunately, most high-consequence negative events have tiny probabilities, because life is no longer nasty, brutish, and short. But when emotions take charge, probabilities get neglected. Consequently, in the face of a fearsome risk, people often exaggerate the benefits of preventive, risk-reducing, or ameliorative measures.

The Darwin Economy: Liberty, Competition, and the Common Good by Robert H. Frank

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carbon footprint, carried interest, Cass Sunstein, clean water, congestion charging, corporate governance, deliberate practice, full employment, income inequality, invisible hand, Plutocrats, plutocrats, positional goods, profit motive, Ralph Nader, rent control, Richard Thaler, Ronald Coase, Ronald Reagan, sealed-bid auction, smart grid, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, trickle-down economics, ultimatum game, winner-take-all economy

This claim merits qualification to the extent that it is relative speed among gazelles that determines which ones are caught and eaten. An old joke describes a camper who awoke to see his friend frantically putting on his running shoes as an angry bear approached their campsite. “Why bother?” he asked. “Don’t you know there’s no way you’ll be able to outrun that bear?” “I don’t have to outrun him,” the friend responded, “I just need to outrun you.” 5. Richard H. Thaler and Cass R. Sunstein, Nudge, New Haven, CT: Yale University Press, 2007. 6. See, for example, Peter Richerson and Robert Boyd, Not by Genes Alone: How Culture Transformed Human Evolution, Chicago: University of Chicago Press, 2004. NOTES TO PAGES 24–31 219 7. See, for example, Richard Rorty, “The Brain as Hardware, Culture as Software,” Inquiry 47(3), 2004: 219–235. 8. The question of how such motives might have evolved in relentlessly competitive environments was the subject of my 1988 book, Passions within Reason: The Strategic Role of the Emotions, New York: W.

Libertarians who are critical of Coase’s framework tend to focus on a presumed right of early arrivers to continue pursuing their activities without restriction. See, for example, Hans-Hermann Hoppe, “The Ethics and Economics of Private Property,” chapter 2 in Enrico Colombatto, ed., The Elgar Companion to the Economics of Property Rights, Cheltenham, U.K.: Edward Elgar, 2004. But if granting such rights is efficient, defending them is of course consistent with Coase’s framework. 13. See, for example, Steven Holmes and Cass R. Sunstein, The Cost of Rights: Why Liberty Depends on Taxes, New York: W. W. Norton, 1999. 14. My erudite Cornell colleague Robert Hockett reminds me that before coming to the United States, Coase had been a colleague of the British economist and überconsequentialist Nicholas Kaldor, a celebrated champion of cost-benefit analysis. 15. The example comes from Bernard Williams. See J.J.C. Smart and Bernard Williams, Utilitarianism: For and Against, Cambridge: Cambridge University Press, 1973. 16.

Standard rational choice models predict that the first subject will make a one-sided proposal—such as $99 for himself and $1 for the second subject— since he knows that it would be in the second subject’s interest to accept rather than get nothing. But such offers are rarely proposed, and when they are, they are almost invariably rejected. Subjects who reject one-sided offers seldom voice regret about having done so. From the beginning, most of the work in behavioral economics has focused on departures from rational choice with regret—those caused by cognitive errors. My former Cornell colleague Dick Thaler collaborated with Cass Sunstein to write Nudge, a marvelous 2008 book summarizing the myriad ways in which such errors lead people astray and how policy makers might restructure environments to facilitate better choices. I enthusiastically endorse almost all the proposals they advocate in that book. From the beginning, however, I’ve believed that much bigger losses result from departures from rational choice without regret.


pages: 417 words: 109,367

The End of Doom: Environmental Renewal in the Twenty-First Century by Ronald Bailey

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3D printing, additive manufacturing, agricultural Revolution, Albert Einstein, autonomous vehicles, Cass Sunstein, Climatic Research Unit, Commodity Super-Cycle, conceptual framework, corporate governance, credit crunch, David Attenborough, decarbonisation, dematerialisation, demographic transition, diversified portfolio, double helix, energy security, failed state, financial independence, Gary Taubes, hydraulic fracturing, income inequality, invisible hand, knowledge economy, meta analysis, meta-analysis, Naomi Klein, oil shale / tar sands, oil shock, pattern recognition, peak oil, phenotype, planetary scale, price stability, profit motive, purchasing power parity, race to the bottom, RAND corporation, rent-seeking, Stewart Brand, Tesla Model S, trade liberalization, University of East Anglia, uranium enrichment, women in the workforce, yield curve

“the greatest uncertainty”: Søren Holm and John Harris, “Precautionary Principle Stifles Discovery.” Nature 400: 398 (July 29, 1999), cited in Gary Marchant et al., Council for Agricultural Science and Technology (CAST), Impact of the Precautionary Principle on Feeding Current and Future Generations. Issue Paper 52. CAST, Ames, Iowa, 2013. “The precautionary principle”: Cass R. Sunstein, “Throwing Precaution to the Wind: Why the ‘Safe’ Choice Can Be Dangerous.” Boston Globe, July 13, 2008. five different common cognitive biases: Cass R. Sunstein, “The Laws of Fear.” University of Chicago Law and Economics, Olin Working Paper No. 128 (June 2001). Available at SSRN: ssrn.com/abstract=274190 or dx.doi.org/10.2139/ssrn.274190. German government decided: Michael Bastasch, “CO2 Emissions Have Increased Since 2011 Despite Germany’s $140 Billion Green Energy Plan.”

Shift the burden of proof—when consequences are uncertain, give the benefit of the doubt to nature, public health, and community well-being,” explained Peter Montague from the Environmental Research Foundation in 2008. Boston University law professor George Annas, a prominent bioethicist who favors the precautionary principle, clearly understands that it is not a value-neutral concept. He has observed, “The truth of the matter is that whoever has the burden of proof loses.” Harvard law professor and former administrator of the Office of Information and Regulatory Affairs in the Obama administration Cass Sunstein agrees: “If the burden of proof is on the proponent of the activity or processes in question the Precautionary Principle would seem to impose a burden of proof that cannot be met.” Why can’t it be met? “The problem is that one cannot prove a negative,” notes Mercatus Center analyst Adam Thierer. “An innovator cannot prove the absence of harm, but a critic or regulator can always prove that some theoretical harm exists.

The precautionary principle will block the development of any technology if there is the slightest theoretical possibility of harm.” Let’s parse the principle a bit more. One particularly troublesome issue is that some activities that promote human health might “raise threats of harm to the environment,” and some activities that might be thought of as promoting the environment might “raise threats of harm to human health.” “The precautionary principle, for all its rhetorical appeal, is deeply incoherent,” argues Cass Sunstein. “It is of course true that we should take precautions against some speculative dangers. But there are always risks on both sides of a decision; inaction can bring danger, but so can action. Precautions, in other words, themselves create risks—and hence the principle bans what it simultaneously requires.” Sunstein argues that five different common cognitive biases distort how people view precaution when considering novel risks.


pages: 274 words: 75,846

The Filter Bubble: What the Internet Is Hiding From You by Eli Pariser

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A Declaration of the Independence of Cyberspace, A Pattern Language, Amazon Web Services, augmented reality, back-to-the-land, Black Swan, borderless world, Build a better mousetrap, Cass Sunstein, citizen journalism, cloud computing, cognitive dissonance, crowdsourcing, Danny Hillis, data acquisition, disintermediation, don't be evil, Filter Bubble, Flash crash, fundamental attribution error, global village, Haight Ashbury, Internet of things, Isaac Newton, Jaron Lanier, Jeff Bezos, jimmy wales, Kevin Kelly, knowledge worker, Mark Zuckerberg, Marshall McLuhan, megacity, Netflix Prize, new economy, PageRank, paypal mafia, Peter Thiel, recommendation engine, RFID, sentiment analysis, shareholder value, Silicon Valley, Silicon Valley startup, social graph, social software, social web, speech recognition, Startup school, statistical model, stem cell, Steve Jobs, Steven Levy, Stewart Brand, technoutopianism, the scientific method, urban planning, Whole Earth Catalog, WikiLeaks, Y Combinator

symposium, Seoul, South Korea, June 1994. 232 that this expectation is one that ... most Americans share: Jeffrey Rosen, “The Web Means the End of Forgetting,” New York Times Magazine , July 21, 2010, www.nytimes.com/2010/07/25/magazine/25privacy-t2.html?_r=1 &pagewanted=all. 235 “help it find a larger audience”: Author interview with confidential source. 237 Google is just a company: “Transcript: Stephen Colbert Interviews Google’s Eric Schmidt on The Colbert Report,” Search Engine Land, Sept. 22, 2010, accessed Dec. 20, 2010, http://searchengineland.com/googles-schmidt-colbert-report-51433. 237 expose their audiences to both sides: Cass R. Sunstein, Republic .com (Princeton: Princeton University Press, 2001). 240 “we shouldn’t have to accept”: Caitlin Petre phone interview with Marc Rotenberg, Nov. 5, 2010. 241 and 70 percent do: “Mistakes Do Happen: Credit Report Errors Mean Consumers Lose,” US PIRG, accessed Feb. 8, 2010, http://www.uspirg.org/home/reports/report-archives/financial-privacy–security/financial-privacy-security/mistakes-do-happen-credit-report-errors-mean-consumers-lose.

So while Google can look at overall clicks, it’s much harder to say how it’s working for any one person. I was also struck by the degree to which personalization is already upon us—not only on Facebook and Google, but on almost every major site on the Web. “I don’t think the genie goes back in the bottle,” Danny Sullivan told me. Though concerns about personalized media have been raised for a decade—legal scholar Cass Sunstein wrote a smart and provocative book on the topic in 2000—the theory is now rapidly becoming practice: Personalization is already much more a part of our daily experience than many of us realize. We can now begin to see how the filter bubble is actually working, where it’s falling short, and what that means for our daily lives and our society. Every technology has an interface, Stanford law professor Ryan Calo told me, a place where you end and the technology begins.

Even if there are ways of addressing these issues that don’t hurt the bottom line—which there may well be—doing so simply isn’t always going to be a top-level priority. As a result, after we’ve each done our part to pop the filter bubble, and after companies have done what they’re willing to do, there’s probably a need for government oversight to ensure that we control our online tools and not the other way around. In his book Republic.com, Cass Sunstein suggested a kind of “fairness doctrine” for the Internet, in which information aggregators have to expose their audiences to both sides. Though he later changed his mind, the proposal suggests one direction for regulation: Just require curators to behave in a public-oriented way, exposing their readers to diverse lines of argument. I’m skeptical, for some of the same reasons Sunstein abandoned the idea: Curation is a nuanced, dynamic thing, an art as much as a science, and it’s hard to imagine how regulating editorial ethics wouldn’t inhibit a great deal of experimentation, stylistic diversity, and growth.


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Reinventing Discovery: The New Era of Networked Science by Michael Nielsen

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Albert Einstein, augmented reality, barriers to entry, bioinformatics, Cass Sunstein, Climategate, Climatic Research Unit, conceptual framework, dark matter, discovery of DNA, double helix, Douglas Engelbart, en.wikipedia.org, Erik Brynjolfsson, fault tolerance, Fellow of the Royal Society, Firefox, Freestyle chess, Galaxy Zoo, Internet Archive, invisible hand, Jane Jacobs, Jaron Lanier, Kevin Kelly, Magellanic Cloud, means of production, medical residency, Nicholas Carr, publish or perish, Richard Feynman, Richard Feynman, Richard Stallman, semantic web, Silicon Valley, Silicon Valley startup, Simon Singh, Skype, slashdot, social web, statistical model, Stephen Hawking, Stewart Brand, Ted Nelson, The Death and Life of Great American Cities, The Nature of the Firm, The Wisdom of Crowds, University of East Anglia, Vannevar Bush, Vernor Vinge

Sullivan, Christopher L. Wood, Marshall J. Iliff, Rick E. Bonney, Daniel Finka, and Steve Kellinga. eBird: A citizen-based bird observation network in the biological sciences. Biological Conservation, 142(10):2282–2292, 2009. [211] John Sulston. Heritage of humanity. Le Monde Diplomatique (English Edition), November 2002. [212] Cass R. Sunstein. Infotopia: How Many Minds Produce Knowledge. New York: Oxford University Press, 2006. [213] Cass R. Sunstein. Republic.com 2.0. Princeton University Press, 2007. [214] James Surowiecki. The Wisdom of Crowds. New York: Doubleday, 2004. [215] Don R. Swanson. Migraine and magnesium: Eleven neglected connections. Perspectives in Biology and Medicine, 31(4):526–557, 1988. [216] Don R. Swanson. Medical literature as a potential source of new knowledge.

The projects we’ve discussed have overcome these and similar problems: some have succeeded with flying colors (the Polymath Project), while others just barely succeeded (World Team deliberations sometimes teetered on the edge of breakdown because of lack of civility). Similar problems also afflict offline groups, and much has been written about the problems and how to overcome them—including books such as James Surowiecki’s The Wisdom of Crowds, Cass Sunstein’s Infotopia, and many other books about business and organizational behavior. While these practical problems are important, they can often be solved with good process. But no matter how good the process, there remains a fundamental dividing line: whether a shared praxis is available. In fields where a shared praxis is available we can scale collective intelligence, and get major qualitative improvements in problem-solving behavior, such as designed serendipity and conversational critical mass.

Yochai Benkler’s insightful “Coase’s Penguin, or, Linux and The Nature of the Firm” [12] and The Wealth of Networks [13] have strongly influenced much thinking about open source, especially in the academic community. Finally, I recommend Ned Gulley and Karim Lakhani’s fascinating account [87] of the Mathworks programming competition. Limits to collective intelligence: Informative summaries are Cass Sunstein’s Infotopia [212] and James Surowiecki’s The Wisdom of Crowds [214]. Classic texts include Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds, first published in 1841, and since reprinted many times [130], and Irving Lester Janis’s Groupthink [99]. Of course, a considerable fraction of our written culture deals, directly or indirectly, with the challenges of group problem solving.


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Priceless: The Myth of Fair Value (And How to Take Advantage of It) by William Poundstone

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availability heuristic, Cass Sunstein, collective bargaining, Daniel Kahneman / Amos Tversky, delayed gratification, Donald Trump, East Village, en.wikipedia.org, endowment effect, equal pay for equal work, experimental economics, experimental subject, feminist movement, game design, German hyperinflation, Henri Poincaré, high net worth, index card, invisible hand, John von Neumann, laissez-faire capitalism, loss aversion, market bubble, mental accounting, meta analysis, meta-analysis, Nash equilibrium, new economy, payday loans, Potemkin village, price anchoring, price discrimination, psychological pricing, Ralph Waldo Emerson, RAND corporation, random walk, RFID, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, rolodex, Steve Jobs, The Chicago School, The Wealth of Nations by Adam Smith, ultimatum game, working poor

———, Jack L. Knetsch, and Richard Thaler (1991). “Anomalies: The Endowment Effect, Loss Aversion, and the Status Quo Bias.” The Journal of Economic Perspectives 5, 193–206. ———, Ilana Ritov, and David A. Schkade (1999). “Economic Preferences or Attitude Expressions? An Analysis of Dollar Responses to Public Issues.” Journal of Risk and Uncertainty 19, 203–35. ———, David A. Schkade, and Cass R. Sunstein (1998). “Shared Outrage and Erratic Awards: The Psychology of Punitive Damages.” Journal of Risk and Uncertainty 16, 49–86. ———, and Eldar Shafir. “Amos Tversky (1937–1996).” American Psychologist 53, 793–94. ———, Paul Slovic, and Amos Tversky (1982). Judgment Under Uncertainty: Heuristics and Biases. Cambridge: Cambridge University Press. ———, and Amos Tversky (1973). “On the Psychology of Prediction.”

Advances in Consumer Research 10, 229. ———(1985). “Mental Accounting and Consumer Choice.” Marketing Science 4, 199– 214. ———(1988). “Anomalies: The Ultimatum Game.” The Journal of Economic Perspectives 2, 195–206. ———(1997). “Irving Fisher: Modern Behavioral Economist.” The American Economic Review 87, 439–41. ———(1999). “Mental Accounting Matters.” Journal of Behavioral Decision Making 12, 183–206. ———, and Cass R. Sunstein (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven: Yale University Press. Thompson, Andrea (2009). “Study: You Touch It, You Buy It.” LiveScience.com, Jan. 16, 2009. Thompson, Don (2008). The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art. New York: Palgrave Macmillan. Tuohy, John William (2001). “The Greenbaum Murder.” American-Mafia.com, Oct. 2001.

The research reviewed in this article is most compatible with the third view of preference as a constructive, context-dependent process. What did gain support was the relativity of prices. What people want, and how much they’re willing to pay, depends on the granular details of how you phrase the question. “It would be an overstatement to say of preferences, as Gertrude Stein said of Oakland, that ‘there is no there there,’ ” wrote legal scholar Cass Sunstein in this connection. “But frequently what is there is far less fixed, and far more malleable, than conventional theory predicts.” Values may not be Oakland, but they are something like the elephant in the parable of the blind men. A man who feels the trunk reports that an elephant is like a snake; a man who feels the side says an elephant is like a wall; one who feels a leg compares the elephant to a pillar.


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Where Good Ideas Come from: The Natural History of Innovation by Steven Johnson

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Ada Lovelace, Albert Einstein, Alfred Russel Wallace, carbon-based life, Cass Sunstein, cleantech, complexity theory, conceptual framework, cosmic microwave background, crowdsourcing, data acquisition, digital Maoism, discovery of DNA, Dmitri Mendeleev, double entry bookkeeping, double helix, Douglas Engelbart, Drosophila, Edmond Halley, Edward Lloyd's coffeehouse, Ernest Rutherford, Geoffrey West, Santa Fe Institute, greed is good, Hans Lippershey, Henri Poincaré, hive mind, Howard Rheingold, hypertext link, invention of air conditioning, invention of movable type, invention of the printing press, invention of the telephone, Isaac Newton, Islamic Golden Age, Jacquard loom, James Hargreaves, James Watt: steam engine, Jane Jacobs, Jaron Lanier, John Snow's cholera map, Joseph Schumpeter, Joseph-Marie Jacquard, Kevin Kelly, lone genius, Louis Daguerre, Louis Pasteur, Mason jar, Mercator projection, On the Revolutions of the Heavenly Spheres, online collectivism, packet switching, PageRank, patent troll, pattern recognition, price mechanism, profit motive, Ray Oldenburg, Richard Florida, Richard Thaler, Ronald Reagan, side project, Silicon Valley, silicon-based life, six sigma, Solar eclipse in 1919, spinning jenny, Steve Jobs, Steve Wozniak, Stewart Brand, The Death and Life of Great American Cities, The Great Good Place, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, transaction costs, urban planning

Oxford, UK: Oxford University Press, 2009. Surowiecki, James. The Wisdom of Crowds. New York: Anchor, 2005. Swade, Doron, and Charles Babbage. The Difference Engine: Charles Babbage and the Quest to Build the First Computer. New York: Viking, 2001. Tapscott, Don, and Anthony D. Williams. Wikinomics: How Mass Collaboration Changes Everything. New York: Portfolio, 2008. Thaler, Richard H., and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. New York: Penguin Books, 2009. Thatcher, Robert W., D. M. North, and C. J. Biver. “Intelligence and EEG Phase Reset: A Two Compartmental Model of Phase Shift and Lock.” NeuroImage 42, no. 4 (2008): 1639-53. Urbina, Ian. “Growing Pains for a Deep-Sea Home Built of Subway Cars.” New York Times, April 8, 2008. http://www.nytimes.com/2008/04/08/us/08reef.html.

This is the irony of the serendipity debate: the thing that is being mourned has actually gone from a fringe experience to the mainstream of the culture. The second analog-era mechanism that encourages serendipity involves the physical limitations of the print newspaper, which forces you to pass by a collection of artfully curated stories on a variety of topics, before you open up the section that most closely matches your existing passions and knowledge. The legal scholar Cass Sunstein refers to this as an example of the “architecture of serendipity.” On the way to the sports section or the comics or the business page, you happen to collide with a story about the abuses of African diamond mines, and something in the headline catches your eye. A thousand words later, you’ve learned something powerful about people living halfway around the world whose existence you had never contemplated before.

John Barth’s discussion of serendipity comes from his novel The Last Voyage of Somebody the Sailor. Henri Poincairé’s pedestrian epiphanies are recounted in his Foundations of Science. A surprisingly long list of essays have argued that the Web is diminishing our opportunities for serendipitous discovery, including William McKeen’s “The Endangered Joy of Serendipity” and Damon Darlin’s “Serendipity, Lost in the Digital Deluge.” Cass Sunstein has discussed his notion of an architecture of serendipity in Going to Extremes, and, with Richard Thaler, in Nudge. Alex Osborn’s brainstorming technique was introduced in his book Applied Imagination. For a discussion of the problems with brainstorming and group creativity in general, see B. A. Nistad’s “Illusion of Group Productivity,” from the European Journal of Social Psychology. For more on open R&D labs, see Don Tapscott’s Wikinomics.


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The Age of the Infovore: Succeeding in the Information Economy by Tyler Cowen

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Albert Einstein, Asperger Syndrome, Cass Sunstein, cognitive bias, David Brooks, en.wikipedia.org, endowment effect, Flynn Effect, framing effect, Google Earth, impulse control, informal economy, Isaac Newton, loss aversion, Marshall McLuhan, Naomi Klein, neurotypical, new economy, Nicholas Carr, pattern recognition, phenotype, placebo effect, Richard Thaler, Silicon Valley, the medium is the message, The Wealth of Nations by Adam Smith, theory of mind

FURTHER READING AND REFERENCES CHAPTER 1: THE FUTURE OF THINKING DIFFERENTLY On Mark Donohoo, see “One Man’s Story: When an Autistic Child Grows Up,” April 1, 2008, www.cnn.com/2008/HEALTH/conditions/04/01/autism.jeffs.story/index.html. For the story of Ethan, see Michael D. Powers and Janet Poland, Asperger Syndrome and Your Child: A Parent’s Guide (New York: Collins Living, 2003), chapter 2. To the best of my knowledge, the phrase “infovores” originates with USC professor Irving Biederman. For a good presentation of framing effects, see for instance Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven: Yale University Press, 2008). For the Steve Hofstetter quotation, see “Thinking Man: Steve Hofstetter is Your Friend,” November 14, 2005, www.collegehumor.com/article:1632255. On “Facebook-like” services for the very young, see Camille Sweeney, “Twittering from the Cradle,” The New York Times, September 11, 2008.

We can meet them or maintain a structured relationship at a distance. By allying with “similars” in this way, we reframe and strengthen our preexisting identities and thus we become more like our true selves. Even very unusual people can find peers through web search, chat groups, and virtual realities. These newly found similarities make it more fun to be yourself and the resulting affiliations are reinforced socially. Cass Sunstein has argued that the web polarizes people politically for reasons like the above. We’ll see, but I think the final effect will be a more tolerant and cosmopolitan one. (Keep in mind we’ve had the web for a while now and our recently elected president Barack Obama succeeded by running on a non-ideological platform; while partisanship will certainly return I doubt if the web is the problem.) For most people our political connections are not the major source of our identity, even if in public arguments we sometimes pretend they are.

Whereas the Stoics sought to understand the psychology of the Roman Empire, exile, and the slave whip, and Smith studied the pin factory, I am looking at Facebook, Google, and the iPod. The later and more general movement of “behavioral economics” has brought psychology very directly into economics. In addition to all the formal research, behavioral economics is represented by such popular books as Dan Ariely’s Predictably Irrational, Richard Thaler and Cass Sunstein’s Nudge, and Ori and Rom Brafman’s Sway. In the most general terms, behavioral economics suggests that human decision-making is often far from rational. For instance maybe we overestimate our prospects of success when we start a new business or maybe we are very bad at evaluating risks with very small probabilities. In the behavioral view we are ruled by emotions and often we use dysfunctional decision-making procedures and rules.


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The Future of the Internet: And How to Stop It by Jonathan Zittrain

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A Declaration of the Independence of Cyberspace, Amazon Mechanical Turk, Andy Kessler, barriers to entry, book scanning, Brewster Kahle, Burning Man, c2.com, call centre, Cass Sunstein, citizen journalism, Clayton Christensen, clean water, corporate governance, Daniel Kahneman / Amos Tversky, distributed generation, en.wikipedia.org, Firefox, game design, Hacker Ethic, Howard Rheingold, Hush-A-Phone, illegal immigration, index card, informal economy, Internet Archive, jimmy wales, license plate recognition, loose coupling, mail merge, national security letter, packet switching, Post-materialism, post-materialism, pre–internet, price discrimination, profit maximization, Ralph Nader, RFC: Request For Comment, RFID, Richard Stallman, Richard Thaler, risk tolerance, Robert X Cringely, SETI@home, Silicon Valley, Skype, slashdot, software patent, Steve Ballmer, Steve Jobs, Ted Nelson, Telecommunications Act of 1996, The Nature of the Firm, The Wisdom of Crowds, web application, wikimedia commons

See Cubby, Inc. v. CompuServe, Inc., 766 F. Supp. 135, 139—40 (S.D.N.Y. 1991) (discussing the nature of CompuServe’s involvement in running the forums). 18. See ADVANCES IN BEHAVIORAL ECONOMICS (Colin F. Camerer, George Loewenstein & Matthew Rabin eds., 2003); Christine Jolls, Cass R. Sunstein & Richard Thaler, A Behavioral Approach to Law and Economics, 50 STAN. L. REV. 1471 (1998); Daniel Kahne-man & Amos Tversky, Prospect Theory: An Analysis of Decision Under Risk, 47 ECONO-METRICA 263 (1979). 19. See Cass R. Sunstein, INFOTOPIA 80 (2006). 20. Tim Wu, Wireless Carterfone, 1 INT’L. J. COMM. 389, 404—15 (2007), available at http://ijoc.org/ojs/index.php/ijoc/article/view/152/96. 21. See id. at 419. 22. Andrew Currah, Hollywood, the Internet and the World: A Geography of Disruptive Innovation, 14 INDUSTRY & INNOVATION 359 (2007). 23.

REV. 1175, 1176 (1989) (discussing how rules are more consistent with democracy than standards); Frederick Schauer, Rules and the Rule of Law, 14 HARV. J.L. & PUB. POL’Y 645, 650—51, 658 (1991) (discussing legal realist arguments regarding the distinction between rules and standards); Pierre J. Schlag, Rules and Standards, 33 UCLAL. REV. 379 (1985) (discussing whether there is a coherent distinction between rules and standards); Cass R. Sunstein, Problems with Rules, 83 CAL. L. REV. 953, 963—64 (1995). 5. See, e.g., LAWRENCE KOHLBERG, FROM IS TO OUGHT: HOW TO COMMIT THE NATURALISTIC FALLACY AND GET AWAY WITH IT IN THE STUDY OF MORAL DEVELOPMENT (1971); Lawrence Kohlberg, Moral Stages and Moralization: The Cognitive-Developmental Approach, in MORAL DEVELOPMENT AND BEHAVIOR: THEORY, RESEARCH AND SOCIAL ISSUES (T. Lickona ed., 1976); Lawrence Kohlberg, The Claim to Moral Adequacy of a Highest Stage of Moral Judgment, 70 J.

And what marks such a community is not merely a spirit of benevolence, or the prevalence of communitarian values, or even ‘shared final ends’ alone, but a common vocabulary of discourse and a background of implicit practices and understandings within which the opacity of the participants is reduced if never finally dissolved.”); MICHAEL WALZER, THICK AND THIN 27 (1984) (arguing that meaning is made with reference to particular social contexts that are “shared across a society, among a group of people with a common life”); see generally DANIEL BELL, COMMUNITARIANISM AND ITS CRITICS (1993); ROBERT NISBET, THE QUEST FOR COMMUNITY (1953); Cass R Sunstein, Beyond the Republican Revival, 97 YALE L.J. 1539 (1988); Robert J. Condlin, Bargaining with a Hugger: The Weakness and Limitations of a Communitarian Conception of Legal Dispute Bargaining, Or Why We Can t All Just Get Along (Berkeley Press Legal Series, Working Paper No. 1194), available at http://works.bepress.com/cgi/viewcontent.cgi?article=1000&context=robert_condlin 72. See Europa Glossary, Subsidiarity, http://europa.eu/scadplus/glossary/subsidiarity_en.htm (last visited June 1, 2007); Wikipedia, Subsidiarity, http://en.wikipedia.org/ wiki/Subsidiarity (as of June 1, 2007, 09:00 GMT). 73.


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The World Beyond Your Head: On Becoming an Individual in an Age of Distraction by Matthew B. Crawford

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airport security, Cass Sunstein, choice architecture, collateralized debt obligation, David Brooks, delayed gratification, dematerialisation, deskilling, digital Maoism, Google Glasses, hive mind, index card, informal economy, Jaron Lanier, large denomination, new economy, new new economy, online collectivism, Plutocrats, plutocrats, Richard Thaler, Rodney Brooks, self-driving car, Silicon Valley, Silicon Valley ideology, the built environment, the scientific method, The Wisdom of Crowds, theory of mind, Walter Mischel, winner-take-all economy

There are, then, three time scales that matter for the question of how we come to be what we are: Darwinian evolution, the history of a civilization, and the life course of an individual. This is perhaps obvious, once stated. But it puts limits, which would seem to be fatal, on the explanatory power of evolutionary psychology—that is, on the attempt to explain human behavior as the product of adaptive pressures we faced on the savannahs in the Pleistocene epoch. 5. Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven: Yale University Press, 2008). 6. And, who knows, maybe this is to be preferred. The Protestant is a somewhat cramped human type. One might prefer to spend the evening with someone nudged into saving money (enough so he can pay for the meal), but who doesn’t have the deeply internalized ethic of thrift, which easily shades into miserliness. 7.

There is a large literature that shows that, for example, we consistently underestimate how long it will take us to get things done, no matter how many times we have been surprised by this same fact in the past (the so-called planning fallacy). We give undue weight to the most recent events when trying to grasp a larger pattern and predict the future. In general, we are terrible at estimating probabilities. We are not so much rational optimizers as creatures who rely on biases and crude heuristics for making important decisions. In Nudge, Cass Sunstein, the former head of the Office of Information and Regulatory Affairs under President Obama, and the economist Richard Thaler argue for a mode of social engineering that takes account of these psychological facts.5 For starters, we’re a lot lazier than the rational optimizer view would have it. That is, to make everything a matter for reflection and explicit evaluation goes against the grain of how human beings normally operate.

The difference is that skilled practitioners themselves keep their actions on track by “partially jigging or informationally structuring the environment as they go along,” as Kirsh says (emphasis added). The jig itself is not flexible—indeed being rigid is the whole point of a jig—but it is deployed flexibly in the intelligent ordering of the environment by someone who is in command of his own actions. The local, actor-centered use of the jig is more attractive, to my mind, than the prospect of being nudged by Cass Sunstein. Let’s note right away that there is a risk of misstating the contrast between the jig and the nudge by putting too much emphasis on the jig being a creation of the agent himself. Quite apart from the extreme case of the push-button McDonald’s kitchen, it is true in general that a cook begins his day in an environment that has already been given a long-term structure by someone else, equipped with tools and facilities laid out in some arrangement.


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The Undoing Project: A Friendship That Changed Our Minds by Michael Lewis

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Albert Einstein, availability heuristic, Cass Sunstein, choice architecture, complexity theory, Daniel Kahneman / Amos Tversky, Donald Trump, Douglas Hofstadter, endowment effect, feminist movement, framing effect, hindsight bias, John von Neumann, loss aversion, medical residency, Menlo Park, Murray Gell-Mann, Nate Silver, New Journalism, Richard Thaler, Saturday Night Live, statistical model, Walter Mischel, Yom Kippur War

The first volume of this remarkable series was published in 1930, and it continues to motor along, fueled by an endlessly renewable source of energy: the need felt by psychologists to explain why they are the way they are. At any rate, in grappling with my subject, I obviously leaned on the work of others. Here are those I leaned on: INTRODUCTION: THE PROBLEM THAT NEVER GOES AWAY Thaler, Richard H., and Cass R. Sunstein. “Who’s on First.” New Republic, August 31, 2003. https://newrepublic.com/article/61123/whos-first. CHAPTER 1: MAN BOOBS Rutenberg, Jim. “The Republican Horse Race Is Over, and Journalism Lost.” New York Times, May 9, 2016. CHAPTER 2: THE OUTSIDER Meehl, Paul E. Clinical versus Statistical Prediction. Minneapolis: University of Minnesota Press, 1954. ——— . “Psychology: Does Our Heterogeneous Subject Matter Have Any Unity?”

