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

American ideology, barriers to entry, big-box store, Cass Sunstein, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, Edward Glaeser, housing crisis, joint-stock company, Joseph Schumpeter, minimum wage unemployment, positional goods, price stability, profit motive, race to the bottom, Ralph Nader, RAND corporation, rent control, Robert Bork, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, The Wealth of Nations by Adam Smith, trade route, transaction costs, Upton Sinclair, urban renewal, wealth creators

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: 256 words: 60,620

Think Twice: Harnessing the Power of Counterintuition by Michael J. Mauboussin

affirmative action, asset allocation, Atul Gawande, availability heuristic, Benoit Mandelbrot, Bernie Madoff, Black Swan, butter production in bangladesh, Cass Sunstein, choice architecture, Clayton Christensen, cognitive dissonance, collateralized debt obligation, Daniel Kahneman / Amos Tversky, deliberate practice, disruptive innovation, Edward Thorp, experimental economics, financial innovation, framing effect, fundamental attribution error, Geoffrey West, Santa Fe Institute, George Akerlof, hindsight bias, hiring and firing, information asymmetry, libertarian paternalism, Long Term Capital Management, loose coupling, loss aversion, mandelbrot fractal, Menlo Park, meta analysis, meta-analysis, money market fund, Murray Gell-Mann, Netflix Prize, pattern recognition, Philip Mirowski, placebo effect, Ponzi scheme, prediction markets, presumed consent, Richard Thaler, Robert Shiller, Robert Shiller, statistical model, Steven Pinker, The Wisdom of Crowds, ultimatum game

Prediction markets are real-money exchanges where people can bet on events with binary and temporally defined outcomes; hence the price reflects the probability of the event occurring. See Kenneth J. Arrow, Robert Forsythe, Michael Gorham, Robert Hahn, Robin Hansen, John O. Ledyard, Saul Levmore, Robert Litan, Paul Milgrom, Forrest D. Nelson, George R. Neumann, Marco Ottaviani, Thomas C. Schelling, Robert J. Shiller, Vernon L. Smith, Erik Snowberg, Cass R. Sunstein, Paul C. Tetlock, Philip E. Tetlock, Hal R. Varian, Justin Wolfers, and Eric Zitzewitz, “The Promise of Prediction Markets,” Science 320 (May 16, 2008):877–878; Bo Cowgill, Justin Wolfers, and Eric Zitzewitz, “Using Prediction Markets to Track Information Flows: Evidence from Google,” working paper, 2008. 4. Phred Dvorak, “Best Buy Taps ‘Prediction Market,’” Wall Street Journal, September 16, 2008. 5.

Watts, Six Degrees: The Science of a Connect Age (New York: W.W. Norton & Company, 2003); and Victor M. Eguiluz and Martin G. Zimmerman, “Transmission of Information and Herd Behavior: An Application to Financial Markets,” Physical Review Letters 85, no. 26 (2000): 5659–5662. 28. Irving Janis, Groupthink: Psychological Studies of Policy Decisions and Fiascoes, 2nd ed. (Boston: Houghton Mifflin, 1982); and Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (Oxford: Oxford University Press, 2006), 45–46. 29. Tetlock, Expert Political Judgment, 73–75. 30. Saul Hansell, “Google Answer to Filling Jobs Is an Algorithm,” New York Times, January 3, 2007. Chapter 4—Situational Awareness: How Accordion Music Boosts Sales of Burgundy 1. S. E. Asch, “Effects of Group Pressure Upon the Modification and Distortion of Judgments,” in Groups, Leadership and Men, ed.

Holland, Merel Hendriks, and Henk Aarts, “Smells Like Clean Spirit: Nonconscious Effects of Scent on Cognition and Behavior,” Psychological Science 16, no. 9 (2005): 689–693. 15. Naomi Mandel and Eric J. Johnson, “When Web Pages Influence Choice: Effects of Visual Primes on Experts and Novices,” Journal of Consumer Research 29, no. 2 (2002): 235–245. 16. Eric J. Johnson and Daniel Goldstein, “Do Defaults Save Lives?” Science 302 (November 21, 2003): 1338–1339. 17. Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, CT: Yale University Press, 2008); Daniel G. Goldstein, Eric J. Johnson, Andreas Herrmann, and Mark Heitmann, “Nudge Your Customers Toward Better Choices,” Harvard Business Review, December 2008, 99–105; and Dan Ariely, Predictably Irrational: The Hidden Forces That Shape Our Decisions (New York: Harper, 2008), 1–6. 18.


pages: 434 words: 117,327

Can It Happen Here?: Authoritarianism in America by Cass R. Sunstein

active measures, affirmative action, Affordable Care Act / Obamacare, airline deregulation, anti-communist, anti-globalists, availability heuristic, business cycle, Cass Sunstein, David Brooks, Donald Trump, Edward Snowden, Estimating the Reproducibility of Psychological Science, failed state, Filter Bubble, Francis Fukuyama: the end of history, ghettoisation, illegal immigration, immigration reform, Isaac Newton, job automation, Joseph Schumpeter, Long Term Capital Management, Nate Silver, Network effects, New Journalism, night-watchman state, obamacare, Potemkin village, random walk, Richard Thaler, road to serfdom, Ronald Reagan, the scientific method, War on Poverty, WikiLeaks, World Values Survey

See, for instance, Jeffrey Toobin, “The Great Election Grab,” New Yorker, December 8, 2003; and Elizabeth Kolbert, “How Redistricting Turned America from Blue to Red,” New Yorker, June 27, 2016. 21. Cass R. Sunstein, Echo Chambers: Bush v. Gore, Impeachment, and Beyond (Princeton, NJ: Princeton Digital Books Plus, 2001); Cass R. Sunstein, Republic.com 2.0 (Princeton, NJ: Princeton University Press, 2007), especially chaps. 2–3; R. Kelly Garrett, “Echo Chambers Online? Politically Motivated Selective Exposure among Internet News Users,” Journal of Computer-Mediated Communication 14 (2009): 265–85. 22. Timur Kuran and Cass R. Sunstein, “Availability Cascades and Risk Regulation,” Stanford Law Review 51 (1999): 683–768. 23. Seth Flaxman, Sharad Goel, and Justin M. Rao, “Filter Bubbles, Echo Chambers, and Online News Consumption,” Public Opinion Quarterly 80 (2016): SI298–320. 24.

See also Japanese-American internment civil liberties during, 438–41 Yates, Sally, 9, 124 Yoo, John, 225 About the Author CASS R. SUNSTEIN is the Robert Walmsley University Professor at Harvard University, where he is founder and director of the Program on Behavioral Economics and Public Policy and a columnist for Bloomberg View. His many books include the New York Times bestsellers The World According to Star Wars and Nudge (with Richard H. Thaler). He lives in Concord, Massachusetts. Discover great authors, exclusive offers, and more at hc.com. Copyright “Lessons from the American Founding” contains content adapted from Introduction, The Federalist (Cambridge: Harvard University Press, 2009). CAN IT HAPPEN HERE? Copyright © 2018 by Cass R. Sunstein. All rights reserved under International and Pan-American Copyright Conventions.

Table of Contents Cover Title Page Contents Introduction The Dictator’s Handbook, US Edition by Eric A. Posner Constitutional Rot by Jack M. Balkin Could Fascism Come to America? by Tyler Cowen Lessons from the American Founding by Cass R. Sunstein Beyond Elections: Foreign Interference with American Democracy by Samantha Power Paradoxes of the Deep State by Jack Goldsmith How We Lost Constitutional Democracy by Tom Ginsburg and Aziz Huq On “It Can’t Happen Here” by Noah Feldman Authoritarianism Is Not a Momentary Madness, But an Eternal Dynamic Within Liberal Democracies by Karen Stenner and Jonathan Haidt States of Emergency by Bruce Ackerman Another Road to Serfdom: Cascading Intolerance by Timur Kuran The Resistible Rise of Louis Bonaparte by Jon Elster Could Mass Detentions Without Process Happen Here?


pages: 654 words: 191,864

Thinking, Fast and Slow by Daniel Kahneman

Albert Einstein, Atul Gawande, availability heuristic, Bayesian statistics, 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, hedonic treadmill, hindsight bias, index card, information asymmetry, job satisfaction, John von Neumann, Kenneth Arrow, libertarian paternalism, loss aversion, medical residency, mental accounting, meta analysis, meta-analysis, nudge unit, pattern recognition, Paul Samuelson, pre–internet, price anchoring, quantitative trading / quantitative finance, random walk, Richard Thaler, risk tolerance, Robert Metcalfe, Ronald Reagan, Shai Danziger, Supply of New York City Cabdrivers, The Chicago School, The Wisdom of Crowds, Thomas Bayes, 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: 324 words: 92,805

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

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business cycle, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, David Brooks, delayed gratification, disruptive innovation, double helix, factory automation, financial deregulation, financial innovation, fixed income, full employment, game design, greed is good, If something cannot go on forever, it will stop - Herbert Stein's Law, impulse control, income inequality, inflation targeting, invisible hand, job automation, John Markoff, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, mass immigration, 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: 484 words: 131,168

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

"Robert Solow", 1960s counterculture, affirmative action, American Legislative Exchange Council, assortative mating, big-box store, blue-collar work, Cass Sunstein, citizen journalism, cognitive dissonance, David Brooks, demographic transition, desegregation, Edward Glaeser, immigration reform, income inequality, industrial cluster, Jane Jacobs, knowledge economy, longitudinal study, mass immigration, meta analysis, meta-analysis, Milgram experiment, music of the spheres, New Urbanism, post-industrial society, 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

"Robert Solow", 3Com Palm IPO, Albert Einstein, Alvin Roth, Amazon Mechanical Turk, Andrei Shleifer, Apple's 1984 Super Bowl advert, Atul Gawande, Berlin Wall, Bernie Madoff, Black-Scholes formula, business cycle, 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, information asymmetry, invisible hand, Jean Tirole, John Nash: game theory, John von Neumann, Kenneth Arrow, Kickstarter, late fees, law of one price, libertarian paternalism, Long Term Capital Management, loss aversion, market clearing, Mason jar, mental accounting, meta analysis, meta-analysis, money market fund, More Guns, Less Crime, mortgage debt, Myron Scholes, Nash equilibrium, Nate Silver, New Journalism, nudge unit, Paul Samuelson, 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, Stanford marshmallow experiment, statistical model, Steve Jobs, Supply of New York City Cabdrivers, 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, Vilfredo Pareto, Walter Mischel, zero-sum game

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.


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

carbon footprint, carried interest, Cass Sunstein, clean water, congestion charging, corporate governance, deliberate practice, full employment, income inequality, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Paul Samuelson, 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.


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The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It by Yascha Mounk

affirmative action, Affordable Care Act / Obamacare, Andrew Keen, basic income, battle of ideas, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Cass Sunstein, central bank independence, centre right, clean water, cognitive bias, conceptual framework, David Brooks, deindustrialization, demographic transition, desegregation, Donald Trump, en.wikipedia.org, Francis Fukuyama: the end of history, German hyperinflation, gig economy, Gini coefficient, Home mortgage interest deduction, housing crisis, income inequality, invention of the printing press, invention of the steam engine, investor state dispute settlement, job automation, Joseph Schumpeter, land value tax, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, mass immigration, mortgage tax deduction, Naomi Klein, new economy, offshore financial centre, open borders, Parag Khanna, plutocrats, Plutocrats, post-materialism, price stability, ride hailing / ride sharing, rising living standards, Ronald Reagan, Rosa Parks, secular stagnation, sharing economy, Thomas L Friedman, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, universal basic income, upwardly mobile, World Values Survey, zero-sum game

Friedman, “The Square People, Part 1,” New York Times, May 13, 2014, https://www.nytimes.com/2014/05/14/opinion/friedman-the-square-people-part-1.html. 15. Diamond, “Liberation Technology,” 71. 16. See for example Morozov, Net Delusion; and Evgeny Morozov, “Whither Internet Control?” in Liberation Technology, ed. Diamond and Plattner. 17. See Cass R. Sunstein, Republic.com 2.0. (Princeton: Princeton University Press, 2009); Elanor Colleoni, Alessandro Rozza, and Adam Arvidsson, “Echo Chamber or Public Sphere? Predicting Political Orientation and Measuring Political Homophily in Twitter Using Big Data,” Journal of Communication 64, no. 2 (2014): 317–332; and Walter Quattrociocchi, Antonio Scala, and Cass R. Sunstein, “Echo Chambers on Facebook,” June 13, 2016, https://ssrn.com/abstract=2795110. 18. See Hunt Allcott and Matthew Gentzkow, “Social Media and Fake News in the 2016 Election,” Journal of Economic Perspectives 31, no. 2 (2017): 211–236.

Asch, “Effects of Group Pressure upon the Modification and Distortion of Judgments,” in Groups, Leadership, and Men: Research in Human Relations, ed. H. Guetzkow, 177–190 (Pittsburgh: Carnegie Press, 1951); Susan T. Ennett and Karl E. Bauman, “The Contribution of Influence and Selection to Adolescent Peer Group Homogeneity: The Case of Adolescent Cigarette Smoking,” Journal of Personality and Social Psychology 67, no. 4 (1994): 653–663; and Cass R. Sunstein, David Schkade, Lisa M. Ellman, and Andres Sawicki, Are Judges Political? An Empirical Analysis of the Federal Judiciary (Washington, DC: Brookings Institution Press, 2007); Herbert Hyman, Political Socialization (New York: Free Press, 1959). 113. Ezra Klein, “The Most Depressing Graphic for Members of Congress,” Washington Post, January 14, 2013, https://www.washingtonpost.com/news/wonk/wp/2013/01/14/the-most-depressing-graphic-for-members-of-congress/?

Nader, Stefan Stieger, and Martin Voracek, “Lunar Lies: The Impact of Informational Framing and Individual Differences in Shaping Conspiracist Beliefs about the Moon Landings,” Applied Cognitive Psychology 27, no. 1 (2013): 71–80. Regarding the Elders of Zion, see Stephen Eric Bronner, A Rumor about the Jews: Antisemitism, Conspiracy, and the Protocols of Zion (New York: Oxford University Press, 2003); and Esther Webman, ed., The Global Impact of “The Protocols of the Elders of Zion”: A Century-Old Myth (New York: Routledge, 2012). 11. For illuminating analyses of the causes of conspiracy theories, see Cass R. Sunstein and Adrian Vermeule, “Conspiracy Theories: Causes and Cures,” Journal of Political Philosophy 17, no. 2 (2009): 202–227; and Jovan Byford, Conspiracy Theories: A Critical Introduction (New York: Palgrave Macmillan, 2011). For the loss of trust in government, see Chapter 3 as well as “Public Trust in Government: 1958–2017,” Pew Research Center, May 3, 2017, http://www.people-press.org/2017/05/03/public-trust-in-government-1958-2017/. 12.


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

"Robert Solow", Andrei Shleifer, availability heuristic, bank run, Black Swan, business cycle, 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, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, iterative process, Kenneth Arrow, Loma Prieta earthquake, London Interbank Offered Rate, market bubble, market clearing, money market fund, moral hazard, mortgage debt, Pareto efficiency, Paul Samuelson, placebo effect, price discrimination, price stability, RAND corporation, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, source of truth, statistical model, stochastic process, The Wealth of Nations by Adam Smith, Thomas Bayes, Thomas Kuhn: the structure of scientific revolutions, too big to fail, transaction costs, ultimatum game, University of East Anglia, urban planning, Vilfredo Pareto

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.


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

3D printing, additive manufacturing, agricultural Revolution, Albert Einstein, Asilomar, autonomous vehicles, business cycle, Cass Sunstein, Climatic Research Unit, Commodity Super-Cycle, conceptual framework, corporate governance, creative destruction, credit crunch, David Attenborough, decarbonisation, dematerialisation, demographic transition, disruptive innovation, diversified portfolio, double helix, energy security, failed state, financial independence, Gary Taubes, hydraulic fracturing, income inequality, Induced demand, Intergovernmental Panel on Climate Change (IPCC), invisible hand, knowledge economy, meta analysis, meta-analysis, Naomi Klein, oil shale / tar sands, oil shock, pattern recognition, peak oil, Peter Calthorpe, 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.


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Good Economics for Hard Times: Better Answers to Our Biggest Problems by Abhijit V. Banerjee, Esther Duflo

"Robert Solow", 3D printing, affirmative action, Affordable Care Act / Obamacare, Airbnb, basic income, Bernie Sanders, business cycle, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, charter city, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, decarbonisation, Deng Xiaoping, Donald Trump, Edward Glaeser, en.wikipedia.org, endowment effect, energy transition, Erik Brynjolfsson, experimental economics, experimental subject, facts on the ground, fear of failure, financial innovation, George Akerlof, high net worth, immigration reform, income inequality, Indoor air pollution, industrial cluster, industrial robot, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Jean Tirole, Jeff Bezos, job automation, Joseph Schumpeter, labor-force participation, land reform, loss aversion, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, Network effects, new economy, New Urbanism, non-tariff barriers, obamacare, offshore financial centre, open economy, Paul Samuelson, place-making, price stability, profit maximization, purchasing power parity, race to the bottom, RAND corporation, randomized controlled trial, Richard Thaler, ride hailing / ride sharing, Robert Gordon, Ronald Reagan, school choice, Second Machine Age, secular stagnation, self-driving car, shareholder value, short selling, Silicon Valley, smart meter, social graph, spinning jenny, Steve Jobs, technology bubble, The Chicago School, The Future of Employment, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, trickle-down economics, universal basic income, urban sprawl, very high income, War on Poverty, women in the workforce, working-age population, Y2K

Virginia,” Pew Research Center, 2017, http://www.pewresearch.org/fact-tank/2017/06/12/key-facts-about-race-and-marriage-50-years-after-loving-v-virginia/. 58 Abhijit Banerjee, Esther Duflo, Maitreesh Ghatak, and Jeanne Lafortune, “Marry for What? Caste and Mate Selection in Modern India,” American Economic Journal: Microeconomics 5, no. 2 (2013), https://doi.org/10.1257/mic.5.2.33. 59 Cass R. Sunstein, Republic.com. (Princeton, NJ: Princeton University Press, 2001); Cass R. Sunstein, #Republic: Divided Democracy in the Age of Social Media (Princeton, NJ: Princeton University Press, 2017). 60 “Little Consensus on Global Warming: Partisanship Drives Opinion,” Pew Research Center, 2006, http://www.people-press.org/2006/07/12/little-consensus-on-global-warming/. 61 R. Cass Sunstein, “On Mandatory Labeling, with Special Reference to Genetically Modified Foods,” University of Pennsylvania Law Review 165, no. 5 (2017): 1043–95. 62 Matthew Gentzkow, Jesse M. Shapiro, and Matt Taddy, “Measuring Polarization in High-Dimensional Data: Method and Application to Congressional Speech,” working paper, 2016. 63 Yuriy Gorodnickenko, Tho Pham, and Oleksandr Talavera, “Social Media, Sentiment and Public Opinions: Evidence from #Brexit and #US Election,” National Bureau of Economics Research Working Paper 24631, 2018. 64 Shanto Iyengar, Gaurav Sood, and Yphtach Lelkes, “Affect, Not Ideology: A Social Identity Perspective on Polarization,” Public Opinion Quarterly, 2012, http://doi.org/10.1093/poq/nfs038. 65 “Most Popular Social Networks Worldwide as of January 2019, Ranked by Number of Active Users (in millions),” Statista.com, 2019, accessed April 21, 2019, https://www.statista.com/statistics/272014/global-social-networks-ranked-by-number-of-users/. 66 Maeve Duggan, Nicole B.

A must-read.” —Thomas Piketty, professor, Paris School of Economics, and author of Capital in the Twenty-First Century “A magnificent achievement, and the perfect book for our time. Banerjee and Duflo brilliantly illuminate the largest issues of the day, including immigration, trade, climate change, and inequality. If you read one policy book this year—heck, this decade—read this one.” —Cass R. Sunstein, Robert Walmsley University Professor, Harvard University, and author of How Change Happens “Banerjee and Duflo have shown brilliantly how the best recent research in economics can be used to tackle the most pressing social issues: unequal economic growth, climate change, lack of trust in public action. Their book is an essential wake-up call for intelligent and immediate action!” —Emmanuel Saez, professor of economics at UC Berkeley “One of the things that makes economics interesting and difficult is the need to balance the neat generalities of theory against the enormous variety of deviations from standard assumptions: lags, rigidities, simple inattention, [and] society’s irrepressible tendency to alter what are sometimes thought of as bedrock characteristics of economic behavior.