But whatever it is in the human psyche that the Oakland A’s exploited for profit—this hunger for an expert who knows things with certainty, even when certainty is not possible—has a talent for hanging around. It’s like a movie monster that’s meant to have been killed but is somehow always alive for the final act. And so, once the dust had settled on the responses to my book, one of them remained more alive and relevant than the others: a review by a pair of academics, then both at the University of Chicago—an economist named Richard Thaler and a law professor named Cass Sunstein. Thaler and Sunstein’s piece, which appeared on August 31, 2003, in the New Republic, managed to be at once both generous and damning. The reviewers agreed that it was interesting that any market for professional athletes might be so screwed-up that a poor team like the Oakland A’s could beat most rich teams simply by exploiting the inefficiencies. But—they went on to say—the author of Moneyball did not seem to realize the deeper reason for the inefficiencies in the market for baseball players: They sprang directly from the inner workings of the human mind.

Drawing upon Kahneman and Tversky’s work, he pushed for changes in the rules, so that homeless kids no longer needed to enroll in the school meal program. Instead they automatically received free breakfast and lunch. Jason never went hungry, and remained in school. If you found #4 more probable than #3, you violated perhaps the simplest and most fundamental law of probability. But you’re also onto something. The lawyer’s name is Cass Sunstein. Among its other consequences, the work that Amos and Danny did together awakened economists and policy makers to the importance of psychology. “I became a believer,” said Nobel Prize–winning economist Peter Diamond of Danny and Amos’s work. “It’s all true. This stuff is not just lab stuff. It’s capturing reality, and it’s important to economists. And I spent years thinking of how to use it—and failing.”


pages: 237 words: 50,758

Obliquity: Why Our Goals Are Best Achieved Indirectly by John Kay

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Andrew Wiles, Asian financial crisis, Berlin Wall, bonus culture, British Empire, business process, Cass Sunstein, computer age, credit crunch, Daniel Kahneman / Amos Tversky, discounted cash flows, discovery of penicillin, diversification, Donald Trump, Fall of the Berlin Wall, financial innovation, Gordon Gekko, greed is good, invention of the telephone, invisible hand, Jane Jacobs, Long Term Capital Management, Louis Pasteur, market fundamentalism, Nash equilibrium, pattern recognition, purchasing power parity, RAND corporation, regulatory arbitrage, shareholder value, Simon Singh, Steve Jobs, The Death and Life of Great American Cities, The Predators' Ball, The Wealth of Nations by Adam Smith, ultimatum game, urban planning, value at risk

Igor Ansoff, Corporate Strategy (Harmondsworth, UK: Penguin, 1985), p. 41. 3 Ibid., p. 10. 4 Ibid., p. 312. 5 Robert Heller in Ansoff, Corporate Strategy, p. 360. 6 Ansoff, Corporate Strategy, pp. 326–7. 7 Saint-Gobain, “Annual Report 2008,” Courbevoie, 2008. 8 Charles Lindblom, “Still Muddling, Not Yet Through,” Public Administration Review 39, no. 6 (1979), pp. 517–26. 9 Cass R. Sunstein, Legal Reasoning and Political Conflict (Oxford: Oxford University Press, 1996), chapter 2. Chapter 8: Pluralism—Why There Is Usually More Than One Answer to a Problem 1 Dead Poets Society, directed by Peter Weir (Touchstone Pictures, 1989). 2 Dr. H. Igor Ansoff was a real person—he died in 2002. Dr. J. Evans Pritchard is not. 3 Helen Gardner, ed., The New Oxford Book of English Verse, 1250–1950 (Oxford: Oxford University Press, 1972). 4 HM Treasury, Microeconomic Reform in Britain: Delivering Opportunities for All, ed.

Such an approach, he says, involves no sharp distinction between means and ends and drastically limits analysis by problem simplification and by ignoring many potentially available options. “The test of a ‘good’ policy,” Lindblom claimed, “is typically that various analysts find themselves directly agreeing on a policy (without their agreeing that it is the most appropriate means to an agreed objective).” The modern legal scholar Cass Sunstein (President Obama’s “regulatory czar”) calls this “an incompletely theorized agreement.”9 Sunstein’s insight is that decision making in politics, business and everyday life is often based on a common view of what to do that does not require a common view of the reasons for doing it. The modesty of Lindblom’s phrase muddling through invited Dr. Ansoff’s scorn. The phrase involves intentional, but misleading, self-deprecation, and Ansoff fell into the trap.

The Panic Virus: The True Story Behind the Vaccine-Autism Controversy by Seth Mnookin

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Albert Einstein, AltaVista, British Empire, Cass Sunstein, cognitive dissonance, correlation does not imply causation, Daniel Kahneman / Amos Tversky, en.wikipedia.org, illegal immigration, index card, Isaac Newton, loss aversion, meta analysis, meta-analysis, mouse model, neurotypical, pattern recognition, placebo effect, Richard Thaler, Saturday Night Live, Solar eclipse in 1919, Stephen Hawking, Steven Pinker, the scientific method, Thomas Kuhn: the structure of scientific revolutions

Sec’y of Health and Human Services, 39–42, 252–53. 196 “I looked out at an audience”: Jane Johnson, interview with author, May 4, 2009. 196 “This is the federal government giving every kid”: Jane Johnson, interview with author, April 22, 2010. 196 “You wouldn’t be saying and doing”: Vicky Debold, interview with author, July 28, 2009. 196 a concept that was first articulated in a 1999 paper: Timur Kuran and Cass R. Sunstein, “Availability Cascades and Risk Regulation,” Stanford Law Review 1999;51(4): 683–768. 196 “self-reinforcing process of collective belief formation”: Kuran and Sunstein, “Availability Cascades and Risk Regulation,” 683. 197 In the 2008 book Nudge: Cass Sunstein and Richard Thaler, Nudge (New Haven: Yale University Press, 2008). 197 “As all women”: Cass Sunstein and Richard Thaler, “Easy Does It: How to Make Lazy People Do the Right Thing,” The New Republic, April 9, 2008; available as “The Amsterdam Urinals” on Nudge, http://nudges.wordpress.com/the-amsterdam-urinals/.

In a recent conversation, Johnson told me that public health officials around the world are potentially more culpable than the tobacco company executives who hid evidence that smoking is harmful: “This is the federal government giving every kid a carton of cigarettes and saying, ‘Get to work.’ ” Vicky Debold, whose reaction to hearing Barbara Loe Fisher in May 2000 was, “You wouldn’t be saying and doing the kinds of things you’re doing if you had seen the kids die in the ICU that I saw,” has become one of the leaders of Fisher’s National Vaccine Information Center. And Theresa Cedillo lent her daughter’s name to the largest vaccine-related compensation lawsuit in the world. The process that explains this convergence of views is called an “availability cascade,” a concept that was first articulated in a 1999 paper by Timur Kuran, an economics and political science professor at Duke who was then at the University of Southern California, and Cass Sunstein, who currently heads up the White House’s Office of Information and Regulatory Affairs and was at the time a professor at the University of Chicago Law School. Kuran and Sunstein defined the term as a “self-reinforcing process of collective belief formation by which an expressed perception triggers a chain reaction that gives the perception increasing plausibility through its rising availability in public discourse.”46 Another way of saying this is that an availability cascade describes how the perception that a belief is widely held—the “availability” of that idea—can be enough to make it so.

“Clinical Presentation and Histologic Findings at Ileocolonoscopy in Children with Autistic Spectrum Disorder and Chronic Gastrointestinal Symptoms.” Autism Insights 2010;2: 1–11. Krugman, Richard. “Immunization ‘Dyspractice’: The Need for ‘No Fault’ Insurance.” Pediatrics 1975;56(2): 159–60. Kulenkampff, M., et al. “Neurological Complications of Pertussis Inoculation.” Archives of Disease in Childhood 1974;49: 46–49. Kuran, Timur, and Cass Sunstein. “Availability Cascades and Risk Regulation.” Stanford Law Review 1999;51(4): 683–768. Laeth, Nasir. “Reconnoitering the Antivaccination Web Sites: News from the Front.” Journal of Family Practice 2000;49(8): 731–33. Langmuir, Alexander. “The Epidemic Intelligence Service of the Center for Disease Control.” Public Health Reports 1980;95(5): 470–77. Larsson, Heidi Jeanet, et al. “Risk Factors for Autism: Perinatal Factors, Parental Psychiatric History, and Socioeconomic Status.”


pages: 350 words: 103,270

The Devil's Derivatives: The Untold Story of the Slick Traders and Hapless Regulators Who Almost Blew Up Wall Street . . . And Are Ready to Do It Again by Nicholas Dunbar

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asset-backed security, bank run, banking crisis, Basel III, Black Swan, Black-Scholes formula, bonus culture, capital asset pricing model, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, Credit Default Swap, credit default swaps / collateralized debt obligations, delayed gratification, diversification, Edmond Halley, facts on the ground, financial innovation, fixed income, George Akerlof, implied volatility, index fund, interest rate derivative, interest rate swap, Isaac Newton, Kenneth Rogoff, Long Term Capital Management, margin call, market bubble, Nick Leeson, Northern Rock, offshore financial centre, price mechanism, regulatory arbitrage, rent-seeking, Richard Thaler, risk tolerance, risk/return, Ronald Reagan, shareholder value, short selling, statistical model, The Chicago School, time value of money, too big to fail, transaction costs, value at risk, Vanguard fund, yield curve

See the remarks by Goldman’s then head of firmwide risk, Bob Litzenberger, in Nicholas Dunbar, Inventing Money: The Story of Long-Term Capital Management and the Legends Behind It (Chichester: Wiley, 2000), 203. 12. The BIS actually further liberalized the VAR-based capital rules in 1998, introducing a so-called specific risk amendment that a Federal Reserve official described in 2009 as “the kiss of death.” 13. For example, see the chapter on consumer credit in Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, CT: Yale University Press, 2008). 14. The products are normally sold to intermediaries such as small banks or insurance companies before passing into the hands of the consumer. 15. An edited version of my interview with Sartori di Borgoricco was published in “The Key to Successful Client Solutions,” Risk, October 2004, 53. 16.

They were envisaged as gifted beings who could frame their beliefs about potential investments in the form of detailed probability distributions, including the correlations between investments. In a footnote to his paper, Markowitz said, “This paper does not consider the difficult question of how investors do (or should) form their probability beliefs.” Since then, analysts have typically assumed that beliefs are formed purely from historical statistics. 13. Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, CT: Yale University Press, 2008). 14. Barclays issued an emerging market CDO structured by Usi’s group named RF Alts Finance in January 2000. 15. E-mail evidence presented at Banca Popolare di Intra and Barclays Bank PLC, transcript of High Court Hearing, February 9, 2010; and witness statement of Stefano Silocchi quoted in Barclays’ pre-trial argument to the High Court. 16.

Since this flavor of diversification protects against falls in prices, justifying it requires plenty of historical price data and deft use of statistics.12 Then there is a third type of diversification, the joker in the pack. Behavioral economists call it naive diversification, in part because it seems to be hardwired into the human psyche. Psychological experiments show that when people are not restricted to a single choice on a menu, they will spread their allocation across whatever is available. For example, in an experiment cited by Cass Sunstein and Richard Thaler in their book Nudge, children who are offered multiple brands of chocolate will almost always divide their picks so that they can taste all the chocolates rather than sticking with a single brand.13 In the same way, and with no more justification for doing so, investors who are offered a menu of different retirement funds blindly split their allocations across the menu, even when it is not in their interests to do so.


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The Social Animal: The Hidden Sources of Love, Character, and Achievement by David Brooks

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Albert Einstein, asset allocation, Atul Gawande, Bernie Madoff, business process, Cass Sunstein, choice architecture, clean water, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, deliberate practice, disintermediation, Donald Trump, Douglas Hofstadter, Emanuel Derman, en.wikipedia.org, fear of failure, financial deregulation, financial independence, Flynn Effect, George Akerlof, Henri Poincaré, hiring and firing, impulse control, invisible hand, Joseph Schumpeter, labor-force participation, loss aversion, medical residency, meta analysis, meta-analysis, Monroe Doctrine, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, school vouchers, six sigma, Steve Jobs, Steven Pinker, the scientific method, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, transaction costs, Walter Mischel, young professional

Hallinan, Why We Make Mistakes: How We Look Without Seeing, Forget Things in Seconds, and Are All Pretty Sure We Are Way Above Average (New York: Broadway Books, 2009), 92–93. 4 In department stores Paco Underhill, Call of the Mall: The Geography of Shopping by the Author of Why We Buy (New York: Simon & Schuster, 2004), 49–50. 5 pairs of panty hose Timothy D. Wilson, Strangers to Ourselves (Cambridge, MA: Belknap Press, 2002), 103. 6 At restaurants, people eat more Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (Ann Arbor, MI: Caravan Books, 2008), 64. 7 Marketing people also realize Hallinan, 99. 8 Capital Pacific Homes David Brooks, “Castle in a Box,” The New Yorker, March 26, 2001, http://www.newyorker.com/archive/2001/03/26/010326fa_fact_brooks. 9 For all of human history Steven E. Landsburg, “The Theory of the Leisure Class,” Slate, March 9, 2007, http://www.slate.com/id/2161309. 10 the owls John Medina, Brain Rules: 12 Principles for Surviving and Thriving at Work, Home, and School (Seattle, WA: Pear Press, 2008), 163. 11 As Angela Duckworth Jonah Lehrer, “The Truth about Grit,” Boston Globe, August 2, 2009, http://www.boston.com/bostonglobe/ideas/articles/2009/08/02/the_truth_about_grit/. 12 M.

Stephen Copley and Andrew Edgar (Oxford: Oxford University Press, 2008), 182. 2 Long-term unemployment Don Peck, “How a New Jobless Era Will Transform America,” The Atlantic, March 2010, http://www.theatlantic.com/magazine/archive/2010/03/how-a-new-jobless-era-will-transform-america/7919/. 3 Ninety percent of drivers Robert H. Frank, The Economic Naturalist: In Search of Explanations for Everyday Enigmas (New York: Basic Books, 2007), 129. 4 Ninety-four percent of college professors Andrew Newburg and Mark Robert Waldman, Why We Believe What We Believe: Uncovering Our Biological Need for Meaning, Spirituality, and Truth (New York: Free Press, 2006), 73. 5 Ninety percent of entrepreneurs Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (Ann Arbor, MI: Caravan Books, 2008), 32. 6 Ninety-eight percent of students Keith E. Stanovich, What Intelligence Tests Miss: The Psychology of Rational Thought (New Haven, CT: Yale University Press, 2009), 109. 7 College students vastly overestimate Daniel Gilbert, Stumbling on Happiness (New York: Vintage, 2007), 18. 8 Golfers on the PGA tour Joseph T.

Augustine’s Press, 2000), 39. 2 “Reason is and ought only” David Hume, A Treatise of Human Nature, bk. 2, sect. 3 (Ithaca, NY: Cornell University Press, 2009), 286. 3 “We are generally” Edmund Burke, Reflections on the Revolution in France (Oxford: Oxford University Press, 1999), 87. 4 “senses and imagination captivate” Gertrude Himmelfarb, The Roads to Modernity: The British, French, and American Enlightenments (New York: Vintage, 2005), 76. 5 Level 2 is like Mr. Spock Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (Ann Arbor, MI: Caravan Books, 2008), 22. 6 The recall process James Le Fanu, Why Us?: How Science Rediscovered the Mystery of Ourselves (New York: Vintage, 2010), 213. 7 Half had significant errors Robert A. Burton, On Being Certain: Believing You Are Right Even When You’re Not (New York: St. Martin’s Press, 2008), 10. 8 201 prisoners in the United States Joseph T.


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To Save Everything, Click Here: The Folly of Technological Solutionism by Evgeny Morozov

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3D printing, algorithmic trading, Amazon Mechanical Turk, Andrew Keen, augmented reality, Automated Insights, Berlin Wall, big data - Walmart - Pop Tarts, Buckminster Fuller, call centre, carbon footprint, Cass Sunstein, choice architecture, citizen journalism, cloud computing, cognitive bias, crowdsourcing, data acquisition, Dava Sobel, disintermediation, East Village, en.wikipedia.org, Fall of the Berlin Wall, Filter Bubble, Firefox, Francis Fukuyama: the end of history, frictionless, future of journalism, game design, Gary Taubes, Google Glasses, illegal immigration, income inequality, invention of the printing press, Jane Jacobs, Jean Tirole, Jeff Bezos, jimmy wales, Julian Assange, Kevin Kelly, Kickstarter, license plate recognition, lone genius, Louis Pasteur, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Narrative Science, Nicholas Carr, packet switching, PageRank, Paul Graham, Peter Singer: altruism, Peter Thiel, pets.com, placebo effect, pre–internet, Ray Kurzweil, recommendation engine, Richard Thaler, Ronald Coase, Rosa Parks, self-driving car, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, Slavoj Žižek, smart meter, social graph, social web, stakhanovite, Steve Jobs, Steven Levy, Stuxnet, technoutopianism, the built environment, The Chicago School, The Death and Life of Great American Cities, the medium is the message, The Nature of the Firm, the scientific method, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, transaction costs, urban decay, urban planning, urban sprawl, Vannevar Bush, WikiLeaks

You’re on Casino Camera,” Associated Press, February 11, 2009, http://www.cbsnews.com/2100–205_162–274604.html. 198 Canadian casinos have recently solved: Ashlee Vance, “A Privacy-Friendly Way to Ban Gambling Addicts from Casinos,” Bloomberg Businessweek, August 29, 2012, http://www.businessweek.com/articles/2012–08–29/a-privacy-friendly-way-to-ban-gambling-addicts-from-casinos. 198 what Cass Sunstein and Richard Thaler call “nudges”: Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness, updated ed. (New York: Penguin Books, 2009). 199 as some recent studies speculate: F. Godlee, “Obesity and Climate Change,” British Medical Journal 345 (2012), http://www.bmj.com/content/345/bmj.e6516. 200 “Moral communities need to keep debating”: Brownsword, “Lost in Translation,” 1356. 200 John Dewey expressed almost a century earlier: the best short introduction to Dewey’s thought on technology and paternalism (from which most of the Dewey quotes in the book are taken) is Tan Sor Hoon, “Paternalism—a Deweyan Perspective,” Journal of Speculative Philosophy 13, no. 1 (January 1, 1999): 56–70.

Perhaps shifting the registers will result in greater efficiency or utility or less crime—in which case we are back to SCP and Kerr’s digital locks. Or perhaps the regulators believe that you are subject to the same cognitive biases and limitations as the rest of us humans; as such, you might be tempted to do the wrong thing even if you really don’t want to. This last set of assumptions accounts for the proliferation of what Cass Sunstein and Richard Thaler call “nudges”: clever manipulations of default settings—what the authors call “choice architecture”—to get you to eat healthy foods or save money for retirement. Nudging is to manipulation what public relations is to advertising: it gets things done while making all the background tinkering implicit and invisible. The most effective nudges give agents a semblance of agency without giving them much choice.

McGonigal (whose twin sister, Jane, of Reality Is Broken fame, we met in the previous chapter) notes that since we have only limited supplies of willpower and self-control, we might as well not waste them on big and important national projects; rather, we should save them for individual pursuits like dieting. “Rather than hope that we as a nation develop more willpower in order to meet our biggest challenges, our best bet might be to take self-control out of the equation whenever possible—or at least reduce the self-control demands of doing the right thing,” she writes. Thus, she endorses the nudges of Cass Sunstein and Richard Thaler, for they “make it easier for people to make good decisions consistent with their values and goals.” In practice this means that instead of confronting open-ended devices like the Caterpillar cord or the Forget Me Not lamp that force us to recognize our own consumption habits, McGonigal would rather have us switch to fully automated systems that simply turn off the standby devices and reading lamps without any human intervention.


pages: 240 words: 65,363

Think Like a Freak by Steven D. Levitt, Stephen J. Dubner

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Albert Einstein, Anton Chekhov, autonomous vehicles, Barry Marshall: ulcers, call centre, Cass Sunstein, colonial rule, Edward Glaeser, food miles, Gary Taubes, income inequality, Internet Archive, Isaac Newton, medical residency, microbiome, prediction markets, randomized controlled trial, Richard Thaler, Scramble for Africa, self-driving car, Silicon Valley, Tony Hsieh, transatlantic slave trade, éminence grise

Krueger, What Makes a Terrorist (Princeton University Press, 2007); Claude Berrebi, “Evidence About the Link Between Education, Poverty and Terrorism Among Palestinians,” Princeton University Industrial Relations Section working paper, 2003; and Krueger and Jita Maleckova, “Education, Poverty and Terrorism: Is There a Causal Connection?” Journal of Economic Perspectives 17, no. 4 (Fall 2003). / 172 Trying to keep a public men’s room clean?: See Richard H. Thaler and Cass R. Sunstein, Nudge (Yale University Press, 2008). / 172 “. . . We are also blind to our blindness”: See Daniel Kahneman, Thinking, Fast and Slow (2011, Farrar, Straus and Giroux). / 173 “It’s easier to jump out of a plane”: Kareem Abdul-Jabbar, “20 Things Boys Can Do to Become Men,” Esquire.com, October 2013. 173 HOW MUCH DID THE ANTI-DRUG CAMPAIGN CUT DRUG USE?: See Robert Hornik, Lela Jacobsohn, Robert Orwin, Andrea Piesse, Graham Kalton, “Effects of the National Youth Anti-Drug Media Campaign on Youths,” American Journal of Public Health 98, no. 12 (December 2008). 174 SELF-DRIVING CARS: Among the many people who informed our thinking on the driverless-car future, we are especially indebted to Raj Rajkumar and his colleagues at Carnegie Mellon, who let us ride in their driverless vehicle and answered every question. / 175 Google has already driven its fleet of autonomous cars: See Angela Greiling Keane, “Google’s Self-Driving Cars Get Boost from U.S.

When someone is heavily invested in his or her opinion, it is inevitably hard to change the person’s mind. So you might think it would be pretty easy to change the minds of people who haven’t thought very hard about an issue. But we’ve seen no evidence of this. Even on a topic that people don’t care much about, it can be hard to get their attention long enough to prompt a change. Richard Thaler and Cass Sunstein, pioneers of the “nudge” movement, recognized this dilemma. Rather than try to persuade people of the worthiness of a goal—whether it’s conserving energy or eating better or saving more for retirement—it’s more productive to essentially trick people with subtle cues or new default settings. Trying to keep a public men’s room clean? Sure, go ahead and put up signs urging people to pee neatly—or, better, paint a housefly on the urinal and watch the male instinct for target practice take over.


pages: 168 words: 46,194

Why Nudge?: The Politics of Libertarian Paternalism by Cass R. Sunstein

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Affordable Care Act / Obamacare, Andrei Shleifer, availability heuristic, Cass Sunstein, choice architecture, clean water, Daniel Kahneman / Amos Tversky, Edward Glaeser, endowment effect, energy security, framing effect, invisible hand, late fees, libertarian paternalism, loss aversion, nudge unit, randomized controlled trial, Richard Thaler

STORRS LECTURES ON JURISPRUDENCE Yale Law School, 2012 Cass R. Sunstein Why Nudge? The Politics of Libertarian Paternalism Published with assistance from the foundation established in memory of Amasa Stone Mather of the Class of 1907, Yale College. Copyright © 2014 by Cass R. Sunstein. All rights reserved. This book may not be reproduced, in whole or in part, including illustrations, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and except by reviewers for the public press), without written permission from the publishers. Yale University Press books may be purchased in quantity for educational, business, or promotional use. For information, please e-mail sales.press@yale.edu (U.S. office) or sales@yaleup.co.uk (U.K. office).

To be sure, the individual mandate can be, and has been, powerfully defended on nonpaternalistic grounds; above all, it should be understood as an effort to overcome a free-rider problem that exists when people do not obtain health insurance (but are nonetheless subsidized in the event that they need medical help). 6. MILL, supra note 2. 7. Id. 8. Id. 9. An authoritative discussion is DANIEL KAHNEMAN, THINKING, FAST AND SLOW (2011). On behavioral economics and public policy, see CASS R. SUNSTEIN, SIMPLER: THE FUTURE OF GOVERNMENT (2013); RICHARD H. THALER & CASS R. SUNSTEIN, NUDGE: IMPROVING DECISIONS ABOUT HEALTH, WEALTH, and HAPPINESS (2008). 10. Richard A. Posner, Why Is There No Milton Friedman Today, 10 ECON. J. WATCH 210, 212 (2013), available at http://econjwatch.org/articles/why-is-there-no-milton-friedman-today-RP. 11. See David Laibson, Golden Eggs and Hyperbolic Discounting, 112 Q.J. ECON. 443, 445 (1997). 12.

Glaeser, Paternalism and Psychology, 73 U. Chi. L. Rev. 133 135–42 (2006), which emphasizes the ability of those in the private sector to balance relevant values and to incorporate new information. 11. Mill, supra note 2. 12. Id. 13. See Cass R. Sunstein, Impersonal Default Rules vs. Active Choices vs. Personalized Default Rules: A Triptych (SSRN Elec. Library, Working Paper No. 2,171,343, 2012), http://ssrn.com/abstract=2171343, at 21–24. 14. See, e.g., Gordon Tullock, Arthur Seldon & Gordon Lo Brady, Government Failure: A Primer in Public Choice (2002). 15. See Timur Kuran & Cass R. Sunstein, Availability Cascades and Risk Regulation, 51 Stan. L. Rev. 683 (1999). The point regarding the shortcomings of behavioral economics is emphasized in Wright & Ginsburg, supra note 5. 16. See Glaeser, supra note 10, for arguments in this vein; Wright & Ginsburg, supra note 5; Niclas Berggren, Time for Behavioral Political Economy?


pages: 461 words: 128,421

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street by Justin Fox

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Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, bank run, Benoit Mandelbrot, Black-Scholes formula, Bretton Woods, Brownian motion, capital asset pricing model, card file, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, discovery of the americas, diversification, diversified portfolio, Edward Glaeser, endowment effect, Eugene Fama: efficient market hypothesis, experimental economics, financial innovation, Financial Instability Hypothesis, floating exchange rates, George Akerlof, Henri Poincaré, Hyman Minsky, implied volatility, impulse control, index arbitrage, index card, index fund, invisible hand, Isaac Newton, John Nash: game theory, John von Neumann, joint-stock company, Joseph Schumpeter, libertarian paternalism, linear programming, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, market bubble, market design, New Journalism, Nikolai Kondratiev, Paul Lévy, pension reform, performance metric, Ponzi scheme, prediction markets, pushing on a string, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Richard Thaler, risk/return, road to serfdom, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Sharpe ratio, short selling, side project, Silicon Valley, South Sea Bubble, statistical model, The Chicago School, The Myth of the Rational Market, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, Thorstein Veblen, Tobin tax, transaction costs, tulip mania, value at risk, Vanguard fund, volatility smile, Yogi Berra

Cohen, “Separate Neural Systems Value Immediate and Delayed Rewards,” Science (Oct. 15, 2004): 503–7. 13. Richard Thaler and Shlomo Benartzi, “Save More Tomorrow: Using Behavioral Economics to Increase Employee Savings,” Journal of Political Economy (Feb. 2004): pt. 2, S164–S187. 14. Justin Fox, “Why Johnny Can’t Save for Retirement,” Fortune, March 21, 2005. 15. Richard H. Thaler, Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven: Yale University Press, 2008). 16. Cass R. Sunstein, ed., Behavioral Law and Economics (Cambridge and New York: Cambridge University Press, 2000). 17. Aditya Chakrabortty, “From Obama to Cameron, why do so many politicians want a piece of Richard Thaler?” Guardian, July 12, 2008, 16. 18. Edward Glaeser, “Paternalism and Psychology,” University of Chicago Law Review (2006): 133–56. 19.

Bush made his unsuccessful push to replace part of Social Security with individual investment accounts, almost all the proposals centered on a simple, low-cost default option such as a life-cycle fund. “We’ve accepted the argument of behavioralists like Dick Thaler that people do dumb things,” said William Niskanen, a former Chicago student of Milton Friedman and chairman of the Cato Institute, the libertarian Washington think tank.14 Thaler joined forces with Chicago law professor Cass Sunstein to apply his ideas beyond retirement savings. They dubbed their guided approach to choice “libertarian paternalism,” and showed how it could improve lending regulation, Medicare prescription plans, public schools, and marriage.15 Just as the law and economics movement that emerged from Chicago gave intellectual backing to the great deregulation of the 1970s through the 1990s, Sunstein became a leading proponent of a new behavioral law and economics movement that aimed to guide a rethink of law and regulation.16 Sunstein’s friend Barack Obama, a former part-time Chicago law professor, put together a presidential campaign platform replete with behaviorist ideas—and appointed Sunstein as his regulation czar after he was elected.


pages: 476 words: 132,042

What Technology Wants by Kevin Kelly

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Albert Einstein, Alfred Russel Wallace, Buckminster Fuller, c2.com, carbon-based life, Cass Sunstein, charter city, Clayton Christensen, cloud computing, computer vision, Danny Hillis, dematerialisation, demographic transition, double entry bookkeeping, en.wikipedia.org, Exxon Valdez, George Gilder, gravity well, hive mind, Howard Rheingold, interchangeable parts, invention of air conditioning, invention of writing, Isaac Newton, Jaron Lanier, John Conway, John von Neumann, Kevin Kelly, knowledge economy, Lao Tzu, life extension, Louis Daguerre, Marshall McLuhan, megacity, meta analysis, meta-analysis, new economy, out of africa, performance metric, personalized medicine, phenotype, Picturephone, planetary scale, RAND corporation, random walk, Ray Kurzweil, recommendation engine, refrigerator car, Richard Florida, Silicon Valley, silicon-based life, Skype, speech recognition, Stephen Hawking, Steve Jobs, Stewart Brand, Ted Kaczynski, the built environment, the scientific method, Thomas Malthus, Vernor Vinge, Whole Earth Catalog, Y2K

Only after a new technology has been deemed okay by the certainty of science should we try to live with it. On the surface, this approach seems reasonable and prudent. Harm must be anticipated and preempted. Better safe than sorry. Unfortunately, the Precautionary Principle works better in theory than in practice. “The precautionary principle is very, very good for one thing—stopping technological progress,” says philosopher and consultant Max More. Cass R. Sunstein, who devoted a book to debunking the principle, says, “We must challenge the Precautionary Principle not because it leads in bad directions, but because read for all it is worth, it leads in no direction at all.” Every good produces harm somewhere, so by the strict logic of an absolute Precautionary Principle no technologies would be permitted. Even a more liberal version would not permit new technologies in a timely manner.

Better Off: Flipping the Switch on Technology. Eric Brende. New York: HarperCollins, 2004. This is a refreshing, fast read about the two years Brende lived off the grid near an Amish community. His book is the best way to get the feel—the warmth, the smell, the atmosphere—of the minimal lifestyle. Because Brende comes from a technological background, he anticipates your questions. Laws of Fear: Beyond the Precautionary Principle. Cass Sunstein. Cambridge: Cambridge University Press, 2005. Case studies on the faults of the Precautionary Principle and a suggested framework for an alternative approach. Whole Earth Discipline. Stewart Brand. New York: Viking, 2009. Many of my themes about progress and urbanization and constant vigilance were first developed by Brand. This book also celebrates the transformative nature of tools and technology.

Rio de Janeiro: United Nations Environment Program. http://www.unep.org/Documents.multilingual/Default.asp?DocumentID=78&ArticleID=1163. 247 such as Portland, Oregon, and San Francisco: Lawrence A. Kogan. (2008) “The Extra-WTO Precautionary Principle: One European ‘Fashion’ Export the United States Can Do Without.” Temple Political & Civil Rights Law Review, 17 (2). p. 497. http://www.itssd.org/Kogan%2017%5B1%5D.2.pdf. 247 “it leads in no direction at all”: Cass Sunstein. (2005) Laws of Fear: Beyond the Precautionary Principle. Cambridge: Cambridge University Press, p. 14. 248 DDT around the insides of homes: Lawrence Kogan. (2004) “‘Enlightened’ Environmentalism or Disguised Protectionism? Assessing the Impact of EU Precaution-Based Standards on Developing Countries,” p. 17. http://www.wto.org/english/forums_e/ngo_e/posp47_nftc_enlightened_e.pdf. 248 EU agreed to phase out DDT altogether: Tina Rosenberg. (2004, April 11) “What the World Needs Now Is DDT.”

Infotopia: How Many Minds Produce Knowledge by Cass R. Sunstein

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affirmative action, Andrei Shleifer, availability heuristic, Build a better mousetrap, c2.com, Cass Sunstein, cognitive bias, cuban missile crisis, Daniel Kahneman / Amos Tversky, Edward Glaeser, en.wikipedia.org, feminist movement, framing effect, hindsight bias, Isaac Newton, Jean Tirole, jimmy wales, market bubble, market design, minimum wage unemployment, prediction markets, profit motive, rent control, Richard Stallman, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, slashdot, stem cell, The Wisdom of Crowds, winner-take-all economy

Infotopia: How Many Minds Produce Knowledge CASS R. SUNSTEIN OXFORD UNIVERSITY PRESS Infotopia/ !"#$%&'()%#*+)*+#,*'--.%-)/+%0-'*1% CASS R. SUNSTEIN / Infotopia / How Many Minds Produce Knowledge / 1 2006 3 Oxford University Press, Inc., publishes works that further Oxford University’s objective of excellence in research, scholarship, and education. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan Poland Portugal Singapore South Korea Switzerland Thailand Turkey Ukraine Vietnam Copyright © 2006 by Oxford University Press, Inc. Published by Oxford University Press, Inc. 198 Madison Avenue, New York, New York 10016 www.oup.com Oxford is a registered trademark of Oxford University Press All rights reserved.

No. 108–301, 2004), available at http://intelligence.senate.gov. Ibid., 4. 1 Columbia Accident Investigation Board, NASA, The Columbia Accident Investigation Board Report, 2003, 97–204, available at http://www.nasa.gov/columbia/home/CAIB_Vol1.html. Ibid., 12, 102 (internal citation omitted), 183. See Cass R. Sunstein, David Schkade, and Lisa Michelle Ellman, “Ideological Voting on Federal Courts of Appeals: A Preliminary Investigation,” Virginia Law Review 90 (2004): 304–6, 314 (showing effects of panel composition on judicial behavior); Cass R. Sunstein et al., Are Judges Political?: An Empirical Analysis of the Federal Judiciary (Washington, DC: Brookings, 2006). Eric Raymond, The Cathedral and the Bazaar, 2d ed. (Sebastopol, CA: O’Reilly, 2001), 30. 232 / Notes to Pages 12–15 18. These often are described as the judgments of “statisticized groups.”

Published by Oxford University Press, Inc. 198 Madison Avenue, New York, New York 10016 www.oup.com Oxford is a registered trademark of Oxford University Press All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press. Library of Congress Cataloging-in-Publication Data Sunstein, Cass R. Infotopia : how many minds produce knowledge / Cass R. Sunstein. p. cm. ISBN-13 978-0-19-518928-5 ISBN 0-19-518928-0 1. Personal information management. 2. Knowledge management. 3. Internet. I. Title. HD30.2.S85 2006 303.48'33—dc22 2005036052 9 8 7 6 5 4 3 2 1 Printed in the United States of America on acid-free paper For Leon Wieseltier !"#$%&'()%#*+)*+#,*'--.%-)/+%0-'*1% Preface and Acknowledgments / Every day of every year, each of us relies on information that is provided by others.


pages: 370 words: 112,602

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhijit Banerjee, Esther Duflo

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Albert Einstein, Andrei Shleifer, business process, business process outsourcing, call centre, Cass Sunstein, charter city, clean water, collapse of Lehman Brothers, congestion charging, demographic transition, diversified portfolio, experimental subject, hiring and firing, land tenure, low skilled workers, M-Pesa, microcredit, moral hazard, purchasing power parity, randomized controlled trial, Richard Thaler, school vouchers, Silicon Valley, The Fortune at the Bottom of the Pyramid, Thomas Malthus, urban planning

Clemens, “Herd Immunity Conferred by Killed Oral Cholera Vaccines in Bangladesh: A Reanalysis,” Lancet 366 (2005): 44–49. 37 The psychological research has found its way in economics thanks to researchers such as Dick Thaler from the University of Chicago, George Lowenstein from Carnegie-Mellon, Matthew Rabin from Berkeley, David Laibson from Harvard, and others, whose work we cite here. 38 Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New York: Penguin, 2008). 39 See a comparative cost-effectiveness analysis on the Web site of the Abdul Latif Jameel Poverty Action Lab, available at http://www.povertyactionlab.org/policy-lessons/health/child-diarrhea. 40 Abhijit Banerjee, Esther Duflo, and Rachel Glennerster, “Is Decentralized Iron Fortification a Feasible Option to Fight Anemia Among the Poorest?”

Fines or incentives can push individuals to take some action that they themselves consider desirable but perpetually postpone taking. More generally, time inconsistency is a strong argument for making it as easy as possible for people to do the “right” thing, while, perhaps, leaving them the freedom to opt out. In their best-selling book Nudge: Improving Decisions About Health, Wealth, and Happiness, Richard Thaler and Cass Sunstein, an economist and a law scholar from the University of Chicago, recommend a number of interventions to do just this.38 An important idea is that of default option: The government (or a well-meaning NGO) should make the option that it thinks is the best for most people the default choice, so that people will need to actively move away from it if they want to. So people have the right to choose what they want, but there is a small cost of doing so, and as a result, most people end up choosing the default option.


pages: 390 words: 96,624

Consent of the Networked: The Worldwide Struggle for Internet Freedom by Rebecca MacKinnon

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A Declaration of the Independence of Cyberspace, Bay Area Rapid Transit, Berlin Wall, business intelligence, Cass Sunstein, Chelsea Manning, citizen journalism, cloud computing, cognitive dissonance, collective bargaining, conceptual framework, corporate social responsibility, Deng Xiaoping, digital Maoism, don't be evil, Filter Bubble, Firefox, future of journalism, illegal immigration, Jaron Lanier, Jeff Bezos, Julian Assange, Mark Zuckerberg, Mikhail Gorbachev, national security letter, online collectivism, pre–internet, race to the bottom, Richard Stallman, Ronald Reagan, sharing economy, Silicon Valley, Silicon Valley startup, Skype, Steve Crocker, Steven Levy, WikiLeaks

For Benkler’s in-depth analysis of the WikiLeaks case, see “A Free Irresponsible Press: WikiLeaks and the Battle over the Soul of the Networked Fourth Estate,” Harvard Civil Rights–Civil Liberties Law Review , forthcoming; working draft http://benkler.org/Benkler_Wikileaks_current.pdf. CHAPTER 6: DEMOCRATIC CENSORSHIP 87 In a blog post explaining her decision: Dan Frost, “The Attack on Kathy Sierra,” SFGate, March 27, 2007, www.sfgate.com/cgi-bin/blogs/techchron/detail?entry_id=14783 (accessed June 27, 2011). 88 The Offensive Internet, published in early 2011: Danielle Keats Citron, “Civil Rights in our Information Age,” and Cass R. Sunstein, “Believing False Rumors,” in The Offensive Internet: Speech, Privacy, and Reputation, ed. Saul Levmore and Martha C. Nussbaum (Cambridge, MA: Harvard University Press, 2010), 31–49, 91–106. 89 Constitutional lawyer Lee Bollinger: His book is Lee C. Bollinger, Uninhibited, Robust, and Wide-Open: A Free Press for a New Century (Inalienable Rights) (New York: Oxford University Press, 2010), 48. 90 “dog poop girl”: Jonathan Krim, “Subway Fracas Escalates into Test of the Internet’s Power to Shame,” Washington Post, July 7, 2005, www.washingtonpost.com/wp-dyn/content/article/2005/07/06/AR2005070601953.html (accessed August 3, 2011). 90 Cyber-harassment has already caused a number of celebrity suicides: “Cyber Bullying Campaign Against Korean Singer Dies Down,” Agence France-Presse, October 13, 2010, www.google.com/hostednews/afp/article/ALeqM5ig4StQI4mbvccWeFCGC5uuihUyAg?

In the essay “Civil Rights in an Information Age,” University of Maryland law professor Danielle Citron describes an Internet with two faces: “One propels us forward with exciting opportunities for women and minorities to work, network, and spread their ideas online. The other brings us back to a time when anonymous mobs prevented vulnerable people from participating in society as equals.” Cass Sunstein, writing in his capacity as a Harvard law professor although the book was published while he was serving under Obama as head of the White House Office of Information and Regulatory Affairs, describes how anonymous online speech enables false rumors about public officials and current events to spread like wildfire and become ingrained in the minds of large segments of a nation’s or region’s population.


pages: 361 words: 81,068

The Internet Is Not the Answer by Andrew Keen

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3D printing, A Declaration of the Independence of Cyberspace, Airbnb, AltaVista, Andrew Keen, augmented reality, Bay Area Rapid Transit, Berlin Wall, bitcoin, Black Swan, Burning Man, Cass Sunstein, citizen journalism, Clayton Christensen, clean water, cloud computing, collective bargaining, Colonization of Mars, computer age, connected car, cuban missile crisis, David Brooks, disintermediation, Downton Abbey, Edward Snowden, Elon Musk, Erik Brynjolfsson, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, Frank Gehry, Frederick Winslow Taylor, frictionless, full employment, future of work, gig economy, global village, Google bus, Google Glasses, Hacker Ethic, happiness index / gross national happiness, income inequality, index card, informal economy, information trail, Innovator's Dilemma, Internet of things, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, Kodak vs Instagram, Lean Startup, libertarian paternalism, Lyft, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, move fast and break things, Nate Silver, Network effects, new economy, Nicholas Carr, nonsequential writing, Norbert Wiener, Occupy movement, packet switching, PageRank, Paul Graham, Peter Thiel, Plutocrats, plutocrats, Potemkin village, precariat, pre–internet, RAND corporation, Ray Kurzweil, ride hailing / ride sharing, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, smart cities, Snapchat, social web, South of Market, San Francisco, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, TaskRabbit, Ted Nelson, telemarketer, the medium is the message, Thomas L Friedman, Tyler Cowen: Great Stagnation, Uber for X, urban planning, Vannevar Bush, Whole Earth Catalog, WikiLeaks, winner-take-all economy, working poor, Y Combinator

,” Guardian, March 24, 2014. 18 On the impracticality of this law, see, for example, this rather self-serving piece by Google’s legal czar David Drummond: “We Need to Talk About the Right to Be Forgotten,” Guardian, July 10, 2014. 19 Roger Cohen, “The Past in Our Future,” New York Times, November 27, 2013. 20 Jonathan Freedland, “From Memory to Sexuality, the Digital Age Is Changing Us Completely,” Guardian, June 21, 2013. 21 Mark Lilla, “The Truth About Our Libertarian Age,” New Republic, June 17, 2014. 22 Ibid. 23 Douglas Rushkoff, Present Shock: When Everything Happens Now (New York: Current, 2014), p. 9. 24 Mic Wright, “Is ‘Shadow’ the Creepiest Startup Ever? No, CIA Investment Palantir Owns That Crown,” Telegraph, September 21, 2013. 25 Cass R. Sunstein, Why Nudge: The Politics of Libertarian Paternalism (New Haven, CT: Yale University Press, 2014), p. 116. 26 Cohen, “Beware the Lure of Mark Zuckerberg’s Cool Capitalism.” 27 europarl.europa.eu/ep_products/poster_invitation.pdf. 28 John Naughton, “Amazon’s History Should Teach Us to Beware ‘Friendly’ Internet Giants,” Guardian, February 22, 2014. 29 Richard Sennett, “Real Progressives Believe in Breaking Up Google,” Financial Times, June 28, 2013. 30 Ibid. 31 Rebecca Solnit, “Who Will Stop Google?

Web 2.0 companies like Facebook, YouTube, and Instagram have reassembled the Bentham brothers’ eighteenth-century Panopticon as data factories. Bentham’s utilitarianism, that bizarre project to quantify every aspect of the human condition, has reappeared in the guise of the quantified-self movement. Even the nineteenth-century debate between Bentham’s utilitarianism and John Stuart Mill’s liberalism over individual rights has reappeared in what Harvard Law School’s Cass Sunstein calls “the politics of libertarian paternalism”—a struggle between “Millville” and “Benthamville” about the role of “nudge” in a world where the government, through partnerships with companies like Acxiom and Palantir, has more and more data on us all25 and Internet companies like Facebook and OkCupid run secretive experiments designed to control our mood. Nick Cohen describes the “cool capitalism” of the networked age as our “borderless future.”26 But while Paul Baran, Vint Cerf, and Tim Berners-Lee consciously designed the Internet to be without a center, that distributed architecture hasn’t been extended to the all-important realms of money or power.


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Equal Is Unfair: America's Misguided Fight Against Income Inequality by Don Watkins, Yaron Brook

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3D printing, Affordable Care Act / Obamacare, Apple II, barriers to entry, Berlin Wall, Bernie Madoff, blue-collar work, business process, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, colonial exploitation, corporate governance, correlation does not imply causation, Credit Default Swap, crony capitalism, David Brooks, deskilling, Edward Glaeser, Elon Musk, en.wikipedia.org, financial deregulation, immigration reform, income inequality, indoor plumbing, inventory management, invisible hand, Isaac Newton, Jeff Bezos, Jony Ive, laissez-faire capitalism, Louis Pasteur, low skilled workers, means of production, minimum wage unemployment, Naomi Klein, new economy, obamacare, Peter Singer: altruism, Peter Thiel, profit motive, rent control, Ronald Reagan, Silicon Valley, Skype, statistical model, Steve Jobs, Steve Wozniak, The Spirit Level, too big to fail, trickle-down economics, Uber for X, urban renewal, War on Poverty, women in the workforce, working poor

Senate, November 18, 2013, http://www.warren.senate.gov/files/documents/Speech%20on%20the%20Retirement%20Crisis%20-%20Senator%20Warren.pdf (accessed May 28, 2015). 7. See Don Watkins, RooseveltCare: How Social Security Is Sabotaging the Land of Self-Reliance (Irvine, CA: Ayn Rand Institute Press, 2014). 8. Nicholas Eberstadt, “American Exceptionalism and the Entitlement State,” National Affairs, Winter 2015, http://www.nationalaffairs.com/publications/detail/american-exceptionalism-and-the-entitlement-state (accessed May 28, 2015). 9. Cass R. Sunstein, Democracy and the Problem of Free Speech (New York: The Free Press, 1995), pp. 18–19. 10. Ibid., p. 19. 11. Paul Krugman, “Losing Our Country,” New York Times, June 10, 2005, http://www.nytimes.com/2005/06/10/opinion/10krugman.html (accessed April 13, 2015). 12. Paul Krugman, The Conscience of a Liberal (New York: W. W. Norton & Company, 2009), p. 18. 13. Ibid., p. 18. 14.

According to the alarmists, if we all enter that room as equal and informed citizens, if we are each given the same amount of time to speak, if we all are committed to arguing in terms of what policies will be for the good of the entire group rather than our own good, and if at the end of that process of deliberation we each get one vote to decide the outcome, the result will be governance aimed at “the common good.” According to President Obama’s former regulatory czar, Cass Sunstein: In such a system, politics is not supposed merely to protect preexisting private rights or to reflect the outcomes of interest-group pressures. It is not intended to aggregate existing private preferences, or to produce compromises among various affected groups with self-interested stakes in the outcome. Instead it is designed to have an important deliberative feature, in which new information and perspectives influence social judgments about possible courses of action.


pages: 369 words: 80,355

Too Big to Know: Rethinking Knowledge Now That the Facts Aren't the Facts, Experts Are Everywhere, and the Smartest Person in the Room Is the Room by David Weinberger

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airport security, Alfred Russel Wallace, Amazon Mechanical Turk, Berlin Wall, Black Swan, book scanning, Cass Sunstein, corporate social responsibility, crowdsourcing, Danny Hillis, David Brooks, Debian, double entry bookkeeping, double helix, en.wikipedia.org, Exxon Valdez, Fall of the Berlin Wall, future of journalism, Galaxy Zoo, Hacker Ethic, Haight Ashbury, hive mind, Howard Rheingold, invention of the telegraph, jimmy wales, John Harrison: Longitude, Kevin Kelly, linked data, Netflix Prize, New Journalism, Nicholas Carr, Norbert Wiener, openstreetmap, P = NP, Pluto: dwarf planet, profit motive, Ralph Waldo Emerson, RAND corporation, Ray Kurzweil, Republic of Letters, RFID, Richard Feynman, Richard Feynman, Ronald Reagan, semantic web, slashdot, social graph, Steven Pinker, Stewart Brand, technological singularity, Ted Nelson, the scientific method, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Whole Earth Catalog, X Prize

Los Angeles Times, June 17, 2005, http://articles.latimes.com/2005/jun/17/opinion/ed-wiki17. 16 James Rainey, “‘Wikitorial’ Pulled Due to Vandalism,” Los Angeles Times, June 21, 2005, http://articles.latimes.com/2005/jun/21/nation/na-wiki21. 17 “Los Angeles Times Launches Editorial Wiki,” Wikinews, June 19, 2005, http://en.wikinews.org/wiki/Los_Angeles_Times_launches_editorial_wiki. 18 Ross Mayfield, “Wikitorial Fork,” Corante blog, June18, 2005, http://many.corante.com/archives/2005/06/18/wikitorial_fork.php. 19 Don Singleton, in his blog: “Write the News Yourself,” June 20, 2005, http://donsingleton.blogspot.com/2005/06/write-news-yourself.html. 20 Harvard Law School announcement, http://www.law.harvard.edu/news/2008/02/19_sunstein.html. 21 Cass Sunstein, Republic.com (Princeton University Press, 2001). 22 Ibid., p. 57. 23 Ibid. 24 Ibid., p. 60. 25 Ibid., pp. 65ff. 26 Ibid., p. 69. 27 Ibid., p. 71. 28 Ibid. 29 Ibid. 30 Cass Sunstein, Republic.com (Princeton University Press, 2002), p. 206. Here, Sunstein is referring in general to the question of whether the Internet poses a threat to democracy. 31 Interview with Clay Shirky, March 30, 2010. 32 See Francesca Polletta, Pang Ching Bobby Chen, and Christopher Anderson, “Is Information Good for Deliberation?

If we’re holing ourselves up with people who think exactly the way we do, then knowledge is hiding from diversity, excluding more differences than ever before. If the Net is creating more echo chambers, the biggest loser will be democracy, for the citizenry will be polarized and thus be less able to come to agreement, and to compromise when it cannot. This is perhaps the greatest concern expressed by Cass Sunstein, a constitutional scholar and currently the administrator of the White House Office of Information and Regulatory Affairs. Sunstein, who is the most-cited living legal scholar in the United States,20 has written a couple of books on the topic. In Republic.com, published in 2001, he argues that when people get to choose what they see, they will tend toward that which is familiar, comfortable, and reinforcing of their existing beliefs, a tendency others call “homophily.”21 Sunstein shows the distressing power of homophily by pointing out that “[i]f you take the ten most highly rated television programs for whites, and then take the ten most highly rated programs for African-Americans, you will find little overlap between them.

For example, Ethan Zuckerman, my colleague at the Berkman Center, took a careful look at it and drew exactly the opposite conclusions.35 He points out that the study finds that Net users are more insular than users of just about all the old media. Indeed, if we were simply to look around the Net, using our own experience as a guide—the opposite of a careful methodology, granted—many of us would, like Cass Sunstein, conclude that people do seem to be more polarized and more uncivil than ever. If you want to attract attention on the Internet, talking in extremes seems to be an effective tactic. We are not yet close to having a solid answer to Sunstein’s question. Yet, it’s worth noting that it always seems to be “those other folks” who are being made stupid by the Net. Most of us feel, as we’re Googling around, that the Net is making us smarter—better informed (with more answers at our literal fingertips), better able to explore a topic, better able to find the points of view that explain and contextualize that which we don’t yet understand.


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Inside the Nudge Unit: How Small Changes Can Make a Big Difference by David Halpern

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Affordable Care Act / Obamacare, availability heuristic, carbon footprint, Cass Sunstein, centre right, choice architecture, cognitive dissonance, collaborative consumption, correlation does not imply causation, Daniel Kahneman / Amos Tversky, endowment effect, happiness index / gross national happiness, hindsight bias, illegal immigration, job satisfaction, Kickstarter, libertarian paternalism, market design, meta analysis, meta-analysis, Milgram experiment, nudge unit, peer-to-peer lending, pension reform, presumed consent, quantitative easing, randomized controlled trial, Richard Feynman, Richard Thaler, Ronald Reagan, Rory Sutherland, Simon Kuznets, skunkworks, the built environment, theory of mind, traffic fines, World Values Survey

For example, in 2004, just eleven years ago, I organised a session at the American Economics Association annual meeting that had the cheeky title: ‘Memos to the Council of Behavioral Economic Advisers’. None of the participants, including me, ever thought we would see the day that any government institution vaguely resembling such an entity would exist. Nothing about this forecast changed when Cass Sunstein and I published our book Nudge, in 2008. The idea of the book was that it might be possible to use the findings of the behavioural and social sciences to help people achieve their goals, and to improve the effectiveness and efficiency of government policies, without requiring anyone to do anything. We called our philosophy libertarian (or liberal in the UK) paternalism. Perhaps because of the presence of that phrase, commercial publishers shunned the book so we went with an academic press and hoped that a few of our colleagues might read it and continue to push the intellectual agenda.

Similarly, it is not difficult to conclude that our brains weren’t made for the day-to-day financial judgements that are the foundation of modern economies: from mortgages, to pensions, to the best buy in a supermarket. Yet classic economic and regulatory models are themselves based on mental shortcuts, or naive models of humanity that do not ring true. They’re like ill-fitting suits, because the model on which they are based is a simplistic mental mannequin. In their book Nudge, Richard Thaler and Cass Sunstein describe these simplified creatures as ‘econs’. These econs consider and weigh up all the options, coolly and accurately, like the Vulcan Mr Spock from Star Trek, or the legendary Deep Blue that finally defeated the great chess champion Garry Kasparov (or at least how people think it ‘thought’). In contrast, ‘humans’ can’t consider 200 million options a second, and our thinking and decisions are fused with emotion.

A ‘nudge’ is essentially a means of encouraging or guiding behaviour, but without mandating or instructing, and ideally without the need for heavy financial incentives or sanctions. We know what it means in everyday life: it’s a gentle hint; a suggestion; a conspicuous glance at a heap of clothes that we’re hoping our kids or our partner might clear away. It stands in marked contrast to an obligation; a strict requirement; or the use of force. For Cass Sunstein and Richard Thaler, originators of the term ‘nudge’, a key element is that it avoids shutting down choices, unlike a law or formal requirement. But, as we shall see, a ‘nudge’ is a subset of a wider, more empirical and behaviourally focused approach to policymaking. Consider how a law actually works. A parliament or executive passes a resolution that says that henceforth there will be a new requirement on people or businesses to do something in a particular way (or not to do something).


pages: 304 words: 22,886

Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler, Cass R. Sunstein

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Al Roth, Albert Einstein, asset allocation, availability heuristic, call centre, Cass Sunstein, choice architecture, continuous integration, Daniel Kahneman / Amos Tversky, desegregation, diversification, diversified portfolio, endowment effect, equity premium, feminist movement, framing effect, full employment, George Akerlof, index fund, invisible hand, late fees, libertarian paternalism, loss aversion, Mahatma Gandhi, Mason jar, medical malpractice, medical residency, mental accounting, meta analysis, meta-analysis, Milgram experiment, pension reform, presumed consent, profit maximization, rent-seeking, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, Saturday Night Live, school choice, school vouchers, transaction costs, Vanguard fund, Zipcar

NUDGE This page intentionally left blank NUDGE Improving Decisions About Health, Wealth, and Happiness Richard H. Thaler Cass R. Sunstein Yale University Press New Haven & London A Caravan book. For more information, visit www.caravanbooks.org. Copyright © 2008 by Richard H. Thaler and Cass R. Sunstein. All rights reserved. This book may not be reproduced, in whole or in part, including illustrations, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and except by reviewers for the public press), without written permission from the publishers. Set in Galliard and Copperplate 33 types by The Composing Room of Michigan, Inc. Printed in the United States of America. Library of Congress Cataloging-in-Publication Data Thaler, Richard H., 1945– Nudge : improving decisions about health, wealth, and happiness / Richard H. Thaler and Cass R. Sunstein. p. cm. Includes bibliographical references and index.

Management Science 45 (1999): 364–81. ———. “Naive Diversification Strategies in Defined Contribution Savings Plans.” American Economic Review 91, no. 1 (2001): 79–98. ———. “How Much Is Investor Autonomy Worth?” Journal of Finance 57 (2002): 1593–1616. ———. “Heuristics and Biases in Retirement Savings Behavior.” Journal of Economic Perspectives 21, no. 3 (2007): 81–104. Benartzi, Shlomo, Richard H. Thaler, Stephen P. Utkus, and Cass R. Sunstein. “The Law and Economics of Company Stock in 401(k) Plans.” Journal of Law and Economics 50 (2007): 45–79. BIBLIOGRAPHY Benjamin, Daniel, and Jesse Shapiro. “Thin-Slice Forecasts of Gubernatorial Elections.” Working paper, University of Chicago, 2007. Bentham, Jeremy. An Introduction to the Principles of Morals and Legislation. Oxford: Blackwell, 1789. Berger, Jonah, Marc Meredith, and S.

“Accounting for the Social Context of Risk Communication.” Science and Technology Studies 5 (1987): 103–11. Johnson, Eric J., and Daniel Goldstein. “Do Defaults Save Lives?” Science 302 (2003): 1338–39. Johnson, Eric J., John Hershey, Jacqueline Meszaros, and Howard Kunreuther. “Framing, Probability Distortions, and Insurance Decisions.” In Kahneman and Tversky (2000), 224–40. Jolls, Christine, Cass R. Sunstein, and Richard Thaler. “A Behavioral Approach to Law and Economics.” Stanford Law Review 50 (1998): 1471–1550. Jones-Lee, Michael, and Graham Loomes. “Private Values and Public Policy.” In Conflict and Tradeoffs in Decision Making, ed. Elke U. Weber, Jonathan Baron, and Graham Loomes, 205–30. Cambridge: Cambridge University Press, 2001. Kahneman, Daniel. “New Challenges to the Rationality Assumption.”


pages: 542 words: 132,010

The Science of Fear: How the Culture of Fear Manipulates Your Brain by Daniel Gardner

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Atul Gawande, availability heuristic, Black Swan, Cass Sunstein, citizen journalism, cognitive bias, cognitive dissonance, Columbine, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Brooks, Doomsday Clock, feminist movement, haute couture, hindsight bias, illegal immigration, medical residency, Mikhail Gorbachev, millennium bug, mutually assured destruction, nuclear winter, placebo effect, Ralph Nader, RAND corporation, Ronald Reagan, Stephen Hawking, Steven Levy, Steven Pinker, the scientific method, Tunguska event, uranium enrichment, Y2K, young professional

In a different experiment, Tversky and Daniel Kahneman also showed that when people were told a flu outbreak was expected to kill 600 people, people’s judgments about which program should be implemented to deal with the outbreak were heavily influenced by whether the expected program results were described in terms of lives saved (200) or lives lost (400). The vividness of language is also critical. In one experiment, Cass Sunstein—a University of Chicago law professor who often applies psychology’s insights to issues in law and public policy—asked students what they would pay to insure against a risk. For one group, the risk was described as “dying of cancer.” Others were told not only that the risk was death by cancer but that the death would be “very gruesome and intensely painful, as the cancer eats away at the internal organs of the body.”

Certainty, for example, has been shown to have outsize influence on how we judge probabilities: A change from 100 percent to 95 percent carries far more weight than a decline from 60 percent to 55 percent, while a jump from 0 percent to 5 percent will loom like a giant over a rise from 25 percent to 30 percent. This focus on certainty helps explain our unfortunate tendency to think of safety in black-and-white terms—something is either safe or unsafe—when, in reality, safety is almost always a shade of gray. And all this is true when there’s no fear, anger, or hope involved. Toss in a strong emotion and people can easily become—to use a term coined by Cass Sunstein—“probability blind.” The feeling simply sweeps the numbers away. In a survey, Paul Slovic asked people if they agreed or disagreed that a one-in-10 million lifetime risk of getting cancer from exposure to a chemical was too small to worry about. That’s an incredibly tiny risk—far less than the lifetime risk of being killed by lightning and countless other risks we completely ignore. Still, one-third disagreed; they would worry.

We remain a species powerfully influenced by the unconscious mind and its tools—particularly the Example Rule, the Good-Bad Rule, and the Rule of Typical Things. We also remain social animals who care about what other people think. And if we aren’t sure whether we should worry about this risk or that, whether other people are worried makes a huge difference. “Imagine that Alan says that abandoned hazardous waste sites are dangerous, or that Alan initiates protest action because such a site is located nearby,” writes Cass Sunstein in Risk and Reason. “Betty, otherwise skeptical or in equipoise, may go along with Alan; Carl, otherwise an agnostic, may be convinced that if Alan and Betty share the relevant belief, the belief must be true. It will take a confident Deborah to resist the shared judgments of Alan, Betty and Carl. The result of these sets of influences can be social cascades, as hundreds, thousands or millions of people come to accept a certain belief because of what they think other people believe.”


pages: 281 words: 95,852

The Googlization of Everything: by Siva Vaidhyanathan

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1960s counterculture, AltaVista, barriers to entry, Berlin Wall, borderless world, Burning Man, Cass Sunstein, choice architecture, cloud computing, computer age, corporate social responsibility, correlation does not imply causation, data acquisition, death of newspapers, don't be evil, Firefox, Francis Fukuyama: the end of history, full text search, global village, Google Earth, Howard Rheingold, informal economy, information retrieval, Joseph Schumpeter, Kevin Kelly, knowledge worker, libertarian paternalism, market fundamentalism, Marshall McLuhan, means of production, Mikhail Gorbachev, Naomi Klein, Network effects, new economy, Nicholas Carr, PageRank, pirate software, Ray Kurzweil, Richard Thaler, Ronald Reagan, side project, Silicon Valley, Silicon Valley ideology, single-payer health, Skype, social web, Steven Levy, Stewart Brand, technoutopianism, The Nature of the Firm, The Structural Transformation of the Public Sphere, Thorstein Veblen, urban decay, web application

There is no formula for assessing it: I can’t give Google three of my privacy points in exchange 88 TH E G OOGL IZATION OF US for 10 percent better service. More seriously, Mayer and Google fail to acknowledge the power of default settings in a regime ostensibly based on choice. T H E IRR EL EVANC E O F C H O I C E In their 2007 book Nudge: Improving Decisions about Health, Wealth, and Happiness, the economist Richard Thaler and law professor Cass Sunstein describe a concept they call “choice architecture.” Plainly put, the structure and order of the choices offered to us profoundly influence the decisions we make. So, for instance, the arrangement of foods in a school cafeteria can influence children to eat better. The positions of restrooms and break rooms can influence the creativity and communality of office staff. And, in the best-known example of how defaults can influence an ostensibly free choice, studies have demonstrated that when employer-based retirement plans in the United States required employees to opt in to them, more than 40 percent of employees either failed to enroll or contributed too little to get matching contributions from their employers.

Legal scholars who have helped me work through this material include Randy Picker, Michael Madison, Ann Bartow, Lawrence Lessig, Yochai Benkler, Mark Lemley, Pamela Samuelson, Mahadevi Sundar, Chris Sprigman, Julie Cohen, Molly Van Howeling, Lolly Gasaway, Anupam Chander, Shubha Ghosh, Mike Godwin, and Tim Wu. Neil Netanel and David Nimmer gave me an opportunity to outline my perspectives on Google for their seminar at UCLA Law School. Their students gave me valuable feedback on a draft of part of this book. Oren Bracha did me the great favor of bringing me back to my alma mater, the University of Texas at Austin, to speak about Google Books in its early days. Cass Sunstein assured me I was on the right track with my approach. Frank Pasquale went above and beyond the duties of friendship by engaging with me in conversation on the various blogs to which he contributes about the many facets of Google. Andrew Chin, my dear friend since our early undergraduate years at the University of Texas, read the entire manuscript and helped me avoid some serious mistakes. The two people who taught me the most about search engines and prompted me to think broadly about how Google affects the world are Helen Nissenbaum of New York University and Michael Zimmer of the University of Wisconsin at Milwaukee.