As a result, differing opinions can persist, even on points of fact such as whether vaccines cause autism or where Barack Obama was born, and even more obviously on matters of taste. We earlier observed that people might rationally choose to suppress their own opinions and join the herd, but of course not being exposed to any opinions outside the herd only makes things worse. We end up with multiple closed groups with contrasting opinions and very little capacity for communicating respectfully with each other. Cass Sunstein, a law professor at Harvard and a member of the Obama administration, describes these as “echo chambers,” where like-minded people whip themselves into a frenzy by listening only to each other.59 One result of this is extreme polarization on what should be more or less objective facts; for example, 41 percent of Americans believe human activity causes global warming, but the same number either say warming is due to a natural cycle (21 percent) or say there is no warming at all (20 percent).


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

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, Metcalfe’s law, Netflix Prize, new economy, PageRank, paypal mafia, Peter Thiel, recommendation engine, RFID, Robert Metcalfe, 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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They Don't Represent Us: Reclaiming Our Democracy by Lawrence Lessig

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Berlin Wall, Bernie Sanders, blockchain, Cass Sunstein, Columbine, crony capitalism, crowdsourcing, David Brooks, do-ocracy, Donald Trump, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, illegal immigration, income inequality, Jaron Lanier, Jeff Bezos, Joi Ito, Mark Zuckerberg, obamacare, Parag Khanna, plutocrats, Plutocrats, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Ronald Reagan, Shoshana Zuboff, Silicon Valley, Skype, speech recognition, Steven Levy, Upton Sinclair

Journal of Science Communication 14 (2015), available at link #119. A similar conclusion is drawn by Jonathan Haidt. See The Righteous Mind. See also Why Do They Vote That Way (New York: Vintage Books 2018) (drawn in part from The Righteous Mind). This dynamic at the macro level is reinforced at the micro level as well. Cass R. Sunstein, “The Law of Group Polarization,” Journal of Political Philosophy 10, no. 2 (2002): 175–95. For a detailed review of evidence, see Cass R. Sunstein, Going to Extremes: How Like Minds Unite and Divide (Oxford: Oxford University Press, 2009), 161–68. 90.Ben Gilbert, “There’s a Simple Reason Your New Smart TV Was So Affordable: It’s Collecting and Selling Your Data,” Business Insider, January 12, 2019, available at link #120. 91.Sean Burch, “‘Senator, We Run Ads’: Hatch Mocked for Basic Facebook Question to Zuckerberg,” SFGate, April 10, 2018, available at link #121; “Facebook CEO Mark Zuckerberg Hearing on Data Privacy and Protection,” C-SPAN, April 10, 2018, available at link #122. 92.My thinking in this respect was inspired by a brilliant article by Jonathan Zittrain, published just at the height of the copyright wars.

For the most compelling accounts, see Wu, The Attention Merchants; McChesney and Nichols, Death and Life of American Journalism. For the most comprehensive and theorized recent account, see Shoshana Zuboff, The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power (New York: PublicAffairs, 2019). 60.Lawrence Lessig, The Future of Ideas: The Fate of the Commons in a Connected World (New York: Random House, 2001), 7. 61.Compare Cass R. Sunstein, “The First Amendment in Cyberspace,” Yale Law Journal 104 (1995): 1757–1804, available at link #99, with Eugene Volokh, “Cheap Speech and What It Will Do,” Yale Law Journal 104 (1995): 1805–50, available at link #100. Rick Hasen gives a contemporary view of Volokh’s “remarkably prescient article” in “Cheap Speech and What It Has Done (to American Democracy),” First Amendment Law Review 16 (2017–18): 200. 62.Nick Visser, “CBS Chief Les Moonves Says Trump’s ‘Damn Good’ for Business,” Huffington Post, March 1, 2016, available at link #101. 63.Gregory J.

What we were not imagining was that as the technology of media became more and more sensitive to us individually, it would become more and more responsive to what we individually would want. And that that responsiveness itself would be a problem. The point is not that the idea was never there. In one of the first “law of cyberspace” conferences that I attended at Yale in 1994, Professors Eugene Volokh and Cass Sunstein were already debating the consequences of “the daily me.”61 Yet none of us then had any rich or deep sense about how this crafting would evolve, or what the consequences in the end would be. For the reality is this: the world of cable television is insanely competitive. The markets are small (by comparison, historically) and the drive for ratings is fierce. The primary technique for earning strong ratings is to give the customer what the customer wants.


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Digital Disconnect: How Capitalism Is Turning the Internet Against Democracy by Robert W. McChesney

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, access to a mobile phone, Albert Einstein, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, Automated Insights, barriers to entry, Berlin Wall, business cycle, Cass Sunstein, citizen journalism, cloud computing, collaborative consumption, collective bargaining, creative destruction, crony capitalism, David Brooks, death of newspapers, declining real wages, Double Irish / Dutch Sandwich, Erik Brynjolfsson, failed state, Filter Bubble, full employment, future of journalism, George Gilder, Gini coefficient, Google Earth, income inequality, informal economy, intangible asset, invention of agriculture, invisible hand, Jaron Lanier, Jeff Bezos, jimmy wales, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Julian Assange, Kickstarter, Mark Zuckerberg, Marshall McLuhan, means of production, Metcalfe’s law, mutually assured destruction, national security letter, Nelson Mandela, Network effects, new economy, New Journalism, Nicholas Carr, Occupy movement, offshore financial centre, patent troll, Peter Thiel, plutocrats, Plutocrats, post scarcity, price mechanism, profit maximization, profit motive, QWERTY keyboard, Ralph Nader, Richard Stallman, road to serfdom, Robert Metcalfe, Saturday Night Live, sentiment analysis, Silicon Valley, single-payer health, Skype, spectrum auction, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, Stewart Brand, Telecommunications Act of 1996, the medium is the message, The Spirit Level, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, Upton Sinclair, WikiLeaks, winner-take-all economy, yellow journalism

Henry Jenkins, Convergence Culture: Where Old and New Media Collide (New York: New York University Press, 2006), 4. 19. Michael Nielsen, Reinventing Discovery: The New Era of Networked Science (Princeton, NJ: Princeton University Press, 2012), 3, 6, 10, 41. See also “The Wow Factor,” The Economist, Mar. 10, 2012, 92. 20. Yochai Benkler, The Penguin and the Leviathan: How Cooperation Triumphs over Self-Interest (New York: Crown Business, 2011), 3. 21. Cass R. Sunstein, Republic.com (Princeton, NJ: Princeton University Press, 2001). 22. Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (New York: Oxford University Press, 2006), 8, 9. 23. Simon Mainwaring, We First: How Brands and Consumers Use Social Media to Build a Better World (New York: Palgrave Macmillan, 2011), 1. 24. Jeff Jarvis, Public Parts: How Sharing in the Digital Age Improves the Way We Work and Live (New York: Simon & Schuster, 2011), 11, 76. 25.

He provides the basis for this argument in Yochai Benkler, The Wealth of Networks: How Social Production Transforms Markets and Freedom (New Haven, CT: Yale University Press, 2006). 56. Don Tapscott and Anthony D. Williams, Wikinomics: How Mass Collaboration Changes Everything (New York: Portfolio, 2006), 1, 3. 57. Jarvis, Public Parts, 6–7, 163–66. 58. Botsman and Rogers, What’s Mine Is Yours, 224–25. 59. Mainwaring, We First, 231. 60. Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (New York: Oxford University Press, 2006), 224. 61. Charles E. Lindblom, The Market System (New Haven, CT: Yale University Press, 2001), 3. 62. Ha-Joon Chang, 23 Things They Don’t Tell You About Capitalism (New York: Bloomsbury Press, 2010), vx. 63. Richard A. Posner, A Failure of Capitalism: The Crisis of ’08 and the Descent into Depression (Cambridge, MA: Harvard University Press, 2009); and Richard A.

Nielsen concedes this revolution in “how knowledge is constructed” faces some speed bumps—not the least of which comes from commercial interests’ desire to patent everything—but the general trajectory is irreversible.19 In his 2011 The Penguin and the Leviathan, Yochai Benkler sees the Internet as driving a fundamental shift in human nature, one very much for the better: All around us we see people cooperating and working in collaboration, doing the right thing, behaving fairly, acting generously, caring about their group or team, and trying to behave like decent people who reciprocate kindness with kindness. Nowhere has this fact been more obvious than online, where Wikipedia and open-source software have been so successful. Tux, the Linux Penguin, is beginning to nibble away at the grim view of humanity that breathed life into Thomas Hobbes’s Leviathan.20 These developments are so powerful, they have even brought a pronounced skeptic back toward the celebrant fold. Cass Sunstein once wrote of “information cocoons” and how the Internet would make it possible for people to avoid or ignore much of humanity, with dire implications for public life.21 With his 2006 Infotopia, Sunstein turned—heralding “the development of cumulative knowledge” online, “producing an astonishing range of new goods and activities.” With wikis, with “respect to the aggregation of information, we are in the first stages of a revolution.”22 “Enabled by the Internet and social media,” Simon Mainwaring writes in 2011’s We First, “we are connecting with each other across geographic, cultural, and language barriers, reawakening our innate capacity for empathy and allowing ourselves to derive great satisfaction from social contributions as well as our self-interested endeavors.”


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

Albert Einstein, augmented reality, barriers to entry, bioinformatics, Cass Sunstein, Climategate, Climatic Research Unit, conceptual framework, dark matter, discovery of DNA, Donald Knuth, double helix, Douglas Engelbart, 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, Johannes Kepler, Kevin Kelly, Magellanic Cloud, means of production, medical residency, Nicholas Carr, P = NP, publish or perish, Richard Feynman, Richard Stallman, selection bias, semantic web, Silicon Valley, Silicon Valley startup, Simon Singh, Skype, slashdot, social intelligence, 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

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, Kenneth Arrow, laissez-faire capitalism, Landlord’s Game, loss aversion, market bubble, mental accounting, meta analysis, meta-analysis, Nash equilibrium, new economy, Paul Samuelson, payday loans, Philip Mirowski, 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, social intelligence, starchitect, 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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The Unbanking of America: How the New Middle Class Survives by Lisa Servon

Affordable Care Act / Obamacare, Airbnb, basic income, Build a better mousetrap, business cycle, Cass Sunstein, choice architecture, creative destruction, Credit Default Swap, employer provided health coverage, financial exclusion, financial independence, financial innovation, gender pay gap, George Akerlof, gig economy, income inequality, informal economy, Jane Jacobs, Joseph Schumpeter, late fees, Lyft, M-Pesa, medical bankruptcy, microcredit, Occupy movement, payday loans, peer-to-peer lending, precariat, Ralph Nader, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, sharing economy, too big to fail, transaction costs, unbanked and underbanked, underbanked, universal basic income, Unsafe at Any Speed, We are the 99%, white flight, working poor, Zipcar

Luke Shaefer, $2.00 a Day: Living on Almost Nothing in America (New York: Houghton Mifflin Harcourt, 2015). 167 a strong safety net: Michael S. Barr, Sendhil Mullainathan, and Eldar Shafir, “Behaviorally Informed Regulation,” in No Slack: The Financial Lives of Low-Income Americans, edited by Michael S. Barr (Washington, DC: Brookings Institution Press, 2012). 169 “choice architecture”: Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, CT: Yale University Press, 2008). simply changing the default option: John Beshears et al., “The Importance of Default Options for Retirement Savings Outcomes: Evidence from the United States,” NBER Working Paper No. 12009 (Cambridge, MA: National Bureau of Economic Research, February 2006). how to “nudge” people: Barr, No Slack; Thaler and Sunstein, Nudge. 170 “favoring bank profitability”: Mehrsa Baradaran, How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy (Cambridge, MA: Harvard University Press, 2015), p. 7. 171 enable them to borrow: International Monetary Fund, “Big Banks Benefit from Government Subsidies,” IMF Survey Magazine, March 31, 2014. http://www.imf.org/external/pubs/ft/survey/so/2014/POL033114A.htm 172 through the postal service: Mehrsa Baradaran endorses this idea in How the Other Half Banks.

London: Bloomsbury, 2014. Stango, Victor. “Some New Evidence on Competition in Payday Lending Markets.” Contemporary Economic Policy, vol. 30, no. 2 (2012): 149–61. Stempel, Jonathan. “US Agency Claims Darden Won’t Hire ‘Old White Guys’ for Dining Chain.” Reuters, February 12, 2015. Sweetland Edwards, Haley. “The Middle Class Is Doing Worse Than You Think.” Time, April 8, 2015. Thaler, Richard H., and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven, CT: Yale University Press, 2008. Theodos, Brett, Margaret Simms, Mark Treskon, Christina Plerhoples Stacy, Rachel Brash, Dina Emam, Rebecca Daniels, and Juan Collazos. “An Evaluation of the Impacts and Implementation Approaches of Financial Coaching Programs.” Washington, DC: Urban Institute, October 2015. Think Finance.

Remember Ariane, the teller I worked with at Check Center, who took out five payday loans to fix her car so she could get to work? The situation she found herself in—choosing between taking out payday loans or losing her job—overrode her knowledge; as she told me, “I know it’s bad.” The upside of this finding is that the effect of context on decision making is predictable. We can find ways to protect people at vulnerable moments. The way choices are presented—what the economists Richard Thaler and Cass Sunstein call “choice architecture”—is also critical to making a good decision. Employee enrollment in retirement plans provides a good illustration. When a worker is lucky enough to get a job that includes a retirement plan, she must usually make several decisions—whether to participate, how much to contribute, how to allocate contributions across different investments. Most plans require workers to “opt in”—in other words, you have to choose to participate.


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

Albert Einstein, Asperger Syndrome, business cycle, 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, selection bias, Silicon Valley, social intelligence, 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 World Beyond Your Head: On Becoming an Individual in an Age of Distraction by Matthew B. Crawford

airport security, Cass Sunstein, choice architecture, collateralized debt obligation, creative destruction, 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, Norman Mailer, online collectivism, plutocrats, Plutocrats, Richard Thaler, Rodney Brooks, self-driving car, Silicon Valley, Silicon Valley ideology, Stanford marshmallow experiment, 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 Future of the Internet: And How to Stop It by Jonathan Zittrain

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, commoditize, corporate governance, Daniel Kahneman / Amos Tversky, disruptive innovation, 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, John Markoff, license plate recognition, loose coupling, mail merge, national security letter, old-boy network, packet switching, peer-to-peer, post-materialism, pre–internet, price discrimination, profit maximization, Ralph Nader, RFC: Request For Comment, RFID, Richard Stallman, Richard Thaler, risk tolerance, Robert Bork, 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, zero-sum game

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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Future Politics: Living Together in a World Transformed by Tech by Jamie Susskind

3D printing, additive manufacturing, affirmative action, agricultural Revolution, Airbnb, airport security, Andrew Keen, artificial general intelligence, augmented reality, automated trading system, autonomous vehicles, basic income, Bertrand Russell: In Praise of Idleness, bitcoin, blockchain, brain emulation, British Empire, business process, Capital in the Twenty-First Century by Thomas Piketty, cashless society, Cass Sunstein, cellular automata, cloud computing, computer age, computer vision, continuation of politics by other means, correlation does not imply causation, crowdsourcing, cryptocurrency, digital map, distributed ledger, Donald Trump, easy for humans, difficult for computers, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Ethereum, ethereum blockchain, Filter Bubble, future of work, Google bus, Google X / Alphabet X, Googley, industrial robot, informal economy, intangible asset, Internet of things, invention of the printing press, invention of writing, Isaac Newton, Jaron Lanier, John Markoff, Joseph Schumpeter, Kevin Kelly, knowledge economy, lifelogging, Metcalfe’s law, mittelstand, more computing power than Apollo, move fast and break things, move fast and break things, natural language processing, Network effects, new economy, night-watchman state, Oculus Rift, Panopticon Jeremy Bentham, pattern recognition, payday loans, price discrimination, price mechanism, RAND corporation, ransomware, Ray Kurzweil, Richard Stallman, ride hailing / ride sharing, road to serfdom, Robert Mercer, Satoshi Nakamoto, Second Machine Age, selection bias, self-driving car, sexual politics, sharing economy, Silicon Valley, Silicon Valley startup, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, smart contracts, Snapchat, speech recognition, Steve Jobs, Steve Wozniak, Steven Levy, technological singularity, the built environment, The Structural Transformation of the Public Sphere, The Wisdom of Crowds, Thomas L Friedman, universal basic income, urban planning, Watson beat the top human players on Jeopardy!, working-age population

See Yochai Benkler, The Wealth of Networks: How Social Production Transforms Markets and Freedom (New Haven and London: Yale University Press, 2006). 4. See e.g. Robert Faris et al.,‘Partisanship, Propaganda, and Disinformation: Online Media and the 2016 U.S. Presidential Election’, Berkman Klein Center Research Paper <https://papers.ssrn.com/sol3/papers. cfm?abstract_id=3019414> (accessed 8 December 2017). 5. See Cass R. Sunstein, Republic.com 2.0 (Princeton: Princeton University Press, 2007); Cass R. Sunstein, #Republic: Divided Democracy in the age of Social Media (Princeton: Princeton University Press, 2017); Alex Krasodomski-Jones, ‘Talking To Ourselves?’ Demos, September 2016 <https://www.demos.co.uk/wp-content/uploads/2017/02/EchoChambers-final-version.pdf> (accessed 1 December 2017). 6. Bruce Bimber, Information and American Democracy: Technology in the Evolution of Political Power (New York: Cambridge University Press, 2011), 206–9. 7.

utm_source=dd&utm_ medium=email&utm_campaign=10242016&variable=af3d170230 8a23693509dd3317fe68e7> (accessed 8 December 2017). 22. The Correspondence of John Stuart Mill and Auguste Comte, ed. Oscar A. Haac (London: Transaction, 1995), Foreword and Introduction. 23. Helen Nissenbaum, Privacy in Context:Technology, Policy, and the Integrity of Social Life (Stanford: Stanford University Press, 2010), 83. 24. Cass R. Sunstein, The Ethics of Influence: Government in the Age of Behavioral Science (New York: Cambridge University Press, 2016), 82. 25. Dworkin, Autonomy, 18. 26. Sarah Dean,‘A Nation of “Micro-Criminals”:The 11 Sneaky Crimes We Are Commonly Committing’, iNews, 22 October 2016 <https:// OUP CORRECTED PROOF – FINAL, 30/05/18, SPi РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Notes 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 403 inews.co.uk/essentials/news/uk/nation-micro-criminals-11-sneakycrimes-commonly-committing/> (accessed 1 December 2017).

The eccentric philosopher Auguste Comte (1798–1857) believed that the key to good thinking was insulation from the ideas of others. He called this ‘cerebral hygiene’.22 (Students: next time you haven’t done the required reading for class, blame ‘cerebral hygiene’.) I prefer the view of Helen Nissenbaum, that to be ‘utterly impervious to all outside influences’ is not to be autonomous: but to be a ‘fool’.23 Harvard professor Cass Sunstein has done some interesting thinking on this subject, most recently in OUP CORRECTED PROOF – FINAL, 30/05/18, SPi РЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS Freedom and the Supercharged State 171 The Ethics of Influence (2016). For Sunstein, reminders, warnings, ­disclosures of factual information, simplification, and frameworks of ‘active choosing’ are nudges that influence people but preserve their freedom of choice.


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

Ada Lovelace, Albert Einstein, Alfred Russel Wallace, carbon-based life, Cass Sunstein, cleantech, complexity theory, conceptual framework, cosmic microwave background, creative destruction, crowdsourcing, data acquisition, digital Maoism, digital map, discovery of DNA, Dmitri Mendeleev, double entry bookkeeping, double helix, Douglas Engelbart, 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, James Hargreaves, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Johannes Kepler, John Snow's cholera map, Joseph Schumpeter, Joseph-Marie Jacquard, Kevin Kelly, lone genius, Louis Daguerre, Louis Pasteur, Mason jar, mass immigration, 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 Globotics Upheaval: Globalisation, Robotics and the Future of Work by Richard Baldwin

agricultural Revolution, Airbnb, AltaVista, Amazon Web Services, augmented reality, autonomous vehicles, basic income, business process, business process outsourcing, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, commoditize, computer vision, Corn Laws, correlation does not imply causation, Credit Default Swap, David Ricardo: comparative advantage, declining real wages, deindustrialization, deskilling, Donald Trump, Douglas Hofstadter, Downton Abbey, Elon Musk, Erik Brynjolfsson, facts on the ground, future of journalism, future of work, George Gilder, Google Glasses, Google Hangouts, hiring and firing, impulse control, income inequality, industrial robot, intangible asset, Internet of things, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, knowledge worker, laissez-faire capitalism, low skilled workers, Machine translation of "The spirit is willing, but the flesh is weak." to Russian and back, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, Metcalfe’s law, new economy, optical character recognition, pattern recognition, Ponzi scheme, post-industrial society, post-work, profit motive, remote working, reshoring, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Reagan, Second Machine Age, self-driving car, side project, Silicon Valley, Skype, Snapchat, social intelligence, sovereign wealth fund, standardized shipping container, statistical model, Stephen Hawking, Steve Jobs, supply-chain management, TaskRabbit, telepresence, telepresence robot, telerobotics, Thomas Malthus, trade liberalization, universal basic income

Jonathan Haidt, “The Key to Trump is Stenner’s Authoritarianism”, The Righteous Mind (blog), January 6, 2016. 7. “Andrew Yang for President” website, www.yang2020.com. 8. Samantha Reis and Brian Martin, “Psychological Dynamics of Outrage against Injustice,” The Canadian Journal of Peace and Conflict Studies, 2008. 9. Cass R. Sunstein, David Schkade, and Daniel Kahneman, “Deliberating about Dollars: The Severity Shift,” Law & Economics Working Papers No. 95, 2000. 10. Cass Sunstein, “Growing Outrage,” in Behavioural Public Policy, 2018 (in press). 11. Manuel Funke, Moritz Schularick, and Christoph Trebesch, “The Political Aftermath of Financial Crises: Going to Extremes,” CEPR policy portal, VoxEU.org, November 21, 2015. 12. Alan de Bromhead, Barry Eichengreen and Kevin O'Rourke, “Right-wing Political Extremism in the Great Depression,” VoxEU.org, February 27, 2012. 13.