Barry Schwartz, “First Google Image Result for Michelle Obama Pure Racist,” Search Engine Round Table, November 13, 2009, www.seroundtable.com/ archives/021162.html; David Colker, “Google Won’t Exclude Distorted Michelle Obama Image from Its Site,” Los Angeles Times, November 25, 2009; Judit BarIlan, “Web Links and Search Engine Ranking: The Case of Google and the Query ‘Jew’,” Journal of the American Society for Information Science and Technology 57, no. 12 (2006): 1581. 8. Richard Thaler and Cass Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness (New Haven: Yale University Press, 2008). 9. Levy, “Secret of Googlenomics.” 10. Randall E. Stross, Planet Google: One Company’s Audacious Plan to Organize Everything We Know (New York: Free Press, 2008), 109–28. 11. Cecillia Kang, “AT&T Accuses Google of Violating Telecom Laws; Google Rejects Claims,” Post I.T., blog, September 25, 2009; Amy Schatz, “AT&T Asks for Curbs on Google,” WSJ.com, September 26, 2009; John Markoff and Matt Richtel, “F.C.C.


pages: 503 words: 131,064

Liars and Outliers: How Security Holds Society Together by Bruce Schneier

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airport security, barriers to entry, Berlin Wall, Bernie Madoff, Bernie Sanders, Brian Krebs, Broken windows theory, carried interest, Cass Sunstein, Chelsea Manning, corporate governance, crack epidemic, credit crunch, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Graeber, desegregation, don't be evil, Double Irish / Dutch Sandwich, Douglas Hofstadter, experimental economics, Fall of the Berlin Wall, financial deregulation, George Akerlof, hydraulic fracturing, impulse control, income inequality, invention of agriculture, invention of gunpowder, iterative process, Jean Tirole, John Nash: game theory, joint-stock company, Julian Assange, meta analysis, meta-analysis, microcredit, moral hazard, mutually assured destruction, Nate Silver, Network effects, Nick Leeson, offshore financial centre, patent troll, phenotype, pre–internet, principal–agent problem, prisoner's dilemma, profit maximization, profit motive, race to the bottom, Ralph Waldo Emerson, RAND corporation, rent-seeking, RFID, Richard Thaler, risk tolerance, Ronald Coase, security theater, shareholder value, slashdot, statistical model, Steven Pinker, Stuxnet, technological singularity, The Market for Lemons, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, too big to fail, traffic fines, transaction costs, ultimatum game, UNCLOS, union organizing, Vernor Vinge, WikiLeaks, World Values Survey, Y2K

failure or absence Simon Baron-Cohen (2011), Zero Degrees of Empathy: A New Theory of Human Cruelty, Penguin/Allen Lane; published in the U.S. as The Science of Evil: On Empathy and the Origins of Human Cruelty, Basic Books. food on the honor Stephen J. Dubner and Steven D. Levitt (6 Jun 2004), “What the Bagel Man Saw: An Accidental Glimpse at Human Nature,” New York Times Magazine, 62–5. follow social norms Daniel Kahneman and Dale T. Miller (1986), “Norm Theory: Comparing Reality to Its Alternatives,” Psychological Review, 93:136–53. Cass R. Sunstein (1996), “Social Norms and Social Roles,” Columbia Law Review, 96:903–68. Helen Bernhard, Ernst Fehr, and Urs Fischbacher (2006), “Group Affiliation and Altruistic Norm Enforcement,” American Economic Review, 96:217–21. Emmanuel Levinas Michael L. Morgan (2011), The Cambridge Introduction to Emmanuel Levinas, Cambridge University Press. people turned in Akiko Fujita (17 Aug 2011), “Honest Japanese Return $78 Million in Cash Found in Quake Rubble,” ABC News.

based on perceived Bruce Schneier (3 Apr 2008), “The Difference Between Feeling and Reality in Security,” Wired News. Natural Biases Barry Glassner (1999), The Culture of Fear: Why Americans Are Afraid of the Wrong Things, Basic Books. Paul Slovic (2000), The Perception of Risk, Earthscan Publications. Daniel Gilbert (2 Jul 2006), “If Only Gay Sex Caused Global Warming,” Los Angeles Times. Jeffrey Kluger (26 Nov 2006), “How Americans Are Living Dangerously,” Time. Cass Sunstein and Richard Zeckhauser (2011), “Overreaction to Fearsome Risks,” Environmental & Resource Economics, 48:435–49. John Mueller wrote John Mueller (2004), “A False Sense of Insecurity?” Regulation, 27:42–6. exaggerate the risk John Mueller (2006), Overblown: How Politicians and the Terrorism Industry Inflate National Security Threats, and Why We Believe Them, Free Press. tolerance for risk Meir Statman (2010), “The Cultures of Risk Tolerance,” Social Sciences Research Network Behavioral & Experimental Finance eJournal, 1–23.


pages: 418 words: 128,965

The Master Switch: The Rise and Fall of Information Empires by Tim Wu

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accounting loophole / creative accounting, Alfred Russel Wallace, Apple II, barriers to entry, British Empire, Burning Man, Cass Sunstein, Clayton Christensen, don't be evil, Douglas Engelbart, Howard Rheingold, Hush-A-Phone, informal economy, intermodal, Internet Archive, invention of movable type, invention of the telephone, invisible hand, Jane Jacobs, Joseph Schumpeter, Menlo Park, open economy, packet switching, PageRank, profit motive, road to serfdom, Ronald Coase, shareholder value, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, Telecommunications Act of 1996, The Chicago School, The Death and Life of Great American Cities, the market place, The Wisdom of Crowds, too big to fail, Upton Sinclair, urban planning

Apparently taken from an interview with Bob Hope in the mid-1970s, this ironic quote by the founder of one of the nation’s most watched news networks is from Patrick Parsons, Blue Skies: A History of Cable Television (Philadelphia: Temple University Press, 2008), 453. 8. This point is drawn from Becker’s book on modern cultural identities and sexual politics as examined through the lens of media coverage and representation of gay America: Ron Becker, Gay TV and Straight America (New Brunswick, NJ: Rutgers University Press, 2006), 86. 9. Cass R. Sunstein, Republic.com 2.0 (Princeton, NJ: Princeton University Press, 2007), xi. 10. Ken Auletta, Three Blind Mice: How the TV Networks Lost Their Way (New York: Random House, 1991), 5. CHAPTER 17: MASS PRODUCTION OF THE SPIRIT 1. An account of the rise and fall of United Artists, itself a story of open period filmmaking, may be found in Tino Balio, United Artists: The Company That Changed the Film Industry (Madison: University of Wisconsin Press, 1987). 2.

Obviously, there is a difference between a nation in which on any given night conservatives are watching Fox News, sports fans are tuned to ESPN, and teenagers are glued to MTV, as compared to the America of television’s yesteryear, where the nuclear family would watch I Love Lucy and the CBS Evening News together, whether they would have preferred to or not. Indeed, the television writer Ron Becker observes, “cable networks and TV shows were designed not only to appeal to those in a targeted demographic group but also to send clear signals to unwanted eyes that certain media products weren’t meant for them.” The alienation was, in a way, the message, and the product.8 Critics like the law professor Cass Sunstein go so far as to describe the fragmenting powers of cable and other technologies, notably the Internet, as a threat to the notion of a free society. “In a democracy,” writes Sunstein, “people do not live in echo chambers or information cocoons. They see and hear a wide range of topics and ideas.”9 There is a bit of a paradox to this complaint that must be sorted out. The concern is not that there are too many outlets of information—surely that serves the purpose of free expression that sustains democratic society.


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

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affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, lump of labour, Malacca Straits, market bubble, microcredit, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional

Michael Cooper, “Transit Use Hit Five-Decade High in 2008 as Gas Prices Rose,” New York Times, March 9, 2009. 10. Fernando A. Wilson, Jim Stimpson, and Peter E. Hilsenrath, “Gasoline Prices and Their Relationship to Rising Motorcycle Fatalities, 1990–2007,” American Journal of Public Health, vol. 99, no. 10 (October 2009). 11. Jaime Sneider, “Good Propaganda, Bad Economics,” New York Times, May 16, 2000, p. A31. 12. Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness (New Haven, Conn.: Yale University Press, 2008). 13. Press release from The Royal Swedish Academy of Sciences, October 9, 2002. 14. Jonathan Gruber, “Smoking’s ‘Internalities,’” Regulation, vol. 25, no. 4 (Winter 2002/2003). 15. Annamaria Lusardi, “The Importance of Financial Literacy,” NBER Reporter: Research Summary, no. 2 (2009). 16.

As a practical matter, those mistakes often do spill over to affect the rest of us, as we saw in the real estate collapse and the accompanying mortgage mess. And there is a range of views in between (e.g., you’re allowed to sniff glue and roll down the steps but only while wearing a helmet). One intriguing and practical middle ground is the notion of “libertarian paternalism,” which was advanced in an influential book called Nudge by Richard Thaler, a professor of behavioral science and economics at the University of Chicago, and Cass Sunstein, a Harvard Law School professor now serving in the Obama administration. The idea behind benign paternalism is that individuals do make systematic errors of judgment, but society should not force you to change your behavior (that’s the libertarian part); instead, we should merely point you in the right direction (that’s the paternalism part). One of Thaler and Sunstein’s key insights is that our decisions are often a product of inertia.


pages: 25 words: 5,789

Data for the Public Good by Alex Howard

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23andMe, Atul Gawande, Cass Sunstein, cloud computing, crowdsourcing, Hernando de Soto, Internet of things, Network effects, openstreetmap, Silicon Valley, slashdot, social software, social web, web application

Civic developer and startup communities are creating a new distributed ecosystem that will help create that community, from BuzzData to Socrata to new efforts like Max Ogden’s DataCouch. Smart Disclosure There are enormous economic and civic good opportunities in the “smart disclosure” of personal data, whereby a private company or government institution provides a person with access to his or her own data in open formats. Smart disclosure is defined by Cass Sunstein, Administrator of the White House Office for Information and Regulatory Affairs, as a process that “refers to the timely release of complex information and data in standardized, machine-readable formats in ways that enable consumers to make informed decisions.” For instance, the quarterly financial statements of the top public companies in the world are now available online through the Securities and Exchange Commission.


pages: 199 words: 43,653

Hooked: How to Build Habit-Forming Products by Nir Eyal

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Airbnb, AltaVista, Cass Sunstein, choice architecture, cognitive bias, cognitive dissonance, en.wikipedia.org, framing effect, game design, Google Glasses, Inbox Zero, invention of the telephone, iterative process, Jeff Bezos, Lean Startup, Mahatma Gandhi, Mark Zuckerberg, meta analysis, meta-analysis, Oculus Rift, Paul Buchheit, Paul Graham, Peter Thiel, QWERTY keyboard, Silicon Valley, Silicon Valley startup, Snapchat, TaskRabbit, telemarketer, Toyota Production System, Y Combinator

Socioaffective Neuroscience & Psychology 3, no. 0 (September 26, 2013). doi:10.3402/snp.v3i0.21592. [xiii] “The Acceleration of Addictiveness,” Paul Graham. Accessed November 12, 2013. http://www.paulgraham.com/addiction.html. [xiv] “Night of the Living Dead.” Wikipedia, the Free Encyclopedia, December 18, 2013. http://en.wikipedia.org/w/index.php?title=Night_of_the_Living_Dead&oldid=586570022. [xv] Thaler, Richard H., Cass R. Sunstein, and John P. Balz. Choice Architecture. SSRN Scholarly Paper. Rochester, NY: Social Science Research Network, April 2, 2010. http://papers.ssrn.com/abstract=1583509. [xvi] For a memorable acronym of the Hook Model, think “ATARI”, as in the 1980s video gaming console. “A hook has four parts: Trigger, Action, Reward, and Investment. Chapter 1: The Habit Zone [xvii] Wood, Wendy, Jeffrey M Quinn, and Deborah A Kashy.

[cxii] “Pinterest Does Another Massive Funding — $225 Million at $3.8 Billion Valuation (Confirmed).” AllThingsD. Accessed November 13, 2013. http://allthingsd.com/20131023/pinterest-does-another-massive-funding-225-million-at-3-8-billion-valuation/. Chapter 6: What Are You Going to Do with This? [cxiii] For further thoughts on the morality of designing behavior, see: Thaler, Richard H., Cass R. Sunstein, and John P. Balz. Choice Architecture. SSRN Scholarly Paper. Rochester, NY: Social Science Research Network, April 2, 2010. http://papers.ssrn.com/abstract=1583509. [cxiv] White, Charlie. “Survey: Cellphones Vs. Sex – Which Wins? [INFOGRAPHIC].” Mashable, August 3, 2011. http://mashable.com/2011/08/03/telenav-cellphone-infographic/. [cxv] Bogost, Ian. “The Cigarette of This Century.” The Atlantic, June 6, 2012. http://www.theatlantic.com/technology/archive/2012/06/the-cigarette-of-this-century/258092/.


pages: 486 words: 148,485

Being Wrong: Adventures in the Margin of Error by Kathryn Schulz

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affirmative action, anti-communist, banking crisis, Bernie Madoff, car-free, Cass Sunstein, cognitive dissonance, colonial rule, conceptual framework, cosmological constant, cuban missile crisis, Daniel Kahneman / Amos Tversky, dark matter, desegregation, Johann Wolfgang von Goethe, lake wobegon effect, Ronald Reagan, six sigma, stem cell, Steven Pinker, Tenerife airport disaster, the scientific method, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, trade route

Jastrow, 16–17; also, Juergen Klein, “Francis Bacon,” The Stanford Encyclopedia of Philosophy (Spring 2009 Edition), Edward N. Zalta, ed., (http://plato.stanford.edu/archives/spr2009/entries/francis-bacon); and Francis Bacon, Bacon’s Essays, Edwin A. Abbott, ed. (Longmans, Green and Co., 1886), lxxii–lxxiii. Thomas Gilovich. Thomas Gilovich, How We Know What Isn’t So: The Fallibility of Human Reason in Everyday Life (The Free Press, 1991), 112. Cass Sunstein. Cass Sunstein, Why Societies Need Dissent (Harvard University Press, 2005), v. James Surowiecki. James Surowiecki, The Wisdom of Crowds (Anchor Books, 2005), 43. John Locke and David Hume. This rejection of secondhand information as insufficient grounds for knowledge is part of the same epistemological tradition articulated by, among others, Descartes (who cautioned against believing anything based on scanty evidence) and William Clifford (James’s foil in “The Will To Believe”).

And when we brag about our liberty And they laugh at you and me Fifty million Frenchmen can’t be wrong. In short, if everybody’s doing it, it must be a good idea. This is a notion that has received considerable support well outside the domain of pop songs. The Cornell psychologist and behavioral economist Thomas Gilovich has observed that, “Other things being equal, the greater the number of people who believe something, the more likely it is to be true.” And the legal scholar Cass Sunstein has pointed out that, “Conformity of this kind is not stupid or senseless,” since “the decisions of other people convey information about what really should be done.” The financial writer James Surowiecki calls this notion “social proof”—the idea that “if lots of people are doing something or believe something, there must be a good reason why.”* The other side of the Fifty Million Frenchmen coin is the one your mother loves: if all your friends were jumping off the roof, would you jump, too?

* People with borderline personality disorder are sometimes described as being stuck in this stage, because they continue to regard the world as a place of absolutes. The disorder is characterized by, among other things, an overpowering need to be right and a corresponding inability to accept the possibility of error, or the potential validity of multiple viewpoints. * In the long run, the suppression of disagreement is likely to be bad for the rulers as well as the ruled over. As the legal scholar Cass Sunstein observed in Why Societies Need Dissent, “Dictators, large and small, tend to be error-prone as well as cruel. The reason is that they learn far too little. Those with coercive authority, from presidents to police chiefs, do much better if they encourage diverse views and expose themselves to a range of opinions.” This was the lesson of groupthink as well, although power there was consolidated in the hands of a small group instead of in the hands of the individual


pages: 353 words: 98,267

The Price of Everything: And the Hidden Logic of Value by Eduardo Porter

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Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, new economy, New Urbanism, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, women in the workforce, World Values Survey, Yom Kippur War, young professional

Using people’s own choices to determine the price we are willing to pay to save lives could lead society down some uncomfortable paths. Given the choice between pulling a dozen thirty-year-olds from a blazing fire or saving a dozen sixty-year-olds instead, it might be an odd choice to save the seniors from the point of view of social welfare. For starters, saving the young would save many more years of life than the old. Cass Sunstein, the legal scholar from the University of Chicago who currently heads the White House’s Office of Information and Regulatory Affairs, which oversees these valuations, has proposed focusing government policies on saving years of life rather than lives, even though that would discount the value of seniors. “A program that saves younger people is better, along every dimension, than an otherwise identical program that saves older people,” he wrote.

The value of health warnings on cigarette packs in Australia is in “Cost-Benefit Analysis of Proposed New Health Warnings on Tobacco Products,” Report Prepared for the Commonwealth Department of Health and Ageing, December 2003 (http://www.treasury.gov.au/contentitem.asp?ContentID=794&NavID, accessed on 08/08/2010). 51-54 Do We Know How Much We Are Worth?: The value of an old life versus a young life is debated in Cass Sunstein, “Lives, Life-Years and Willingness to Pay,” University of Chicago John M. Olin Law and Economics Program Working Paper, June 2003; Joseph Aldy and W. Kip Viscusi, “Age Differences in the Value of Statistical Life Revealed Preference Evidence,” Resources for the Future Discussion Paper, April 2007; and John Graham, “Benefit-Cost Methods and Lifesaving Rules,” Memorandum from the White House’s Office of Information and Regulatory Affairs to the President’s Management Council, May 2003.

Kip Viscusi, “Racial Differences in Labor Market Values of a Statistical Life,” Harvard Law School Center for Law, Economics, and Business Discussion Paper (April 2003); James Hammitt and María Eugenia Ibarrarán, “The Economic Value of Reducing Fatal and Non-Fatal Occupational Risks in Mexico City Using Actuarial- and Perceived-Risk Estimates,” Health Economics, Vol. 15, No. 12, 2006, pp. 1329-1335; James Hammitt and Ying Zhou, “The Economic Value of Air-Pollution-Related Health Risks in China: A Contingent Valuation Study,” Environmental and Resource Economics, Vol. 33, No. 3, 2006, pp. 399-423; Cass Sunstein, “Are Poor People Worth Less Than Rich People? Disaggregating the Value of Statistical Lives,” University of Chicago, Olin Law and Economics Program Research Paper, February 2004. Data on deaths on the Titanic is in http://www.ithaca.edu/staff/jhenderson/titanic.html. 54-58 The Price of Health: Data on cervical cancer in Mexico is found in Cristina Gutiérrez-Delgado, Camilo Báez-Mendoza, Eduardo González-Pier, Alejandra Prieto de la Rosa, and Renee Witlen, “Relación costo-efectividad de las intervenciones preventivas contra el cáncer cervical en mujeres mexicanas,” Salud Pública Méx, Vol. 50, No. 2, 2008, pp. 107-118; Olga Georgina Martinez M., “Introducing New Health Commodities into National Programs: Mexico’s Experience with the HPV Vaccine,” Presentation at the Microbicide Access Forum, Mexico City, August 3, 2008; Liliana Alcántara and Thelma Gomez, “Papiloma, Vacuna de la Discordia,” El Universal, March 5, 2009.


pages: 353 words: 110,919

The Road to Character by David Brooks

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Cass Sunstein, David Brooks, desegregation, Donald Trump, follow your passion, Mahatma Gandhi, meta analysis, meta-analysis, moral hazard, New Journalism, Ralph Waldo Emerson, rent control, Snapchat, Steve Jobs, Triangle Shirtwaist Factory, union organizing, Upton Sinclair, upwardly mobile

Reprinted by permission of Random House, an imprint and division of Penguin Random House LLC and Curtis Brown Ltd. All rights reserved. RANDOM HOUSE, AN IMPRINT AND DIVISION OF PENGUIN RANDOM HOUSE LLC: Excerpt from Eisenhower in War and Peace by Jean Edward Smith, copyright © 2012 by Jean Edward Smith. Reprinted by permission of Random House, an imprint and division of Penguin Random House LLC. All rights reserved. CASS SUNSTEIN: Excerpt from a toast given by Leon Wieseltier at the wedding of Cass Sunstein to Samantha Power. Used by permission. By DAVID BROOKS On Paradise Drive: How We Live Now (and Always Have) in the Future Tense Bobos in Paradise: The New Upper Class and How They Got There The Social Animal: The Hidden Sources of Love, Character, and Achievement The Road to Character ABOUT THE AUTHOR DAVID BROOKS writes an op-ed column for The New York Times, teaches at Yale University, and appears regularly on PBS NewsHour, NPR’s All Things Considered, and NBC’s Meet the Press.

As she put it in a letter, “I have counted the cost of the step that I have taken and am prepared to bear, without irritation or bitterness, renunciation by all my friends. I am not mistaken in the person to whom I have attached myself. He is worthy of the sacrifice I have incurred, and my only anxiety is that he should be rightly judged.” All love is narrowing. It is the renunciation of other possibilities for the sake of one choice. In a 2008 wedding toast to Cass Sunstein and Samantha Power, Leon Wieseltier put it about as well as possible: Brides and grooms are people who have discovered, by means of love, the local nature of happiness. Love is a revolution in scale, a revision of magnitudes; it is private and it is particular; its object is the specificity of this man and that woman, the distinctness of this spirit and that flesh. Love prefers deep to wide, and here to there; the grasp to the reach….


pages: 184 words: 53,625

Future Perfect: The Case for Progress in a Networked Age by Steven Johnson

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airport security, algorithmic trading, banking crisis, barriers to entry, Bernie Sanders, call centre, Captain Sullenberger Hudson, Cass Sunstein, cognitive dissonance, credit crunch, crowdsourcing, dark matter, Dava Sobel, David Brooks, future of journalism, hive mind, Howard Rheingold, HyperCard, Jane Jacobs, John Gruber, John Harrison: Longitude, Kevin Kelly, Kickstarter, lone genius, Mark Zuckerberg, meta analysis, meta-analysis, Naomi Klein, Nate Silver, Occupy movement, packet switching, Peter Thiel, planetary scale, pre–internet, RAND corporation, risk tolerance, shareholder value, Silicon Valley, Silicon Valley startup, social graph, Steve Jobs, Steven Pinker, Stewart Brand, The Death and Life of Great American Cities, Tim Cook: Apple, urban planning, WikiLeaks, working poor, X Prize

— Peer-produced journalism may well be able to solve the funding problem without relying on advertising monopolies, but that still leaves the ideological question about the future of news. Some critics believe that a world in which news is divided up into much smaller and more diverse sources will inevitably lead to political echo chambers, where like-minded partisans reinforce their beliefs by filtering out dissenting views. Perhaps the most articulate and influential advocate for this belief is the legal scholar and Obama administration official Cass Sunstein, who describes the echo-chamber effect this way: If Republicans are talking only with Republicans, if Democrats are talking primarily with Democrats, if members of the religious right speak mostly to each other, and if radical feminists talk largely to radical feminists, there is a potential for the development of different forms of extremism, and for profound mutual misunderstandings with individuals outside the group.

For another, more skeptical, overview of journalism’s future in the age of peer networks, see “Confidence Game,” by Dean Starkman, published in the Columbia Journalism Review. My book Where Good Ideas Come From explores the eco-system metaphor for information technology in more detail; see also James Boyle’s “Cultural Environmentalism and Beyond,” published in Law and Contemporary Problems. Cass Sunstein’s theories on echo chambers appear in his books Republic.com and Echo Chambers: Bush v. Gore, Impeachment, and Beyond, the latter a digital publication from Princeton University Press. For a rebuttal to Sunstein’s theory, see “Ideological Segregation Online and Offline,” by Matthew Gentzkow and Jesse M. Shapiro (http://faculty.chicagobooth.edu/jesse.shapiro/research/echo_chambers.pdf). For more on the power of diversity, see Scott E.


pages: 190 words: 61,970

Life You Can Save: Acting Now to End World Poverty by Peter Singer

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accounting loophole / creative accounting, Branko Milanovic, Cass Sunstein, clean water, experimental economics, illegal immigration, Martin Wolf, microcredit, Peter Singer: altruism, pre–internet, purchasing power parity, randomized controlled trial, Richard Thaler, Silicon Valley, Thomas Malthus, ultimatum game, union organizing

In seven countries with “opt out” systems, the lowest proportion of potential donors is 85.9 percent.8 Just as we tend to leave unchanged the factory settings on a computer, so other kinds of “defaults” can make a big difference to our behavior—and, in the case of organ donations, save thousands of lives. There is a new wave of interest in exploring how to frame choices so that people make better decisions. Richard Thaler and Cass Sunstein, professors of economics and law, respectively, teamed up to write Nudge: Improving Decisions About Health, Wealth, and Happiness, which advocates using defaults to nudge us to make better choices.9 Even when we are choosing in our own interests, we often choose unwisely. When employees have the option of participating in a retirement-savings scheme, many do not, despite the financial advantages of doing so.

Charles Isherwood, “The Graffiti of the Philanthropic Class,” The New York Times, December 2, 2007. 6. www.boldergiving.org. 7. Plan International, “Sponsor a Child: Frequently Asked Questions,” www.plan-international.org/sponsorshipform/sponsorfaq/, accessed January 16, 2008. 8. Eric Johnson and Daniel Goldstein, “Do Defaults Save Lives?” Science 302 (November 2003), pp. 1338-39. I owe this reference to Eldar Shafir, whose comments on this topic were very helpful. 9. Richard Thaler and Cass Sunstein, Nudge: Improving Decisions about Health, Wealth and Happiness (New Haven, CT: Yale University Press, 2008). 10. Brigitte Madrian and Dennis Shea, “The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior,” Quarterly Journal of Economics 116:4 (2001), pp. 1149-87. 11. Louise Story, “A Big Salary With a Big Stipulation: Share It,” The New York Times, November 12, 2007. 12.


pages: 230 words: 61,702

The Internet of Us: Knowing More and Understanding Less in the Age of Big Data by Michael P. Lynch

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Affordable Care Act / Obamacare, Amazon Mechanical Turk, big data - Walmart - Pop Tarts, bitcoin, Cass Sunstein, Claude Shannon: information theory, crowdsourcing, Edward Snowden, Firefox, Google Glasses, hive mind, income inequality, Internet of things, John von Neumann, meta analysis, meta-analysis, Nate Silver, new economy, patient HM, prediction markets, RFID, sharing economy, Steve Jobs, Steven Levy, the scientific method, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, WikiLeaks

We read the blogs of those we agree with, watch the cable news network that reports on the world in the way that we see it, and post and share jokes made at the expense of the “other side.”5 The real worry is not, as Popper feared, that an open digital society makes us into independent individuals living Robinson Crusoe–like on smartphone islands; the real worry is that the Internet is increasing “group polarization”—that we are becoming increasingly isolated tribes. As one of the most influential thinkers about digital culture, Cass Sunstein, has noted, one reason the Internet contributes to polarization is that “repeated exposure to an extreme position, with the suggestion that many people hold that position, will predictably move those exposed, and likely predisposed, to believe in it.”6 So, with a steady diet of Fox News, conservatives will become more conservative. Liberals who only read the Huffington Post or the Daily Kos will become more liberal.

When it comes to global warming, at least we’ll get to realize the consequences of our current policies (or lack of them) one way or another. But the abuse of knowledge isn’t going to be so obvious, and the abusers will have every reason to hide behind good intentions. That was one of the points made by the President’s own review panel’s report in 2013.8 That panel—made up of not only writers and scholars including Cass Sunstein but former leaders of the CIA—suggested, in fact, more than simply fencing the pool (passing legislation to make it more difficult to access); they suggested the pool be drained. That is, they urged that all incidentally collected information (again, mostly on Americans, and far outweighing the amount being collected on warranted targets) simply be removed from the NSA’s databases. This has not yet been done.9 Privacy and the Concept of a Person The potential dangers of abusing big data are one reason the storage of incidentally collected information is wrong.


pages: 241 words: 75,516

The Paradox of Choice: Why More Is Less by Barry Schwartz

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accounting loophole / creative accounting, attribution theory, Atul Gawande, availability heuristic, Cass Sunstein, Daniel Kahneman / Amos Tversky, endowment effect, framing effect, income per capita, job satisfaction, loss aversion, medical residency, mental accounting, Own Your Own Home, positional goods, price anchoring, psychological pricing, RAND corporation, Richard Thaler, science of happiness, The Wealth of Nations by Adam Smith

But if unrestricted freedom can impede the individual’s pursuit of what he or she values most, then it may be that some restrictions make everyone better off. And if “constraint” sometimes affords a kind of liberation while “freedom” affords a kind of enslavement, then people would be wise to seek out some measure of appropriate constraint. Second-Order Decisions AWAY OF EASING THE BURDEN THAT FREEDOM OF CHOICE IMPOSES IS to make decisions about when to make decisions. These are what Cass Sunstein and Edna Ullmann-Margalit call second-order decisions. One kind of second-order decision is the decision to follow a rule. If buckling your seat belt is a rule, you will always buckle up, and the issue of whether it’s worth the trouble for a one-mile trip to the market just won’t arise. If you adopt the rule that you will never cheat on your partner, you will eliminate countless painful and tempting decisions that might confront you later on.

I write about the time problem in The Costs of Living: How Market Freedom Erodes the Best Things in Life (Philadelphia: Xlibris, 2001). Sociologist Arlie Hochschild writes brilliantly about it in The Time Bind: When Work Becomes Home and Home Becomes Work (New York: Metropolitan, 1997). Economist and historian A.O. Hirschman, Exit, Voice, and Loyalty (Cambridge, MA: Harvard University Press, 1970). These are what Cass Sunstein C.R. Sunstein and E. Ullmann-Margalit, “Second-Order Decisions,” in C.R. Sunstein (ed.), Behavioral Law and Economics (New York: Cambridge University Press, 2000), pp. 187–208. At the turn of J. von Uexkull, “A Stroll Through the Worlds of Animals and Men,” in C.H. Schiller (ed.), Instinctive behavior (New York: International Universities Press, 1954), pp. 3–59. The quote is on page 26. But powerful evidence K.


pages: 268 words: 75,850

The Formula: How Algorithms Solve All Our Problems-And Create More by Luke Dormehl

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3D printing, algorithmic trading, Any sufficiently advanced technology is indistinguishable from magic, augmented reality, big data - Walmart - Pop Tarts, call centre, Cass Sunstein, Clayton Christensen, computer age, death of newspapers, deferred acceptance, Edward Lorenz: Chaos theory, Erik Brynjolfsson, Filter Bubble, Flash crash, Florence Nightingale: pie chart, Frank Levy and Richard Murnane: The New Division of Labor, Google Earth, Google Glasses, High speed trading, Internet Archive, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Kevin Kelly, Kodak vs Instagram, Marshall McLuhan, means of production, Nate Silver, natural language processing, Netflix Prize, pattern recognition, price discrimination, recommendation engine, Richard Thaler, Rosa Parks, self-driving car, sentiment analysis, Silicon Valley, Silicon Valley startup, Slavoj Žižek, social graph, speech recognition, Steve Jobs, Steven Levy, Steven Pinker, Stewart Brand, the scientific method, The Signal and the Noise by Nate Silver, upwardly mobile, Wall-E, Watson beat the top human players on Jeopardy!, Y Combinator

If laws or rules are an effort to moralize other people, does this differ from attempts to moralize technology? Can we quantify in any real sense the difference between a rule that asks that we not waste water in the shower and the use of a water-saving showerhead technology that ensures that we do not? In their book Nudge: Improving Decisions about Health, Wealth, and Happiness, authors Richard Thaler and Cass Sunstein recount the story of a fake housefly placed in each of the urinals at Schiphol Airport in Amsterdam. By giving urinating men something to aim at, spillage was reduced by a whole 80 percent.37 While few would likely decry the kind of soft paternalism designed to keep public toilets clean, what about the harder paternalism of a car that forcibly brakes to stop a person breaking the speed limit?