Outrageous things seem more outrageous when you share your sense of outrage with others. And a similar thing happened in the opposite direction. When it came to mock crimes that seemed trivial or technocratic, the group as a whole acted more leniently after they deliberated together. The key point here is that this sort of group dynamics makes social outrage into a highly unstable, highly unpredictable thing. Cass Sunstein wrote a recent article discussing the key role that injustice played in the rapid spread of the #MeToo movement. He stressed the point that the reaction outrage causes can depend upon unexpected dynamics. “With small variations in starting points, and inertia . . . [o]utrage may fizzle or grow.”10 Another key point—and one that reinforces the notion that the globotics backlash will involve a fusing of white-collar and blue-collar furies—is that outrage usually springs from a bed of long-lived discontent.


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

Andrew Wiles, Asian financial crisis, Berlin Wall, bonus culture, British Empire, business process, Cass Sunstein, computer age, corporate raider, 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, lateral thinking, Long Term Capital Management, Louis Pasteur, market fundamentalism, Myron Scholes, Nash equilibrium, pattern recognition, Paul Samuelson, purchasing power parity, RAND corporation, regulatory arbitrage, shareholder value, Simon Singh, Steve Jobs, Thales of Miletus, 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.


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

Albert Einstein, 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, selection bias, 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.”


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

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, Kenneth Arrow, loss aversion, medical residency, Menlo Park, Murray Gell-Mann, Nate Silver, New Journalism, Paul Samuelson, Richard Thaler, Saturday Night Live, Stanford marshmallow experiment, statistical model, the new new thing, Thomas Bayes, 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.”


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Can Democracy Work?: A Short History of a Radical Idea, From Ancient Athens to Our World by James Miller

Berlin Wall, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, colonial rule, cuban missile crisis, Daniel Kahneman / Amos Tversky, David Graeber, Donald Trump, failed state, Fall of the Berlin Wall, Francis Fukuyama: the end of history, income inequality, Joseph Schumpeter, mass incarceration, means of production, Occupy movement, Ralph Waldo Emerson, Republic of Letters, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, transatlantic slave trade, union organizing, upwardly mobile, Vilfredo Pareto

David Graeber—the most prominent of those infatuated—responded to Hedges with an “open letter,” “Concerning the Violent Peace Police,” February 9, 2012, http://nplusonemag.com/concerning-the-violent-peace-police. “experiences of visionary inspiration”: David Graeber, “Revolution in Reverse,” in Revolutions in Reverse: Essays in Politics, Violence, Art, and Imagination (London: Minor Compositions, 2011), 64. “the law of group polarization”: Cass R. Sunstein, “The Law of Group Polarization,” John M. Olin Law & Economics Working Paper No. 91, www.law.uchicago.edu/Publications/Working/index.html. “the most important negative liberties”: Arendt, On Revolution, 284. Instead of single-mindedly pursuing a new form of “collective thinking”: Cf. John Gray, The Two Faces of Liberalism (New York: New Press, 2000), who has come to a similar conclusion.

Equally insidious are the paradoxical results that occur in a polarizing protest movement that simultaneously demands consensus in its organs of self-government. As a result of the willingness of moderates within such a movement to compromise, the consensus view that prevails is generally the most radical alternative on offer (as had happened before in SDS in the late 1960s—yet another illustration of what Cass Sunstein has called “the law of group polarization”). Some of these problems could be papered over briefly. Occupy proved that a handful of networked activists can exploit social media to muster a large, ostensibly leaderless protest movement. But when the tear gas and crowds have dispersed from the city squares, those left behind will have to face the fact that “organizing without organizations” is a fantasy—not a winning long-term political strategy.

“if the will of the majority of citizens”: James Bryce, The American Commonwealth (Indianapolis: Liberty Fund, 1995 [1888]), 2:919. “to the extent that polls also are accurate”: American Association for Public Opinion Research, “AAPOR’s Statement on 2012 Presidential Election Polling,” www.aapor.org/Communications/Press-Releases/AAPOR-s-Statement-on-2012-Presidential-Election-Po.aspx. The more refined such data: For a recent discussion of this problem, see Cass Sunstein, The Ethics of Influence: Government in the Age of Behavioral Science (New York: Cambridge University Press, 2016). “were increasingly listening to what people”: James W. Beniger, “Comment on Charles Tilly,” Public Opinion Quarterly 47, no. 4 (Winter 1983): 481–482. “What we are confronted with”: Schumpeter, Capitalism, Socialism, and Democracy, p. 263 (quoting from the third edition; the first edition appeared in 1942, the second in 1947).


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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

asset-backed security, bank run, banking crisis, Basel III, Black Swan, Black-Scholes formula, bonus culture, break the buck, buy and hold, capital asset pricing model, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, commoditize, 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, John Meriwether, Kenneth Rogoff, Kickstarter, Long Term Capital Management, margin call, market bubble, money market fund, Myron Scholes, Nick Leeson, Northern Rock, offshore financial centre, Paul Samuelson, price mechanism, regulatory arbitrage, rent-seeking, Richard Thaler, risk tolerance, risk/return, Ronald Reagan, shareholder value, short selling, statistical model, The Chicago School, Thomas Bayes, time value of money, too big to fail, transaction costs, value at risk, Vanguard fund, yield curve, zero-sum game

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

Albert Einstein, Anton Chekhov, autonomous vehicles, Barry Marshall: ulcers, call centre, Cass Sunstein, colonial rule, Edward Glaeser, Everything should be made as simple as possible, food miles, Gary Taubes, income inequality, Internet Archive, Isaac Newton, medical residency, Metcalfe’s law, 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.


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

Albert Einstein, asset allocation, assortative mating, Atul Gawande, Bernie Madoff, business process, Cass Sunstein, choice architecture, clean water, creative destruction, 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, longitudinal study, loss aversion, medical residency, meta analysis, meta-analysis, Monroe Doctrine, Paul Samuelson, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, school vouchers, six sigma, social intelligence, Stanford marshmallow experiment, 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

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, creative destruction, 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, lifelogging, lone genius, Louis Pasteur, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, moral panic, Narrative Science, Nelson Mandela, Nicholas Carr, packet switching, PageRank, Parag Khanna, Paul Graham, peer-to-peer, 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: 461 words: 128,421

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

activist fund / activist shareholder / activist investor, Albert Einstein, Andrei Shleifer, asset allocation, asset-backed security, bank run, beat the dealer, Benoit Mandelbrot, Black-Scholes formula, Bretton Woods, Brownian motion, business cycle, buy and hold, capital asset pricing model, card file, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, corporate raider, 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, Edward Thorp, endowment effect, Eugene Fama: efficient market hypothesis, experimental economics, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, George Akerlof, Henri Poincaré, Hyman Minsky, implied volatility, impulse control, index arbitrage, index card, index fund, information asymmetry, invisible hand, Isaac Newton, John Meriwether, John Nash: game theory, John von Neumann, joint-stock company, Joseph Schumpeter, Kenneth Arrow, libertarian paternalism, linear programming, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, market bubble, market design, Myron Scholes, New Journalism, Nikolai Kondratiev, Paul Lévy, Paul Samuelson, 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 Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Sharpe ratio, short selling, side project, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, statistical model, stocks for the long run, 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, Vilfredo Pareto, 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

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, Douglas Engelbart, 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, Joan Didion, John Conway, John Markoff, John von Neumann, Kevin Kelly, knowledge economy, Lao Tzu, life extension, Louis Daguerre, Marshall McLuhan, megacity, meta analysis, meta-analysis, new economy, off grid, out of africa, performance metric, personalized medicine, phenotype, Picturephone, planetary scale, RAND corporation, random walk, Ray Kurzweil, recommendation engine, refrigerator car, Richard Florida, Rubik’s Cube, 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, wealth creators, 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.”


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The Internet Is Not the Answer by Andrew Keen

"Robert Solow", 3D printing, A Declaration of the Independence of Cyberspace, Airbnb, AltaVista, Andrew Keen, augmented reality, Bay Area Rapid Transit, Berlin Wall, bitcoin, Black Swan, Bob Geldof, Burning Man, Cass Sunstein, citizen journalism, Clayton Christensen, clean water, cloud computing, collective bargaining, Colonization of Mars, computer age, connected car, creative destruction, cuban missile crisis, David Brooks, disintermediation, disruptive innovation, Donald Davies, 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, Joi Ito, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, Kodak vs Instagram, Lean Startup, libertarian paternalism, lifelogging, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Metcalfe’s law, move fast and break things, move fast and break things, Nate Silver, Nelson Mandela, Network effects, new economy, Nicholas Carr, nonsequential writing, Norbert Wiener, Norman Mailer, Occupy movement, packet switching, PageRank, Panopticon Jeremy Bentham, Paul Graham, peer-to-peer, peer-to-peer rental, Peter Thiel, plutocrats, Plutocrats, Potemkin village, precariat, pre–internet, RAND corporation, Ray Kurzweil, ride hailing / ride sharing, Robert Metcalfe, 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 Future of Employment, the medium is the message, the new new thing, Thomas L Friedman, Travis Kalanick, Tyler Cowen: Great Stagnation, Uber for X, uber lyft, 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.


pages: 345 words: 92,849

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

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, creative destruction, 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, wealth creators, women in the workforce, working poor, zero-sum game

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: 168 words: 46,194

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

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: 390 words: 96,624

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

A Declaration of the Independence of Cyberspace, Bay Area Rapid Transit, Berlin Wall, business cycle, 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, John Markoff, Joi Ito, Julian Assange, Mark Zuckerberg, Mikhail Gorbachev, MITM: man-in-the-middle, national security letter, online collectivism, Panopticon Jeremy Bentham, Parag Khanna, 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.


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The Big Nine: How the Tech Titans and Their Thinking Machines Could Warp Humanity by Amy Webb

Ada Lovelace, AI winter, Airbnb, airport security, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, artificial general intelligence, Asilomar, autonomous vehicles, Bayesian statistics, Bernie Sanders, bioinformatics, blockchain, Bretton Woods, business intelligence, Cass Sunstein, Claude Shannon: information theory, cloud computing, cognitive bias, complexity theory, computer vision, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, Deng Xiaoping, distributed ledger, don't be evil, Donald Trump, Elon Musk, Filter Bubble, Flynn Effect, gig economy, Google Glasses, Grace Hopper, Gödel, Escher, Bach, Inbox Zero, Internet of things, Jacques de Vaucanson, Jeff Bezos, Joan Didion, job automation, John von Neumann, knowledge worker, Lyft, Mark Zuckerberg, Menlo Park, move fast and break things, move fast and break things, natural language processing, New Urbanism, one-China policy, optical character recognition, packet switching, pattern recognition, personalized medicine, RAND corporation, Ray Kurzweil, ride hailing / ride sharing, Rodney Brooks, Rubik’s Cube, Sand Hill Road, Second Machine Age, self-driving car, SETI@home, side project, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart cities, South China Sea, sovereign wealth fund, speech recognition, Stephen Hawking, strong AI, superintelligent machines, technological singularity, The Coming Technological Singularity, theory of mind, Tim Cook: Apple, trade route, Turing machine, Turing test, uber lyft, Von Neumann architecture, Watson beat the top human players on Jeopardy!, zero day

Marisa Fernandez, “Amazon Leaves Retail Competitors in the Dust, Claims 50% of US E-Commerce Market,” Axios, July 13, 2018, https://www.axios.com/amazon-now-has-nearly-50-of-the-us-e-commerce-market-1531510098-8529045a-508d-46d6-861f-1d0c2c4a04b4.html. 8. Art Kleiner, “The Man Who Saw the Future,” Strategy+Business, February 12, 2003, https://www.strategy-business.com/article/8220?gko=0d07f. 9. Cass R. Sunstein, “Probability Neglect: Emotions, Worst Cases, and Law,” Chicago Unbound, John M. Olin Program in Law and Economics Working Paper No. 138, 2001. 10. “Quick Facts 2015,” National Highway Traffic Safety Administration, https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/812348. 11. “Aviation Statistics,” National Transportation Safety Board, https://www.ntsb.gov/investigations/data/Pages/aviation_stats.aspx. 12.

The Royal Dutch Shell company popularized scenario planning when it revealed that scenarios had led managers to anticipate the global energy crisis (1973 and 1979) and the collapse of the market in 1986 and to mitigate risk in advance of their competition.8 Scenarios are such a powerful tool that Shell still, 45 years later, employs a large, dedicated team to researching and writing them. I’ve prepared risk and opportunity scenarios for the future of AI across many industries and fields and for a varied group of organizations. Scenarios are a tool to help us cope with a cognitive bias behavioral economics and legal scholar Cass Sunstein calls “probability neglect.”9 Our human brains are bad at assessing risk and peril. We assume that common activities are safer than novel or uncommon activities. For example, most of us feel completely safe driving our cars compared to flying on a commercial airline, yet air travel is the safest mode of transportation. Americans have a 1-in-114 chance of dying in a car crash, compared with a 1-in-9,821 chance of being killed on a plane.10, 11 We’re bad at assessing the risk of driving, which is why so many people text and drink behind the wheel.


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The Coming of Neo-Feudalism: A Warning to the Global Middle Class by Joel Kotkin

Admiral Zheng, Andy Kessler, autonomous vehicles, basic income, Bernie Sanders, call centre, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, Cass Sunstein, clean water, creative destruction, deindustrialization, demographic transition, don't be evil, Donald Trump, edge city, Elon Musk, European colonialism, financial independence, Francis Fukuyama: the end of history, gig economy, Gini coefficient, Google bus, guest worker program, Hans Rosling, housing crisis, income inequality, informal economy, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, job satisfaction, Joseph Schumpeter, land reform, liberal capitalism, life extension, low skilled workers, Lyft, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, megacity, Nate Silver, new economy, New Urbanism, Occupy movement, Parag Khanna, Peter Thiel, plutocrats, Plutocrats, post-industrial society, post-work, postindustrial economy, postnationalism / post nation state, precariat, profit motive, RAND corporation, Ray Kurzweil, rent control, Richard Florida, road to serfdom, Robert Gordon, Sam Altman, Satyajit Das, sharing economy, Silicon Valley, smart cities, Steve Jobs, Stewart Brand, superstar cities, The Death and Life of Great American Cities, The Future of Employment, The Rise and Fall of American Growth, Thomas L Friedman, too big to fail, trade route, Travis Kalanick, Uber and Lyft, uber lyft, universal basic income, unpaid internship, upwardly mobile, We are the 99%, Wolfgang Streeck, women in the workforce, working-age population, Y Combinator

Adam, “Political Affiliation of Canadian University Professors,” Canadian Journal of Sociology, vol. 33:4 (2008), 873–98, https://journals.library.ualberta.ca/cjs/index.php/CJS/article/viewFile/1036/3661; James Galbraith, “The Future of the Left in Europe?” American Prospect, August 17, 2016, http://prospect.org/article/future-left-europe. 37 Jonathan Kay, “A Black Eye for the Columbia Journalism Review,” Quillette, June 18, 2019, https://quillette.com/2019/06/18/a-black-eye-for-the-columbia-journalism-review/. 38 Cass R. Sunstein, “The Problem With All Those Liberal Professors,” Bloomberg, September 17, 2018, https://www.bloomberg.com/view/articles/2018-09-17/colleges-have-way-too-many-liberal-professors; Chase Watkins, “Study finds ‘ideological similarity, hostility, and discrimination’ rampant in academic philosophy,” College Fix, August 21, 2019, https://www.thecollegefix.com/study-inds-ideological-similarity-hostility-and-discrimination-rampant-in-academic-philosophy/. 39 Rex Murphy, “Laurier, trading ‘free speech’ for ‘better speech,’ proves unspeakably clueless still,” National Post, August 3, 2018, https://nationalpost.com/opinion/rex-murphy-now-laurier-wants-to-ditch-free-speech-for-better-speech-can-we-converse. 40 Kate Hardiman, “Universities require scholars pledge commitment to diversity,” College Fix, April 14, 2017, https://www.thecollegefix.com/universities-require-scholars-pledge-commitment-diversity/. 41 James Barrett, “University Panel: Is Intersectionality a Religion?”

Roughly half of British voters lean to the right, while less than 12 percent of academics do.35 Similar ratios are common across Europe and in Canada.36 This political skewing has the effect of transforming much of academia into something resembling an ideological reeducation camp. For example, prominent schools of journalism, including Columbia’s, have moved away from teaching the fundamentals of reporting, to openly advancing a leftist “social justice” agenda.37 Even some progressives, like the legal scholar Cass Sunstein, recognize that “students are less likely to get a good education, and faculty members are likely to learn less from one another, if there is a prevailing political orthodoxy.”38 Yet there seems to be little desire among university administrators to counter the slide ever deeper into ideological conformism. Instead, many are promoting it. One college president in Canada, for example, justified efforts to tamp down on “free speech” by saying it was intended to encourage “better speech” and to protect “the humanity of students, faculty and staff.”39 As many as twenty campuses in the United States ask professors to sign a pledge to support the official campus doctrines concerning “diversity” of a superficial kind, which does not mean diversity of opinion.


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

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, Kickstarter, 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: 383 words: 105,021

Dark Territory: The Secret History of Cyber War by Fred Kaplan

Cass Sunstein, computer age, data acquisition, drone strike, dumpster diving, Edward Snowden, game design, hiring and firing, index card, Internet of things, Jacob Appelbaum, John Markoff, John von Neumann, kremlinology, Mikhail Gorbachev, millennium bug, national security letter, packet switching, pre–internet, RAND corporation, Ronald Reagan, Silicon Valley, Skype, Stuxnet, uranium enrichment, Y2K, zero day

That same day: “Administration White Paper: Bulk Collection of Telephony Metadata Under Section 215 of the USA Patriot Act,” Aug. 9, 2013, http://www.publicrecordmedia.com/wp-content/uploads/2013/08/EOP2013_pd_001.pdf; “The National Security Agency: Missions, Authorities, Oversight and Partnerships,” Aug. 9, 2013, https://www.nsa.gov/public_info/_files/speeches_testimonies/2013_08_09_the_nsa_story.pdf. Sunstein had written an academic paper in 2008: Cass R. Sunstein and Adrian Vermeule, “Conspiracy Theories” (Harvard Public Law Working Paper No. 08-03; University of Chicago Public Law Working Paper No. 199), Jan. 15, 2008, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1084585. The other Chicagoan, Geoffrey Stone: See esp. Geoffrey R. Stone, Perilous Times: Free Speech in Wartime from the Sedition Act of 1798 to the War on Terrorism (New York: W.

Michael Morell was the establishment pick, a thirty-three-year veteran of the CIA, who had just retired two months earlier as the agency’s deputy director and who’d been the main point of contact between Langley and the White House during the secret raid on Osama bin Laden’s lair in Pakistan. Morell’s presence on the panel would go some distance toward placating the intelligence community. Two of the choices were colleagues of Obama from his days, in the 1990s, teaching at the University of Chicago Law School. One of them, Cass Sunstein, had also worked on his presidential campaign, served for three years as the chief administrator of his regulatory office, and was married to Samantha Power, his long-standing foreign policy aide, who had recently replaced Susan Rice as U.N. ambassador. An unconventional thinker on issues ranging from the First Amendment to animal rights, Sunstein had written an academic paper in 2008, proposing that government agencies infiltrate the social networks of extremist groups and post messages to undermine their conspiracy theories; some critics of Obama’s panel took this paper as a sign that Sunstein was well disposed to NSA domestic surveillance.


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

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, information asymmetry, 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.