Common Knowledge, vol. 3, no. 2, 1994. 36 To extend this argument to its deterministic extreme, we might turn to Karl Marx and his assertion in The Poverty of Philosophy: “The hand-mill gives you society with the feudal lord; the steam-mill society with the industrial capitalist.” I take more of a social constructionist perspective, seeing technological development as the interplay of inventors, entrepreneurs, customers and social circumstance. 37 Thaler, Richard, and Cass Sunstein. Nudge: Improving Decisions about Health, Wealth, and Happiness (New Haven, Conn.: Yale University Press, 2008). 38 Brownsword, Roger. “What the World Needs Now: Techno-Regulation, Human Rights and Human Dignity,” in Global Governance and the Quest for Justice. Vol. 4: Human Rights. (Oxford, UK: Hart, 2004). 39 Conly, Sarah. Against Autonomy (Cambridge, UK: Cambridge University Press, 2013). 40 Lessig, Lawrence.


pages: 538 words: 141,822

The Net Delusion: The Dark Side of Internet Freedom by Evgeny Morozov

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A Declaration of the Independence of Cyberspace, Ayatollah Khomeini, Berlin Wall, borderless world, Buckminster Fuller, Cass Sunstein, citizen journalism, cloud computing, cognitive dissonance, Columbine, computer age, conceptual framework, crowdsourcing, Dissolution of the Soviet Union, don't be evil, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, global village, Google Earth, illegal immigration, invention of radio, invention of the printing press, invisible hand, John von Neumann, Marshall McLuhan, Naomi Klein, Network effects, new economy, New Urbanism, pirate software, pre–internet, Productivity paradox, RAND corporation, Ronald Reagan, Ronald Reagan: Tear down this wall, Silicon Valley, Silicon Valley startup, Sinatra Doctrine, Skype, Slavoj Žižek, social graph, Steve Jobs, technoutopianism, The Wisdom of Crowds, urban planning, Washington Consensus, WikiLeaks, women in the workforce

The most interesting part about the Saudi censorship scheme is that it at least informs the user why a website has been blocked; many other countries simply show a bland message like “the page cannot be displayed,” making it impossible to discern whether the site is blocked or simply unavailable because of some technical glitches. In the Saudi case, banned porn websites carry a message that explains in detail the reasons for the ban, referencing a Duke Law Journal article on pornography written by the American legal scholar Cass Sunstein and a 1,960-page study conducted by the U.S. attorney general’s Commission on Pornography in 1986. (At least for most nonlawyers, those are probably far less satisfying than the porn pages they were seeking to visit.) The practice of “crowdsourcing” censorship is becoming popular in democracies as well. Both the British and the French authorities have similar schemes for their citizens to report child pornography and several other kinds of illegal content.

If that accusation is repeated by a hundred other bloggers—even if some of them look rather dubious—most sane critics of the government think twice before reposting that blogger’s critical message. The best way to create such a culture of mistrust is for governments to cultivate extremely agile rapid-response blogging teams that fight fire with fire. The benefits of such an approach have not been lost on Western policy wonks. In 2008 Cass Sunstein, a prominent American legal scholar who now heads the White House Office of Information and Regulatory Affairs, coauthored a punchy policy paper that recommended the U.S. government practice “cognitive infiltration” of Internet groups that are spreading conspiracy theories, suggesting that “government agents or their allies (acting either virtually or in real space, and either openly or anonymously) will undermine the crippled epistemology of believers by planting doubts about the theories and stylized facts that circulate within such groups.”

Special interests have successfully explored the Internet to plant their own messages, micro-tailoring them to the newly segmented audiences and prompting the political commentator Robert Wright to complain that “technology has subverted the original idea of America,” adding that “the new information technology doesn’t just create generation-3.0 special interests; it arms them with precision-guided munitions.” The list of unanswered questions about the relationship between the Internet and democracy is infinite. Will the Internet foster political polarization and promote what Cass Sunstein called “enclave extremism”? Will it further widen the gap between news junkies and those who avoid political news at all costs? Will it decrease the overall amount of political learning, as young people learn news from social networks? Will it prevent our future politicians from making any risky statements—now stored for posterity—in their prepolitical careers so as not to become unelectable?


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What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

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affirmative action, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Berlin Wall, Black Swan, Bretton Woods, capital controls, Cass Sunstein, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial innovation, floating exchange rates, full employment, Gini coefficient, global reserve currency, global village, high net worth, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, invisible hand, Just-in-time delivery, Kenneth Rogoff, labour market flexibility, labour mobility, Long Term Capital Management, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, price stability, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Robert Shiller, Ronald Reagan, sovereign wealth fund, special drawing rights, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Washington Consensus, women in the workforce, yield curve

As nobody enters married life thinking that he or she might get divorced, nobody enters the investment world thinking he or she might fail. Doing the opposite would require humility, which is a quality not found in abundance within the world of investment. Potentially a victim of this hubris, my prediction for 2011 may in the end be nothing more than wishful thinking. If it is, how disconcerting! When Richard Thaler and Cass Sunstein published Nudge–Improving Decisions About Health, Wealth, and Happiness with Yale University Press in 2008, they showed that what’s come out of behavioral economics—and by extension neuroeconomics—can lead to improved decisions in terms of better health or sounder investments. Soon, some of their ideas on how to nudge made their way into policy-making. Today, for example, many governments try to harness some of their insights for specific policy purposes.

Olivier Oullier, “The Useful Brain: How Neuroeconomics Might Change Our Views on Rationality and a Couple of Other Things,” chap. 10 in The Irrational Economist: Making Decisions in a Dangerous World, vol. 1, ed. Erwann O. Michel-Kerjan and Paul Slovic (Philadelphia: PublicAffairs, 2010). 3. These policy units are led by Dr. David Halpern in the United Kingdom and by Dr. Olivier Oullier in France; while Cass Sunstein has become the “regulatory czar” in the Obama administration. 23 THE DIMINISHING RETURNS OF THE INFORMATION AGE Mark Roeder At the dawn of the Internet age in the mid-1990s, many pundits predicted that the Internet would empower billions of people to become smarter, or at least better informed, simply by making so much information easily accessible. But information is not knowledge.


pages: 326 words: 106,053

The Wisdom of Crowds by James Surowiecki

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AltaVista, Andrei Shleifer, asset allocation, Cass Sunstein, Daniel Kahneman / Amos Tversky, experimental economics, Frederick Winslow Taylor, George Akerlof, Howard Rheingold, I think there is a world market for maybe five computers, interchangeable parts, Jeff Bezos, Joseph Schumpeter, knowledge economy, lone genius, Long Term Capital Management, market bubble, market clearing, market design, moral hazard, new economy, offshore financial centre, Picturephone, prediction markets, profit maximization, Richard Feynman, Richard Feynman, Richard Feynman: Challenger O-ring, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, South Sea Bubble, The Nature of the Firm, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Toyota Production System, transaction costs, ultimatum game, Yogi Berra

If a group was made up of people who were generally risk averse, discussion would make the group even more cautious, while groups of risk takers found themselves advocating riskier positions. Other studies showed that people who had a pessimistic view of the future became even more pessimistic after deliberations. Similarly, civil juries that are inclined to give large awards to plaintiffs generally give even larger awards after talking it over. More recently, University of Chicago law professor Cass Sunstein has devoted a great deal of attention to polarization, and in his book Why Societies Need Dissent, he shows both that the phenomenon is more ubiquitous than was once thought and that it can have major consequences. As a general rule, discussions tend to move both the group as a whole and the individuals within it toward more extreme positions than the ones they entered the discussion with. Why does polarization occur?

Kaplan, “Group-Induced Polarization in Simulated Juries,” Personality and Social Psychology Bulletin 2 (1976): 63–66; and A. Vinokur and E. Burnstein, “Novel Argumentation and Attitude Change: The Case of Polarization Following Group Discussion,” European Journal of Social Psychology 8 (1978): 335–48. An excellent look at the evidence for small-group decision making, group polarization, and the value of differing opinions is Cass Sunstein, Why Societies Need Dissent (Cambridge: Harvard University Press, 2003). The experiments with the military fliers were done by E. P. Torrance. See E. P. Torrance, “Some Consequences of Power Differences on Decisions in B-26 Crews,” United States Air Force Personnel and Training Research Center research bulletin 54–128 (1954); and Torrance, “Some Consequences of Power Differences in Permanent and Temporary Three-Man Groups,” in Small Groups, edited by A.


pages: 349 words: 95,972

Messy: The Power of Disorder to Transform Our Lives by Tim Harford

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affirmative action, Air France Flight 447, Airbnb, airport security, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, Atul Gawande, autonomous vehicles, banking crisis, Barry Marshall: ulcers, Basel III, Berlin Wall, British Empire, Broken windows theory, call centre, Cass Sunstein, Chris Urmson, cloud computing, collateralized debt obligation, crowdsourcing, deindustrialization, Donald Trump, Erdős number, experimental subject, Ferguson, Missouri, Filter Bubble, Frank Gehry, game design, global supply chain, Googley, Guggenheim Bilbao, high net worth, Inbox Zero, income inequality, Internet of things, Jane Jacobs, Jeff Bezos, Loebner Prize, Louis Pasteur, Mark Zuckerberg, Menlo Park, Merlin Mann, microbiome, out of africa, Paul Erdős, Richard Thaler, Rosa Parks, self-driving car, side project, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, Steven Levy, Stewart Brand, telemarketer, the built environment, The Death and Life of Great American Cities, Turing test, urban decay

We naturally divide ourselves into tribes (we’re the marketing department, they are the accounting department). Even if we rarely steal from these rival tribes or insult them to their faces, the annoyance we feel is quite real, and often owes more to our tribal feelings than to any genuine offense the accounting team may have committed. One instructive study was conducted by the legal scholar and policy wonk Cass Sunstein, with two social psychologists, Reid Hastie and David Schkade. The three researchers assembled participants from two quite different cities: Boulder, Colorado, where people often lean to the left (it’s known jokingly as “The People’s Republic of Boulder”) and Colorado Springs, which is well known as a conservative stronghold. Participants were privately asked their views on three politically heated topics: climate change, affirmative action, and same-sex partnerships.

Except where otherwise stated, descriptions of the Robbers Cave experiment are from Muzafer Sherif et al., The Robbers Cave Experiment: Intergroup Conflict and Cooperation (Middletown, CT: Wesleyan University Press, 1988). 13. Gary Alan Fine, “Forgotten Classic: The Robbers Cave Experiment,” Sociological Forum 19, no. 4 (December 2004), DOI: 10.1007/s11206-004-0704-7. 14. The study is described in Cass Sunstein and Reid Hastie, Wiser: Getting Beyond Groupthink to Make Groups Smarter (Boston: Harvard Business Review Press, 2015), pp. 81–83. 15. Irving L. Janis, Victims of Groupthink (Boston: Houghton Mifflin, 1972). 16. The Asch experiments are often known as the “conformity” experiments, although most subjects did not conform every time. However, given the fact that the group members—actors working for Solomon Asch—were clearly wrong, it is striking that people conformed at all.


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Grouped: How Small Groups of Friends Are the Key to Influence on the Social Web by Paul Adams

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Airbnb, Cass Sunstein, cognitive dissonance, David Brooks, information retrieval, invention of the telegraph, planetary scale, race to the bottom, Richard Thaler, sentiment analysis, social web, statistical model, The Wisdom of Crowds, web application, white flight

People in our group, and people we perceive to be like us, disproportionately influence us. We often change our behavior to conform to the expectations, attitudes, and behavior of our group. We overrate the advice of experts. Random strangers can often outperform experts. Further reading 1. See the Wikipedia article titled Mirror Neuron for an introduction and further reading. 2. See Richard Thaler and Cass Sunstein’s book Nudge: Improving Decisions About Health, Wealth, and Happiness (Yale University Press, 2008). 3. In their book Connected (Little, Brown, 2009), Nicholas Christakis and James Fowler describe how people are influenced by social proof. 4. See the 2002 research paper “Evidence on learning and network externalities in the diffusion of home computers” by Austan Goolsbee and Peter Klenow. 5.


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The Stack: On Software and Sovereignty by Benjamin H. Bratton

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1960s counterculture, 3D printing, 4chan, Ada Lovelace, additive manufacturing, airport security, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, algorithmic trading, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, Berlin Wall, bioinformatics, bitcoin, blockchain, Buckminster Fuller, Burning Man, call centre, carbon footprint, carbon-based life, Cass Sunstein, Celebration, Florida, charter city, clean water, cloud computing, connected car, corporate governance, crowdsourcing, cryptocurrency, dark matter, David Graeber, deglobalization, dematerialisation, disintermediation, distributed generation, don't be evil, Douglas Engelbart, Edward Snowden, Elon Musk, en.wikipedia.org, Eratosthenes, ethereum blockchain, facts on the ground, Flash crash, Frank Gehry, Frederick Winslow Taylor, future of work, Georg Cantor, gig economy, global supply chain, Google Earth, Google Glasses, Guggenheim Bilbao, High speed trading, Hyperloop, illegal immigration, industrial robot, information retrieval, intermodal, Internet of things, invisible hand, Jacob Appelbaum, Jaron Lanier, Jony Ive, Julian Assange, Khan Academy, linked data, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Masdar, McMansion, means of production, megacity, megastructure, Menlo Park, Minecraft, Monroe Doctrine, Network effects, new economy, offshore financial centre, oil shale / tar sands, packet switching, PageRank, pattern recognition, peak oil, performance metric, personalized medicine, Peter Thiel, phenotype, place-making, planetary scale, RAND corporation, recommendation engine, reserve currency, RFID, Sand Hill Road, self-driving car, semantic web, sharing economy, Silicon Valley, Silicon Valley ideology, Slavoj Žižek, smart cities, smart grid, smart meter, social graph, software studies, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Startup school, statistical arbitrage, Steve Jobs, Steven Levy, Stewart Brand, Stuxnet, Superbowl ad, supply-chain management, supply-chain management software, TaskRabbit, the built environment, The Chicago School, the scientific method, Torches of Freedom, transaction costs, Turing complete, Turing machine, Turing test, universal basic income, urban planning, Vernor Vinge, Washington Consensus, web application, WikiLeaks, working poor, Y Combinator

Popper wrote that members of informationally and socially isolated groups (which means today any Internet subculture) tend toward a kind of paranoid cognition. They become suspicious and distrustful of society and susceptible to “sinister attribution errors.” As Cass Sunstein puts it, “This error occurs when people feel that they are under pervasive scrutiny, and hence they attribute personalistic motives to outsiders and overestimate the amount of attention they receive. Benign actions that happen to disadvantage the group are taken as purposeful plots, intended to harm. They overestimate the amount of attention they receive [emphasis mine]. Benign actions that happen to disadvantage the group are taken as purposeful plots, intended to harm.” See Cass R. Sunstein and Adrain Vermeule, “Conspiracy Theories,” Coase-Sandor Working Papers in Law and Economics, University of Chicago Law School, 2008. Keller and I discussed how, in some Software Studies circles, people compare Google AdWords to the Stasi with a straight face.

Falling Behind: Explaining the Development Gap Between Latin America and the United States by Francis Fukuyama

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Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, crony capitalism, European colonialism, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Hernando de Soto, income inequality, income per capita, labour market flexibility, land reform, land tenure, Monroe Doctrine, moral hazard, New Urbanism, oil shock, open economy, purchasing power parity, rent-seeking, Ronald Reagan, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, upwardly mobile, Washington Consensus

Without the enforcement of rights, and without the necessary fiscal support for that set of provisions not to appear to the governed as a scheme, societies may swing back and forth between a widespread sense of anomie, at one extreme, and at the other a diffuse awareness that those rights should operate as a sort of free gift. These processes are more complex because they put us on notice, as Stephen Holmes and Cass R. Sunstein have shown very clearly, that rights have costs: In practice, rights become more than mere declarations only if they confer power on bodies whose decisions are legally binding. . . . As a general rule, unfortunate individuals who do not live under a government capable of taxing and delivering an effective remedy have no legal rights. Statelessness spells rightslessness. A legal right exists, in reality, only when and if it has budgetary costs.11 These words summarize the problems we mentioned above: political obligation, civic responsibility, and transparency in the path that extends from the taxpayer base to the administration in charge of public spending.

The fact that I enjoy a certain level of protection with respect to external threats does not mean that another individual enjoys a diminished level of defense; similarly, no individual can be excluded from the benefit of the common defense, as the preamble of the Argentine Constitution says, independent of whether he or she pays taxes. Juan J. Llach and María Marcela Harriague, “Un sistema impositivo para el desarrollo y la equidad,” paper presented at the Fundación Producir Conservando, Buenos Aires, June 2005, p. 45. Stephen Holmes and Cass R. Sunstein, The Cost of Rights: Why Liberty Depends on Taxes ( New York: Norton, 1999), p. 19. Ibid., p. 146. See ibid., p. 205. S. E. Finer, The History of Government, vol. 1: Ancient Monarchies and Empires (Oxford: Oxford University Press, 1999), p. 81. Alexander Hamilton, James Madison, and John Jay, The Federalist Papers, edited by Isaac Kramnick ( New York: Penguin, 1987), article XXIII. In this quote and those that follow, the articles corresponding to Hamilton are indicated in roman numerals.


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Free Speech: Ten Principles for a Connected World by Timothy Garton Ash

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A Declaration of the Independence of Cyberspace, Affordable Care Act / Obamacare, Andrew Keen, Apple II, Ayatollah Khomeini, battle of ideas, Berlin Wall, bitcoin, British Empire, Cass Sunstein, Chelsea Manning, citizen journalism, Clapham omnibus, colonial rule, crowdsourcing, David Attenborough, don't be evil, Edward Snowden, Etonian, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, Ferguson, Missouri, Filter Bubble, financial independence, Firefox, Galaxy Zoo, global village, index card, Internet Archive, invention of movable type, invention of writing, Jaron Lanier, jimmy wales, Julian Assange, Mark Zuckerberg, Marshall McLuhan, megacity, mutually assured destruction, national security letter, Netflix Prize, Nicholas Carr, obamacare, Peace of Westphalia, Peter Thiel, pre–internet, profit motive, RAND corporation, Ray Kurzweil, Ronald Reagan, semantic web, Silicon Valley, Simon Singh, Snapchat, social graph, Stephen Hawking, Steve Jobs, Steve Wozniak, The Death and Life of Great American Cities, The Wisdom of Crowds, Turing test, We are Anonymous. We are Legion, WikiLeaks, World Values Survey, Yom Kippur War

Imagine how Americans would have behaved, he said, if all three major US television news channels had been taken over for five years by the Ku Klux Klan.14 To be sure, the Yugoslav atrocities occurred in the 1990s, when there were still just a few dominant terrestrial television channels and the internet was in its infancy. The internet gives people the capacity to counterbalance systematic distortions by state-controlled or private near-monopoly media. With two clicks of your mouse, you can seek out contrary facts and alternative views. But how many people actually do? The American scholar Cass Sunstein was among the first to suggest that in practice the internet can contribute to what he calls group polarisation.15 Far from being confronted with a diversity of opposing views, as in an ideal liberal public sphere, people seek out and commune online with a like-minded minority. Jihadists read only jihadi websites, which link to each other; far-right extremists listen only to far-right extremists, atheists to atheists, flat-earthers to flat-earthers.

Here we again note the danger of people going off into their own little echo chambers, their ‘Daily Me’, where they only encounter opinions that reinforce their own prejudices, with facts—or factoids—to match. As the comedian John Oliver put it on the American satirical TV news programme ‘The Daily Show’: what people really want on the internet is ‘to have their own views pushed back at them for free’.63 A rather pretentious word for this echo-chamber effect is ‘homophily’, although that makes it sound vaguely like a sexual preference.64 Cass Sunstein, the American scholar who has warned most influentially about this danger, acknowledges that the evidence that people actually lust for homophily is far from conclusive.65 In a survey conducted for Oxford University’s Reuters Institute for the Study of Journalism in a number of developed countries in 2013 some two thirds of those asked said they preferred news that has ‘no particular point of view’, while the other third was divided between 11 percent seeking news that ‘challenges your view’ and 23 percent who wanted news that ‘shares your point of view’ (see Figure 13).

Emily Steel, ‘Datalogix Leads Path in Online Tracking’, Financial Times, 23 September 2012, http://www.ft.com/cms/s/2/8b9faecc-0584-11e2-9ebd-00144feabdc0.html#axzz3qv6zRoSp 143. Lanier 2011, 198 144. quoted in Pariser 2011, 147 145. see Feuz et al. 2011. Note that this was conducted before Google introduced default personalised search in December 2009 146. a term popularised by Pariser 2011 147. I take the term ‘information cocoon’ from the work of Cass Sunstein. For his definition, see Sunstein 2006, 9. More on the Daily Me under principle 4. On Breivik, see Borchgrevink 2013, 114–44, Seierstad 2015, 155–69, and Timothy Garton Ash, ‘The Internet Nourished Norway’s Killer, but Censorship Would Be Folly’, The Guardian, 29 July 2011, http://perma.cc/R825-99LQ 148. Mill 1991 [1859], 58. The text of chapter 2 is available online at http://perma.cc/7G6A-8J9F 149.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

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Albert Einstein, algorithmic trading, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, conceptual framework, corporate governance, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, stem cell, Steve Jobs, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy

He wants to do what works, not what conforms to any particular ideology or what pleases any particular constituency. His core belief is a belief in facts. Obama the empiricist is not the man who surged from behind to win the 2008 presidential election. That candidate was the Obama of soaring rhetoric, who promised hope and change. But the pragmatist has always been there. Writing in September 2008, several weeks before the presidential elections, Cass Sunstein, who has gone on to serve in the White House, had this to say about his candidate: “Above all, Obama’s form of pragmatism is heavily empirical; he wants to know what will work.” Word crunchers found that the president’s 2009 inaugural address was the first one to use the term “data” and only the second to mention “statistics.” That cognitive approach is one reason Obama attracted so much support, especially among the younger generation, on Wall Street and in Silicon Valley.

In a January 2012 speech about income inequality Alan B. Krueger, “The Rise and Consequences of Inequality in the United States,” remarks prepared for an event at the Center for American Progress, January 12, 2012. But the best explanation See Noam Scheiber, “The Audacity of Data: Barack Obama’s Surprisingly Non-Ideological Policy Shop,” The New Republic, March 12, 2008. “Above all, Obama’s form of pragmatism” Cass Sunstein, “The Empiricist Strikes Back: Obama’s Pragmatism Explained,” The New Republic, September 10, 2008. Word crunchers found that the president’s 2009 inaugural address Justin Wolfers, “The Empiricist-in-Chief,” Freakonomics blog, February 26, 2009. Elizabeth Billington was a diva See Elizabeth Billington’s entry in Philip H. Highfill, Kalman A. Burnim, and Edward A. Langhans, A Biographical Dictionary of Actors, Actresses, Musicians, Dancers, Managers and Other Stage Personnel in London, 1660–1800 (SIU Press, 1993), pp. 122–29.


pages: 494 words: 142,285

The Future of Ideas: The Fate of the Commons in a Connected World by Lawrence Lessig

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AltaVista, Andy Kessler, barriers to entry, business process, Cass Sunstein, computer age, dark matter, disintermediation, Erik Brynjolfsson, George Gilder, Hacker Ethic, Hedy Lamarr / George Antheil, Howard Rheingold, Hush-A-Phone, HyperCard, hypertext link, Innovator's Dilemma, invention of hypertext, inventory management, invisible hand, Jean Tirole, Jeff Bezos, Joseph Schumpeter, linked data, Menlo Park, Network effects, new economy, packet switching, price mechanism, profit maximization, RAND corporation, rent control, rent-seeking, RFC: Request For Comment, Richard Stallman, Richard Thaler, Ronald Coase, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, smart grid, software patent, spectrum auction, Steve Crocker, Steven Levy, Stewart Brand, Ted Nelson, Telecommunications Act of 1996, The Chicago School, transaction costs

.: Federal Trade Commission, May 2000), available at http://www.ftc.gov/reports/privacy2000/privacy2000. pdf. For a list of current legislation proposed, see current information on the status of pending privacy bills, available at http://www.epic.org/privacy/bill_track.html. 22 This is the argument made by Cass Sunstein, in Republic.com (Princeton, N.J.: Princeton University Press, 2001). As Sunstein argues, how groups are structured—what their composition is, how they deliberate—affects the results that deliberation produces. Cass Sunstein, Republic.com, 65-71. 23 The success rate of advertising is highly controversial. The general consensus is that direct snail mail advertising response rates are generally in the 1-3 percent range. Directed e-mail advertising campaigns may have response rates in the 10-15 percent range, though some estimates run as high as 25 percent.


pages: 452 words: 134,502

Hacking Politics: How Geeks, Progressives, the Tea Party, Gamers, Anarchists and Suits Teamed Up to Defeat SOPA and Save the Internet by David Moon, Patrick Ruffini, David Segal, Aaron Swartz, Lawrence Lessig, Cory Doctorow, Zoe Lofgren, Jamie Laurie, Ron Paul, Mike Masnick, Kim Dotcom, Tiffiniy Cheng, Alexis Ohanian, Nicole Powers, Josh Levy

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4chan, Affordable Care Act / Obamacare, Airbnb, Bernie Sanders, Burning Man, call centre, Cass Sunstein, collective bargaining, crony capitalism, crowdsourcing, don't be evil, facts on the ground, Firefox, hive mind, immigration reform, informal economy, jimmy wales, Kickstarter, liquidity trap, Mark Zuckerberg, obamacare, Occupy movement, offshore financial centre, Plutocrats, plutocrats, prisoner's dilemma, rent-seeking, Silicon Valley, Skype, technoutopianism, WikiLeaks, Y Combinator

And finally, we must ask: why does the U.S. government consistently seek to get involved in what is, clearly, a civil business model issue? 2 H acking P olitics : T L D R Ron Paul (former U.S. Representative for Texas’ 14th Congressional District) Indeed, important media and political figures in the U.S. (such as Secretary of State Hillary Clinton) frequently bemoan the Internet’s “lack of a gatekeeper.” University of Chicago law professor and former Obama Administration “regulatory czar” Cass Sunstein has suggested that the federal government create an office to debunk “conspiracy” theories on the Internet. Former President Bill Clinton, that champion of honesty, has even suggested the creation of an entirely new cabinet department devoted to “fact checking” the Internet! These proposals are done in the name of preventing the spread of factual errors, misinformation, and “conspiracy theories.”

American politicians condemn foreign governments like China for restricting access to the Internet, yet many of those same politicians support increased government control of the Internet here in America. Indeed, important media and political figures in the U.S. (such as Secretary of State Hillary Clinton) frequently bemoan the Internet’s “lack of a gatekeeper.” University of Chicago law professor and former Obama Administration “regulatory czar” Cass Sunstein has suggested that the federal government create an office to debunk “conspiracy” theories on the Internet. Former President Bill Clinton, that champion of honesty, has even suggested the creation of an entirely new cabinet department devoted to “fact checking” the Internet! These proposals are done in the name of preventing the spread of factual errors, misinformation, and “conspiracy theories.”

The Corporation: The Pathological Pursuit of Profit and Power by Joel Bakan

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Berlin Wall, Cass Sunstein, corporate governance, corporate personhood, corporate social responsibility, energy security, Exxon Valdez, IBM and the Holocaust, joint-stock company, laissez-faire capitalism, market fundamentalism, Naomi Klein, new economy, race to the bottom, Ralph Nader, Ronald Reagan, shareholder value, South Sea Bubble, The Wealth of Nations by Adam Smith, Triangle Shirtwaist Factory, urban sprawl

After this article was published, Alaska governor Tony Knowles vowed to increase funding for oversight of the oil fields. Critics said his plan would have little impact. See Jim Carlton, "Alaska Will Increase State Funding for Oversight of Local Oil Industry," The Wall Street Journal, December 13, 2001. Chapter 4: Democracy Ltd. 1. Samuel Rosenman, ed., The Public Papers and Addresses of Franklin D. Roosevelt, Volume Two: The Year of Crisis, 1933 (New York: Random House, 1938), as cited in Cass Sunstein, The Partial Constitution (Cambridge, Mass.: Harvard University Press, 1993), 57-58. Back Matter Page 15 NOT N S 185 2. The following account of this story is based primarily on Jules Archer, The Plot to Seize the White House (New York: Hawthorn Books, 1973). 3. Archer, The Plot, 21. 4. National Archives, "U.S. Strategic Bombing Surveys" 243/190/62- Box 696, August 14, 1944; Box 697, August 23, 1945; Box 946.


pages: 411 words: 80,925

What's Mine Is Yours: How Collaborative Consumption Is Changing the Way We Live by Rachel Botsman, Roo Rogers

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Airbnb, barriers to entry, Bernie Madoff, bike sharing scheme, Buckminster Fuller, carbon footprint, Cass Sunstein, collaborative consumption, collaborative economy, Community Supported Agriculture, credit crunch, crowdsourcing, dematerialisation, disintermediation, en.wikipedia.org, experimental economics, George Akerlof, global village, Hugh Fearnley-Whittingstall, information retrieval, iterative process, Kevin Kelly, Kickstarter, late fees, Mark Zuckerberg, market design, Menlo Park, Network effects, new economy, new new economy, out of africa, Parkinson's law, peer-to-peer lending, Ponzi scheme, pre–internet, recommendation engine, RFID, Richard Stallman, ride hailing / ride sharing, Robert Shiller, Robert Shiller, Ronald Coase, Search for Extraterrestrial Intelligence, SETI@home, Simon Kuznets, Skype, slashdot, smart grid, South of Market, San Francisco, Stewart Brand, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thorstein Veblen, Torches of Freedom, transaction costs, traveling salesman, ultimatum game, Victor Gruen, web of trust, women in the workforce, Zipcar

Norton & Company., 2007). Strasser, Susan. Waste and Want: A Social History of Trash (Henry Holt, 1999). Surowiecki, James. The Wisdom of Crowds (Anchor Books, 2005). Tapscott, Don, and Anthony D. Williams. Wikinomics: How Mass Collaboration Changes Everything (Portfolio, 2008). Thackara, John. In the Bubble: Designing in a Complex World (MIT Press, 2006). Thaler, Richard, and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness (Penguin, 2009). Tomasello, Michael. Why We Cooperate (MIT Press, 2009). Turner, Fred. From Counterculture to Cyberculture: Stewart Brand, the Whole Earth Network, and the Rise of Digital Utopianism (University of Chicago Press, 2006). Wilkinson, Richard, and Kate Pickett. The Spirit Level: Why Greater Equality Makes Societies Stronger (Bloomsbury Press, 2009).


pages: 236 words: 77,098

I Live in the Future & Here's How It Works: Why Your World, Work, and Brain Are Being Creatively Disrupted by Nick Bilton

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3D printing, 4chan, Albert Einstein, augmented reality, barriers to entry, book scanning, Cass Sunstein, death of newspapers, en.wikipedia.org, Internet of things, John Gruber, Marshall McLuhan, Nicholas Carr, recommendation engine, RFID, Saturday Night Live, Steve Jobs, Steven Pinker, Stewart Brand

But on the Web, we see drastically more opinions and viewpoints than we do in traditional media such as television and newsprint. A paper by Matthew Gentzkow and Jesse M. Shapiro published in April 2010 through the University of Chicago’s Booth School of Business argued that the Internet is not only breaking down barriers to different viewpoints but also driving us to see things that we never would have seen otherwise.6 This is a stark contrast to previous thinking. In 2001, Cass Sunstein, an American legal scholar, penned an article in the Boston Review, arguing that our communications were moving rapidly toward a world where “people restrict themselves to their own points of view—liberals watching and reading mostly or only liberals; moderates, moderates; conservatives, conservatives; Neo-Nazis, Neo-Nazis.” But online, Gentzkow and Shapiro found in studying Internet traffic, most news consumers get their information from multiple news outlets—even ones you don’t expect they would see: “Visitors of extreme conservative sites such as rushlimbaugh.com and glennbeck.com are more likely than a typical online news reader to have visited nytimes.com.