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#Republic: Divided Democracy in the Age of Social Media by Cass R. Sunstein

A Declaration of the Independence of Cyberspace, affirmative action, Affordable Care Act / Obamacare, Bernie Sanders, Cass Sunstein, choice architecture, Donald Trump, drone strike, Erik Brynjolfsson, Filter Bubble, friendly fire, global village, illegal immigration, immigration reform, income inequality, Jane Jacobs, loss aversion, Mark Zuckerberg, obamacare, prediction markets, road to serfdom, Ronald Reagan, Silicon Valley, Skype, Snapchat, stem cell, The Chicago School, The Death and Life of Great American Cities, The Wisdom of Crowds, WikiLeaks

Powe, “Converging First Amendment Principles for Converging Communications Media,” Yale Law Journal 104, (1995): 1719, 1725. 7.For discussions, see Lawrence Lessig, Free Culture: The Nature and Future of Creativity (New York: Penguin Books, 2004); Yochai Benkler, The Wealth of Networks: How Social Production Transforms Markets and Freedom (New Haven, CT: Yale University Press, 2006). 8.The old case, allowing government action, is Red Lion Broadcasting v. Federal Communications Commission, 395 U.S. 367 (1969). 9.See, for example, Denver Area Educational Telecommunications Consortium v. Federal Communications Commission, 518 U.S. 727 (1996). For a defense of the Court’s caution, see Cass R. Sunstein, One Case at a Time: Judicial Minimalism on the Supreme Court (Cambridge, MA: Harvard University Press, 1999). 10.See Lochner v. New York, 198 U.S. 45 (1905). 11.See Lessig, Free Culture; Benkler, Wealth of Networks. 12.For an effort in this direction, see Cass R. Sunstein, Democracy and the Problem of Free Speech (New York: Free Press, 1995). 13.For an overview, see ibid., 77–81. 14.James Madison, “Report on the Virginia Resolution, January 1800,” in Writings of James Madison, ed. Gaillard Hunt (New York: G. P. Putnam and Sons, 1906), 6:385–401. 15.Ibid. 16.Ibid. 17.I draw here on Sunstein, Democracy and the Problem of Free Speech, 132–36. 18.Pruneyard Shopping Center v.

Copyright © 2017 by Princeton University Press Published by Princeton University Press, 41 William Street, Princeton, New Jersey 08540 In the United Kingdom: Princeton University Press, 6 Oxford Street, Woodstock, Oxfordshire OX20 1TR press.princeton.edu All Rights Reserved Jacket design by Amanda Weiss Library of Congress Cataloging-in-Publication Data Names: Sunstein, Cass R., author. Title: #Republic : divided democracy in the age of social media / Cass R. Sunstein. Other titles: Hashtag republic Description: Princeton : Princeton University Press, 2017. | Includes index. Identifiers: LCCN 2016038668 | ISBN 9780691175515 (hardback) Subjects: LCSH: Information society—Political aspects. | Internet— Political aspects. | Social media—Political aspects. | Polarization (Social sciences) | Political participation—Technological innovations. | Democracy. | Political culture. | BISAC: POLITICAL SCIENCE / Political Ideologies / Democracy. | POLITICAL SCIENCE / Political Freedom & Security / General. | POLITICAL SCIENCE / Censorship. | POLITICAL SCIENCE / Public Policy / General.

Landrum, Katie Carpenter, Laura Helft, and Kathleen Hall Jamieson, “Science Curiosity and Political Information Processing,” Advances in Political Psychology 38 (forthcoming) http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2816803 (accessed August 29, 2016); Andrew M. Guess, Media Choice and Moderation: Evidence from Online Tracking Data (2016), https://dl.dropboxusercontent.com/u/663930/GuessJMP.pdf (accessed August 29, 2016). 4.See Cass R. Sunstein, Infotopia: How Many Minds Produce Knowledge (Oxford: Oxford University Press, 2006). 5.Shanto Iyengar, Gaurav Sood, and Yphtach Lelkes, “Affect, Not Ideology: A Social Identity Perspective on Polarization,” Public Opinion Quarterly 76, no. 3 (2012): 405, http://pcl.stanford.edu/research/2012/iyengar-poq-affect-not-ideology.pdf (accessed August 29, 2016). 6.Ibid. 7.See Shanto Iyengar and Sean J.


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

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, different worldview, endowment effect, happiness index / gross national happiness, hedonic treadmill, hindsight bias, IKEA effect, illegal immigration, job satisfaction, Kickstarter, libertarian paternalism, light touch regulation, longitudinal study, market design, meta analysis, meta-analysis, Milgram experiment, nudge unit, peer-to-peer lending, pension reform, presumed consent, QR code, quantitative easing, randomized controlled trial, Richard Thaler, Right to Buy, Ronald Reagan, Rory Sutherland, Simon Kuznets, skunkworks, the built environment, theory of mind, traffic fines, twin studies, 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).


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

"Robert Solow", affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, business cycle, buy and hold, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, creative destruction, 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, fixed income, 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, John Markoff, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, Malacca Straits, market bubble, microcredit, money market fund, 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, Sam Peltzman, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, the rule of 72, 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, zero-sum game

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.


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Work Rules!: Insights From Inside Google That Will Transform How You Live and Lead by Laszlo Bock

Airbnb, Albert Einstein, AltaVista, Atul Gawande, Black Swan, book scanning, Burning Man, call centre, Cass Sunstein, Checklist Manifesto, choice architecture, citizen journalism, clean water, correlation coefficient, crowdsourcing, Daniel Kahneman / Amos Tversky, deliberate practice, en.wikipedia.org, experimental subject, Frederick Winslow Taylor, future of work, Google Earth, Google Glasses, Google Hangouts, Google X / Alphabet X, Googley, helicopter parent, immigration reform, Internet Archive, longitudinal study, Menlo Park, mental accounting, meta analysis, meta-analysis, Moneyball by Michael Lewis explains big data, nudge unit, PageRank, Paul Buchheit, Ralph Waldo Emerson, Rana Plaza, random walk, Richard Thaler, Rubik’s Cube, self-driving car, shareholder value, side project, Silicon Valley, six sigma, statistical model, Steve Ballmer, Steve Jobs, Steven Levy, Steven Pinker, survivorship bias, TaskRabbit, The Wisdom of Crowds, Tony Hsieh, Turing machine, winner-take-all economy, Y2K

Belcove, “Steamy Wait Before a Walk in a Museum’s Rain,” New York Times, July 17, 2013, http://www.nytimes.com/2013/07/18/arts/steamy-wait-before-a-walk-in-a-museums-rain.html. 207. Michael Barbaro, “The Bullpen Bloomberg Built: Candidates Debate Its Future,” New York Times, March 22, 2013, http://www.nytimes.com/2013/03/23/nyregion/bloombergs-bullpen-candidates-debate-its-future.html. 208. Chris Smith, “Open City,” New York, September 26, 2010, http://nymag.com/news/features/establishments/68511/. 209. Richard H. Thaler and Cass R. Sunstein, Nudge (New Haven, CT: Yale University Press, 2008), 15. 210. An obvious difference between a nudge and a bonus plan is that the former is often not disclosed, while a bonus plan is explicitly set up to drive certain behaviors. But once you concede that a company can legitimately shape its employees’ behaviors, then you’re left with a more difficult question of where exactly the company crosses the line from “good” shaping to “bad” shaping.

.… But when you see the mayor hosting high-level meetings in clear sight of everyone else, you start to understand that this open-communication model is not bull****. And that it works”208 [asterisks mine]. The common theme here is that we are far less consistent, objective, fair, and self-aware in how we navigate the world than we think we are. And because of this, organizations can help people make better decisions. In their book Nudge, Richard Thaler and Cass Sunstein, professors at the University of Chicago and Harvard Law School, document at length how an awareness of the flaws in our brains can be used to improve our lives. They define a nudge as “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives.… To count as a mere nudge, the intervention must be easy and cheap to avoid.


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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

airport security, Alfred Russel Wallace, Amazon Mechanical Turk, Berlin Wall, Black Swan, book scanning, Cass Sunstein, commoditize, 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, Johannes Kepler, 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, 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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Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler, Cass R. Sunstein

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, fixed income, 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, money market fund, pension reform, presumed consent, price discrimination, profit maximization, rent-seeking, Richard Thaler, Right to Buy, risk tolerance, Robert Shiller, Robert Shiller, Saturday Night Live, school choice, school vouchers, transaction costs, Vanguard fund, Zipcar

NUDGE 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.

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. ISBN 978-0-300-12223-7 (cloth : alk. paper) 1. Economics— Psychological aspects. 2. Choice (Psychology)—Economic aspects. 3. Decision making—Psychological aspects. 4. Consumer behavior. I. Sunstein, Cass R. II. Title. HB74.P8T53 2008 330.01’9—dc22 2007047528 A catalogue record for this book is available from the British Library. The paper in this book meets the guidelines for permanence and durability of the Committee on Production Guidelines for Book Longevity of the Council on Library Resources. 10 9 8 7 6 5 4 3 2 1 For France, who makes everything in life better, even this book —RHT For Ellyn, who knows when to nudge her father —CRS CONTENTS Acknowledgments Introduction PART I HUMANS AND ECONS 1 Biases and Blunders 2 Resisting Temptation 3 Following the Herd 4 When Do We Need a Nudge?

“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, Rchard 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. 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. Christian Wheeler.


pages: 418 words: 128,965

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

accounting loophole / creative accounting, Alfred Russel Wallace, Apple II, barriers to entry, British Empire, Burning Man, business cycle, Cass Sunstein, Clayton Christensen, commoditize, corporate raider, creative destruction, disruptive innovation, don't be evil, Douglas Engelbart, Douglas Engelbart, Howard Rheingold, Hush-A-Phone, informal economy, intermodal, Internet Archive, invention of movable type, invention of the telephone, invisible hand, Jane Jacobs, John Markoff, Joseph Schumpeter, Menlo Park, open economy, packet switching, PageRank, profit motive, road to serfdom, Robert Bork, Robert Metcalfe, Ronald Coase, sexual politics, 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, zero-sum game

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.


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

airport security, barriers to entry, Berlin Wall, Bernie Madoff, Bernie Sanders, Brian Krebs, Broken windows theory, carried interest, Cass Sunstein, Chelsea Manning, commoditize, 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, longitudinal study, mass incarceration, 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, zero-sum game

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.


Science Fictions: How Fraud, Bias, Negligence, and Hype Undermine the Search for Truth by Stuart Ritchie

Albert Einstein, anesthesia awareness, Bayesian statistics, Carmen Reinhart, Cass Sunstein, citation needed, Climatic Research Unit, cognitive dissonance, complexity theory, coronavirus, correlation does not imply causation, COVID-19, Covid-19, crowdsourcing, deindustrialization, Donald Trump, double helix, en.wikipedia.org, epigenetics, Estimating the Reproducibility of Psychological Science, Growth in a Time of Debt, Kenneth Rogoff, l'esprit de l'escalier, meta analysis, meta-analysis, microbiome, Milgram experiment, mouse model, New Journalism, p-value, phenotype, placebo effect, profit motive, publication bias, publish or perish, race to the bottom, randomized controlled trial, recommendation engine, rent-seeking, replication crisis, Richard Thaler, risk tolerance, Ronald Reagan, Scientific racism, selection bias, Silicon Valley, Silicon Valley startup, Stanford prison experiment, statistical model, stem cell, Steven Pinker, Thomas Bayes, twin studies, University of East Anglia

‘The 2007 Ig Nobel Prize Winners’, 4 Oct. 2007; https://www.improbable.com/ig/winners/#ig2007. The soup bowl paper is: Brian Wansink and Matthew M. Cheney, ‘Super Bowls: Serving Bowl Size and Food Consumption’, JAMA 293, no. 14 (13 April 2005): pp. 1727–28; https://doi.org/10.1001/jama.293.14.1727. It was featured and described as ‘another Wansink … masterpiece’ in Richard Thaler and Cass Sunstein’s influential 2008 book Nudge. Sunstein has since won a real Nobel Prize for economics. Richard H. Thaler & Cass R. Sunstein, Nudge: Improving Decisions about Health, Wealth and Happiness (New Haven: Yale University Press, 2008): p. 43. 45.  Portion-size research: Wansink & Cheney, ‘Super Bowls’. Shopping when hungry: Aner Tal & Brian Wansink, ‘Fattening Fasting: Hungry Grocery Shoppers Buy More Calories, Not More Food’, JAMA Internal Medicine 173, no. 12 (June 24, 2013): 1146–48; https://doi.org/10.1001/jamainternmed.2013.650.


pages: 475 words: 134,707

The Hype Machine: How Social Media Disrupts Our Elections, Our Economy, and Our Health--And How We Must Adapt by Sinan Aral

Airbnb, Albert Einstein, Any sufficiently advanced technology is indistinguishable from magic, augmented reality, Bernie Sanders, bitcoin, carbon footprint, Cass Sunstein, computer vision, coronavirus, correlation does not imply causation, COVID-19, Covid-19, crowdsourcing, cryptocurrency, death of newspapers, disintermediation, Donald Trump, Drosophila, Edward Snowden, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, experimental subject, facts on the ground, Filter Bubble, global pandemic, hive mind, illegal immigration, income inequality, Kickstarter, knowledge worker, longitudinal study, low skilled workers, Lyft, Mahatma Gandhi, Mark Zuckerberg, Menlo Park, meta analysis, meta-analysis, Metcalfe’s law, mobile money, move fast and break things, move fast and break things, multi-sided market, Nate Silver, natural language processing, Network effects, performance metric, phenotype, recommendation engine, Robert Bork, Robert Shiller, Robert Shiller, Second Machine Age, sentiment analysis, shareholder value, skunkworks, Snapchat, social graph, social intelligence, social software, social web, statistical model, stem cell, Stephen Hawking, Steve Jobs, Telecommunications Act of 1996, The Chicago School, The Wisdom of Crowds, theory of mind, Tim Cook: Apple, Uber and Lyft, uber lyft, WikiLeaks, Yogi Berra

mod=article_inline; Aaron Zitner and Dante Chinni, “Democrats and Republicans Live in Different Worlds,” Wall Street Journal, September 20, 2019. partisans also select into right- or left-leaning media audiences: Kevin Arceneaux and Martin Johnson, Changing Minds or Changing Channels? Partisan News in an Age of Choice (Chicago: University of Chicago Press, 2013). “filter bubbles” of polarized content: Cass R. Sunstein, Republic.com (Princeton: Princeton University Press, 2001); Eli Pariser, The Filter Bubble: What the Internet Is Hiding from You (London: Penguin UK, 2011). Some studies find small increases in polarization with Internet use: Yphtach Lelkes, Gaurav Sood, and Shanto Iyengar, “The Hostile Audience: The Effect of Access to Broadband Internet on Partisan Affect,” American Journal of Political Science 61, no. 1 (2017): 5–20.

Third, the partisan polarization of cable news media has likely reinforced political identities and increased affective polarization between the parties. That said, partisans also select into right- or left-leaning media audiences, making it difficult to determine whether the news media causes polarization or if an already-polarized public simply chooses which polarized media to watch. Fourth, the Internet is frequently blamed for the rise of polarization, as personalization and targeting combine to create what legal scholar Cass Sunstein and activist and MoveOn.org director Eli Pariser describe as “filter bubbles” of polarized content, which allow various factions to consume completely different information and facts about the world. That said, there is conflicting evidence on the Internet’s contribution to polarization. Some studies find small increases in polarization with Internet use, while others find that polarization is more prevalent among those with less Internet use.


pages: 542 words: 132,010

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

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, Intergovernmental Panel on Climate Change (IPCC), lateral thinking, mandatory minimum, medical residency, Mikhail Gorbachev, millennium bug, moral panic, mutually assured destruction, nuclear winter, placebo effect, Ralph Nader, RAND corporation, Ronald Reagan, social intelligence, 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.”


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The Googlization of Everything: by Siva Vaidhyanathan

1960s counterculture, activist fund / activist shareholder / activist investor, 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, creative destruction, data acquisition, death of newspapers, don't be evil, Firefox, Francis Fukuyama: the end of history, full text search, global pandemic, global village, Google Earth, Howard Rheingold, informal economy, information retrieval, John Markoff, Joseph Schumpeter, Kevin Kelly, knowledge worker, libertarian paternalism, market fundamentalism, Marshall McLuhan, means of production, Mikhail Gorbachev, moral panic, Naomi Klein, Network effects, new economy, Nicholas Carr, PageRank, Panopticon Jeremy Bentham, pirate software, Ray Kurzweil, Richard Thaler, Ronald Reagan, side project, Silicon Valley, Silicon Valley ideology, single-payer health, Skype, Social Responsibility of Business Is to Increase Its Profits, 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, zero-sum game

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.


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The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality by Brink Lindsey

"Robert Solow", Airbnb, Asian financial crisis, bank run, barriers to entry, Bernie Sanders, Build a better mousetrap, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, collective bargaining, creative destruction, Credit Default Swap, crony capitalism, Daniel Kahneman / Amos Tversky, David Brooks, diversified portfolio, Donald Trump, Edward Glaeser, endogenous growth, experimental economics, experimental subject, facts on the ground, financial innovation, financial intermediation, financial repression, hiring and firing, Home mortgage interest deduction, housing crisis, income inequality, informal economy, information asymmetry, intangible asset, inventory management, invisible hand, Jones Act, Joseph Schumpeter, Kenneth Rogoff, Kevin Kelly, knowledge worker, labor-force participation, Long Term Capital Management, low skilled workers, Lyft, Mark Zuckerberg, market fundamentalism, mass immigration, mass incarceration, medical malpractice, Menlo Park, moral hazard, mortgage debt, Network effects, patent troll, plutocrats, Plutocrats, principal–agent problem, regulatory arbitrage, rent control, rent-seeking, ride hailing / ride sharing, Robert Metcalfe, Ronald Reagan, Silicon Valley, Silicon Valley ideology, smart cities, software patent, too big to fail, total factor productivity, trade liberalization, transaction costs, tulip mania, Uber and Lyft, uber lyft, Washington Consensus, white picket fence, winner-take-all economy, women in the workforce

It is not a surprise, therefore, that the size of the lobbying industry has grown at the same time that the internal capacity of government has been cut (although, of course, that growth has other sources as well). Lobbying by suppling information may sound more genteel than twisting arms and buying votes, but when spread over the thousands of small decisions that aggregate up into governance, it can produce a powerful bias in policymaking. For instance Cass Sunstein, who served as the head of the White House Office of Information and Regulatory Affairs (OIRA), saw no outright arm-twisting in his time in government. “But if people in the private sector presented arguments, with evidence, about the importance of going in a particular direction, those arguments could matter.” This sounds perfectly innocent, except that “those with an incentive to oppose the rules will tend to overstate the costs and perhaps even claim that if rules are finalized, the sky will fall… .

The White House Office of Management and Budget (OMB), for example, performs rigorous central clearance of the federal budget as well as overseeing cost-benefit analysis of regulations through its Office of Information and Regulatory Affairs. OMB is a famously high-status destination for civil servants, attracting some of the best talent from the nation’s public policy schools. With its strong reputation and its placement in the White House, OMB has the prestige and power to push back against poorly considered programs or regulations. The unlikely liberal/libertarian duo of Cass Sunstein and Edward Glaeser has argued for extending central review of regulations to the states, where much of the relevant rent-seeking occurs.19 Creating 51 state-level Offices of Information and Regulatory Affairs wouldn’t be easy, since to serve as more than just a tool of gubernatorial power those offices would need to build the reputation and organizational culture that OMB has taken years to generate.

The City of New London and the Limits of Eminent Domain (Chicago: University of Chicago Press, 2015). 14.The general phenomenon of the erosion of public interest legislation is discussed in Eric Patashnik, Reforms at Risk (Princeton, NJ: Princeton University Press, 2008). 15.Arthur Wilmarth, “Turning a Blind Eye: Why Washington Keeps Giving In to Wall Street,” University of Cincinnati Law Review 81, no. 4 (2013): 1283-1446. 16.Richard Hall and Alan Deardorff, “Lobbying as Legislative Subsidy,” American Political Science Review 100, no. 1 (February 2006): 69–84; Richard Hall and Frank Wayman, “Buying Time: Moneyed Interests and the Mobilization of Bias,” American Political Science Review 84, no. 3 (September 1990): 797–820. 17.Cass Sunstein, Simpler: The Future of Government (New York: Simon and Schuster, 2013), p. 175. 18.Lee Drutman, The Business of America Is Lobbying (New York: Oxford University Press, 2015). 19.Douglas Arnold, The Logic of Congressional Action (New Haven, CT: Yale University Press, 1992). 20.Baumgartner and Jones, The Politics of Information (Chicago: University of Chicago Press, 2015), ch. 4. 21.Baumgartner and Jones, Agendas and Instability. 22.Charles Geisst, Wall Street: A History (New York: Oxford University Press, 2012). 23.James Kwak, “Cultural Capital and the Financial Crisis,” in Preventing Regulatory Capture: Special Interest Influence and How to Limit It, ed.


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Palaces for the People: How Social Infrastructure Can Help Fight Inequality, Polarization, and the Decline of Civic Life by Eric Klinenberg

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, American Society of Civil Engineers: Report Card, assortative mating, basic income, big-box store, Broken windows theory, carbon footprint, Cass Sunstein, clean water, deindustrialization, desegregation, Donald Trump, East Village, Filter Bubble, ghettoisation, helicopter parent, income inequality, informal economy, invisible hand, Jane Jacobs, John Snow's cholera map, late fees, Mark Zuckerberg, mass incarceration, Menlo Park, New Urbanism, Peter Thiel, Ray Oldenburg, Richard Florida, Ronald Reagan, Rosa Parks, shareholder value, Silicon Valley, smart grid, the built environment, The Death and Life of Great American Cities, The Great Good Place, the High Line, universal basic income, urban planning, young professional

While today, people in the United States and Europe are more likely to marry someone from a different ethnic background, they are also far more likely to marry someone from the same social class. The United States was segregated and unequal, but the social infrastructure supported shared experiences and forms of group mixing that are uncommon today. “We are living in different political universes,” writes the Harvard political scientist and legal scholar Cass Sunstein. “Of course mixed groups are no panacea….But mixed groups have been shown to have two desirable effects. First, exposure to competing positions generally increases political tolerance….Second, mixing increases the likelihood that people will be aware of competing rationales and see that their own arguments might be met with plausible counterarguments.” Sunstein draws on classic studies and experimental research to show that, as in South Chicago during its industrial heyday, in-group attachments and prejudices against others diminish when people interact across the usual social boundaries.

“I have sponsored and passed laws with colleagues who I likely wouldn’t have spoken to, let alone gotten to know, without this team” she said. * * * Establishing meaningful connections with people we conceive as different is not only a challenge in historically divided places like South Africa and politically contentious cities like Washington, DC. Scholars such as Sherry Turkle, Cass Sunstein, and Jonathan Haidt argue that the rapid rise of the Internet has changed the ways that people everywhere view and treat one another, creating vast terrains of social distance, even between friends. There’s no doubt that parts of the Internet bring out the worst in human behavior, but does it actually cause polarization? Sunstein and Haidt believe it does. “As a result of the Internet, we live increasingly in an era of enclaves and niches—much of it voluntary, much of it produced by those who think they know, and often do know, what we’re likely to like,” Sunstein claims.

The quote is from Peter Bearman and Delia Baldassarri, “Dynamics of Political Polarization,” American Sociological Review 72 (October 2007): 787. On the rise of marriage within a social class (or “assortative mating”), see Robert Mare, “Educational Homogamy in Two Gilded Ages,” Annals of the American Academy of Political and Social Science 663 (2016): 117–39. “met with plausible counterarguments”: Cass Sunstein, #Republic: Divided Democracy in the Age of Social Media (Princeton, NJ: Princeton University Press, 2017), 91–92. It’s urgent that we understand them: See Elijah Anderson, The Cosmopolitan Canopy: Race and Civility in Everyday Life (New York: W. W. Norton, 2011). “they all meet up”: Hafstein is quoted in https://www.cnn.com/​2017/​03/​20/​health/​iceland-pool-culture/. “among their countrymen”: Dan Kois, “Iceland’s Water Cure,” New York Times Magazine, April 19, 2016.


The New Class War: Saving Democracy From the Metropolitan Elite by Michael Lind

affirmative action, anti-communist, basic income, Bernie Sanders, Boris Johnson, Bretton Woods, business cycle, capital controls, Cass Sunstein, central bank independence, centre right, collective bargaining, commoditize, corporate governance, crony capitalism, deindustrialization, Doha Development Round, Donald Trump, Edward Snowden, future of work, global supply chain, guest worker program, Haight Ashbury, illegal immigration, immigration reform, invisible hand, knowledge economy, liberal world order, low skilled workers, low-wage service sector, manufacturing employment, Mark Zuckerberg, mass immigration, means of production, moral panic, Nate Silver, new economy, offshore financial centre, oil shock, open borders, plutocrats, Plutocrats, Ponzi scheme, purchasing power parity, Ralph Nader, regulatory arbitrage, rent-seeking, Richard Florida, Ronald Reagan, Silicon Valley, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade liberalization, union organizing, universal basic income, upwardly mobile, WikiLeaks, Wolfgang Streeck, working poor

Theodore Lowi, “The Public Philosophy: Interest Group Liberalism,” American Political Science Review 61, March 1967, pp. 5–24; and Theodore Lowi, The End of Liberalism (New York: Norton, 1969). 3. Nicholas Lemann, “Interest-Group Liberalism,” Washington Post, October 21, 1986. 4. Alan Blinder, “Is Government Too Political?” Foreign Affairs, November/December 1997. 5. Quoted in Aaron Timms, “The Sameness of Cass Sunstein,” New Republic, June 20, 2019; Cass Sunstein, How Change Happens (Cambridge, MA: MIT Press, 2019). 6. James S. Henry, “The Price of Offshore Revisited,” Tax Justice Network, July 2012, cited in Robert Kuttner, Can Democracy Survive Global Capitalism? (New York: W. W. Norton, 2018), p. 230. 7. Jane Gravelle, “Tax Havens: International Tax Avoidance and Evasion,” Congressional Research Service, January 2015, cited in Kuttner, Can Democracy Survive Global Capitalism?

In Europe, the US, and Japan, the authors concluded, major problems “stem from an excess of democracy.” In 1997 former Federal Reserve vice chairman Alan Blinder, a neoliberal Democrat, asked: “Do we want to take more policy decisions out of the realm of politics and put them in the realm of technocracy?” Blinder suggested that tax policy, trade policy, and environmental policy might be delegated to independent technocratic agencies, with only minimal congressional control.4 In 2019, Cass Sunstein, who had been the head of the Office of Information and Regulatory Affairs from 2009 to 2012, during the Obama administration, suggested that the US was afflicted by excessive “partyism,” for which the cure “lies in delegation, and in particular in strengthening the hand of technocratic forces in government.”5 Economic activities that could not be insulated from democratic meddling by transferring them to technocratic government agencies could be transferred wholly to private sector elites by privatization and marketization.


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Economic Dignity by Gene Sperling

active measures, Affordable Care Act / Obamacare, autonomous vehicles, basic income, Bernie Sanders, Cass Sunstein, collective bargaining, corporate governance, David Brooks, desegregation, Detroit bankruptcy, Donald Trump, Double Irish / Dutch Sandwich, Elon Musk, employer provided health coverage, Erik Brynjolfsson, Ferguson, Missouri, full employment, gender pay gap, ghettoisation, gig economy, Gini coefficient, guest worker program, Gunnar Myrdal, housing crisis, income inequality, invisible hand, job automation, job satisfaction, labor-force participation, late fees, liberal world order, longitudinal study, low skilled workers, Lyft, Mark Zuckerberg, market fundamentalism, mass incarceration, mental accounting, meta analysis, meta-analysis, minimum wage unemployment, obamacare, offshore financial centre, payday loans, price discrimination, profit motive, race to the bottom, RAND corporation, randomized controlled trial, Richard Thaler, ride hailing / ride sharing, Ronald Reagan, Rosa Parks, Second Machine Age, secular stagnation, shareholder value, Silicon Valley, single-payer health, speech recognition, The Chicago School, The Future of Employment, The Wealth of Nations by Adam Smith, Toyota Production System, traffic fines, Triangle Shirtwaist Factory, Uber and Lyft, uber lyft, union organizing, universal basic income, War on Poverty, working poor, young professional, zero-sum game

37 This aloof form of welfare economics or cost-benefit analysis is at stark odds with an economic dignity perspective. Determining that a certain policy was a net job creator fails to account for how deep the economic pain was for those who did lose jobs. A family that loses everything to a new policy will understandably draw little comfort from the fact that the same policy helped create a job for a young worker or two in another state. Cass Sunstein—one of the nation’s top cost-benefit gurus and former regulatory chief under President Obama—stresses that even cost-benefit done right should be seen not as a cold, dollars-and-cents calculation, but as an effort to weigh ultimate impacts on well-being. Sunstein’s discussion makes clear why even from a cost-benefit perspective, one could choose a policy with higher monetary cost (spread a non-consequential few dollars per person across millions) over a policy with a smaller monetary cost that would cause devastating harm to a small number of people.

Like MLK’s vision, FDR’s New Deal vision was deeply rooted in the expansion of the two-way compact of contribution that asked individuals who could to carry their weight in exchange for a broader government guarantee of economic dignity in being able to care for family. FDR stated, “The Federal Government has no intention or desire to force either upon the country or the unemployed themselves a system of relief which is repugnant to American ideals of individual self-reliance.”7 In his book on FDR, Cass Sunstein points out that New Deal policymakers were willing to opt for “employment relief” even if it was more expensive than pure cash relief, as it honored the sense of a social compact “and was preferred by both the administration and recipients alike.”8 Frances Perkins wrote in The Roosevelt I Knew about the discussion within the Roosevelt White House of the resistance to just a handout strategy “when Americans wanted, above everything, to work and contribute.”9 She wrote of a favorite story that was “not lost on Roosevelt” of an elderly man getting $15 a week in relief who “went out regularly, without being asked, to sweep the streets of his village.

These include, but are not limited to, Larry Mishel, Tom Kalil, LaPhonza Butler, Sasha Post, Neera Tanden, Thea Lee, Ron Klain, Bill Godfrey, Felicia Wong, Michael Calhoun, Bob Reich, Judy Lichtman, Andrew Kassoy, Wade Henderson, Jackie Woodson, Brian Highsmith, Joe Sanberg, John Podesta, Pauline Abernathy, Rick Samans, Meeghan Prunty, Bob Greenstein, Josh Steiner, Dan Porterfield, Barry Lynn, Sarah Bianchi, Sarah Miller, Samantha Power, Victoria Palomo, Leo Gerard, Tom Conway, Kelly Friendly, Rebecca Winthrop, Monique Dorsainvil, Liz Fine, Michael Shapiro, Jason Miller, Nick Merrill, Sheryl Sandberg, and Trelaine Ito. After all this time, I still often ask what Chris Georges would think on so many issues—and am grateful to have his parents, Jerry and Mary Georges, still in my life. A special thanks to Cass Sunstein, the most prolific book author most of us know, for his passion for the concept of dignity and his advice and early encouragement of me writing this book. Thanks to another amazing author, Walter Isaacson, as well for his early encouragement. So much of this book was written at my favorite café. I am so grateful for the incredibly kind and supportive efforts of Kyle Jones, Selina Tapangco, Megan Fodran, and many others who went so out of their way to support my writing at every turn, month after month.


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This Could Be Our Future: A Manifesto for a More Generous World by Yancey Strickler

basic income, big-box store, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, corporate governance, Daniel Kahneman / Amos Tversky, David Graeber, Donald Trump, Doomsday Clock, effective altruism, Elon Musk, financial independence, gender pay gap, global supply chain, housing crisis, Ignaz Semmelweis: hand washing, invention of the printing press, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Nash: game theory, Joi Ito, Joseph Schumpeter, Kickstarter, Louis Pasteur, Mark Zuckerberg, medical bankruptcy, new economy, Oculus Rift, off grid, offshore financial centre, Ralph Nader, RAND corporation, Richard Thaler, Ronald Reagan, self-driving car, shareholder value, Silicon Valley, Simon Kuznets, Snapchat, Social Responsibility of Business Is to Increase Its Profits, stem cell, Steve Jobs, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Travis Kalanick, universal basic income, white flight

Gibbs told the reporter that “the traffic advisor is the one that has all the sway . . . He vetoed so many sites that he was called The Terminator.” Gibbs also wrote about this in his 2012 book Principles of Urban Retail Planning and Development. Bob Gibbs was kind enough to speak with me. I asked whether the no-left-turn rule was still alive and well. He assured me that it continues to guide where shopping centers and stores are built today. Cass Sunstein has written: Cass Sunstein wrote about white lines in parking lots as a kind of hidden default in his 2008 book with Richard Thaler, Nudge. citizens are default opted-out: Data on organ donation rates comes from a 2004 study, “Defaults and Donation Decisions,” by Eric J. Johnson and Daniel G. Goldstein. keep paying anyway: Data on gym attendance rates comes from USA Today (“Is Your Gym Membership a Good Investment?

This is the no-left-turn rule in action. You’re driving against the expected flow of traffic. Q: Why did the customer cross the road? A: They didn’t. HIDDEN DEFAULTS The no-left-turn rule is an example of a hidden default. An unseen influence on our behavior. Hidden defaults are subtle nudges that guide us, like the white lines of a parking lot, as Harvard Law School professor Cass Sunstein has written. The modern world is full of these hidden defaults. And for good reason: they’re very effective. Take organ donation rates. You would expect a country’s cultural beliefs around death to determine whether people choose to donate their organs or not. In reality we exercise less choice than we think. Here are the percentages of people who chose to donate their organs in different European countries: Organ donation rates SOURCE: JOHNSON AND GOLDSTEIN 2003 Notice the huge differences between countries that seem similar, like Austria and Germany.


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Money Moments: Simple Steps to Financial Well-Being by Jason Butler

Albert Einstein, asset allocation, buy and hold, Cass Sunstein, diversified portfolio, estate planning, financial independence, fixed income, happiness index / gross national happiness, index fund, intangible asset, longitudinal study, loss aversion, Lyft, Mark Zuckerberg, mortgage debt, passive income, placebo effect, Richard Thaler, ride hailing / ride sharing, Steve Jobs, time value of money, traffic fines, Travis Kalanick, Uber and Lyft, uber lyft, Vanguard fund, Yogi Berra

I felt great about the purchase for a few weeks, until I received my credit card bill! So why did I succumb to an impulsive purchase of an expensive and unnecessary item instead of putting that money in my retirement plan? A key reason is because we have two modes of thinking, one instinctive and the other reflective. Think of these two modes as a bit like having different financial personalities. Richard Thaler and Cass Sunstein, two distinguished professors of behavioural economics describe these personalities as a far-sighted ‘Planner’ and a myopic ‘Doer’. The Planner represents the reflective thinking mode and the Doer represents the instinctive mode. ‘The Planner is trying to promote your long-term welfare but must cope with the feelings, mischief, and strong will of the Doer, who is exposed to the temptations that come with arousal.

Wellbeing: The Five Essential Elements, Gallup Press. 2010. 2Financial Well-Being: The Goal of Financial Education, Consumer Financial Protection Bureau (01/2015), p18 http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf (accessed 17.10.17) 3Ibid, p19 4Momentum UK Household Financial Wellness Index 2017 Summary Report https://www.momentumgim.co.uk/wps/wcm/connect/mgim2/3a6e04d0-4d20-47f9-b1e2-26ed81db67bb/Final+summary+report+-+Financial+Wellness+2017.pdf?MOD=AJPERES (accessed 21.10.17) 5Thaler, Richard, and Cass Sunstein. Nudge. London: Penguin Books, 2009. p45-46 6Ajzen, Icek. 1991. “The Theory of Planned Behaviour.” Organisational Behaviour and Human Decision Processes 50:2: 179-211. 7Frank, R. H. 2004. “How not to buy happiness.” Daedalus 133, 69-79. 8Van Boven, L., M. C. Campbell and T. Gilovich. 2010. “Stigmatizing materialism: on stereotypes and impressions of materialistic and experiential pursuits.”


Convergence Culture: Where Old and New Media Collide by Henry Jenkins

barriers to entry, Cass Sunstein, citizen journalism, collective bargaining, Columbine, deskilling, Donald Trump, game design, George Gilder, global village, Howard Rheingold, informal economy, means of production, moral panic, new economy, profit motive, Robert Metcalfe, Saturday Night Live, slashdot, Steven Pinker, the market place, Y Combinator

Such a process tends Skenovano pro studijni ucely 85 86 Buying into American Idol to p u l l toward a consensus over time, and then, over a longer time, the consensus no longer seems to be something that was disputed or haggled over; it is the commonsense outcome. We can see this as part of the process through w h i c h collective intelligence generates shared knowledge. Some critics, such as Cass Sunstein, argue that this process of consensus formation tends to decrease the diversity of perspectives that any community member encounters; people tend to flock toward groups that share their existing biases, and over time they hear less and less disagreement about those core assumptions. A t the same time, this consensus-forming process increases the likelihood that these brand a n d fan communities w i l l speak u p when corporate interests cross the group's consensus.

W h e n I visited the right-wing blogosphere, it was like going to the zoo to look at exotic animals. . . . I dismissed it, secure i n the armor provided by the communities of people w h o share m y values. . . . What I find disturbing, however, is h o w easy the internet has made it not just to Google the fact that I need w h e n I need it, but to get the m i n d set I want w h e n I want i t . 47 Cass Sunstein, a l a w professor at the University of Chicago, has argued that Web communities fragmented the electorate a n d tended to exaggerate whatever consensus emerged i n the g r o u p . 48 Time maga- zine adopted a similar argument w h e n it described the g r o w i n g d i v i d e between "Blue T r u t h " a n d " R e d T r u t h " : " R e d Truth looks at B u s h and sees a savior; Blue Truth sees a zealot w h o must be stopped.

McAlexander, John W. Schouten, and H a r o l d F. Koenig, " B u i l d ing Brand C o m m u n i t y , " Journal of Marketing, January 2002, p p . 38-54. 42. Deborah Starr Seibel, "American Idol Outrage: Your Vote Doesn't C o u n t , " Broadcasting & Cable, M a y 17, 2004, p. 1. 43. Deborah Jones, "Gossip: Note on Women's O r a l C u l t u r e , " Women's Studies International Quarterly 3 (1980): 194-195. 44. Cass Sunstein, Republic.Com (Princeton, N.J.: Princeton University Press, 2002). 45. Wade Paulsen, "Distorted American Idol Voting Due to an Overtaxed American Power G r i d ? " Reality TV World, h t t p : / / w w w . r e a l i t y t v w o r l d . c o m / index/articles/story.php?s=2570. 46. Staff, "The Right Fix for Fox," Broadcasting & Cable, M a y 24, 2004, p. 36. Skenovano pro studijni ucely 266 Notes to Chapter 2 47.


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

Airbnb, AltaVista, Cass Sunstein, choice architecture, cognitive bias, cognitive dissonance, en.wikipedia.org, framing effect, game design, Google Glasses, IKEA effect, 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, Richard Thaler, Silicon Valley, Silicon Valley startup, Snapchat, TaskRabbit, telemarketer, the new new thing, Toyota Production System, Y Combinator

Damien Brevers and Xavier Noël, “Pathological Gambling and the Loss of Willpower: A Neurocognitive Perspective,” Socioaffective Neuroscience & Psychology 3, no. 2 (Sept. 2013), doi:10.3402/snp.v3i0.21592. 13. Paul Graham, “The Acceleration of Addictiveness,” (accessed Nov. 12, 2013), http://www.paulgraham.com/addiction.html. 14. Night of the Living Dead, IMDb, (accessed June 25, 2014), http://www.imdb.com/title/tt0063350. 15. Richard H. Thaler, 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. Chapter 1: The Habit Zone 1. Wendy Wood, Jeffrey M. Quinn, and Deborah A. Kashy, “Habits in Everyday Life: Thought, Emotion, and Action,” Journal of Personality and Social Psychology 83, no. 6 (Dec. 2002): 1281–97. 2.

Kara Swisher and Liz Gannes, “Pinterest Does Another Massive Funding—$225 Million at $3.8 Billion Valuation (Confirmed),” All Things Digital (accessed Nov. 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? 1. For further thoughts on the morality of designing behavior, see: Richard H. Thaler, Cass R. Sunstein, and John P. Balz, “Choice Architecture” (SSRN Scholarly Paper, Rochester, New York), Social Science Research Network, (April 2, 2010), http://papers.ssrn.com/abstract=1583509. 2. Charlie White, “Survey: Cellphones vs. Sex—Which Wins?,” Mashable (accessed), http://mashable.com/2011/08/03/telenav-cellphone-infographic. 3. Ian Bogost, “The Cigarette of This Century,” Atlantic (June 6, 2012), http://www.theatlantic.com/technology/archive/2012/06/the-cigarette-of-this-century/258092/. 4.