pages: 252 words: 70,424

The Self-Made Billionaire Effect: How Extreme Producers Create Massive Value by John Sviokla, Mitch Cohen

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Cass Sunstein, Colonization of Mars, Daniel Kahneman / Amos Tversky, Elon Musk, Frederick Winslow Taylor, game design, global supply chain, James Dyson, Jeff Bezos, John Harrison: Longitude, Jony Ive, loss aversion, Mark Zuckerberg, market design, paper trading, RAND corporation, randomized controlled trial, Richard Thaler, risk tolerance, self-driving car, Silicon Valley, smart meter, Steve Ballmer, Steve Jobs, Steve Wozniak, Tony Hsieh, Toyota Production System, young professional

John Paul DeJoria talks in detail about his early professional experiences working for other companies in the hair industry at http://money.cnn.com/2012/04/24/smallbusiness/paul_mitchell_dejoria.fortune/index.htm. 23. Bloomberg, Bloomberg by Bloomberg. 24. Unless otherwise noted, all details and quotes about T. Boone Pickens come from an in-person interview conducted by the authors on January 24, 2013. 25. Roger Fisher and William Ury, Getting to Yes (New York: Penguin Books, 1981). 26. Cass Sunstein, “Stay Alive: Imagine Yourself Decades from Now,” Bloomberg Businessweek, October 23, 2012, www.bloomberg.com/news/2012-10-23/stay-alive-imagine-yourself-decades-from-now.html. 27. Unless otherwise noted, all details and quotes from T. Boone Pickens come from an in-person interview with the authors conducted on January 24, 2013. 28. http://blogmaverick.com/. 29. Cuban, How to Win at the Sport of Business. 30.


pages: 296 words: 82,501

Stuffocation by James Wallman

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3D printing, Airbnb, back-to-the-land, Berlin Wall, big-box store, Black Swan, BRICs, carbon footprint, Cass Sunstein, clean water, collaborative consumption, crowdsourcing, David Brooks, Fall of the Berlin Wall, happiness index / gross national happiness, high net worth, income inequality, James Hargreaves, Joseph Schumpeter, Martin Wolf, McMansion, means of production, Nate Silver, Occupy movement, post-industrial society, Post-materialism, post-materialism, Richard Florida, Richard Thaler, sharing economy, Silicon Valley, Simon Kuznets, Skype, spinning jenny, The Signal and the Noise by Nate Silver, Thorstein Veblen, Tyler Cowen: Great Stagnation, World Values Survey, Zipcar

In summer, the temperatures are balmy too. They are not in winter. On average, 305 inches of snow falls.” Source: Taos Ski Valley Chamber of Commerce. “The way to make sense of this is, as behavioural psychologists have showed time and again, that people do not necessarily behave in a rational, logical way.” To understand this, read Daniel Kahneman, Thinking, Fast and Slow (New York: Penguin, 2011), and Richard Thaler and Cass Sunstein, Nudge (New York: Penguin, 2008). For the best visualization of how the two parts of the brain work together, read about the elephant and its rider in Jonathan Haidt, The Happiness Hypothesis: Putting Ancient Wisdom to the Test of Modern Science (London: Arrow, 2007). Not Simple, but Simpler Living To read a more complete account of how LeVally and Harris came down from the mountain, and struggled with that decision, read www.cagefreefamily.com.


pages: 291 words: 81,703

Average Is Over: Powering America Beyond the Age of the Great Stagnation by Tyler Cowen

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Amazon Mechanical Turk, Black Swan, brain emulation, Brownian motion, Cass Sunstein, choice architecture, complexity theory, computer age, computer vision, cosmological constant, crowdsourcing, dark matter, David Brooks, David Ricardo: comparative advantage, deliberate practice, Drosophila, en.wikipedia.org, endowment effect, epigenetics, Erik Brynjolfsson, eurozone crisis, experimental economics, Flynn Effect, Freestyle chess, full employment, future of work, game design, income inequality, industrial robot, informal economy, Isaac Newton, Khan Academy, labor-force participation, Loebner Prize, low skilled workers, manufacturing employment, Mark Zuckerberg, meta analysis, meta-analysis, microcredit, Narrative Science, Netflix Prize, Nicholas Carr, pattern recognition, Peter Thiel, randomized controlled trial, Ray Kurzweil, reshoring, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, Skype, statistical model, stem cell, Steve Jobs, Turing test, Tyler Cowen: Great Stagnation, upwardly mobile, Yogi Berra

That gap—between our perception of superior human intellect and its actual reality—is the sobering lesson of the programs. So what? Haven’t thousands of articles from psychology and behavioral economics outlined major weaknesses in human perception and decision-making abilities? There are the works of Daniel Kahneman, Dan Ariely, and many others. Haven’t we all heard about “nudge,” the concept so eloquently outlined by Cass Sunstein and Richard Thaler? In that worldview, experts know the biases of other decision makers and design the choice architecture to manipulate better human choices, such as changing the default options for which pension plan you will enroll in. Yes, but the chess result differs. Computer chess is pointing out some imperfections in the world’s experts, or you might say it is pointing out imperfections in those who, in other contexts, might be nudgers themselves.


pages: 272 words: 64,626

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs by Andy Kessler

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23andMe, Andy Kessler, bank run, barriers to entry, Berlin Wall, British Empire, business process, California gold rush, carbon footprint, Cass Sunstein, cloud computing, collateralized debt obligation, collective bargaining, computer age, disintermediation, Eugene Fama: efficient market hypothesis, fiat currency, Firefox, Fractional reserve banking, George Gilder, Gordon Gekko, greed is good, income inequality, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, libertarian paternalism, low skilled workers, Mark Zuckerberg, McMansion, Netflix Prize, packet switching, personalized medicine, pets.com, prediction markets, pre–internet, profit motive, race to the bottom, Richard Thaler, risk tolerance, risk-adjusted returns, Silicon Valley, six sigma, Skype, social graph, Steve Jobs, The Wealth of Nations by Adam Smith, transcontinental railway, transfer pricing, Yogi Berra

Hypnotists use anchors to get you to do things. But so do your parents and your priest or rabbi and certainly your boss. It makes sense. Who has any idea how to confront situations unless there is some anchor of honesty or morality or self-interest or just kindness that influences what we do? Entire wings of psychology departments exist to study this stuff. And now so do businesses and society. Richard Thaler and Cass Sunstein wrote Nudge, a book about how governments can act with “libertarian paternalism” to influence people’s behavior, to nudge them away from making poor decisions. Of course, who decides what is right or wrong, good or bad? Andrew Ferguson wrote an April 2010 piece in The Weekly Standard aptly titled “Nudge Nudge, Wink Wink,” pointing out that many of the favorite behavioral economics studies are done by grad students observing paid volunteer undergraduates doing trivial tasks, and arguing that this is hardly a basis for making largescale policy recommendations for a better society.


pages: 281 words: 79,958

Denialism: How Irrational Thinking Hinders Scientific Progress, Harms the Planet, and Threatens Our Lives by Michael Specter

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agricultural Revolution, Anne Wojcicki, Any sufficiently advanced technology is indistinguishable from magic, carbon footprint, Cass Sunstein, clean water, Drosophila, food miles, invention of gunpowder, out of africa, personalized medicine, placebo effect, profit motive, randomized controlled trial, Richard Feynman, Richard Feynman, Richard Feynman: Challenger O-ring, Ronald Reagan, Simon Singh, Skype, stem cell, Ted Kaczynski, the scientific method, Thomas Malthus, Upton Sinclair, X Prize

Fresco has written often and revealingly about issues of food security in the developing world. See particularly her report, last updated in 2007, Biomass, Food & Sustainability: Is There a Dilemma? (www.rabobank.com/content/images/Biomass_food_and_sustainability_tcm43-38549.pdf). There are many discussions of the “precautionary principle,” fear, and the idea of risk. Four stand out to me: Cass Sunstein’s Laws of Fear: Beyond the Precautionary Principle (Cambridge University Press, 2005); Lars Svendsen’s A Philosophy of Fear (Reaktion Books, 2008); Peter L. Bernstein’s Against the Gods: The Remarkable Story of Risk (Wiley, 1996); and Leonard Mlodinow’s The Drunkard’s Walk: How Randomness Rules Our Lives (Pantheon, 2008). 4. The Era of Echinacea The Cochrane Collaboration (www.cochrane.org), through its Database of Systematic Reviews, comes as close as possible to providing authoritative information in a field that needs it badly.


pages: 270 words: 79,992

The End of Big: How the Internet Makes David the New Goliath by Nicco Mele

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3D printing, 4chan, A Declaration of the Independence of Cyberspace, Airbnb, Amazon Web Services, Any sufficiently advanced technology is indistinguishable from magic, Apple's 1984 Super Bowl advert, barriers to entry, Berlin Wall, big-box store, bitcoin, business climate, call centre, Cass Sunstein, centralized clearinghouse, Chelsea Manning, citizen journalism, cloud computing, collaborative consumption, collaborative editing, crony capitalism, cross-subsidies, crowdsourcing, David Brooks, death of newspapers, Donald Trump, Douglas Engelbart, en.wikipedia.org, Exxon Valdez, Fall of the Berlin Wall, Filter Bubble, Firefox, Galaxy Zoo, global supply chain, Google Chrome, Gordon Gekko, Hacker Ethic, Jaron Lanier, Jeff Bezos, jimmy wales, Julian Assange, Kevin Kelly, Khan Academy, Kickstarter, Lean Startup, Mark Zuckerberg, minimum viable product, Mohammed Bouazizi, Mother of all demos, Narrative Science, new economy, Occupy movement, Peter Thiel, pirate software, Ronald Reagan, Ronald Reagan: Tear down this wall, sharing economy, Silicon Valley, Skype, social web, Steve Jobs, Steve Wozniak, Stewart Brand, Stuxnet, Ted Nelson, Telecommunications Act of 1996, telemarketer, The Wisdom of Crowds, transaction costs, uranium enrichment, Whole Earth Catalog, WikiLeaks, Zipcar

The sad specter of JFK’s press secretary Pierre Salinger brandishing a photo printed from the Internet ostensibly “proving” that a missile shot down TWA flight 800 comes to mind. A quick sample of Snopes.com “top 25” Internet rumors turns up provably false gems including that Starbucks has refused to send product to active duty Marines in Iraq, entering your PIN in reverse at any ATM will summon the police, and the spurious claim that automobile components emit cancer-causing benzene fumes. Weinberger has summarized Cass Sunstein’s impression of such rumors as “information cascades of false and harmful ideas … that not only gain velocity from the ease with which they can be forwarded but gain credibility by how frequently they are forwarded.”38 Individuals and groups on the Internet might believe in evolution, but they might also decide that Barack Obama is a Muslim, born outside the United States, and thus an illegitimate president.


pages: 398 words: 86,023

The Wikipedia Revolution: How a Bunch of Nobodies Created the World's Greatest Encyclopedia by Andrew Lih

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Albert Einstein, AltaVista, barriers to entry, Benjamin Mako Hill, c2.com, Cass Sunstein, citation needed, crowdsourcing, Debian, en.wikipedia.org, Firefox, Hacker Ethic, HyperCard, index card, Jane Jacobs, Jason Scott: textfiles.com, jimmy wales, Marshall McLuhan, Network effects, optical character recognition, Ralph Waldo Emerson, Richard Stallman, side project, Silicon Valley, Skype, slashdot, social software, Steve Jobs, The Death and Life of Great American Cities, The Wisdom of Crowds, urban planning, urban renewal, Vannevar Bush, wikimedia commons, Y2K

Credentials and central control, once considered the most important parameters for generating quality content, now yield to new terms: crowdsourcing, peer production, and open source intelligence. What was once only done top-down is now being viewed bottom-up. Books and essays have addressed the impact of projects freely driven by communities of scattered individuals: The Cathedral and the Bazaar by Eric S. Raymond, The Wisdom of Crowds by James Surowiecki, The Wealth of Networks by Yochai Benkler, The Long Tail by Chris Anderson, Infotopia by Cass R. Sun-stein, and Everything Is Miscellaneous by David Weinberger. This book, however, goes in with a deeper focus on Wikipedia, explaining how it evolved to become the phenomenon it is today, and showing the fascinating community behind the articles and the unique online culture the site has fostered. While most people experience Wikipedia in their mother tongue, the impact of the site in other languages reveals a fascinating world of diverse online cultural norms.


pages: 296 words: 87,299

Portfolios of the poor: how the world's poor live on $2 a day by Daryl Collins, Jonathan Morduch, Stuart Rutherford

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Cass Sunstein, clean water, failed state, financial innovation, financial intermediation, income per capita, informal economy, job automation, M-Pesa, mental accounting, microcredit, moral hazard, profit motive, purchasing power parity, RAND corporation, randomized controlled trial, The Fortune at the Bottom of the Pyramid, transaction costs

Working Paper 56, Finance and Development Research Programme, Institute for Development Policy and Management, Manchester University. Stiglitz, Joseph. 2005. Globalization and Its Discontents. New York: Norton. Swibel, Matthew, and Forbes Staff. 2007. “The world’s top 50 microfinance institutions.” Forbes, December 20. Available at www.forbes.com. Thaler, Richard H. 1990. “Anomalies: Saving, fungibility and mental accounts.” Journal of Economic Perspectives 4 (1): 193–205. Thaler, Richard H., and Cass R. Sunstein. 2008. Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven: Yale University Press. Thomas, Duncan. 1990. “Intra-household resource allocation: An inferential approach.” Journal of Human Resources 25 (4): 635–64. Thomas, Duncan. 1994. “Like father, like son or like mother, like daughter: Parental education and child health.” Journal of Human Resources 29 (4): 950–89. Townsend, Robert M. 1994.


pages: 381 words: 101,559

Currency Wars: The Making of the Next Gobal Crisis by James Rickards

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Asian financial crisis, bank run, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, borderless world, Bretton Woods, BRICs, British Empire, business climate, capital controls, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, Deng Xiaoping, diversification, diversified portfolio, Fall of the Berlin Wall, family office, financial innovation, floating exchange rates, full employment, game design, German hyperinflation, Gini coefficient, global rebalancing, global reserve currency, high net worth, income inequality, interest rate derivative, Kenneth Rogoff, labour mobility, laissez-faire capitalism, liquidity trap, Long Term Capital Management, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, money: store of value / unit of account / medium of exchange, Network effects, New Journalism, Nixon shock, offshore financial centre, oil shock, open economy, paradox of thrift, price mechanism, price stability, private sector deleveraging, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, Ronald Reagan, sovereign wealth fund, special drawing rights, special economic zone, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, time value of money, too big to fail, value at risk, War on Poverty, Washington Consensus

Taylor, John B. Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis. Stanford: Hoover Institution Press, 2009. ———. Global Financial Warriors: The Untold Story of International Finance in the Post-9/11 World. New York: Norton, 2007. Temin, Peter. Lessons from the Great Depression. Cambridge: MIT Press, 1989. Thaler, Richard H., and Cass R. Sunstein. Nudge: Improving Decisions about Health, Wealth, and Happiness. New York: Penguin, 2009. Thompson, J.M.T., and H. B. Stewart. Nonlinear Dynamics and Chaos, 2nd ed. New York: Wiley, 2002. Tilden, Freeman. A World in Debt. Toronto: Friedberg Commodity Management, 1983. Von Mises, Ludwig. The Theory of Money and Credit. Indianapolis: Liberty Fund, 1980. Von Mises, Ludwig, et al. The Austrian Theory of the Trade Cycle and Other Essays.


pages: 316 words: 105,384

Moneyball by Michael Lewis

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Cass Sunstein, high batting average, placebo effect, RAND corporation, Richard Thaler, systematic trading, the scientific method, upwardly mobile

—Rich Karlgaard, Forbes “An extraordinary job of reporting and writing.” —Mark Emmons, San Jose Mercury News “Anyone who cares about baseball must read it.” —Cathleen McGuigan, Newsweek “Michael Lewis has written what might be the best book ever about baseball.” —Steve Weinberg, Orlando Sentinel “Lewis has a wonderful story to tell, and he tells it wonderfully.” —Richard H. Thaler and Cass R. Sunstein, The New Republic “[Lewis’s] descriptive writing allows Beane and the others in the lively cast of baseball characters to come alive.” —Publishers Weekly “Lewis’s book is a thoroughly modern, entertaining…even revolutionary look at the way the game has changed and is changing…guaranteed to ruffle a lot of feathers.” —Brad Zellar, Minneapolis Star Tribune “This book is as much for people who take joy in new ideas as in games.”


pages: 327 words: 103,336

Everything Is Obvious: *Once You Know the Answer by Duncan J. Watts

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affirmative action, Albert Einstein, Amazon Mechanical Turk, Black Swan, butterfly effect, Carmen Reinhart, Cass Sunstein, clockwork universe, cognitive dissonance, collapse of Lehman Brothers, complexity theory, correlation does not imply causation, crowdsourcing, death of newspapers, discovery of DNA, East Village, easy for humans, difficult for computers, edge city, en.wikipedia.org, Erik Brynjolfsson, framing effect, Geoffrey West, Santa Fe Institute, happiness index / gross national happiness, high batting average, hindsight bias, illegal immigration, interest rate swap, invention of the printing press, invention of the telescope, invisible hand, Isaac Newton, Jane Jacobs, Jeff Bezos, Joseph Schumpeter, Kenneth Rogoff, lake wobegon effect, Long Term Capital Management, loss aversion, medical malpractice, meta analysis, meta-analysis, Milgram experiment, natural language processing, Netflix Prize, Network effects, oil shock, packet switching, pattern recognition, performance metric, phenotype, planetary scale, prediction markets, pre–internet, RAND corporation, random walk, RFID, school choice, Silicon Valley, statistical model, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, The Death and Life of Great American Cities, the scientific method, The Wisdom of Crowds, too big to fail, Toyota Production System, ultimatum game, urban planning, Vincenzo Peruggia: Mona Lisa, Watson beat the top human players on Jeopardy!, X Prize

Overlapping Experiment Infrastructure: More, Better, Faster Experimentation. 16th ACMSIGKDD International Conference on Knowledge Discovery abd Data Mining, Washington, DC. ACM Press. Taylor, Carl C. 1947. “Sociology and Common Sense.” American Sociological Review 12 (1):1–9. Tetlock, Philip E. 2005. Expert Political Judgment: How Good Is It? How Can We Know? Princeton, NJ: Princeton University Press. Thaler, Richard H., and Cass R. Sunstein. 2008. Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven, CT: Yale University Press. Thompson, Clive. 2010. “What Is I.B.M.’s Watson?” New York Times Magazine (June 20):30–45. Thorndike, Edward L. 1920. “A Constant Error on Psychological Rating.” Journal of Applied Psychology 4:25–9. Tomlinson, Brian, and Clive Cockram. 2003. “SARS: Experience at Prince of Wales Hospital, Hong Kong.”


pages: 384 words: 89,250

Made to Break: Technology and Obsolescence in America by Giles Slade

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Albert Einstein, Alexey Pajitnov wrote Tetris, Apple's 1984 Super Bowl advert, Buckminster Fuller, Cass Sunstein, Douglas Engelbart, global village, housing crisis, indoor plumbing, invention of radio, Joseph Schumpeter, Marshall McLuhan, Mikhail Gorbachev, more computing power than Apollo, mutually assured destruction, Ralph Nader, rent control, Ronald Reagan, Silicon Valley, Steve Jobs, the market place, the medium is the message, Thorstein Veblen, unemployed young men, upwardly mobile, Vladimir Vetrov: Farewell Dossier, women in the workforce

In The Romantic Ethic, p. 60, Campbell points out that this view is suggested by Edward O. Laumann and James S. House, “Living Room Styles and Social Attributes: The Patterning of Material Artifacts in a Modern Urban Community,”in H. H.Kassarjaian and T. S.Robertson, eds., Perspectives in Consumer Behavior (Glenview, IL: Scott Foresman, 1973), pp. 430–440. 12. Campbell, “The Desire for the New,” p. 56. 13. Ibid., pp. 56–57. 14. Cass R. Sunstein, Why Societies Need Dissent (Cambridge: Harvard University Press, 2003), pp. 10–11. 15. Ling, Mobile Connection, p. 6, n.8. 16. Ibid., pp. 11, 14–15,86. 17. Ibid., p. 96. 18. Ibid., p. 104. 19. Ibid., pp. 97, 15. 20. Paul Levinson, Cellphone: The Story of the World’s Most Mobile Medium and How It Has Transformed Everything (New York: Palgrave Macmillan, 2004), p. 127. Patricia Riedman, “U.S.


pages: 342 words: 94,762

Wait: The Art and Science of Delay by Frank Partnoy

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algorithmic trading, Atul Gawande, Bernie Madoff, Black Swan, blood diamonds, Cass Sunstein, Checklist Manifesto, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, Daniel Kahneman / Amos Tversky, delayed gratification, Flash crash, Frederick Winslow Taylor, George Akerlof, Google Earth, Hernando de Soto, High speed trading, impulse control, income inequality, Isaac Newton, Long Term Capital Management, Menlo Park, mental accounting, meta analysis, meta-analysis, Nick Leeson, paper trading, Paul Graham, payday loans, Ralph Nader, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Saturday Night Live, six sigma, Spread Networks laid a new fibre optics cable between New York and Chicago, statistical model, Steve Jobs, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, upwardly mobile, Walter Mischel

III(15). 53. The psychologist Piers Steel says this kind of planning can be helpful: “Impulsive people find it difficult to plan work ahead of time and even after they start, they are easily distracted. Procrastination inevitably follows.” Steel, The Procrastination Equation, p. 14. 54. Bertrand and Morse, Information Disclosure, Cognitive Biases, and Payday Borrowing. 55. Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (Yale University Press, 2008). 56. See Henri C. Schouwenburg, Clarry H. Lay, and Timothy A. Pychyl, Counseling the Procrastinator in Academic Settings (American Psychological Association, 2004); Henri C. Schouwenburg and JanTjeerd Groenewoud, “Study Motivation Under Social Temptation: Effects of Trait Procrastination,” Personality and Individual Differences 30(2, 2001): 299–340.


pages: 305 words: 89,103

Scarcity: The True Cost of Not Having Enough by Sendhil Mullainathan

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American Society of Civil Engineers: Report Card, Andrei Shleifer, Cass Sunstein, clean water, computer vision, delayed gratification, double entry bookkeeping, Exxon Valdez, fault tolerance, happiness index / gross national happiness, impulse control, indoor plumbing, inventory management, knowledge worker, late fees, linear programming, mental accounting, microcredit, p-value, payday loans, purchasing power parity, randomized controlled trial, Report Card for America’s Infrastructure, Richard Thaler, Saturday Night Live, Walter Mischel, Yogi Berra

Evidence from a Randomized Evaluation” (MIT working paper, 2010). do not undo hard work: Some of this argument can be made without resort to the psychology of scarcity. Much of policy design makes the presumption of rationality. Simply allowing for people to have natural psychological limitations already can improve policy making. This view has recently been wonderfully articulated by Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness (New Haven, Conn.: Yale University Press, 2008). See also Eldar Shafir, ed., The Behavioral Foundations of Public Policy (Princeton, N.J.: Princeton University Press, 2012). We have previously used this logic to argue that we can better understand poverty just by understanding that the poor can have the same psychological quirks that affect everyone else: Marianne Bertrand, Sendhil Mullainathan, and Eldar Shafir, “A Behavioral-Economics View of Poverty,” American Economic Review (2004): 419–23.


pages: 383 words: 108,266

Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions by Dan Ariely

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air freight, Al Roth, Bernie Madoff, Burning Man, butterfly effect, Cass Sunstein, collateralized debt obligation, computer vision, corporate governance, credit crunch, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, endowment effect, financial innovation, fudge factor, Gordon Gekko, greed is good, housing crisis, invisible hand, lake wobegon effect, late fees, loss aversion, market bubble, Murray Gell-Mann, payday loans, placebo effect, price anchoring, Richard Thaler, second-price auction, Silicon Valley, Skype, The Wealth of Nations by Adam Smith, Upton Sinclair

Constantine Sedikides, Dan Ariely, and Nils Olsen, “Contextual and Procedural Determinants of Partner Selection: On Asymmetric Dominance and Prominence,” Social Cognition (1999). Chapter 2: The Fallacy of Supply and Demand BASED ON Dan Ariely, George Loewenstein, and Drazen Prelec, “Coherent Arbitrariness: Stable Demand Curves without Stable Preferences,” Quarterly Journal of Economics (2003). Dan Ariely, George Loewenstein, and Drazen Prelec, “Tom Sawyer and the Construction of Value,” Journal of Economic Behavior and Organization (2006). RELATED READINGS Cass R. Sunstein, Daniel Kahneman, David Schkade, and Ilana Ritov, “Predictably Incoherent Judgments,” Stanford Law Review (2002). Uri Simonsohn, “New Yorkers Commute More Everywhere: Contrast Effects in the Field,” Review of Economics and Statistics (2006). Uri Simonsohn and George Loewenstein, “Mistake #37: The Impact of Previously Faced Prices on Housing Demand,” Economic Journal (2006). Chapter 3: The Cost of Zero Cost BASED ON Kristina Shampanier, Nina Mazar, and Dan Ariely, “How Small Is Zero Price?


pages: 580 words: 168,476

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

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affirmative action, Affordable Care Act / Obamacare, airline deregulation, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, income inequality, income per capita, indoor plumbing, inflation targeting, invisible hand, John Harrison: Longitude, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, London Interbank Offered Rate, lone genius, low skilled workers, Mark Zuckerberg, market bubble, market fundamentalism, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, obamacare, offshore financial centre, paper trading, patent troll, payday loans, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, women in the workforce

See discussions of anchoring and framing effects on judgments and preferences in Daniel Kahneman, Paul Slovic, and Amos Tversky, eds., Judgment under Uncertainty: Heuristics and Biases (Cambridge: Cambridge University Press, 1982); and Daniel Kahneman and Amos Tversky, eds., Choices, Values and Frames (New York: Cambridge University Press, 2000). For a popular and recent discussion, see Daniel Kahneman, Thinking, Fast and Slow (New York: Farrar, Straus and Giroux, 2011); and Richard Thaler and Cass Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness (New Haven and London: Yale University Press, 2008). 12. See the discussion of framing effects in the case of the introduction of lifecycle funds in U.S. 401(k) plans in Ning Tang, Olivia S. Mitchell, Gary R. Mottola, and Stephen P. Utkus, “The Efficiency of Sponsor and Participant Portfolio Choices in 401(k) Plans,” Journal of Public Economics 84, nos. 11–12 (2010): 1073–85; and Olivia S.

An individual who wants to be reinforced in his conservative views can turn to Fox News. The views to which he is exposed have been preselected to conform to his beliefs. The consequence is the risk of further polarization of beliefs. The fact that beliefs about inequality are thus so polarized has obvious implications for the ability of our society to deal with the problem on the basis of a national consensus. For a discussion of these issues, see, e.g., Cass Sunstein, Infotopia: How Many Minds Produce Knowledge (New York: Oxford University Press, 2006), where he suggests that people are trapped in “information cocoons,” shielded from information at odds with their preconceptions. Charles Lord and coauthors carried out important research on belief polarization: they showed research results on the death penalty to two groups of people, pro– and anti–capital punishment.


pages: 662 words: 180,546

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown by Philip Mirowski

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Andrei Shleifer, asset-backed security, bank run, barriers to entry, Basel III, Berlin Wall, Bernie Madoff, Bernie Sanders, Black Swan, blue-collar work, Bretton Woods, Brownian motion, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, facts on the ground, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, full employment, George Akerlof, Goldman Sachs: Vampire Squid, Hernando de Soto, housing crisis, Hyman Minsky, illegal immigration, income inequality, incomplete markets, invisible hand, Jean Tirole, joint-stock company, Kenneth Rogoff, knowledge economy, l'esprit de l'escalier, labor-force participation, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, payday loans, Ponzi scheme, precariat, prediction markets, price mechanism, profit motive, quantitative easing, race to the bottom, random walk, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, savings glut, school choice, sealed-bid auction, Silicon Valley, South Sea Bubble, Steven Levy, technoutopianism, The Chicago School, The Great Moderation, the map is not the territory, The Myth of the Rational Market, the scientific method, The Wisdom of Crowds, theory of mind, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, Tobin tax, too big to fail, transaction costs, War on Poverty, Washington Consensus, We are the 99%, working poor

[it is] built on the premise that not only mainstream methods are great, but so too are mainstream economic assumptions.”51 So wherever did the vast bulk of lay commentators derive the unfounded impression that behavioral economics was poised to deliver us from the previous errors of orthodoxy when it came to the economic crisis? Partly, it was the fault of a few high-profile economists such as Shiller, Akerlof, Krugman, and Lo, whose “behavioral” credentials within the community were, shall we say, less than robust. Partly it was due to some political appointees in the Obama administration such as Cass Sunstein who claimed (falsely, as it turned out) that behavioral economics could be used to “nudge” people into behaving more like neoclassical agents.52 Partly, it was the fault of a few bona fide behavioral finance economists (like Andrei Shleifer), who quickly whipped up a couple of toy models after the crisis, purportedly demonstrating that all agents are beset with a peculiar character flaw that causes them to ignore unlikely disastrous events, causing them to whipsaw around the true fundamental determinants of asset prices as defined by the orthodox rational-expectations model, in the face of securitization and tranching.53 But it also emanated from the vast scrum of journalists, primed to believe that once economists would just abjure “rational choice theories,” then all would become revealed.