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The Age of Entitlement: America Since the Sixties by Christopher Caldwell

1960s counterculture, affirmative action, Affordable Care Act / Obamacare, anti-communist, Bernie Sanders, big data - Walmart - Pop Tarts, blue-collar work, Cass Sunstein, choice architecture, computer age, crack epidemic, crony capitalism, Daniel Kahneman / Amos Tversky, David Attenborough, desegregation, disintermediation, disruptive innovation, Edward Snowden, Erik Brynjolfsson, Ferguson, Missouri, financial deregulation, financial innovation, Firefox, full employment, George Gilder, global value chain, Home mortgage interest deduction, illegal immigration, immigration reform, informal economy, Jeff Bezos, John Markoff, Kevin Kelly, libertarian paternalism, Mark Zuckerberg, Martin Wolf, mass immigration, mass incarceration, mortgage tax deduction, Nate Silver, new economy, Norman Mailer, post-industrial society, pre–internet, profit motive, reserve currency, Richard Thaler, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Rosa Parks, Silicon Valley, Skype, South China Sea, Steve Jobs, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, transatlantic slave trade, transcontinental railway, War on Poverty, Whole Earth Catalog, zero-sum game

Nudge: The discussion of Nudge draws on the following sources: Christopher Caldwell, “The Perils of Shaping Choice,” Financial Times, April 4, 2008. Christopher Caldwell, “Coaxers and Coercers on Common Ground,” Financial Times, March 1, 2013. “largely an empirical question”: Cass Sunstein, “It’s for Your Own Good!,” review of Sarah Conly, Against Autonomy: Justifying Coercive Paternalism, New York Review of Books, March 7, 2013. “So I left him”: Plato, The Apology 21, in The Dialogues of Plato, Jowett translation (New York: Macmillan, 1892), 113–14. “We agree that”: Richard Thaler and Cass Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, Connecticut: Yale University Press, 2008), 238. When New Republic editor Andrew Sullivan: Andrew Sullivan, “Here Comes the Groom,” New Republic, August 28, 1989: 20–22.

For a generation, every imputation of bias in public life had required the ransacking of institutions and the shredding of reputations. Now the word “bias,” which had once carried overtones of bigotry and evil, had come to mean something like “human nature.” During the presidential campaign of 2008, two of Barack Obama’s friends and advisors from the University of Chicago collaborated on a book called Nudge, which used behavioral economics to justify an activist state. The law professor Cass Sunstein would become the senior advisor on regulation to the Obama White House. The economist Richard Thaler, an early collaborator of Kahneman, would take up a similar role as head of the Behavioural Insights Team for Britain’s Conservative prime minister David Cameron. Thaler and Sunstein laid out the baleful consequences of poorly designed choosing systems and suggested ways to fix them. Schoolchildren carrying their trays through lunch lines don’t usually mull over which dessert they prefer; they often grab the first thing their eyes alight on.

Communism, Conformity and Civil Liberties: A Cross-Section of the Nation Speaks Its Mind. New Brunswick, New Jersey: Transaction Publishers, 2009 [1955]. Strauss, Leo. Jewish Philosophy and the Crisis of Modernity: Essays and Lectures in Modern Jewish Thought. Albany: State University of New York Press, 1997. Strauss, William, and Neil Howe. Generations: The History of America’s Future, 1584 to 2069. New York: Quill, 1991. Thaler, Richard, and Cass Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven: Yale University Press, 2008. Theoharis, Jeanne. The Rebellious Life of Mrs. Rosa Parks. Boston: Beacon Press, 2013. Trilling, Lionel. The Liberal Imagination: Essays on Literature and Society. New York: NYRB Books, 2008 [1950]. Trow, George W. S. Within the Context of No Context. New York: Atlantic Monthly Press, 1997 [1981].


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Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Nicholas Taleb

availability heuristic, Benoit Mandelbrot, Bernie Madoff, Black Swan, Brownian motion, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cellular automata, Claude Shannon: information theory, cognitive dissonance, complexity theory, David Graeber, disintermediation, Donald Trump, Edward Thorp, equity premium, financial independence, information asymmetry, invisible hand, knowledge economy, loss aversion, mandelbrot fractal, mental accounting, microbiome, moral hazard, Murray Gell-Mann, offshore financial centre, p-value, Paul Samuelson, Ponzi scheme, price mechanism, principal–agent problem, Ralph Nader, random walk, rent-seeking, Richard Feynman, Richard Thaler, Ronald Coase, Ronald Reagan, Rory Sutherland, Silicon Valley, Steven Pinker, stochastic process, survivorship bias, The Nature of the Firm, transaction costs, urban planning, Yogi Berra

With psychology studies replicating less than 40 percent of the time, dietary advice reversing after thirty years of dietary fat phobia, macroeconomics and financial economics (while trapped in an intricate Gargantuan patch of words) scientifically worse than astrology (this is what the reader of the Incerto has known since Fooled by Randomness), the reappointment of Bernanke (in 2010) who was less than clueless about financial risk as the Federal Reserve boss, and pharmaceutical trials replicating at best only a third of the time, people are perfectly entitled to rely on their own ancestral instincts and to listen to their grandmothers (or to Montaigne and such filtered classical knowledge), who have a better track record than these policymaking goons. SCIENCE AND SCIENTISM Indeed, one can see that these academico-bureaucrats who feel entitled to run our lives aren’t even rigorous, whether in medical statistics or policymaking. They can’t tell science from scientism—in fact in their eyes scientism looks more scientific than real science. For instance, it is trivial to show the following: much of what the Cass Sunstein and Richard Thaler types—those who want to “nudge” us into some behavior—much of what they would classify as “rational” or “irrational” (or some such categories indicating deviation from a desired or prescribed protocol) comes from their misunderstanding of probability theory and cosmetic use of first-order models. They are also prone to mistake the ensemble for the linear aggregation of its components—that is, they think that our understanding of single individuals allows us to understand crowds and markets, or that our understanding of ants allows us to understand ant colonies.

Whether it is superstition or something else, some deep scientific understanding of probability that is stopping you, it doesn’t matter, so long as you don’t sleep under dead trees. And if you dream of making people use probability in order to make decisions, I have some news: more than ninety percent of psychologists dealing with decision making (which includes such regulators and researchers as Cass Sunstein and Richard Thaler) have no clue about probability, and try to disrupt our efficient organic paranoias. FIGURE 4. The classical “large world vs small world” problem. Science is currently too incomplete to provide all answers—and says it itself. We have been so much under assault by vendors using “science” to sell products that many people, in their mind, confuse science and scientism. Science is mainly rigor in the process.

fn2 Also the IYI thinks this criticism of IYIs means “everybody is an idiot,” not realizing that their group represents, as we said, a tiny minority—but they don’t like their sense of entitlement to be challenged, and although they treat the rest of humans as inferiors, they don’t like it when the water hose is turned to the opposite direction (what the French call arroseur arrosé). For instance, the economist and psycholophaster Richard Thaler, partner of the dangerous GMO advocate übernudger Cass Sunstein, interpreted this piece as saying that “there are not many non-idiots not called Taleb,” not realizing that people like him are less than 1 percent or even less than one-tenth of 1 percent of the population. CHAPTER 7: INEQUALITY AND SKIN IN THE GAME fn1 It came to my notice that in countries with high rent-seeking, wealth is seen as something zero-sum: you take from Peter to give to Paul.


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The Tyranny of Metrics by Jerry Z. Muller

Affordable Care Act / Obamacare, Atul Gawande, Cass Sunstein, Checklist Manifesto, Chelsea Manning, collapse of Lehman Brothers, corporate governance, Credit Default Swap, crowdsourcing, delayed gratification, deskilling, Edward Snowden, Erik Brynjolfsson, Frederick Winslow Taylor, George Akerlof, Hyman Minsky, intangible asset, Jean Tirole, job satisfaction, joint-stock company, joint-stock limited liability company, Moneyball by Michael Lewis explains big data, performance metric, price mechanism, RAND corporation, school choice, Second Machine Age, selection bias, Steven Levy, total factor productivity, transaction costs, WikiLeaks

Only when multiple compromises have been made and a deal has been reached can it be subjected to public scrutiny, that is, made transparent.3 The same holds true for the performance of the government. Here, too, effective functioning often depends on not making internal deliberations open to the public—but rather on maintaining a lack of transparency. We need to distinguish between those elements of government that ought to be made public and those that should not be. Cass R. Sunstein, a wide-ranging academic who has also served in government, makes a useful distinction between government inputs and outputs. Outputs include data that the government produces on social and economic trends, as well as the results of government actions, such as regulatory rules. Outputs, he argues, ought to be made as publicly accessible as possible. Inputs, by contrast, are the discussions that go into government decision-making: discussions between policymakers and civil servants.

Tom Daschle, foreword to Jason Grumet, City of Rivals: Restoring the Glorious Mess of American Democracy (New York, 2014), p. x. 3. See on this Jonathan Rauch, “How American Politics Went Insane,” The Atlantic, July–August, 2016; Jonathan Rauch, “Why Hillary Clinton Needs to be Two-Faced,” New York Times, October 22, 2016; and Matthew Yglesias, “Against Transparency,” Vox, September 6, 2016. 4. Cass R. Sunstein, “Output Transparency vs. Input Transparency,” August 18, 2016, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2826009. 5. Wikipedia, “Chelsea Manning.” 6. Christian Stöcker, “Leak at WikiLeaks: A Dispatch Disaster in Six Acts,” Spiegel Online, September 1, 2011. 7. Halbertal, Concealment and Revelation, p. 164. 8. Joel Brenner, Glass Houses: Privacy, Secrecy, and Cyber Insecurity in a Transparent World (New York, 2013), p. 210.


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Speculative Everything: Design, Fiction, and Social Dreaming by Anthony Dunne, Fiona Raby

3D printing, augmented reality, autonomous vehicles, Berlin Wall, Buckminster Fuller, Cass Sunstein, computer age, corporate governance, David Attenborough, en.wikipedia.org, Fall of the Berlin Wall, game design, global village, Google X / Alphabet X, haute couture, life extension, Mark Zuckerberg, mouse model, New Urbanism, Peter Eisenman, RAND corporation, Richard Thaler, Ronald Reagan, self-driving car, Silicon Valley, social software, technoutopianism, Wall-E

Available at http://www.arterritory.com/en/ texts/interviews/ 538-between-art-and-designwithout-borders/2. Accessed December 24, 2012. CHAPTER 9 1. From Nico Macdonald's seminar "Designerly Thinking and Beyond" for design interactions MA students at the RCA (January 25, 2006). Available at http:// www.spy.co.uk/Communication/Talks/Colleges/RCA_ID/2006. Accessed December 24, 2012. 2. See Richard Thaler and Cass Sunstein, Nudge: Improving Decisions about Health, Wealth, and Happiness (London: Penguin, 2009). 3. For more on this, see B.J.Fogg, Persuasive Technology: Using Computers to Change What We Thin k and Do (Burlington, MA: Morgan Kaufmann, 2003). 4. Available at http://www.cabinetoffice.gov.uk/behavioural-insights-team. Accessed December 23, 2012. 5. Eric Olin Wright, E nvisioning Real Utopias (London: Verso, 2010), 23. 6.

Red Plenty. London: Faber and Faber, 2010. Kindle edition. Strand, Clare. Monograph. Gottingen: Steidl, 2009. Suarez, Mauricio, ed. Fictions in Science: Philosophical Essays on Modeling and Idealization. London: Routledge, 2009. Talshir, Gayil, Mathew Humphrey, and Michael Freeden, eds. Taking Ideology Seriously: 21st Century Reconfigurations. London: Routledge, 2006. Thaler, Richard, and Cass Sunstein. Nudge: Improving Decisions about Health, Wealth, and Happiness. London: Penguin, 2009. Thomas, Ann. The Photography of Lynne Cohen. London: Thames & Hudson, 2001. Thomson, Rupert. Divided Kingdom. London: Bloomsbury, 2006. Tsuzuki, Kyoichi. Image Club. Osaka: Amus Arts Press, 2003. Tunbjork, Lars. Office. Stockholm: Journal, 2001. Turney, Jon. The Rough Guide to the Future. London: Rough Guides, 2010.


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Narrative Economics: How Stories Go Viral and Drive Major Economic Events by Robert J. Shiller

agricultural Revolution, Albert Einstein, algorithmic trading, Andrei Shleifer, autonomous vehicles, bank run, banking crisis, basic income, bitcoin, blockchain, business cycle, butterfly effect, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, central bank independence, collective bargaining, computerized trading, corporate raider, correlation does not imply causation, cryptocurrency, Daniel Kahneman / Amos Tversky, debt deflation, disintermediation, Donald Trump, Edmond Halley, Elon Musk, en.wikipedia.org, Ethereum, ethereum blockchain, full employment, George Akerlof, germ theory of disease, German hyperinflation, Gunnar Myrdal, Gödel, Escher, Bach, Hacker Ethic, implied volatility, income inequality, inflation targeting, invention of radio, invention of the telegraph, Jean Tirole, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, litecoin, market bubble, money market fund, moral hazard, Northern Rock, nudge unit, Own Your Own Home, Paul Samuelson, Philip Mirowski, plutocrats, Plutocrats, Ponzi scheme, publish or perish, random walk, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, Rubik’s Cube, Satoshi Nakamoto, secular stagnation, shareholder value, Silicon Valley, speech recognition, Steve Jobs, Steven Pinker, stochastic process, stocks for the long run, superstar cities, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, theory of mind, Thorstein Veblen, traveling salesman, trickle-down economics, tulip mania, universal basic income, Watson beat the top human players on Jeopardy!, We are the 99%, yellow journalism, yield curve, Yom Kippur War

No longer do economists routinely assume that people always behave rationally. One widespread and important innovation is the creation of economic think tanks interested in creating policies based on the insights of behavioral economics. These think tanks have been called “nudge units,” following the Behavioral Insights Team in the UK government in 2010. Working with the ideas popularized by Richard Thaler and Cass Sunstein in their 2008 book Nudge: Improving Decisions about Health, Wealth, and Happiness, these units try to redesign government institutions toward “nudging” people away from their irrational behavior without coercing them. According to the Organization for Economic Cooperation and Development, there are now close to two hundred such units around the world.6 I advocate formalizing some of the intuitive judgment that national leaders already use to acknowledge and harness changing economic narratives.

Review of Economics and Statistics 29(3):161–72. Kozinets, Robert V., Kristine de Valck, Andrea Wojnicki, and Sarah J. S. Wilner. 2010. “Networked Narratives: Understanding Word-of-Mouth Marketing in Online Communities.” Journal of Marketing 74:71–89. Kuran, Timur. 2012. The Great Divergence: How Islamic Law Held Back the Middle East. Princeton, NJ: Princeton University Press. Kuran, Timur, and Cass Sunstein. 1999. “Availability Cascades and Risk Regulation.” Stanford Law Review 51(4):683–768. Kuziemko, Ilyana, and Ebonya Washington. 2015. “Why Did the Democrats Lose the South? Bringing New Data to an Old Debate.” National Bureau of Economic Research Working Paper 21703. Kydland, Finn E., and Edward C. Prescott. 1982. “Time to Build and Aggregate Fluctuations.” Econometrica 50(6):1345–70. Laffer, Arthur. 2004.

Marineli, Filio, Gregory Tsoucalas, Marianna Karamanou, and George Androutsos. 2013. “Mary Mallon (1869–1938) and the History of Typhoid Fever.” Annals of Gastroenterology 26(2):132–34. Marx, Groucho. 2017 [1959]. Groucho and Me. Muriwai Books. McCabe, Brian J. 2016. No Place Like Home: Wealth, Community, and the Politics of Homeownership. New York: Oxford University Press. McCaffery, Edward. 2000. “Cognitive Theory and Tax.” In Cass Sunstein, ed., Behavioral Law and Economics. Cambridge: Cambridge University Press. McCloskey, Deirdre. 2016. “Adam Smith Did Humanomics: So Should We.” Eastern Economic Journal 42(4):503–13. McCullough, David. 1993. Truman. New York: Simon & Schuster. McDaniel, M. A., and G. O. Einstein. 1986. “Bizarre Imagery as an Effective Memory Aid: The Importance of Distinctiveness.” Journal of Experimental Psychology: Learning, Memory, and Cognition 12(1):54–65.


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Intertwingled: Information Changes Everything by Peter Morville

A Pattern Language, Airbnb, Albert Einstein, Arthur Eddington, augmented reality, Bernie Madoff, Black Swan, business process, Cass Sunstein, cognitive dissonance, collective bargaining, disruptive innovation, index card, information retrieval, Internet of things, Isaac Newton, iterative process, Jane Jacobs, John Markoff, Lean Startup, Lyft, minimum viable product, Mother of all demos, Nelson Mandela, Paul Graham, peer-to-peer, RFID, Richard Thaler, ride hailing / ride sharing, Schrödinger's Cat, self-driving car, semantic web, sharing economy, Silicon Valley, Silicon Valley startup, source of truth, Steve Jobs, Stewart Brand, Ted Nelson, The Death and Life of Great American Cities, the scientific method, The Wisdom of Crowds, theory of mind, uber lyft, urban planning, urban sprawl, Vannevar Bush, zero-sum game

Relative to information, architecture is a less direct but more persuasive path to change. Of course, the two tactics usually work best when paired. For instance, asking designers and engineers to collaborate may have a limited effect, unless we also co-locate their desks. As Winston Churchill famously remarked “We shape our buildings; thereafter they shape us.” In Nudge, Richard Thaler and Cass Sunstein define a “choice architect” as a person responsible for “organizing the context in which people make decisions.”cxvii They note that by rearranging a school cafeteria, it’s possible to increase or decrease the consumption of many food items by as much as 25 percent.cxviii Of course the context need not be physical. In one study, forty thousand people were asked “Do you intend to buy a new car in the next six months?”

cviii Spradley (1979), adapted from Figure 5.1, p.102. cix Spradley (1979), adapted from Figure 10.1, p.176. cx The Fifth Discipline by Peter Senge (1990), p.57. cxi Senge (1990), p.88. cxii Senge (1990), p.63. cxiii Schein (1999), p.34. cxiv Schein (1999), p.223. cxv Schein (1999), p.86. cxvi Leading from the Emerging Future by Otto Scharmer and Katrim Kaufer (2013), p.16. cxvii Nudge by Richard Thaler and Cass Sunstein (2008), p.3. cxviii Thaler and Sunstein (2008), p.1. cxix Thaler and Sunstein (2008), p.71. cxx Thaler and Sunstein (2008), p.111. cxxi Culture Mapping by Dave Gray. cxxii The Power of Habit by Charles Duhigg (2012), p.139. cxxiii The Fastest Way to Make Change (2012). cxxiv Meetup’s Dead Simple User Testing (2008). cxxv Duhigg (2012), p.98. cxxvi Duhigg (2012), p.116. cxxvii The Folkways Collection, Episode 12: Pete Seeger.


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Data for the Public Good by Alex Howard

23andMe, Atul Gawande, Cass Sunstein, cloud computing, crowdsourcing, Hernando de Soto, Internet of things, Kickstarter, lifelogging, Network effects, openstreetmap, Silicon Valley, slashdot, social intelligence, 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.


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

Alvin Roth, 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, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Joshua Gans and Andrew Leigh, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, longitudinal study, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, Monkeys Reject Unequal Pay, new economy, New Urbanism, peer-to-peer, 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, ultimatum game, unpaid internship, urban planning, Veblen good, women in the workforce, World Values Survey, Yom Kippur War, young professional, zero-sum game

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.


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

Airbus A320, airport security, algorithmic trading, banking crisis, barriers to entry, Bernie Sanders, call centre, Captain Sullenberger Hudson, Cass Sunstein, Charles Lindbergh, cognitive dissonance, credit crunch, crowdsourcing, dark matter, Dava Sobel, David Brooks, Donald Davies, future of journalism, hive mind, Howard Rheingold, HyperCard, Jane Jacobs, John Gruber, John Harrison: Longitude, Joi Ito, Kevin Kelly, Kickstarter, lone genius, Mark Zuckerberg, mega-rich, meta analysis, meta-analysis, Naomi Klein, Nate Silver, Occupy movement, packet switching, peer-to-peer, 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, US Airways Flight 1549, WikiLeaks, William Langewiesche, working poor, X Prize, your tax dollars at work

— 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.


American Secession: The Looming Threat of a National Breakup by F. H. Buckley

Affordable Care Act / Obamacare, Andrei Shleifer, Bernie Sanders, British Empire, Cass Sunstein, colonial rule, crony capitalism, desegregation, diversified portfolio, Donald Trump, Francis Fukuyama: the end of history, hindsight bias, illegal immigration, immigration reform, income inequality, old-boy network, race to the bottom, Republic of Letters, reserve currency, Ronald Coase, transaction costs, Washington Consensus, wealth creators

Secession might also seem like a reasonable way to resolve unbridgeable partisan differences, in which case an Article V convention to amend the Constitution might work out our own velvet divorce. Finally, the right of secession might find support in the Supreme Court, were it to follow the decision of the Canadian Supreme Court when it was faced with the possibility of a successful independence referendum in Quebec. Cass Sunstein has said that “no serious scholar or politician now argues that a right to secede exists under American constitutional law.”3 He’s right. But I will show how it could still happen through constitutional means. Rehabilitating James Buchanan President James Buchanan (1857–61), pompous and dithering, was wholly incapable of solving the secession crisis. An ardent defender of slavery, he seems to have had a hand in crafting the Supreme Court’s notorious Dred Scott decision.

Cutler, “Using Morals, Not Money on Pretoria,” New York Times, August 3, 1986. 2 Russia, Belarus, Ukraine, Georgia, Moldova, Latvia, Lithuania, Estonia, Armenia, Uzbekistan, Kazakhstan, Tajikistan, Kirgizia, Azerbaijan, Turkmenistan, Czech Republic, Slovakia, Bosnia & Herzegovina, Montenegro, Croatia, Macedonia, Slovenia, Serbia, Kosovo. On the rise of secessionist movements following the end of the Cold War, see Ryan D. Griffiths, Age of Secession: The International and Domestic Determinants of State Birth (New York: Cambridge University Press, 2016). 3 Cass Sunstein, “Constitutionalism and Secession,” University of Chicago Law Review, vol. 58, no. 2 (1991): 633. 4 The Records of the Federal Convention of 1787, ed. Max Farrand, rev. ed. (New Haven: Yale University Press, 1937), I.54 (May 31). (Hereafter, “Farrand.”) 5 Farrand I.165 (June 8). 6 Farrand II.466 (August 30). Two firm nationalists among the delegates, Charles Pinckney and Gouverneur Morris, would have given the federal government the right to declare that a state of domestic violence existed, without regard to what the state legislature or governor might think.


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

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, longitudinal study, mandatory minimum, Pierre-Simon Laplace, 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


Survival of the Friendliest: Understanding Our Origins and Rediscovering Our Common Humanity by Brian Hare, Vanessa Woods

Cass Sunstein, cognitive bias, desegregation, Donald Trump, drone strike, income inequality, Jane Jacobs, Law of Accelerating Returns, meta analysis, meta-analysis, microbiome, Milgram experiment, Nelson Mandela, New Urbanism, nuclear winter, out of africa, phenotype, Ray Kurzweil, Richard Florida, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), self-driving car, smart cities, social intelligence, Stanford marshmallow experiment, stem cell, Steven Pinker, The Death and Life of Great American Cities, theory of mind, Tim Cook: Apple, trade route, white flight, zero-sum game

Rohde, “The Gingrich Senators and Party Polarization in the U.S. Senate,” The Journal of Politics 73, 1011–24 (2011). 51. J. Biden, “Remarks: Joe Biden,” National Constitution Center, 16 October 2017 (2017), published online https://constitutioncenter.org/​liberty-medal/​media-info/​remarks-joe-biden. 52. S. A. Frisch, S. Q. Kelly, Cheese Factories on the Moon: Why Earmarks Are Good for American Democracy (Routledge, 2015). 53. Cass R. Sunstein, Can It Happen Here?: Authoritarianism in America (New York: Dey Street Books, 2018). 1 Thinking About Thinking 1. M. Tomasello, M. Carpenter, U. Liszkowski, “A New Look at Infant Pointing,” Child Development 78, 705–22 (2007). 2. Brian Hare, “From Hominoid to Hominid Mind: What Changed and Why?” Annual Review of Anthropology 40, 293–309 (2011). 3. Michael Tomasello, Becoming Human: A Theory of Ontogeny (Cambridge, MA: Belknap Press of Harvard University Press, 2019). 4.

: Democracy, Political Change, and Civil War,” in American Political Science Association, vol. 95 (Cambridge University Press, 2001), 33–48. 11. H. Hegre, “Democracy and Armed Conflict,” Journal of Peace Research 51, 159–172 (2014). 12. Peter Levine, The New Progressive Era: Toward a Fair and Deliberative Democracy (Lanham, MD: Rowman & Littlefield, 2000). 13. James Madison, The Federalist no. 10 (1787). 14. Thomas Paine, Common Sense (Penguin, 1986). 15. Cass R. Sunstein, Can It Happen Here?: Authoritarianism in America (New York: Dey Street Books, 2018). 16. James Madison, The Federalist no. 51 (1788). 17. James Madison, John Jay, Alexander Hamilton, The Federalist Papers, edited by Jim Miller (Mineola, NY: Dover Publications, 2014), 253–57. 18. R. A. Dahl, How Democratic Is the American Constitution? (New Haven, CT: Yale University Press, 2003). 19.


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The Road to Character by David Brooks

Cass Sunstein, coherent worldview, David Brooks, desegregation, Donald Trump, follow your passion, George Santayana, 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: 1,380 words: 190,710

Building Secure and Reliable Systems: Best Practices for Designing, Implementing, and Maintaining Systems by Heather Adkins, Betsy Beyer, Paul Blankinship, Ana Oprea, Piotr Lewandowski, Adam Stubblefield

anti-pattern, barriers to entry, bash_history, business continuity plan, business process, Cass Sunstein, cloud computing, continuous integration, correlation does not imply causation, create, read, update, delete, cryptocurrency, cyber-physical system, database schema, Debian, defense in depth, DevOps, Edward Snowden, fault tolerance, fear of failure, general-purpose programming language, Google Chrome, Internet of things, Kubernetes, load shedding, margin call, microservices, MITM: man-in-the-middle, performance metric, pull request, ransomware, revision control, Richard Thaler, risk tolerance, self-driving car, Skype, slashdot, software as a service, source of truth, Stuxnet, Turing test, undersea cable, uranium enrichment, Valgrind, web application, Y2K, zero day

“Do Developers Learn New Tools on the Toilet?” Proceedings of the 41st International Conference on Software Engineering. https://oreil.ly/ZN18B. 7 This topic is closely related to nudging, a method of changing behavior by subtly encouraging people to do the right thing. Nudge theory was developed by Richard Thaler and Cass Sunstein, who were awarded a Nobel Prize in Economics for their contribution to behavioral economics. For more information, see Thaler, Richard H., and Cass R. Sunstein. 2008. Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven, CT: Yale University Press. 8 Dave Rensin, Director of Customer Reliability Engineering at Google, considers this topic in greater detail in his talk “Less Risk Through Greater Humanity”. 9 The final report of the Columbia Disaster Investigation Board is preserved on the NASA website for the general public to read.


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

accounting loophole / creative accounting, Branko Milanovic, Cass Sunstein, clean water, end world poverty, experimental economics, illegal immigration, Martin Wolf, microcredit, Monkeys Reject Unequal Pay, 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.


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

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, Panopticon Jeremy Bentham, 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.


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Reinventing Capitalism in the Age of Big Data by Viktor Mayer-Schönberger, Thomas Ramge

accounting loophole / creative accounting, Air France Flight 447, Airbnb, Alvin Roth, Atul Gawande, augmented reality, banking crisis, basic income, Bayesian statistics, bitcoin, blockchain, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, Cass Sunstein, centralized clearinghouse, Checklist Manifesto, cloud computing, cognitive bias, conceptual framework, creative destruction, Daniel Kahneman / Amos Tversky, disruptive innovation, Donald Trump, double entry bookkeeping, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Ford paid five dollars a day, Frederick Winslow Taylor, fundamental attribution error, George Akerlof, gig economy, Google Glasses, information asymmetry, interchangeable parts, invention of the telegraph, inventory management, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, job satisfaction, joint-stock company, Joseph Schumpeter, Kickstarter, knowledge worker, labor-force participation, land reform, lone genius, low cost airline, low cost carrier, Marc Andreessen, market bubble, market design, market fundamentalism, means of production, meta analysis, meta-analysis, Moneyball by Michael Lewis explains big data, multi-sided market, natural language processing, Network effects, Norbert Wiener, offshore financial centre, Parag Khanna, payday loans, peer-to-peer lending, Peter Thiel, Ponzi scheme, prediction markets, price anchoring, price mechanism, purchasing power parity, random walk, recommendation engine, Richard Thaler, ride hailing / ride sharing, Sam Altman, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley startup, six sigma, smart grid, smart meter, Snapchat, statistical model, Steve Jobs, technoutopianism, The Future of Employment, The Market for Lemons, The Nature of the Firm, transaction costs, universal basic income, William Langewiesche, Y Combinator

., Margaret Jane Radin, “From Babyselling to Boilerplate: Reflections on the Limits of the Infrastructures of the Market,” Osgoode Hall Law Journal 54, no. 2, forthcoming; Osgoode Legal Studies Research Paper No. 28/2017 (January 24, 2017); University of Michigan Law and Economics Research Paper No. 16-031; University of Michigan Public Law Research Paper No. 530, https://ssrn.com/abstract=2905141. a better-than-even chance to know the truth: Cass R. Sunstein, Infotopia (New York: Oxford University Press, 2006), 25ff. the probability of events related to Google projects: Other companies have also experimented with prediction markets, but Google’s appear to be the largest and longest experiments conducted in the corporate world. See Bo Cowgill, Justin Wolfers, and Eric Zitzewitz, “Using Prediction Markets to Track Information Flows: Evidence from Google,” in Sanmay Das, Michael Ostrovsky, David Pennock, and Boleslaw K.

computer system that would assist the Chilean government: The evolution of Cybersyn and its implications are eloquently captured in Eden Medina, Cybernetics Revolutionaries: Technology and Politics in Allende’s Chile (Cambridge: MIT Press, 2011); see also Evgeny Morozov, “The Planning Machine,” New Yorker, October 13, 2014, http://www.newyorker.com/magazine/2014/10/13/planning-machine. The development of Cybersyn also underlies the plot of a work of fiction: see Sascha Reh, Gegen die Zeit (Frankfurt, Germany: Schöffling, 2015). Great Famine of 1932–1933: See Anne Applebaum, Red Famine: Stalin’s War on Ukraine (New York: Doubleday, 2017). to coax us to transact appropriately: See, e.g., Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven: Yale University Press, 2008). CHAPTER 9: UNBUNDLING WORK “The drive was as mundane”: Alex Davies, “Uber’s Self-Driving Truck Makes Its First Delivery: 50,000 Beers,” Wired, October 25, 2016, https://www.wired.com/2016/10/ubers-self-driving-truck-makes-first-delivery-50000-beers. the system won’t take away their jobs: Eric Newcomer and Alex Webb, “Uber Self-Driving Truck Packed with Budweiser Makes First Delivery in Colorado,” Bloomberg, October 25, 2016, https://www.bloomberg.com/news/articles/2016-10-25/uber-self-driving-truck-packed-with-budweiser-makes-first-delivery-in-colorado.


pages: 241 words: 75,516

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

accounting loophole / creative accounting, attribution theory, Atul Gawande, availability heuristic, Cass Sunstein, Daniel Kahneman / Amos Tversky, endowment effect, framing effect, hedonic treadmill, income per capita, job satisfaction, loss aversion, medical residency, mental accounting, Own Your Own Home, Pareto efficiency, 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

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, commoditize, computer age, death of newspapers, deferred acceptance, disruptive innovation, 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, John Markoff, Kevin Kelly, Kodak vs Instagram, lifelogging, Marshall McLuhan, means of production, Nate Silver, natural language processing, Netflix Prize, Panopticon Jeremy Bentham, 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.


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

"Robert Solow", 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 Markoff, John von Neumann, Marshall McLuhan, Mitch Kapor, Naomi Klein, Network effects, new economy, New Urbanism, Panopticon Jeremy Bentham, peer-to-peer, 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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Uberland: How Algorithms Are Rewriting the Rules of Work by Alex Rosenblat

"side hustle", Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, autonomous vehicles, barriers to entry, basic income, big-box store, call centre, cashless society, Cass Sunstein, choice architecture, collaborative economy, collective bargaining, creative destruction, crowdsourcing, disruptive innovation, don't be evil, Donald Trump, en.wikipedia.org, future of work, gender pay gap, gig economy, Google Chrome, income inequality, information asymmetry, Jaron Lanier, job automation, job satisfaction, Lyft, marginal employment, Mark Zuckerberg, move fast and break things, Network effects, new economy, obamacare, performance metric, Peter Thiel, price discrimination, Ralph Waldo Emerson, regulatory arbitrage, ride hailing / ride sharing, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, social software, stealth mode startup, Steve Jobs, strikebreaker, TaskRabbit, Tim Cook: Apple, transportation-network company, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, union organizing, universal basic income, urban planning, Wolfgang Streeck, Zipcar

Angèle Christin, “Algorithms in Practice: Comparing Web Journalism and Criminal Justice,” July 16, 2017, Big Data & Society 4 (2): 1–14, http://journals.sagepub.com/doi/abs/10.1177/2053951717718855. 44. Rosenblat and Hwang, “Wisdom of the Captured,” 4–5. 45. Ibid. 46. Drivers do resist some of Uber’s control—for example, by GPS spoofing. 47. Rosenblat and Hwang, “Wisdom of the Captured,” 4. 48. Rosenblat and Stark, “Algorithmic Labor,” 3768. 49. Ibid., 3766. 50. Cass R. Sunstein, “Misconceptions about Nudges,” September 6, 2017, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3033101. 5. BEHIND THE CURTAIN 1. “New LAX Rule: Taxi Drivers Who Discriminate Will Lose Permits,” CBS Los Angeles, February 2, 2016, http://losangeles.cbslocal.com/2016/02/02/la-city-council-to-consider-revoking-permits-from-taxi-cab-drivers-who-refuse-service-at-lax/; Yanbo Ge, Christopher R.

Tarleton Gillespie, “The Relevance of Algorithms,” in Media Technologies, ed. Tarleton Gillespie, Pablo Boczkowskie, and Kristen Foot (Cambridge, MA: MIT Press, 2014); Angele Christin, “Algorithms in Practice: Comparing Web Journalism and Criminal Justice,” Big Data & Society (2017): 1–4, http://journals.sagepub.com/doi/pdf/10.1177/2053951717718855. 7. On nudging as “choice architecture,” see, e.g., Cass R. Sunstein, “Nudging: A Very Short Guide,” Journal of Consumer Policy 37, no. 4 (2014): 583–588, doi:10.1007/s10603–014–9273–1. 8. Josh Horwitz, “Uber Customer Complaints from the US Are Increasingly Handled in the Philippines,” Quartz, July 30, 2015, https://qz.com/465613/uber-customer-complaints-from-the-us-are-increasingly-handled-in-the-philippines/. 9. See, e.g., Heather Timmons, “Uber Explains Why a Search for ‘Rape’ in Its Customer Support Inbox Gets Thousands of Results,” Quartz, March 7, 2016, https://qz.com/632440/uber-explains-why-a-search-for-rape-in-its-customer-support-inbox-gets-thousands-of-results/. 10. “180 Days of Change: Building Together in 2018,” Uber, December 7, 2017, www.uber.com/blog/180-days-of-change-building-together-in-2018/. 11.


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Testosterone Rex: Myths of Sex, Science, and Society by Cordelia Fine

assortative mating, Cass Sunstein, credit crunch, Donald Trump, Downton Abbey, Drosophila, epigenetics, experimental economics, gender pay gap, George Akerlof, glass ceiling, helicopter parent, longitudinal study, meta analysis, meta-analysis, phenotype, publication bias, risk tolerance

Risk researchers have also found that both knowledge and familiarity in a particular domain reduces perceptions of risk.30 Plausibly, men may tend to be relatively more knowledgeable or familiar with some of the risky activities that tend to feature in surveys (like sports betting, financial investments, and motorcycle riding). The point is that an “unruly amalgam of things” underlies choices, as Harvard University legal scholar Cass Sunstein puts it: “aspirations, tastes, physical states, responses to existing roles and norms, values, judgments, emotions, drives, beliefs, whims.”31 And so, we’re not only sensitive to the material benefits and costs when we make choices, Sunstein argues, but also to the less tangible effects a particular choice could have on self-concept and reputation. In a gendered world, these impacts are inevitably different for females and males.

In their own cross-cultural research, Henrich and colleagues therefore use large stakes “to focus the informants’ attention on the game payoffs rather than on exogenous social concerns.”33 As you’ll recall, sex didn’t predict financial risk taking when this research method was used with the Mapuche, Sangu, and Huinca communities of Chile and Tanzania. Their research protocol is also in perfect keeping with Cass Sunstein’s argument (first met in Chapter 5) that the consequences of a decision for one’s self-concept and reputation are vital ingredients in the recipe from which preferences emerge. This aspect of the decision-making context is something that economists, in particular, have not been especially interested in. It was only at the turn of the twenty-first century, in a groundbreaking economics article written by Nobel Prize–winning economist George Akerlof and fellow economist Rachel Kranton, that the concept that social identity and norms have a motivating effect on behavior was formally introduced to economists.34 “What people care about, and how much they care about it, depends in part on their identity,”35 they observe.


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Thinking in Bets by Annie Duke

banking crisis, Bernie Madoff, Cass Sunstein, cognitive bias, cognitive dissonance, Daniel Kahneman / Amos Tversky, delayed gratification, Donald Trump, en.wikipedia.org, endowment effect, Estimating the Reproducibility of Psychological Science, Filter Bubble, hindsight bias, Jean Tirole, John Nash: game theory, John von Neumann, loss aversion, market design, mutually assured destruction, Nate Silver, p-value, phenotype, prediction markets, Richard Feynman, ride hailing / ride sharing, Stanford marshmallow experiment, Stephen Hawking, Steven Pinker, the scientific method, The Signal and the Noise by Nate Silver, urban planning, Walter Mischel, Yogi Berra, zero-sum game

Diversity is the foundation of productive group decision-making, but we can’t underestimate how hard it is to maintain. We all tend to gravitate toward people who are near clones of us. After all, it feels good to hear our ideas echoed back to us. If there is any doubt about how easy it can be to fall into this confirmatory drift, we can even see this tendency in groups we consider some of the most dedicated to truthseeking: judges and scientists. Federal judges: drift happens Cass Sunstein, now a Harvard law professor, conducted a massive study with colleagues when he was on the faculty at the University of Chicago Law School, on ideological diversity in federal judicial panels. Sunstein recognized at the outset that the U.S. Courts of Appeals are “an extraordinary and longstanding natural experiment” in diversity. Appellate court panels are composed of three judges randomly drawn from that circuit’s pool.

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets. New York: Random House, 2004. Tetlock, Philip, and Dan Gardner. Superforecasting: The Art and Science of Prediction. New York: Crown, 2015. Thaler, Richard. Misbehaving: The Making of Behavioral Economics. New York: W. W. Norton, 2015. ———“Some Empirical Evidence on Dynamic Inconsistency.” Economics Letters 8, no. 3 (January 1981): 201–07. Thaler, Richard, and Cass Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. Upd. ed. New York: Penguin, 2009. Todes, Daniel. Pavlov’s Physiology Factory: Experiment, Interpretation, Laboratory Enterprise. Baltimore: Johns Hopkins University Press, 2002. Tomlin, Damon, David Rand, Elliot Ludvig, and Jonathan Cohen. “The Evolution and Devolution of Cognitive Control: The Costs of Deliberation in a Competitive World.”


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Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State by Paul Tucker

Andrei Shleifer, bank run, banking crisis, barriers to entry, Basel III, battle of ideas, Ben Bernanke: helicopter money, Berlin Wall, Bretton Woods, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, centre right, conceptual framework, corporate governance, diversified portfolio, Fall of the Berlin Wall, financial innovation, financial intermediation, financial repression, first-past-the-post, floating exchange rates, forensic accounting, forward guidance, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, incomplete markets, inflation targeting, information asymmetry, invisible hand, iterative process, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, liberal capitalism, light touch regulation, Long Term Capital Management, means of production, money market fund, Mont Pelerin Society, moral hazard, Northern Rock, Pareto efficiency, Paul Samuelson, price mechanism, price stability, principal–agent problem, profit maximization, quantitative easing, regulatory arbitrage, reserve currency, risk tolerance, risk-adjusted returns, road to serfdom, Robert Bork, Ronald Coase, seigniorage, short selling, Social Responsibility of Business Is to Increase Its Profits, stochastic process, The Chicago School, The Great Moderation, The Market for Lemons, the payments system, too big to fail, transaction costs, Vilfredo Pareto, Washington Consensus, yield curve, zero-coupon bond, zero-sum game

As a result, they were excluded from the executive orders mandating that OIRA review drafts of significant government rules and regulations that they conduct formal cost-benefit analysis. Chu and Shedd, “Presidential Review.” 13 Obama Executive Order 13579, saying that independent agencies should (not must or shall) comply with orders binding on executive agencies; and letter of November 8, 2011, from Federal Reserve Board Chairman Ben S. Bernanke to Cass R. Sunstein, Administrator, OIRA. 14 In Humphrey’s Executor (1935), the Court concluded that where congressional legislation provides that officers can be fired only “for cause,” the president cannot fire them just because of disagreement. This case is widely seen as signaling the acceptability of independent agencies under the US Constitution. On the same day, in Schechters case, the Court ruled unconstitutional a delegation in one of the New Deal statutes.