This explains why neoliberals tend to diverge from their predecessors: “most nineteenth century liberals were guided by a naïve overconfidence in what mere communication of knowledge could achieve” (p. 377). 147 Hayek, The Road to Serfdom, pp. 204–5. 148 Hayek reveled in the tough-minded stance of the scholar who disparaged any recourse to the Third Way, most notoriously in his denunciation of the welfare state as just the slippery “Road to Serfdom.” This sets him apart from his contemporary figures like Walter Lippmann, or Keynes, or their modern epigones like Cass Sunstein or Joseph Stiglitz. 149 Hayek, The Constitution of Liberty, p. 377, 112, 110, 22. 150 Schneider, “The Role of the Category of Ignorance in Sociological Theory,” p. 498. 151 Ibid., p. 500. 152 Hayek entertained the possibility of blaming “the engineers” for the frustration of the neoliberal project in his Counterrevolution of Science (1952), but subsequently came around to the position that it was politically unwise to demonize such a powerful constituency in the twentieth-century economy.


pages: 297 words: 103,910

Free culture: how big media uses technology and the law to lock down culture and control creativity by Lawrence Lessig

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Brewster Kahle, Cass Sunstein, future of journalism, George Akerlof, Innovator's Dilemma, Internet Archive, invention of the printing press, Kevin Kelly, knowledge economy, Louis Daguerre, new economy, prediction markets, prisoner's dilemma, profit motive, rent-seeking, Richard Florida, Richard Stallman, Ronald Coase, Ronald Reagan, Saturday Night Live, Silicon Valley, software patent, transaction costs

online, 4 November 2000, available at link #8; "Timeline," 22 November 2000, available at link #9. [38] Interview with Daley and Barish. [39] Ibid. [40] See, for example, Alexis de Tocqueville, Democracy in America, bk. 1, trans. Henry Reeve (New York: Bantam Books, 2000), ch. 16. [41] Bruce Ackerman and James Fishkin, "Deliberation Day," Journal of Political Philosophy 10 (2) (2002): 129. [42] Cass Sunstein, Republic.com (Princeton: Princeton University Press, 2001), 65-80, 175, 182, 183, 192. [43] Noah Shachtman, "With Incessant Postings, a Pundit Stirs the Pot," New York Times, 16 January 2003, G5. [44] Telephone interview with David Winer, 16 April 2003. [45] John Schwartz, "Loss of the Shuttle: The Internet; A Wealth of Information Online," New York Times, 2 February 2003, A28; Staci D. Kramer, "Shuttle Disaster Coverage Mixed, but Strong Overall," Online Journalism Review, 2 February 2003, available at link #10


pages: 422 words: 113,525

Whole Earth Discipline: An Ecopragmatist Manifesto by Stewart Brand

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agricultural Revolution, back-to-the-land, biofilm, borderless world, Buckminster Fuller, business process, Cass Sunstein, clean water, Community Supported Agriculture, conceptual framework, Danny Hillis, dark matter, decarbonisation, demographic dividend, demographic transition, Elon Musk, Exxon Valdez, failed state, Geoffrey West, Santa Fe Institute, glass ceiling, Google Earth, Hans Rosling, Hernando de Soto, informal economy, interchangeable parts, invention of agriculture, invention of the steam engine, Jane Jacobs, jimmy wales, Kevin Kelly, Kibera, land tenure, M-Pesa, Marshall McLuhan, megacity, microbiome, New Urbanism, out of africa, Paul Graham, peak oil, Richard Florida, Ronald Reagan, Silicon Valley, smart grid, stem cell, Stewart Brand, The Fortune at the Bottom of the Pyramid, Thomas Malthus, University of East Anglia, uranium enrichment, urban renewal, Whole Earth Catalog, Whole Earth Review, working-age population, Y2K

” • The precautionary principle has been so widely recognized as a barrier to progress that, according to England’s Prospect magazine, in 2006, the House of Commons select committee on science and technology recommended that the term “should not be used and should ‘cease to be included in policy guidance.’ ” Various attempts have been made to draft a substitute—the proactive principle (Max More and Kevin Kelly), the precautionary approach (Nuffield Council on Bioethics), the reversibility principle (Jamais Cascio), and the anti-catastrophe principle—that one from an excellent book, Laws of Fear: Beyond the Precautionary Principle (2005), by behavioral economist Cass Sunstein, who now heads Obama’s Office of Information and Regulatory Affairs. I would not replace the precautionary principle. Its name and founding idea are too good to lose. But I would shift its bias away from inaction and toward action with a supplement—the vigilance principle, whose entire text is: “Eternal vigilance is the price of liberty.” The precautionary principle by itself seeks strictly to stop or slow new things, even in the face of urgent need.


pages: 459 words: 103,153

Adapt: Why Success Always Starts With Failure by Tim Harford

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Andrew Wiles, banking crisis, Basel III, Berlin Wall, Bernie Madoff, Black Swan, car-free, carbon footprint, Cass Sunstein, charter city, Clayton Christensen, clean water, cloud computing, cognitive dissonance, complexity theory, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, Dava Sobel, Deep Water Horizon, Deng Xiaoping, double entry bookkeeping, Edmond Halley, en.wikipedia.org, Erik Brynjolfsson, experimental subject, Fall of the Berlin Wall, Fermat's Last Theorem, Firefox, food miles, Gerolamo Cardano, global supply chain, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, Jarndyce and Jarndyce, John Harrison: Longitude, knowledge worker, loose coupling, Martin Wolf, Menlo Park, Mikhail Gorbachev, mutually assured destruction, Netflix Prize, New Urbanism, Nick Leeson, PageRank, Piper Alpha, profit motive, Richard Florida, Richard Thaler, rolodex, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, South China Sea, special economic zone, spectrum auction, Steve Jobs, supply-chain management, the market place, The Wisdom of Crowds, too big to fail, trade route, Tyler Cowen: Great Stagnation, web application, X Prize

The root cause of the loophole problem is something we also met with the Merton Rule: the crucial difference between the letter and the spirit of the law. This point was hammered home to me over a world-saving coffee (I had an espresso; he had a soya cappuccino) with the environmental economist Prashant Vaze, author of The Economic Environmentalist. Vaze was waxing lyrical about the concept of the ‘nudge’, proposed by the behavioural economist Richard Thaler and polymath legal scholar Cass Sunstein. The idea is that subtle influences could be used to direct thoughtless behaviour, while preserving individual rights consciously to choose. For example, incandescent light bulbs – which are a very wasteful way to produce light, but preferred by people with partial sight and certain light-sensitive skin conditions – could be removed from open shelves, but available from storage on request. Nobody would buy such a light bulb out of carelessness, but someone who really wanted an incandescent bulb could seek one out without too much trouble.


pages: 375 words: 105,067

Pound Foolish: Exposing the Dark Side of the Personal Finance Industry by Helaine Olen

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asset allocation, Bernie Madoff, Cass Sunstein, Credit Default Swap, David Brooks, delayed gratification, diversification, diversified portfolio, Donald Trump, Elliott wave, en.wikipedia.org, estate planning, financial innovation, Flash crash, game design, greed is good, high net worth, impulse control, income inequality, index fund, London Whale, Mark Zuckerberg, mortgage debt, oil shock, payday loans, pension reform, Ponzi scheme, quantitative easing, Ralph Nader, RAND corporation, random walk, Richard Thaler, Ronald Reagan, Saturday Night Live, too big to fail, transaction costs, Unsafe at Any Speed, upwardly mobile, Vanguard fund, wage slave, women in the workforce, working poor, éminence grise

“Fee transparency could create”: Robert Powell, “401(k) Changes Give Savers a Brighter Future,” MarketWatch, December 16, 2010, http://articles.marketwatch.com/2010-12-16/finance/30737091_1_fee-disclosure-plan-sponsors-fees-and-expenses. As a remedy: “Should Policies Nudge People to Save?” Wall Street Journal Econblog (Richard Thaler comments), May 25, 2007, http://online.wsj.com/article/SB117977357721809835.html; Richard Thaler and Cass Sunstein, Nudge: Improving Decisions about Health, Wealth and Happiness (New Haven: Yale University Press, 2008); African Americans: Diversity and Defined Contribution Plans, The Role of Automatic Plan Features, Vanguard study, September 12, 2011, https://institutional.vanguard.com/VGApp/iip/site/institutional/researchcommentary/article/RetResDiversity; take-up increased: Regina Lewis, “The Pros and Cons of Automatic 401(k) Enrollment,” DailyFinance, July 11, 2011, http://www.dailyfinance.com/2011/07/11/401k-automatic-enrollment-pros-cons/.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

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accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, disintermediation, Edward Glaeser, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, Hyman Minsky, If something cannot go on forever, it will stop, illegal immigration, income inequality, income per capita, invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey

Blueprint for a Safer Planet: How to Manage Climate Change and Create a New Era of Progress and Prosperity. London: The Bodley Head. Stevenson, Betsey, and Justin Wolfers. 2008. “Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox.” Brookings Papers on Economic Activity 1 (spring), pp. 1–102. Stoker, Gerry. 2006. Why Politics Matters. London: Palgrave Macmillan. Sunstein, Cass R. 2007. Republic.com 2.0. Princeton: Princeton University Press. Thaler, Richard, and Cass Sunstein. 2008. Nudge: Improving Decisions about Health, Wealth and Happiness. New York: Penguin. Trajtenberg, Manuel. 1989. “Welfare Analysis of Product Innovations, with an Application to Computed Tomography Scanners.” Journal of Political Economy 97:2, pp. 444–79. Trivers, Robert L. 1971. “The Evolution of Reciprocal Altruism.” Quarterly Review of Biology 46 (March), pp. 35–57. Trollope, Anthony. 1875.


pages: 317 words: 87,566

The Happiness Industry: How the Government and Big Business Sold Us Well-Being by William Davies

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1960s counterculture, Airbnb, business intelligence, Cass Sunstein, corporate governance, dematerialisation, experimental subject, Exxon Valdez, Frederick Winslow Taylor, Gini coefficient, income inequality, invisible hand, joint-stock company, market bubble, mental accounting, nudge unit, profit maximization, randomized controlled trial, Richard Thaler, road to serfdom, Ronald Coase, Ronald Reagan, science of happiness, sentiment analysis, sharing economy, Slavoj Žižek, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, Steve Jobs, The Chicago School, The Spirit Level, theory of mind, urban planning

Norton & Company, 2013, 297. 7Mark Harrington, ‘How Social Intelligence Is Revolutionizing Market Research’, business2community.com, 20 June 2013. 8‘Carol Matlack, ‘Tesco’s In-Store Ads Watch You – and It Looks Like You Need a Coffee’, businessweek.com, 4 November 2013. 9Mark Bright, ‘Facial Recognition Ads Planned for Manchester Streets’, salfordonline.com, 28 May 2013. 10Rob Matheson, ‘A Market for Emotions’, newsoffice.mit.edu, 31 July 2014. 11James Armstrong, ‘Toronto May Soon Track Residents’ Online Sentiments About City Services’, globalnews.ca, 17 June 2013 ; Sabrina Rodak, ‘Sentiment Analysis: An Emerging Trend That Could Give Hospitals an Edge in Patient Experience’, beckershospitalreview.com, 28 June 2013. 12Dana Liebelson, ‘Meet the Data Brokers Who Help Corporations Sell Your Digital Life’, Mother Jones, November/December 2013. 13Adam Kramer, Jamie Guillory and Jeffrey Hancock, ‘Experimental Evidence of Massive-Scale Emotional Contagion Through Social Networks’, Proceedings of the National Academy of the Sciences 111: 24, 2014. 14Robinson Meyer, ‘Everything We Know About Facebook’s Secret Mood Manipulation Experiment’, theatlantic.com, 28 June 2014. 15Ernesto Ramirez, ‘How to Measure Mood Using Quantified Self Tools’, quantifiedself.com, 17 January 2013. 16Matthew Killingsworth and Daniel Gilbert, ‘A Wandering Mind Is an Unhappy Mind’, Science 330: 6006, 2010. 17Mount Sinai Medical Center, ‘Neuroimaging May Offer New Way to Diagnose Bipolar Disorder’, sciencedaily.com, 5 June, 2013; Lucy McKeon, ‘The Neuroscience of Happiness’, salon.com, 28 January 2012. 18Steve Lohr, ‘Huge New Development Project Becomes a Data Science Lab’, bits.blogs.nytimes.com, 14 April 2014. 19Shiv Malik, ‘Jobseekers Made to Carry Out Bogus Psychometric Tests’, theguardian.com, 30 April 2013. 20Randy Rieland, ‘Think You’re Doing a Good Job? Not If the Algorithms Say You’re Not’, smithsonianmag.com, 27 August, 2013. 21Cass Sunstein, ‘Shopping Made Psychic’, nytimes.com, 20 August 2014. 22Rian Boden, ‘Alfa-Bank Uses Activity Trackers to Offer Higher Interest Rates to Customers Who Exercise’, nfcworld.com, 30 May 2014. 23‘Moscow Subway Station Lets Passengers Pay Fare in Squats’, forbes.com, 14 November 2013. 8 Critical Animals 1Lizzie Davies and Simon Rogers, ‘Wellbeing Index Points Way to Bliss: Live on a Remote Island, and Don’t Work’, theguardian.com, 24 July 2012. 2Cari Nierenberg, ‘A Green Scene Sparks Our Creativity’, bodyodd.nbcnews.com, 28 March 2012. 3In Spring 2011, the British Psychological Society published an open letter, authored by clinical psychologists, criticizing the DSM-V. 4See Richard Wilkinson and Kate Pickett, The Spirit Level. 5One calculation produced by the British happiness economist Andrew Oswald suggests that an unemployed person would need benefits of £250,000 a year to compensate them for the negative psychological impact of unemployment. 6Sally Dickerson and Margaret Kemeny, ‘Acute Stressors and Cortisol Responses: A Theoretical Integration and Synthesis of Laboratory Research’, Psychological Bulletin 130: 3, 2004; Robert Karasek and Tores Theorell, Healthy Work: Stress, Productivity, and the Reconstruction of Working Life, New York: Basic Books, 1992. 7Ronald McQuaid et al., ‘Fit for Work: Health and Wellbeing of Employees in Employee Owned Businesses’, employeeownership.co.uk, 2012. 8David Stuckler and Sanjay Basu, The Body Economic: Why Austerity Kills, New York: HarperCollins, 2013. 9See the CIPD Absence Management Annual Survey, cipd.co.uk, 2013. 10Tim Kasser and Aaron Ahuvia, ‘Materialistic Values and Well-Being in Business Students’, European Journal of Social Psychology 32: 1, 2002. 11Miriam Tatzel, M.


pages: 377 words: 110,427

The Boy Who Could Change the World: The Writings of Aaron Swartz by Aaron Swartz, Lawrence Lessig

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affirmative action, Alfred Russel Wallace, Benjamin Mako Hill, bitcoin, Bonfire of the Vanities, Brewster Kahle, Cass Sunstein, deliberate practice, Donald Trump, failed state, fear of failure, Firefox, full employment, Howard Zinn, index card, invisible hand, John Gruber, Lean Startup, More Guns, Less Crime, post scarcity, Richard Feynman, Richard Feynman, Richard Stallman, Ronald Reagan, school vouchers, semantic web, single-payer health, SpamAssassin, SPARQL, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, the scientific method, Toyota Production System, unbiased observer, wage slave, Washington Consensus, web application, WikiLeaks, working poor

Wikipedia is visited by millions each day; how do get them to contribute back their thoughts on the article instead of muttering them under their breath or airing them to their friends? Making More Wikipedias http://www.aaronsw.com/weblog/morewikipedias September 14, 2006 Age 19 Maybe it’s just me, but it seems like everywhere you look people are trying to get a piece of Wikipedia. Wiki sites have been started in every field from the Muppets to the law. The domain Wiki.com recently was sold for 3 million dollars. Professor Cass Sunstein, previously seen arguing the Internet could tear apart the republic, just published a new book arguing tools like wikis will lead us to “Infotopia.” So is it possible to replicate Wikipedia’s success? What’s the key that made it work? Unfortunately, this question hasn’t gotten the attention it deserves. For the most part, people have simply assumed that Wikipedia is as simple as the name suggests: install some wiki software, say that it’s for writing an encyclopedia, and voila!

Remix: Making Art and Commerce Thrive in the Hybrid Economy by Lawrence Lessig

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Amazon Web Services, Andrew Keen, Benjamin Mako Hill, Berlin Wall, Bernie Sanders, Brewster Kahle, Cass Sunstein, collaborative editing, disintermediation, don't be evil, Erik Brynjolfsson, Internet Archive, invisible hand, Jeff Bezos, jimmy wales, Kevin Kelly, late fees, Netflix Prize, Network effects, new economy, optical character recognition, PageRank, recommendation engine, revision control, Richard Stallman, Ronald Coase, Saturday Night Live, SETI@home, sharing economy, Silicon Valley, Skype, slashdot, Steve Jobs, The Nature of the Firm, thinkpad, transaction costs, VA Linux

Through a suite of tools called Amazon Web Services (AWS), Amazon enables developers to build products that integrate directly into Amazon’s database. For example, a developer named Jim Biancolo used AWS to build a free Web tool to track the price difference between new products and used products (plus shipping). And a company called TouchGraph used AWS to build a product browser that would show the links between related products. Enter Cass Sunstein’s, for example, and you’ll see all the books in Amazon that relate to Sunstein’s books in subject and citation. Amazon sells some of these AWS services. Some it leaves free. But it develops these services if it believes such development will drive the sales of its products, and perhaps even teach Amazon something about how to better offer its products. Of course, it ultimately controls the platform.


pages: 307 words: 94,069

Switch: How to Change Things When Change Is Hard by Chip Heath, Dan Heath

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Atul Gawande, Cass Sunstein, clean water, cognitive dissonance, corporate social responsibility, en.wikipedia.org, fundamental attribution error, impulse control, medical residency, Piper Alpha, placebo effect, publish or perish, Richard Thaler, shareholder value, Silicon Valley, Steve Jobs

The Heart of Change, by John Kotter and Dan Cohen [Business and organizational change]. Our favorite book of Kotter’s, this book will be useful if you are trying to change a big organization. Mindless Eating, by Brian Wansink [Dieting]. Do you want to lose a few pounds, or are you just curious about why everyone else is getting fatter? This book is filled with clever research like the popcorn study we described in the first chapter. Nudge, by Richard Thaler and Cass Sunstein [Decision making and public policy]. The authors argue that people can be “nudged” to make better decisions, and they propose some great Path solutions. One Small Step Can Change Your Life, by Robert Maurer [Individual and organizational change]. If you liked the chapter on shrinking the change, this is your book. Maurer shows how small steps can lead to great change. Divorce Busting, by Michele Weiner-Davis [Relationships].


pages: 209 words: 89,619

The Precariat: The New Dangerous Class by Guy Standing

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8-hour work day, banking crisis, barriers to entry, Bertrand Russell: In Praise of Idleness, call centre, Cass Sunstein, centre right, collective bargaining, corporate governance, crony capitalism, deindustrialization, deskilling, fear of failure, full employment, hiring and firing, Honoré de Balzac, housing crisis, illegal immigration, immigration reform, income inequality, labour market flexibility, labour mobility, land reform, libertarian paternalism, low skilled workers, lump of labour, marginal employment, Mark Zuckerberg, means of production, mini-job, moral hazard, Naomi Klein, nudge unit, pensions crisis, placebo effect, post-industrial society, precariat, presumed consent, quantitative easing, remote working, rent-seeking, Richard Thaler, rising living standards, Ronald Coase, Ronald Reagan, science of happiness, shareholder value, Silicon Valley, The Market for Lemons, The Nature of the Firm, The Spirit Level, Tobin tax, transaction costs, universal basic income, unpaid internship, winner-take-all economy, working poor, working-age population, young professional

Why risk being humiliated online by being rigorous? Give them what they want! This is an illusion of empowerment that degrades responsibility and professionalism. Soon, everybody will be rating everybody else. The state as libertarian paternalist A new perspective on social and economic policy is behavioural economics, which has produced libertarian paternalism. Nudge, an influential book by Cass Sunstein and Richard Thaler (2008), two Chicago-based advisers and friends of Barack Obama, was premised on the idea that people have too much information and so make irrational decisions. People must be steered, or nudged, to make A POLITICS OF INFERNO 139 the decisions that are in their best interest. The authors do not attribute the idea to Bentham but say the state should create ‘an architecture of choice’.


pages: 416 words: 106,582

This Will Make You Smarter: 150 New Scientific Concepts to Improve Your Thinking by John Brockman

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23andMe, Albert Einstein, Alfred Russel Wallace, banking crisis, Barry Marshall: ulcers, Benoit Mandelbrot, Berlin Wall, biofilm, Black Swan, butterfly effect, Cass Sunstein, cloud computing, congestion charging, correlation does not imply causation, Daniel Kahneman / Amos Tversky, dark matter, data acquisition, David Brooks, delayed gratification, Emanuel Derman, epigenetics, Exxon Valdez, Flash crash, Flynn Effect, hive mind, impulse control, information retrieval, Isaac Newton, Jaron Lanier, John von Neumann, Kevin Kelly, mandelbrot fractal, market design, Mars Rover, Marshall McLuhan, microbiome, Murray Gell-Mann, Nicholas Carr, open economy, place-making, placebo effect, pre–internet, QWERTY keyboard, random walk, randomized controlled trial, rent control, Richard Feynman, Richard Feynman, Richard Feynman: Challenger O-ring, Richard Thaler, Schrödinger's Cat, security theater, Silicon Valley, stem cell, Steve Jobs, Steven Pinker, Stewart Brand, the scientific method, Thorstein Veblen, Turing complete, Turing machine, Walter Mischel, Whole Earth Catalog

Consider the world we could live in if all of our local and global leaders, if all of our personal and professional friends and foes, recognized the defeasibility of their beliefs and acted accordingly. That sure sounds like progress to me. But of course I could be wrong. Aether Richard Thaler Economist; director, Center for Decision Research, Booth School of Business, University of Chicago; coauthor (with Cass Sunstein), Nudge: Improving Decisions About Health, Wealth, and Happiness I recently posted a question on Edge asking people to name their favorite example of a wrong scientific belief. One of my prized answers came from Clay Shirky. Here is an excerpt: The existence of ether, the medium through which light (was thought to) travel. It was believed to be true by analogy—waves propagate through water, and sound waves propagate through air, so light must propagate through X, and the name of this particular X was ether.


pages: 397 words: 109,631

Mindware: Tools for Smart Thinking by Richard E. Nisbett

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affirmative action, Albert Einstein, availability heuristic, big-box store, Cass Sunstein, choice architecture, cognitive dissonance, correlation coefficient, correlation does not imply causation, cosmological constant, Daniel Kahneman / Amos Tversky, dark matter, endowment effect, experimental subject, feminist movement, fundamental attribution error, glass ceiling, Henri Poincaré, Isaac Newton, job satisfaction, lake wobegon effect, libertarian paternalism, loss aversion, low skilled workers, Menlo Park, meta analysis, meta-analysis, quantitative easing, Richard Thaler, Ronald Reagan, Socratic dialogue, Steve Jobs, Steven Levy, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, William of Occam, Zipcar

The biggest problem with loss aversion is that it prompts a status quo bias.6 I continue to receive several newsletters that I long ago stopped reading because the time is never right to figure out how to stop the darn things from coming. Right now I’m in the middle of X (watering the garden, making a list of what to buy at the hardware store, getting organized to write a paper). Canceling the newsletters means ceasing to do something that I value. So I’ll do it tomorrow when I have nothing much else to do. (Ha!) The economist Richard Thaler and the legal scholar Cass Sunstein have shown numerous ways we can make the status quo bias work in our favor. 7 Some of the most important work rests on a single concept, namely “default option.” Only 12 percent of Germans allow the government to harvest their organs, but 99 percent of Austrians do. Who would have thought the Austrians were so much more humanitarian than the Germans? Actually, there’s no reason to assume there’s a difference between Germany and Austria in concern for their fellow citizens.


pages: 357 words: 95,986

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

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3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, back-to-the-land, banking crisis, battle of ideas, blockchain, Bretton Woods, call centre, capital controls, carbon footprint, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, housing crisis, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, late capitalism, low skilled workers, manufacturing employment, market design, Martin Wolf, means of production, minimum wage unemployment, Mont Pelerin Society, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, patent troll, pattern recognition, post scarcity, postnationalism / post nation state, precariat, price stability, profit motive, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, the built environment, The Chicago School, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, We are the 99%, women in the workforce, working poor, working-age population

Emphasis added. 2.The tenacity of the gendered division of society is amply demonstrated in Maria Mies, Patriarchy and Accumulation on a World Scale: Women in the International Division of Labour (London: Zed, 1999). 3.Kathi Weeks, The Problem with Work: Feminism, Marxism, Antiwork Politics, and Postwork Imaginaries (Durham, NC: Duke University Press, 2011), p. 216. 4.Robert J. Van Der Veen and Philippe Van Parijs, ‘A Capitalist Road to Communism’, Theory and Society 15: 5 (1986), p. 637. 5.Gregory N. Mandel and James Thuo Gathii, ‘Cost-Benefit Analysis Versus the Precautionary Principle: Beyond Cass Sunstein’s Laws of Fear’, University of Illinois Law Review 5 (2006). 6.For an essential meditation on this, see Benedict Singleton, ‘Maximum Jailbreak’, in Robin Mackay and Armen Avanessian, eds, #Accelerate: The Accelerationist Reader (Falmouth: Urbanomic, 2014). 7.Paul Mason, ‘What Would Keynes Do?’, New Statesman, 12 June 2014. 8.Singleton, ‘Maximum Jailbreak’; Nikolai Federovich Federov, ‘The Philosophy of the Common Task’, in What Was Man Created For?


pages: 445 words: 105,255

Radical Abundance: How a Revolution in Nanotechnology Will Change Civilization by K. Eric Drexler

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3D printing, additive manufacturing, agricultural Revolution, Bill Joy: nanobots, Brownian motion, carbon footprint, Cass Sunstein, conceptual framework, crowdsourcing, dark matter, double helix, failed state, global supply chain, industrial robot, iterative process, Mars Rover, means of production, Menlo Park, mutually assured destruction, New Journalism, performance metric, reversible computing, Richard Feynman, Richard Feynman, Silicon Valley, South China Sea, Thomas Malthus, V2 rocket, Vannevar Bush

From the Office of the Chairman of the Joint Chiefs of Staff, “National Military Strategy” (2011): “Preventing wars is as important as winning them, and far less costly,” a view that concurs with opinions throughout most of the world and its history. Chapter 18: Changing Our Conversation About the Future 283the first response . . . often sets the direction for the next: This is an example of a “social cascade,” discussed (together with a range of other successes and pathologies of group decision-making) in Cass Sunstein’s brief and readable book, Infotopia: How Many Minds Produce Knowledge (Oxford, UK: Oxford University Press, 2006). INDEX Actin, 69 Additive manufacturing, 76–77 Agriculturalists, hunter-gatherers vs., 41–42 Agricultural Revolution, 39, 40–42 APM Revolution and, 50, 54 Industrial Revolution and, 44 nature and human impacts of, 54 Agriculture, atomically precise manufacturing and, 231–232, 248, 250 American Chemical Society, 181 Angewandte Chemie (journal), 20n APM.


pages: 354 words: 91,875

The Willpower Instinct: How Self-Control Works, Why It Matters, and What You Can Doto Get More of It by Kelly McGonigal

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banking crisis, bioinformatics, Cass Sunstein, choice architecture, cognitive bias, delayed gratification, game design, impulse control, loss aversion, meta analysis, meta-analysis, phenotype, Richard Thaler, Wall-E, Walter Mischel

As individuals, we can take steps to strengthen our personal self-control, and this will make no small difference in our personal lives. Knowing how to strengthen the limited self-control of a nation is a trickier thing. Rather than hope that we as a nation develop more willpower in order to meet our biggest challenges, our best bet might be to take self-control out of the equation whenever possible—or at least reduce the self-control demands of doing the right thing. Behavioral economist Richard Thaler and legal scholar Cass Sunstein have argued persuasively for “choice architecture,” systems that make it easier for people to make good decisions consistent with their values and goals. For example, asking people to become organ donors when they renew a driver’s license or register to vote. Or having health insurance companies automatically schedule annual check-ups for their members. These are things most people mean to do, but put off because they are distracted by so many other more pressing demands.


pages: 369 words: 90,630

Mindwise: Why We Misunderstand What Others Think, Believe, Feel, and Want by Nicholas Epley

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affirmative action, airport security, Amazon Mechanical Turk, Cass Sunstein, crowdsourcing, cuban missile crisis, friendly fire, invisible hand, meta analysis, meta-analysis, Milgram experiment, payday loans, Peter Singer: altruism, pirate software, Richard Thaler, school choice, the scientific method, theory of mind

Roll out a financial literacy program to make their minds smarter. Americans getting too fat? Try to raise awareness about the dangers of obesity so that they’ll be more motivated to lose weight. Common sense suggests targeting people’s minds to change their actions, but many of these solutions are useless because they misunderstand the cause of the problems. As my colleagues Richard Thaler and Cass Sunstein point out in their book Nudge, much more effective for changing behavior is targeting the broader context rather than individual minds, making it easier for people to do the things they already want to do.29 Consider four examples: • ENCOURAGING ENVIRONMENTALISM. Convincing people not to litter is hard, and most already know that they’re not supposed to simply toss their garbage on the ground.


pages: 471 words: 124,585

The Ascent of Money: A Financial History of the World by Niall Ferguson

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Admiral Zheng, Andrei Shleifer, Asian financial crisis, asset allocation, asset-backed security, Atahualpa, bank run, banking crisis, banks create money, Black Swan, Black-Scholes formula, Bonfire of the Vanities, Bretton Woods, BRICs, British Empire, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collateralized debt obligation, colonial exploitation, Corn Laws, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, Daniel Kahneman / Amos Tversky, deglobalization, diversification, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Glaeser, Edward Lloyd's coffeehouse, financial innovation, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, Francisco Pizarro, full employment, German hyperinflation, Hernando de Soto, high net worth, hindsight bias, Home mortgage interest deduction, Hyman Minsky, income inequality, interest rate swap, Isaac Newton, iterative process, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour mobility, London Interbank Offered Rate, Long Term Capital Management, market bubble, market fundamentalism, means of production, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, mortgage tax deduction, Naomi Klein, Nick Leeson, Northern Rock, pension reform, price anchoring, price stability, principal–agent problem, probability theory / Blaise Pascal / Pierre de Fermat, profit motive, quantitative hedge fund, RAND corporation, random walk, rent control, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, seigniorage, short selling, Silicon Valley, South Sea Bubble, sovereign wealth fund, spice trade, structural adjustment programs, technology bubble, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, too big to fail, transaction costs, value at risk, Washington Consensus, Yom Kippur War

Mauboussin, More Than You Know: Finding Financial Wisdom in Unconventional Places (New York / Chichester, 2006). 12 Mark Buchanan, The Social Atom: Why the Rich Get Richer, Cheaters Get Caught, and Your Neighbor Usually Looks Like You (New York, 2007), p. 54. 13 For an introduction, see Andrei Shleifer, Inefficient Markets: An Introduction to Behavioral Finance (Oxford, 2000). For some practical applications see Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, 2008). 14 See Peter Bernstein, Capital Ideas Evolving (New York, 2007). 15 See for example James Surowiecki, The Wisdom of Crowds (New York, 2005); Ian Ayres, Supercrunchers: How Anything Can Be Predicted (London, 2007). 16 Daniel Gross, ‘The Forecast for Forecasters is Dismal’, New York Times, 4 March 2007. 17 The classic work, first published in 1841, is Charles MacKay, Extraordinary Popular Delusions and the Madness of Crowds (New York, 2003 [1841]). 18 Yudkowsky, ‘Cognitive Biases’, pp. 110f. 19 For an introduction to Lo’s work, see Bernstein, Capital Ideas Evolving , ch. 4.


pages: 494 words: 116,739

Geek Heresy: Rescuing Social Change From the Cult of Technology by Kentaro Toyama

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Albert Einstein, Berlin Wall, Bernie Madoff, blood diamonds, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, computer vision, conceptual framework, delayed gratification, Edward Glaeser, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Francis Fukuyama: the end of history, fundamental attribution error, germ theory of disease, global village, Hans Rosling, happiness index / gross national happiness, income inequality, invention of the printing press, invisible hand, Isaac Newton, Khan Academy, Kibera, knowledge worker, libertarian paternalism, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, microcredit, mobile money, Nicholas Carr, North Sea oil, pattern recognition, Peter Singer: altruism, Peter Thiel, post-industrial society, randomized controlled trial, rent-seeking, RFID, Richard Florida, Richard Thaler, school vouchers, self-driving car, Silicon Valley, Simon Kuznets, Steve Jobs, Steven Pinker, technoutopianism, The Fortune at the Bottom of the Pyramid, Upton Sinclair, Walter Mischel, War on Poverty, winner-take-all economy, World Values Survey, Y2K

Journal of Personality 72(2):271–324, http://onlinelibrary.wiley.com/doi/10.1111/j.0022-3506.2004.00263.x/abstract. Taylor, Chris. (2011). Why not call it a Facebook Revolution? CNN, Feb. 24, 2011, www.cnn.com/2011/TECH/social.media/02/24/facebook.revolution/. Taylor, William C. (1999). Inspired by work. Fast Company, Nov. 1999, www.fastcompany.com/38466/inspired-work. Thaler, Richard H., and Cass R. Sunstein. (2008). Nudge: Improving Decisions About Health, Wealth, and Happiness. Yale University Press. Thiel, Peter. (2012). Technology and regulation 3-3-12. The Federalist Society, https://www.youtube.com/watch?v=DDSO36mzBss. Thompson, John B. (2010). Merchants of Culture: The Publishing Business in the Twenty-First Century. Polity. Tichenor, P. J., G. A. Donohue, and C. N. Olien. (1970). Mass media flow and differential growth in knowledge.


pages: 288 words: 16,556

Finance and the Good Society by Robert J. Shiller

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bank run, banking crisis, barriers to entry, Bernie Madoff, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, cognitive dissonance, collateralized debt obligation, collective bargaining, computer age, corporate governance, Daniel Kahneman / Amos Tversky, Deng Xiaoping, diversification, diversified portfolio, Donald Trump, Edward Glaeser, eurozone crisis, experimental economics, financial innovation, full employment, fundamental attribution error, George Akerlof, income inequality, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, land reform, loss aversion, Louis Bachelier, Mahatma Gandhi, Mark Zuckerberg, market bubble, market design, means of production, microcredit, moral hazard, mortgage debt, Occupy movement, passive investing, Ponzi scheme, prediction markets, profit maximization, quantitative easing, random walk, regulatory arbitrage, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, self-driving car, shareholder value, Sharpe ratio, short selling, Simon Kuznets, Skype, Steven Pinker, telemarketer, The Market for Lemons, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Vanguard fund, young professional, Zipcar

W. Norton. Tarbell, Ida M. 1904. The History of the Standard Oil Company. New York: McClure, Phillips. Tarlow, Steve. 2010. “Estate Tax Sends Elderly Racing to the Grave.” newsytype.com, November 2, http://www.newsytype.com/3257-estate-tax/. Tetlock, Philip E. 2006. Expert Political Judgment: How Good Is It? How Can We Know? Princeton, NJ: Princeton University Press. Thaler, Richard H., and Cass R. Sunstein. 2008. Nudge: Improving Decisions about Health, Wealth and Happiness. New Haven, CT: Yale University Press. Thomsen, Jens, and Verner Anderson. 2007. “Longevity Bonds: A Financial Market Instrument to Manage Longevity Risk.” Monetary Review 46(4):29–44. Thoreau, Henry David. 2008 [1863]. Life without Principle. Forgotten Books, http://www.forgottenbooks.org/. Toppe, Christopher M., Arthur D.


pages: 388 words: 119,492

Ghettoside: A True Story of Murder in America by Jill Leovy

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Affordable Care Act / Obamacare, Cass Sunstein, correlation does not imply causation, illegal immigration

Main Street runs north-south behind Seventy-seventh Street Station. 7 moonshiners who intimidated people and killed snitches Frank, pp. 124, 126; Lane, Roots of Violence in Black Philadelphia, p. 9; Monkkonen, Murder in New York City, p. 73; W. Fitzhugh Brundage, Lynching in the New South: Georgia and Virginia, 1880–1930 (Urbana and Chicago: University of Illinois Press, 1993), p. 23. 8 “sown in the nature of man” Quoted from the Federalist Papers in Cass R. Sunstein, “The Enlarged Republic—Then and Now,” The New York Review of Books, March 26, 2009. 9 so few gang homicides stemmed from drug deals Later, a Centers for Disease Control and Prevention study would confirm what LAPD homicide detectives already knew—that very few street homicides directly involve drug deals. The study found that less than 5 percent of all homicides in Los Angeles and Long Beach involved the drug trade.


pages: 441 words: 136,954

That Used to Be Us by Thomas L. Friedman, Michael Mandelbaum

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3D printing, Affordable Care Act / Obamacare, Albert Einstein, Amazon Web Services, American Society of Civil Engineers: Report Card, Andy Kessler, Ayatollah Khomeini, bank run, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business process, call centre, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, Climatic Research Unit, cloud computing, collective bargaining, corporate social responsibility, Credit Default Swap, crowdsourcing, delayed gratification, energy security, Fall of the Berlin Wall, fear of failure, full employment, Google Earth, illegal immigration, immigration reform, income inequality, job automation, Kenneth Rogoff, knowledge economy, Lean Startup, low skilled workers, Mark Zuckerberg, market design, more computing power than Apollo, Network effects, obamacare, oil shock, pension reform, Report Card for America’s Infrastructure, rising living standards, Ronald Reagan, Rosa Parks, Saturday Night Live, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, the scientific method, Thomas L Friedman, too big to fail, University of East Anglia, WikiLeaks

The title came from an assessment by then vice president Dick Cheney, who, in the face of concerns that a Pakistani scientist was offering nuclear-weapons expertise to al-Qaeda, reportedly declared: “If there’s a 1% chance that Pakistani scientists are helping Al Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response.” Cheney contended that the United States had to confront a very new type of threat: a “low-probability, high-impact event.” Soon after Suskind’s book was published, the legal scholar Cass Sunstein, then at the University of Chicago, pointed out that Cheney seemed to be endorsing the same “precautionary principle” that animated environmentalists. Sunstein wrote in his blog: “According to the Precautionary Principle, it is appropriate to respond aggressively to low-probability, high-impact events—such as climate change. Indeed, another vice president—Al Gore—can be understood to be arguing for a precautionary principle for climate change (though he believes that the chance of disaster is well over 1 percent).”


pages: 602 words: 120,848

Winner-Take-All Politics: How Washington Made the Rich Richer-And Turned Its Back on the Middle Class by Paul Pierson, Jacob S. Hacker

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accounting loophole / creative accounting, affirmative action, asset allocation, barriers to entry, Bonfire of the Vanities, business climate, carried interest, Cass Sunstein, clean water, collective bargaining, corporate governance, Credit Default Swap, David Brooks, desegregation, employer provided health coverage, financial deregulation, financial innovation, financial intermediation, full employment, Home mortgage interest deduction, Howard Zinn, income inequality, invisible hand, knowledge economy, laissez-faire capitalism, Martin Wolf, medical bankruptcy, moral hazard, Nate Silver, new economy, night-watchman state, offshore financial centre, oil shock, Ralph Nader, Ronald Reagan, shareholder value, Silicon Valley, The Wealth of Nations by Adam Smith, too big to fail, trickle-down economics, union organizing, very high income, War on Poverty, winner-take-all economy, women in the workforce

Nordic Journal of Political Economy 31 (2005): 111–125. 10 Quoted in Steve Fraser, Wall Street: A Cultural History (London: Faber and Faber, 2005), 158. 11 Michael Waldman, ed., My Fellow Americans: The Most Important Speeches of America’s Presidents, from George Washington to George W. Bush (Naperville, IL: Sourcebooks, 2003), 72–73. 12 Melvin I. Urofsky, Louis D. Brandeis: A Life (New York: Pantheon Books, 2009), 326. 13 Quoted in Ibid., 320. 14 Cass Sunstein, The Second Bill of Rights: FDR’s Unfinished Revolution and Why We Need It More Than Ever (New York: Basic Books, 2004), 20–25. 15 Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations (Edinburgh: Thomas Nelson and Peter Brown, 1827), 277, 279. 16 Walter Lippmann, Drift and Mastery: An Attempt to Diagnose the Current Unrest (New York: Mitchell Kennerley, 1914), 36–37. 17 Ibid., 100. 18 Frances E.


pages: 465 words: 124,074

Atomic Obsession: Nuclear Alarmism From Hiroshima to Al-Qaeda by John Mueller

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airport security, Albert Einstein, Black Swan, Cass Sunstein, conceptual framework, cuban missile crisis, Doomsday Clock, energy security, F. W. de Klerk, failed state, Mikhail Gorbachev, mutually assured destruction, nuclear winter, oil shock, RAND corporation, Ronald Reagan, side project, uranium enrichment, Yom Kippur War

Yet the risk that this potential (and fully possible) calamity might take place evokes little concern; essentially, it is “accepted.” Meanwhile, Russia, with whom the United States enjoys a rather strained relationship, could at any time do vastly more damage with its nuclear weapons, a fully imaginable calamity that goes substantially ignored. In constructing what he calls “a case for fear,” Cass Sunstein notes that if there is a yearly probability of one in 100,000 that terrorists could launch a nuclear or massive biological attack, the risk would cumulate to one in 10,000 over 10 years and to one in 5,000 over 20 years. These odds, he suggests, are “not the most comforting.”34 Comfort, of course, lies in the viscera of those to be comforted, and, as he suggests, many would probably have difficulty settling down with odds like that.


pages: 543 words: 147,357

Them And Us: Politics, Greed And Inequality - Why We Need A Fair Society by Will Hutton

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Andrei Shleifer, asset-backed security, bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, capital controls, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, choice architecture, cloud computing, collective bargaining, conceptual framework, Corn Laws, corporate governance, credit crunch, Credit Default Swap, debt deflation, decarbonisation, Deng Xiaoping, discovery of DNA, discovery of the americas, discrete time, diversification, double helix, Edward Glaeser, financial deregulation, financial innovation, financial intermediation, first-past-the-post, floating exchange rates, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Akerlof, Gini coefficient, global supply chain, Growth in a Time of Debt, Hyman Minsky, I think there is a world market for maybe five computers, income inequality, inflation targeting, interest rate swap, invisible hand, Isaac Newton, James Dyson, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, Long Term Capital Management, Louis Pasteur, low-wage service sector, mandelbrot fractal, margin call, market fundamentalism, Martin Wolf, means of production, Mikhail Gorbachev, millennium bug, moral hazard, mortgage debt, new economy, Northern Rock, offshore financial centre, open economy, Plutocrats, plutocrats, price discrimination, private sector deleveraging, purchasing power parity, quantitative easing, race to the bottom, railway mania, random walk, rent-seeking, reserve currency, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, Rory Sutherland, shareholder value, short selling, Silicon Valley, Skype, South Sea Bubble, Steve Jobs, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, unpaid internship, value at risk, Washington Consensus, working poor, éminence grise

Steinmueller and Juan Mateos-Garcia (2009) ‘Rebooting Britain’, Nesta Policy Briefing. 6 Rohit Talwar and Tim Hancock (2010) ‘The Shape of Jobs to Come: Possible New Careers Emerging from Advances in Science and Technology (2010–2030)’, report, Fast Future. 7 Ian Brinkley (2008) ‘The Knowledge Economy: How Knowledge is Reshaping the Economic Life of Nations’, report, Work Foundation. 8 Robert Nozick (1974) Anarchy, State, and Utopia, Basic Books, p. 169. 9 Liam Murphy and Thomas Nagel (2002) The Myth of Ownership: Taxes and Justice, Harvard University Press. 10 Will Hutton and Philippe Schneider (2008) ‘The Failure of Market Failure: Towards a 21st Century Keynesianism’, Nesta Provocation. 11 George Akerlof (1970) ‘The Market for Lemons: Quality Uncertainty and the Market Mechanism’, Quarterly Journal of Economics 84 (3): 488–500. 12 Nava Asraf, Colin Camerer and George Loewenstein (2005) ‘Adam Smith,Behavioral Economist’, Journal of Economic Perspectives 19 (3): 131–45. 13 John Coates and Joe Herbert (2008) ‘Endogenous Steroids and Financial Risk Taking on a London Trading Floor’, Proceedings of the National Academy of Sciences 105: 6167–72. 14 Technically, this can be understood as rational behaviour. 15 Studies have sought to limit attention to one potential bias at a time; but several biases might plausibly explain behaviour. There is a need to distinguish between biases insofar as the policy responses to the underlying explanations for behaviour point in very different directions. 16 John Sterman (2000) Business Dynamics: Systems Thinking and Modeling for a Complex World, Irwin McGraw-Hill. 17 Richard Thaler and Cass Sunstein (2008) Nudge: Improving Decisions about Health, Wealth and Happiness, Yale University Press, esp. Part V. See also Jack Fuller (2009) ‘Heads, You Die: Bad Decisions, Choice Architecture, and How to Mitigate Predictable Irrationality’, Per Capita, at http://www.percapita.org.au/01_cms/details.asp?ID=215. 18 Friedrich Hayek (1945) ‘The Use of Knowledge in Society’, American Economic Review 34 (4): 519–30, at http://www.econlib.org/library/Essays/ hykKnw1.html. 19 Herbert Hart (1997) The Concept of Law, Oxford University Press. 20 HM Treasury (2007) ‘The Race to the Top: A Review of Government’s Science and Innovation Policies’, HMSO. 21 Yannis Pierrakis and Stian Westlake (2009) ‘Reshaping the UK Economy: The Role of Public Investment in Financing Growth’, report, Nesta. 22 Ibid. 23 John R.


pages: 598 words: 134,339

Data and Goliath: The Hidden Battles to Collect Your Data and Control Your World by Bruce Schneier

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23andMe, Airbnb, airport security, AltaVista, Anne Wojcicki, augmented reality, Benjamin Mako Hill, Black Swan, Brewster Kahle, Brian Krebs, call centre, Cass Sunstein, Chelsea Manning, citizen journalism, cloud computing, congestion charging, disintermediation, Edward Snowden, experimental subject, failed state, fault tolerance, Ferguson, Missouri, Filter Bubble, Firefox, friendly fire, Google Chrome, Google Glasses, hindsight bias, informal economy, Internet Archive, Internet of things, Jacob Appelbaum, Jaron Lanier, Julian Assange, Kevin Kelly, license plate recognition, linked data, Lyft, Mark Zuckerberg, Nash equilibrium, Nate Silver, national security letter, Network effects, Occupy movement, payday loans, pre–internet, price discrimination, profit motive, race to the bottom, RAND corporation, recommendation engine, RFID, self-driving car, Silicon Valley, Skype, smart cities, smart grid, Snapchat, social graph, software as a service, South China Sea, stealth mode startup, Steven Levy, Stuxnet, TaskRabbit, telemarketer, Tim Cook: Apple, transaction costs, Uber and Lyft, urban planning, WikiLeaks, zero day

the Internet you see: Joseph Turow (2013), The Daily You: How the New Advertising Industry Is Defining Your Identity and Your Worth, Yale University Press, http://yalepress.yale.edu/yupbooks/book.asp?isbn=9780300165012. the “filter bubble”: Eli Pariser (2011), The Filter Bubble: What the Internet Is Hiding from You, Penguin Books, http://www.thefilterbubble.com. on a large scale it’s harmful: Cass Sunstein (2009), Republic.com 2.0, Princeton University Press, http://press.princeton.edu/titles/8468.html. We don’t want to live: To be fair, this trend is older and more general than the Internet. Robert D. Putnam (2000), Bowling Alone: The Collapse and Revival of American Community, Simon and Schuster, http://bowlingalone.com. Facebook ran an experiment: Adam D. I. Kramer, Jamie E. Guillory, and Jeffrey T.


pages: 742 words: 137,937

The Future of the Professions: How Technology Will Transform the Work of Human Experts by Richard Susskind, Daniel Susskind

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23andMe, 3D printing, additive manufacturing, AI winter, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, Andrew Keen, Atul Gawande, Automated Insights, autonomous vehicles, Big bang: deregulation of the City of London, big data - Walmart - Pop Tarts, Bill Joy: nanobots, business process, business process outsourcing, Cass Sunstein, Checklist Manifesto, Clapham omnibus, Clayton Christensen, clean water, cloud computing, computer age, computer vision, conceptual framework, corporate governance, crowdsourcing, Daniel Kahneman / Amos Tversky, death of newspapers, disintermediation, Douglas Hofstadter, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Frank Levy and Richard Murnane: The New Division of Labor, full employment, future of work, Google Glasses, Google X / Alphabet X, Hacker Ethic, industrial robot, informal economy, information retrieval, interchangeable parts, Internet of things, Isaac Newton, James Hargreaves, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, knowledge economy, lump of labour, Marshall McLuhan, Narrative Science, natural language processing, Network effects, optical character recognition, personalized medicine, pre–internet, Ray Kurzweil, Richard Feynman, Richard Feynman, Second Machine Age, self-driving car, semantic web, Skype, social web, speech recognition, spinning jenny, strong AI, supply-chain management, telepresence, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, transaction costs, Turing test, Watson beat the top human players on Jeopardy!, young professional

(2008), p. 59. 86 International Telecommunications Union, ‘The World in 2014: ICT Fact and Figures’ at <http://www.itu.int/en/ITU-D/Statistics/Documents/facts/ICTFactsFigures2014-e.pdf> (accessed 29 March 2015). 87 Sara Radicati, ‘Email Statistics Report, 2014–2018’, at <http://www.radicati.com/wp/wp-content/uploads/2014/01/Email-Statistics-Report-2014-2018-Executive-Summary.pdf> (accessed 19 March 2015). 88 On sites such as <https://www.flickr.com>, <http://www.slideshare.net>, <https://www.youtube.com> (accessed 23 March 2015). 89 <http://www.youtube.com/yt/press/statistics.html> (accessed 23 March 2015). 90 <http://www.nielsen.com/us/en/insights/news/2012/buzz-in-the-blogosphere-millions-more-bloggers-and-blog-readers.html> (accessed 23 March 2015). 91 <https://about.twitter.com/company> (accessed 19 March 2015). 92 <http://www.statista.com/statistics/274050/quarterly-numbers-of-linkedin-members/> (accessed 19 March 2015). 93 <http://wikipedia.org> (accessed 23 March 2015). 94 A important literature on mass collaboration emerged in the mid-2000s. See e.g. Yochai Benkler, The Wealth of Networks (2006), Don Tapscott and Anthony Williams, Wikinomics (2006), Charles Leadbetter, We-Think (2008), and Cass Sunstein, Infotopia (2006). For a more critical view of the subject at that time, see Andrew Keen, The Cult of the Amateur (2007). 95 Greg Kroath-Hartman, Jonathan Corbet, and Amanda McPherson, ‘Linux Kernel Development: How Fast it is Going, Who is Doing It, What They are Doing, and Who is Sponsoring it’, Sept. 2013 <http://www.linuxfoundation.org/publication/linux-foundation/who-writes-linux-2013> (accessed 24 March 2015). 96 Daren Brabham, Crowdsourcing (2013). 97 Yochai Benkler, The Penguin and the Leviathan (2011), 23. 98 Benkler, The Penguin and the Leviathan, 182. 99 See <http://www.retailresearch.org/onlineretailing.php> (accessed 24 March 2015). 100 <http://www.ebay.com>. 101 Trefis Team, ‘eBay: The Year 2013 In Review’, 26 December 2013, at <http://www.forbes.com/sites/greatspeculations/2013/12/26/ebay-the-year-2013-in-review/> (accessed 24 March 2015). 102 See Dov Seidman, How (2007), 39; original emphasis. 103 Some popular texts of that era were Patrick Winston, Artificial Intelligence (1984), Edward Feigenbaum and Pamela McCorduck, The Fifth Generation (1983), Donald Michie and Rory Johnston, The Creative Computer (1984), and Edward Feigenbaum, Pamela McCorduck, and Penney Nii, The Rise of Expert Company (1988). 104 Richard Susskind, Expert Systems in Law (1987). 105 Phillip Capper and Richard Susskind, Latent Damage Law—The Expert System (1988). 106 Richard Susskind and Chris Tindall, ‘VATIA: Ernst & Whinney’s VAT Expert System’, in Proceedings of the Fourth International Expert Systems Conference (1988). 107 We have answered this question at length in Richard Susskind, ‘Artificial Intelligence and the Law Revisited’, in Jon Bing: A Tribute, ed.


pages: 518 words: 147,036

The Fissured Workplace by David Weil

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accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, banking crisis, barriers to entry, business process, call centre, Carmen Reinhart, Cass Sunstein, Clayton Christensen, clean water, collective bargaining, corporate governance, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, declining real wages, employer provided health coverage, Frank Levy and Richard Murnane: The New Division of Labor, George Akerlof, global supply chain, global value chain, hiring and firing, income inequality, intermodal, inventory management, Jane Jacobs, Kenneth Rogoff, law of one price, loss aversion, low skilled workers, minimum wage unemployment, moral hazard, Network effects, new economy, occupational segregation, performance metric, pre–internet, price discrimination, principal–agent problem, Rana Plaza, Richard Florida, Richard Thaler, Ronald Coase, shareholder value, Silicon Valley, statistical model, Steve Jobs, supply-chain management, The Death and Life of Great American Cities, The Nature of the Firm, transaction costs, ultimatum game, union organizing, women in the workforce, Y2K, yield management

In Locating Global Advantage: Industry Dynamics in the International Economy, edited by Martin Kenney and Richard Florida. Stanford, CA: Stanford University Press, 52–81. Sum, Andrew, and Joseph McLaughlin. 2011. “Who Has Benefited from the Post–Great Recession Recovery?” Working paper, Center for Labor Market Studies, Northeastern University (July). Sunstein, Cass, Daniel Kahnemann, David Schkade, and Ilana Ritov. “Predictably Incoherent Judgments.” Stanford Law Review 54: 1153–1215. Thaler, Richard, and Cass Sunstein. 2008. Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven: Yale University Press. Theodore, Nik. 2010. “Realigning Labor: Toward a Framework for Collaboration between Labor Unions and Day Labor Worker Centers.” Special report, Neighborhood Funders Group. Theodore, Nik, Edwin Melendez, Abel Valenzuela Jr., and Ana Luz Gonzalez. 2008. “Day Labor and Workplace Abuses in the Residential Construction Industry: Conditions in the Washington, DC Region.”


pages: 444 words: 138,781

Evicted: Poverty and Profit in the American City by Matthew Desmond

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affirmative action, Cass Sunstein, crack epidemic, Credit Default Swap, deindustrialization, desegregation, dumpster diving, ending welfare as we know it, ghettoisation, glass ceiling, housing crisis, informal economy, Jane Jacobs, late fees, New Urbanism, payday loans, price discrimination, profit motive, rent control, statistical model, superstar cities, The Chicago School, The Death and Life of Great American Cities, thinkpad, upwardly mobile, working poor, young professional

Let’s deal with the real problems we have, not the imaginary problems we don’t. 39. Martha Davis, “Participation, Equality, and the Civil Right to Counsel: Lessons from Domestic and International Law,” Yale Law Journal 122 (2013): 2260–81; Raven Lidman, “Civil Gideon as a Human Right: Is the U.S. Going to Join Step with the Rest of the Developed World?,” Temple Political and Civil Rights Law Review 15 (2006): 769–800. 40. Quoted in Cass Sunstein, The Second Bill of Rights: FDR’s Unfinished Revolution and Why We Need It More Than Ever (New York: Basic Books, 2004), 3. 41. Quoted in Beryl Satter, Family Properties: How the Struggle over Race and Real Estate Transformed Chicago and Urban America (New York: Metropolitan Books, 2009), 215. 42. “Exploitation” appears but twice in William Julius Wilson’s The Truly Disadvantaged: The Inner City, the Underclass, and Public Policy, 2nd ed.


pages: 384 words: 118,572

The Confidence Game: The Psychology of the Con and Why We Fall for It Every Time by Maria Konnikova

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attribution theory, Bernie Madoff, British Empire, Cass Sunstein, cognitive dissonance, Daniel Kahneman / Amos Tversky, endowment effect, epigenetics, hindsight bias, lake wobegon effect, libertarian paternalism, Milgram experiment, placebo effect, Ponzi scheme, publish or perish, Richard Thaler, risk tolerance, side project, Skype, Steven Pinker, the scientific method, tulip mania, Walter Mischel

But the order effect—what Russo was demonstrating—is but one of the many elements of decision architecture—how information is presented to us—that can get us to make decisions in a very precise way, and not necessarily in a way that corresponds to our stated preferences. There’s the positive side of decision architecture, the nudge, popularized by behavioral economist Richard Thaler and legal scholar Cass Sunstein in their 2008 book by the same name. The idea behind the nudge, in its positive guise, is a simple one. In many cases, our choices aren’t based on some innate preference. Instead, they are constructed at any given moment by a combination of situational factors. I may not have thought about drinking wine with dinner, for instance, but if the wine list is right in front of me, I may find myself ordering a glass all the same.


pages: 577 words: 149,554

The Problem of Political Authority: An Examination of the Right to Coerce and the Duty to Obey by Michael Huemer

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Cass Sunstein, Chelsea Manning, cognitive dissonance, cuban missile crisis, Daniel Kahneman / Amos Tversky, en.wikipedia.org, Eratosthenes, experimental subject, framing effect, Gini coefficient, illegal immigration, impulse control, Isaac Newton, Julian Assange, laissez-faire capitalism, Machinery of Freedom by David Friedman, Milgram experiment, moral hazard, Phillip Zimbardo, profit maximization, profit motive, Ralph Nader, RAND corporation, rent-seeking, Ronald Coase, The Wealth of Nations by Adam Smith, unbiased observer, uranium enrichment, WikiLeaks

‘Prefentryerences, Property Rights, and Anonymity in Bargaining Games’, Games and Economic Behavior 7: 346–80. Hoffman, Leah. 2006. ‘To Have and To Hold on To’, Forbes, November 7, www.forbes.com/2006/11/07/divorce-costs-legal-biz-cx_lh_1107legaldivorce.html. Accessed May 3, 2011. Holguin, Jaime. 2002. ‘A Murder a Minute’, CBS News, October 3, www.cbsnews.com/stories/2002/10/03/health/main524231.shtml. Accessed March 21, 2011. Holmes, Stephen, and Cass Sunstein. 1999. The Cost of Rights: Why Liberty Depends on Taxes. New York: Norton. Honoré, Tony. 1981. ‘Must We Obey? Necessity as a Ground of Obligation’, Virginia Law Review 67: 39–61. Hopkinson, Michael. 2002. The Irish War of Independence. Montreal: McGill–Queen’s University Press. Hornberger, Jacob G. 2006. Why Do They Hate Us? www.fff.org/comment/com0608c.asp. Accessed October 13, 2011. Horne, Alistair. 1987.


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The Wealth of Networks: How Social Production Transforms Markets and Freedom by Yochai Benkler

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affirmative action, barriers to entry, bioinformatics, Brownian motion, call centre, Cass Sunstein, centre right, clean water, dark matter, desegregation, East Village, fear of failure, Firefox, game design, George Gilder, hiring and firing, Howard Rheingold, informal economy, invention of radio, Isaac Newton, iterative process, Jean Tirole, jimmy wales, market bubble, market clearing, Marshall McLuhan, New Journalism, optical character recognition, pattern recognition, pre–internet, price discrimination, profit maximization, profit motive, random walk, recommendation engine, regulatory arbitrage, rent-seeking, RFID, Richard Stallman, Ronald Coase, Search for Extraterrestrial Intelligence, SETI@home, shareholder value, Silicon Valley, Skype, slashdot, social software, software patent, spectrum auction, technoutopianism, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, transaction costs

A point originally raised by Eli Noam is that in this explosively large universe, getting attention will be as difficult as getting your initial message out in the mass-media context, if not more so. The same means that dominated the capacity to speak in the mass-media environment--money--will dominate the capacity to be heard on the Internet, even if it no longer controls the capacity to speak. 421 Fragmentation of attention and discourse. A point raised most explicitly by Cass Sunstein in Republic.com is that the ubiquity of information and the absence of the mass media as condensation points will impoverish public discourse by fragmenting it. There will be no public sphere. [pg 235] Individuals will view the world through millions of personally customized windows that will offer no common ground for political discourse or action, except among groups of highly similar individuals who customize their windows to see similar things. 422 Polarization.


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Money Changes Everything: How Finance Made Civilization Possible by William N. Goetzmann

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Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, banking crisis, Benoit Mandelbrot, Black Swan, Black-Scholes formula, Bretton Woods, Brownian motion, capital asset pricing model, Cass Sunstein, collective bargaining, colonial exploitation, compound rate of return, conceptual framework, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, debt deflation, delayed gratification, Detroit bankruptcy, disintermediation, diversified portfolio, double entry bookkeeping, Edmond Halley, en.wikipedia.org, equity premium, financial independence, financial innovation, financial intermediation, fixed income, frictionless, frictionless market, full employment, high net worth, income inequality, index fund, invention of the steam engine, invention of writing, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, laissez-faire capitalism, Louis Bachelier, mandelbrot fractal, market bubble, means of production, money: store of value / unit of account / medium of exchange, moral hazard, new economy, passive investing, Paul Lévy, Ponzi scheme, price stability, principal–agent problem, profit maximization, profit motive, quantitative trading / quantitative finance, random walk, Richard Thaler, Robert Shiller, Robert Shiller, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, spice trade, stochastic process, the scientific method, The Wealth of Nations by Adam Smith, Thomas Malthus, time value of money, too big to fail, trade liberalization, trade route, transatlantic slave trade, transatlantic slave trade, tulip mania, wage slave

Or could we just push people a little bit in the right direction without taking the decision-making power from them? Thaler and Benartzi suggested establishing programs that have a default allocation or savings contribution percentage that is good for the average person. One could always override the default, but the no-decision decision is designed to be good for you. Richard Thaler and another co-author of his, Cass Sunstein, coined a term for this: a “nudge.”6 Do you want the government thinking for you—nudging and cajoling you to save or put 50% of your savings into equities? I guess I wouldn’t mind too much, given that the government already sets all kinds of norms and standards based on welfare considerations. How do you feel about the IRS withholding payroll taxes? Would you rather be given the option of setting aside your taxes each week from your salary and then writing a check for the total tax balance due on April 15?


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The Irrational Bundle by Dan Ariely

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accounting loophole / creative accounting, air freight, Albert Einstein, banking crisis, Bernie Madoff, Black Swan, Broken windows theory, Burning Man, business process, cashless society, Cass Sunstein, clean water, cognitive dissonance, computer vision, corporate governance, credit crunch, Credit Default Swap, Daniel Kahneman / Amos Tversky, delayed gratification, Donald Trump, endowment effect, Exxon Valdez, first-price auction, Frederick Winslow Taylor, fudge factor, George Akerlof, Gordon Gekko, greed is good, happiness index / gross national happiness, Jean Tirole, job satisfaction, knowledge economy, knowledge worker, lake wobegon effect, late fees, loss aversion, Murray Gell-Mann, new economy, Peter Singer: altruism, placebo effect, price anchoring, Richard Feynman, Richard Feynman, Richard Thaler, Saturday Night Live, Schrödinger's Cat, second-price auction, shareholder value, Silicon Valley, Skype, software as a service, Steve Jobs, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, ultimatum game, Upton Sinclair, Walter Mischel, young professional

Constantine Sedikides, Dan Ariely, and Nils Olsen, “Contextual and Procedural Determinants of Partner Selection: On Asymmetric Dominance and Prominence,” Social Cognition (1999). Chapter 2: The Fallacy of Supply and Demand BASED ON Dan Ariely, George Loewenstein, and Drazen Prelec, “Coherent Arbitrariness: Stable Demand Curves without Stable Preferences,” Quarterly Journal of Economics (2003). Dan Ariely, George Loewenstein, and Drazen Prelec, “Tom Sawyer and the Construction of Value,” Journal of Economic Behavior and Organization (2006). RELATED READINGS Cass R. Sunstein, Daniel Kahneman, David Schkade, and Ilana Ritov, “Predictably Incoherent Judgments,” Stanford Law Review (2002). Uri Simonsohn, “New Yorkers Commute More Everywhere: Contrast Effects in the Field,” Review of Economics and Statistics (2006). Uri Simonsohn and George Loewenstein, “Mistake #37: The Impact of Previously Faced Prices on Housing Demand,” Economic Journal (2006). Chapter 3: The Cost of Zero Cost BASED ON Kristina Shampanier, Nina Mazar, and Dan Ariely, “How Small Is Zero Price?


pages: 1,351 words: 385,579

The Better Angels of Our Nature: Why Violence Has Declined by Steven Pinker

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1960s counterculture, affirmative action, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Albert Einstein, availability heuristic, Berlin Wall, Bonfire of the Vanities, British Empire, Broken windows theory, California gold rush, Cass Sunstein, citation needed, clean water, cognitive dissonance, colonial rule, Columbine, computer age, conceptual framework, correlation coefficient, correlation does not imply causation, crack epidemic, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, demographic transition, desegregation, Doomsday Clock, Douglas Hofstadter, Edward Glaeser, en.wikipedia.org, European colonialism, experimental subject, facts on the ground, failed state, first-past-the-post, Flynn Effect, food miles, Francis Fukuyama: the end of history, fudge factor, full employment, ghettoisation, Gini coefficient, global village, Henri Poincaré, impulse control, income inequality, informal economy, invention of the printing press, Isaac Newton, lake wobegon effect, libertarian paternalism, loss aversion, Marshall McLuhan, McMansion, means of production, mental accounting, meta analysis, meta-analysis, Mikhail Gorbachev, mutually assured destruction, open economy, Peace of Westphalia, Peter Singer: altruism, QWERTY keyboard, race to the bottom, Ralph Waldo Emerson, random walk, Republic of Letters, Richard Thaler, Ronald Reagan, Rosa Parks, Saturday Night Live, security theater, Skype, Slavoj Žižek, South China Sea, statistical model, stem cell, Steven Levy, Steven Pinker, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, theory of mind, transatlantic slave trade, transatlantic slave trade, Turing machine, ultimatum game, uranium enrichment, V2 rocket, Walter Mischel, WikiLeaks, women in the workforce

Much of what looks like a lack of self-control in the modern world may consist of using a discounting rate that was wired into our nervous systems in the iffy world of our pre-state ancestors, when people died much younger and had no institutions that could parlay savings now into returns years later.76 Economists have noted that when people are left to their own devices, they save far too little for their retirement, as if they expect to die in a few years.77 That is the basis for the “libertarian paternalism” of Richard Thaler, Cass Sunstein, and other behavioral economists, in which the government would, with people’s consent, tilt the playing field between their current and future selves.78 One example is setting an optimal retirement savings plan as the default, which employees would have to opt out of, rather than as a selection they would have to opt into. Another is to shift the burden of sales taxes onto the least healthy foods.