I apologize to anyone I have omitted and thank those not listed here who have so generously helped with other projects. In Cambridge, MA, I have been helped, at Harvard, by Eric Beerbohm, Dan Carpenter, John Coates, Richard Cooper, Chris Desan, Marty Feldstein, Jeff Frieden, Ben Friedman, Jacob Gersen, Robin Greenwood, Peter Hall, Olivier Hart, Howell Jackson, Louis Kaplow, Frank Michelman, Joe Nye, Richard Parker, Carmen Reinhart, Ken Rogoff, David Scharfstein, Hal Scott, Emile Simpson, Jeremy Stein, Cass Sunstein, Richard Tuck, Adrian Vermeule, and Richard Zeckhauser; and although we never met, I should mention Jenny Mansbridge, who e-introduced me to Philip Pettit. At MIT: Bengt Holmstrom, Athanasios Orphanides, and David Singer. Over the river: Vivien Schmidt (BU), Dan Coquillette (Boston College), and Alasdair Roberts (formerly Sussex). At Yale, I was helped by Bruce Ackerman, Andrew Metrick, Nick Parillo, Roberta Romano, Susan Rose-Ackerman (who, amazingly, invited me to a conference on comparative administrative law).


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The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society by Binyamin Appelbaum

"Robert Solow", airline deregulation, Alvin Roth, Andrei Shleifer, anti-communist, battle of ideas, Benoit Mandelbrot, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, Celtic Tiger, central bank independence, clean water, collective bargaining, Corn Laws, correlation does not imply causation, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, desegregation, Diane Coyle, Donald Trump, ending welfare as we know it, financial deregulation, financial innovation, fixed income, floating exchange rates, full employment, George Akerlof, George Gilder, Gini coefficient, greed is good, Growth in a Time of Debt, income inequality, income per capita, index fund, inflation targeting, invisible hand, Isaac Newton, Jean Tirole, John Markoff, Kenneth Arrow, Kenneth Rogoff, land reform, Long Term Capital Management, low cost airline, manufacturing employment, means of production, Menlo Park, minimum wage unemployment, Mohammed Bouazizi, money market fund, Mont Pelerin Society, Network effects, new economy, oil shock, Paul Samuelson, Philip Mirowski, plutocrats, Plutocrats, price stability, profit motive, Ralph Nader, RAND corporation, rent control, rent-seeking, Richard Thaler, road to serfdom, Robert Bork, Robert Gordon, Ronald Coase, Ronald Reagan, Sam Peltzman, Silicon Valley, Simon Kuznets, starchitect, Steve Jobs, supply-chain management, The Chicago School, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, transaction costs, trickle-down economics, ultimatum game, Unsafe at Any Speed, urban renewal, War on Poverty, Washington Consensus

Older chairs, however, were not recalled and, in 1987, an eighteen-month-old child climbed onto a recliner at a day-care center in Orange County, California, fell between the seat and leg rest, and suffered permanent brain damage.62 The government’s growing reliance on cost-benefit analysis meant that economists like Prunella were exercising significant influence over life-and-death decisions. Cass Sunstein, a Harvard Law School professor who is a leading proponent of cost-benefit analysis — and who supervised regulation under President Obama — says the process enhanced democracy because it served “to translate social problems into terms that lay bare the underlying variables and make them clear for all to see.”63 But cost-benefit analysis also displaced democracy, by elevating the judgments of economists above the judgments of politicians.

By the end of the 1980s, the pace of rule writing had rebounded.68 But the new regulations increasingly were shaped by cost-benefit analyses.69 “What’s the alternative?” asked Christopher DeMuth, who had helped to create the EPA as a young Nixon aide, and who succeeded Miller as Reagan’s regulator of regulators. “Flipping a coin? Consulting a Ouija board?”70 There were undoubtedly theoretical imperfections and shortcomings but, in the words of Cass Sunstein, “a signal advantage of cost-benefit analysis is that we can actually engage in it.”71 By refusing to engage, opponents of cost-benefit analysis were allowing others to determine the rules used to make the rules. Paralysis by Analysis W. Kip Viscusi was determined to persuade liberals to embrace cost-benefit analysis. Viscusi, born in New Jersey in 1949, developed an interest in cost-benefit analysis as a Harvard undergraduate in the late 1960s, during the early years of excitement.

Joy Griffith’s case attracted particular attention because the comatose child was killed by her father at a Miami hospital in June 1985, one week after the CPSC issued the alert. Griffith told police that he could not bear his daughter’s suffering. He was convicted of first-degree murder. 61. Bill McAllister, “Formula for Product Safety Raises Questions About Human Factor,” Washington Post, May 26, 1987. 62. Bill Billiter, “Family Settles for $5 Million in Recliner Suit,” Los Angeles Times, September 7, 1991. 63. Cass Sunstein, The Cost-Benefit Revolution (Cambridge: MIT Press, 2018), ebook loc. 932. In 1981, Sunstein, then working as a young lawyer at the Justice Department, was tasked with preparing the official opinion on the legality of Reagan’s order requiring cost-benefit analysis. He approved. 64. William R. Greer, “Value of One Life? From $8.37 to $10 Million,” New York Times, June 26, 1985. 65. Clyde H.


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

affirmative action, Air France Flight 447, Airbnb, airport security, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, assortative mating, 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, industrial cluster, Internet of things, Jane Jacobs, Jeff Bezos, Loebner Prize, Louis Pasteur, Marc Andreessen, 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, William Langewiesche

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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The Hacker and the State: Cyber Attacks and the New Normal of Geopolitics by Ben Buchanan

active measures, Bernie Sanders, bitcoin, blockchain, borderless world, Brian Krebs, British Empire, Cass Sunstein, citizen journalism, credit crunch, cryptocurrency, cuban missile crisis, data acquisition, Donald Trump, drone strike, Edward Snowden, family office, hive mind, Internet Archive, Jacob Appelbaum, John Markoff, John von Neumann, Julian Assange, Kickstarter, kremlinology, MITM: man-in-the-middle, Nate Silver, profit motive, RAND corporation, ransomware, risk tolerance, Robert Hanssen: Double agent, rolodex, Ronald Reagan, Silicon Valley, South China Sea, Steve Jobs, Stuxnet, technoutopianism, undersea cable, uranium enrichment, Vladimir Vetrov: Farewell Dossier, WikiLeaks, zero day

For more on the development and challenges of NOBUS, see Ben Buchanan, “Nobody But Us: The Rise and Fall of the Golden Age of Signals Intelligence,” Aegis Series Paper No. 1708, Hoover Institution, Stanford, CA, August 30, 2017; David Aitel, “Hope Is Not a NOBUS Strategy,” CyberSecPolitics, May 13, 2019. 17. When some decryption programs became public, a major review commission pointed out the severe risk of blowback and unintended consequences. Richard A. Clarke, Michael J. Morell, Geoffrey R. Stone, Cass R. Sunstein, and Peter Swire, “Liberty and Security in a Changing World,” President’s Review Group on Intelligence and Communications Technologies report, December 12, 2013, 36. 18. Barton Gellman and Greg Miller, “ ‘Black Budget’ Summary Details U.S. Spy Network’s Successes, Failures and Objectives,” Washington Post, August 29, 2013. Kevin Poulsen, “New Snowden Leak Reports ‘Groundbreaking’ NSA Crypto-Cracking,” Wired, August 29, 2013. 19.

“The World Factbook: Korea, North,” Central Intelligence Agency, continually updated at https://www.cia.gov/library/publications/the-world-factbook/geos/kn.html, accessed September 15, 2017. See also Michelle Nichols, “North Korea Took $2 Billion in Cyberattacks to Fund Weapons Program: U.N. Report,” Reuters, August 5, 2019. 8. John Markoff and Thom Shanker, “Halted ’03 Iraq Plan Illustrates U.S. Fear of Cyberwar Risk,” New York Times, August 1, 2009. 9. Richard A. Clarke, Michael J. Morell, Geoffrey R. Stone, Cass R. Sunstein, and Peter Swire, “Liberty and Security in a Changing World,” President’s Review Group on Intelligence and Communications Technologies, report, December 12, 2013, 221. 10. Steven D. Levitt and Stephen J. Dubner, When to Rob a Bank (New York: HarperCollins, 2015). 11. Associated Press, “Suspect in Major Brazil Robbery Is Found Dead,” New York Times, October 22, 2005. 12. Serajul Quadir, “Bangladesh Bank Exposed to Hackers by Cheap Switches, No Firewall: Police,” Reuters, April 21, 2016. 13.


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

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 Wisdom of Crowds by James Surowiecki

AltaVista, Andrei Shleifer, asset allocation, Cass Sunstein, coronavirus, 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, John Meriwether, Joseph Schumpeter, knowledge economy, lone genius, Long Term Capital Management, market bubble, market clearing, market design, Monkeys Reject Unequal Pay, moral hazard, Myron Scholes, new economy, offshore financial centre, Picturephone, prediction markets, profit maximization, 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, zero-sum game

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: 453 words: 111,010

Licence to be Bad by Jonathan Aldred

"Robert Solow", Affordable Care Act / Obamacare, Albert Einstein, availability heuristic, Ayatollah Khomeini, Benoit Mandelbrot, Berlin Wall, Black Swan, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Cass Sunstein, clean water, cognitive dissonance, corporate governance, correlation does not imply causation, cuban missile crisis, Daniel Kahneman / Amos Tversky, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Snowden, Fall of the Berlin Wall, falling living standards, feminist movement, framing effect, Frederick Winslow Taylor, From Mathematics to the Technologies of Life and Death, full employment, George Akerlof, glass ceiling, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Jeff Bezos, John Nash: game theory, John von Neumann, Long Term Capital Management, Louis Bachelier, mandelbrot fractal, meta analysis, meta-analysis, Mont Pelerin Society, mutually assured destruction, Myron Scholes, Nash equilibrium, Norbert Wiener, nudge unit, obamacare, offshore financial centre, Pareto efficiency, Paul Samuelson, plutocrats, Plutocrats, positional goods, profit maximization, profit motive, race to the bottom, RAND corporation, rent-seeking, Richard Thaler, ride hailing / ride sharing, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, Skype, Social Responsibility of Business Is to Increase Its Profits, spectrum auction, The Nature of the Firm, The Wealth of Nations by Adam Smith, transaction costs, trickle-down economics, Vilfredo Pareto, wealth creators, zero-sum game

But as the new behavioural economics began to filter through to policy-making circles, something strange happened. The central lesson of behavioural economics is that people make poor decisions – yet the policy innovation it provoked seeks to rely on precisely those poor decisions to bring about desirable outcomes. Welcome to the weird world of Nudge. Nudge began with a 2008 book of that name by economist Richard Thaler and lawyer Cass Sunstein. Both of them had worked with Kahneman and Tversky, who had shown that real people do not act like homo economicus. Rather than weighing up all relevant considerations and carefully calculating the ‘optimal’ choice, people are guided by rules of thumb, intuition, impulse and inertia. The core idea behind Nudge is that rather than fighting these forces, we should use them, to steer or nudge people to make the choices they would want to make – the choices homo economicus would make, or at least something close.

objection, 107, 119–20 Friedman, Milton, 4–5, 56, 69, 84, 88, 126, 189 awarded Nobel Prize, 132 and business responsibility, 2, 152 debate with Coase at Director’s house, 50, 132 as dominant Chicago thinker, 50, 132 on fairness and justice, 60 flawed arguments of, 132–3 influence on modern economics, 131–2 and monetarism, 87, 132, 232 at Mont Pèlerin, 5, 132 rejects need for realistic assumptions, 132–3 Sheraton Hall address (December 1967), 132 ‘The Methodology of Positive Economics’ (essay, 1953), 132–3 ‘The Social Responsibility of Business is to Increase Its Profits’ (article, 1970), 2, 152 Frost, Gerald, Antony Fisher: Champion of Liberty (2002), 7* Galbraith, John Kenneth, 242–3 game theory assumptions of ‘rational behaviour’, 18, 28, 29–32, 35–8, 41–3, 70, 124 Axelrod’s law of the instrument, 41 backward induction procedure, 36–7, 38 and Cold War nuclear strategy, 18, 20, 21–2, 24, 27, 33–4, 35, 70, 73, 198 focus on consequences alone, 43 as form of zombie science, 41 and human awareness, 21–3, 24–32 and interdependence, 23 limitations of, 32, 33–4, 37–40, 41–3 minimax solution, 22 multiplicity problem, 33–4, 35–7, 38 Nash equilibrium, 22–3, 24, 25, 27–8, 33–4, 41–2 the Nash program, 25 and nature of trust, 28–31, 41 the Prisoner’s Dilemma, 26–8, 29–32, 42–3 real world as problem for, 21–2, 24–5, 29, 31–2, 37–8, 39–40, 41–3 rise of in economics, 40–41 and Russell’s Chicken, 33–4 and Schelling, 138–9 and spectrum auctions, 39–40 theory of repeated games, 29–30, 35 tit-for-tat, 30–31 and trust, 29, 30–31, 32, 41 uses of, 23–4, 34, 38–9 view of humanity as non-cooperative/distrustful, 18, 21–2, 25–32, 36–8, 41–3 Von Neumann as father of, 18, 19, 20–22, 25, 26, 28, 30, 34, 41 zero-sum games, 21–2 Gates, Bill, 221–2 Geithner, Tim, 105 gender, 127–8, 130–31, 133, 156 General Electric, 159 General Motors (GM), 215–16 George, Prince of Cambridge, 98 Glass–Steagall Act, repeal of, 194 globalization, 215, 220 Goldman Sachs, 182, 184, 192 Google, 105 Gore, Al, 39 Great Reform Act (1832), 120 greed, 1–2, 196, 197, 204, 229, 238 Greenspan, Alan, 57, 203 Gruber, Jonathan, 245 Haifa, Israel, 158, 161 Harper, ‘Baldy’, 7 Harsanyi, John, 34–5, 40 Harvard Business Review, 153 Hayek, Friedrich and Arrow’s framework, 78–9 economics as all of life, 8 and Antony Fisher, 6–7 influence on Thatcher, 6, 7 and Keynesian economics, 5–6 and legal frameworks, 7* at LSE, 4 at Mont Pèlerin, 4, 5, 6, 15 and Olson’s analysis, 104 and public choice theory, 89 rejection of incentive schemes, 156 ‘spontaneous order’ idea, 30 The Road to Serfdom (1944), 4, 5, 6, 78–9, 94 healthcare, 91–2, 93, 178, 230, 236 hedge funds, 201, 219, 243–4 Heilbroner, Robert, The Worldly Philosophers, 252 Heller, Joseph, Catch-22, 98, 107, 243–4 Helmsley, Leona, 105 hero myths, 221–3, 224 Hewlett-Packard, 159 hippie countercultural, 100 Hoffman, Abbie, Steal This Book, 100 Holmström, Bengt, 229–30 homo economicus, 9, 10, 12, 140, 156–7 and Gary Becker, 126, 129, 133, 136 and behaviour of real people, 15, 136, 144–5, 171, 172, 173, 250–51 and behavioural economics, 170, 171, 172, 255 long shadow cast by, 248 and Nudge economists, 13, 172, 173, 174–5, 177 Hooke, Robert, 223 housing market, 128–9, 196, 240–41 separate doors for poor people, 243 Hume, David, 111 Huxley, Thomas, 114 IBM, 181, 222 identity, 32, 165–6, 168, 180 Illinois, state of, 46–7 immigration, 125, 146 Impossibility Theorem, 72, 73–4, 75, 89, 97 Arrow’s assumptions, 80, 81, 82 and Duncan Black, 77–8 and free marketeers, 78–9, 82 as misunderstood and misrepresented, 76–7, 79–82 ‘paradox of voting’, 75–7 as readily solved, 76–7, 79–80 Sen’s mathematical framework, 80–81 incentives adverse effect on autonomy, 164, 165–6, 168, 169–70, 180 authority figure–autonomy contradiction, 180 and behavioural economics, 171, 175, 176–7 cash and non-cash gifts, 161–2 context and culture, 175–6 contrast with rewards and punishments, 176–7 ‘crowding in’, 176 crowding out of prior motives, 160–61, 162–3, 164, 165–6, 171, 176 impact of economists’ ideas, 156–7, 178–80 and intrinsic motivations, 158–60, 161–3, 164, 165–6, 176 and moral disengagement, 162, 163, 164, 166 morally wrong/corrupting, 168–9 origins in behaviourism, 154 and orthodox theory of motivation, 157–8, 164, 166–7, 168–70, 178–9 payments to blood donors, 162–3, 164, 169, 176 as pervasive in modern era, 155–6 respectful use of, 175, 177–8 successful, 159–60 as tools of control/power, 155–7, 158–60, 161, 164, 167, 178 Indecent Proposal (film, 1993), 168 India, 123, 175 individualism, 82, 117 and Becker, 134, 135–8 see also freedom, individual Industrial Revolution, 223 inequality and access to lifeboats, 150–51 and climate change, 207–9 correlation with low social mobility, 227–8, 243 and demand for positional goods, 239–41 and economic imperialism, 145–7, 148, 151, 207 and efficiency wages, 237–8 entrenched self-deluding justifications for, 242–3 and executive pay, 215–16, 219, 224, 228–30, 234, 238 as falling in 1940–80 period, 215, 216 Great Gatsby Curve, 227–8, 243 hero myths, 221–3, 224 increases in as self-perpetuating, 227–8, 230–31, 243 as increasing since 1970s, 2–3, 215–16, 220–21 and lower growth levels, 239 mainstream political consensus on, 216, 217, 218, 219–21 marginal productivity theory, 223–4, 228 new doctrine on taxation since 1970s, 232–5 and Pareto, 217, 218–19, 220 poverty as waste of productive capacity, 238–9 public attitudes to, 221, 226–8 rises in as not inevitable, 220, 221, 242 role of luck downplayed, 222, 224–6, 243 scale-invariant nature of, 219, 220 ‘socialism for the rich’, 230 Thatcher’s praise of, 216 and top-rate tax cuts, 231, 233–5, 239 trickle-down economics, 232–3 US and European attitudes to, 226–7 ‘you deserve what you get’ belief, 223–6, 227–8, 236, 243 innovation, 222–3, 242 Inside Job (documentary, 2010), 88 Institute of Economic Affairs, 7–8, 15, 162–3 intellectual property law, 57, 68, 236 Ishiguro, Kazuo, Never Let Me Go, 148 Jensen, Michael, 229 Journal of Law and Economics, 49 justice, 1, 55, 57–62, 125, 137 Kahn, Herman, 18, 33 Kahneman, Daniel, 170–72, 173, 179, 202–3, 212, 226 Kennedy, President John, 139–40 Keynes, John Maynard, 11, 21, 162, 186, 204 and Buchanan’s ideology, 87 dentistry comparison, 258–9, 261 on economics as moral science, 252–3 Friedman’s challenge to orthodoxy of, 132 Hayek’s view of, 5–6 massive influence of, 3–4, 5–6 on power of economic ideas, 15 and probability, 185, 186–7, 188–9, 190, 210 vision of the ideal economist, 20 General Theory (1936), 15, 188–9 Khomeini, Ayatollah, 128 Khrushchev, Nikita, 139–40, 181 Kilburn Grammar School, 48 Kildall, Gary, 222 Kissinger, Henry, 184 Knight, Frank, 185–6, 212 Krugman, Paul, 248 Kubrick, Stanley, 35*, 139 labour child labour, 124, 146 and efficiency wages, 237–8 labour-intensive services, 90, 92–3 lumpenproletariat, 237 Olson’s hostility to unions, 104 Adam Smith’s ‘division of labour’ concept, 128 Laffer, Arthur, 232–3, 234 Lancet (medical journal), 257 Larkin, Philip, 67 law and economics movement, 40, 55, 56–63, 64–7 Lazear, Edward, ‘Economic Imperialism’, 246 legal system, 7* and blame for accidents, 55, 60–61 and Chicago School, 49, 50–52, 55 and Coase Theorem, 47, 49, 50–55, 63–6 criminal responsibility, 111, 137, 152 economic imperialist view of, 137 law and economics movement, 40, 55, 56–63, 64–7 ‘mimic the market’ approach, 61–3, 65 Posner’s wealth-maximization principle, 57–63, 64–7, 137 precautionary principle, 211–12, 214 transaction costs, 51–3, 54–5, 61, 62, 63–4, 68 Lehmann Brothers, 194 Lexecon, 58, 68 Linda Problem, 202–3 LineStanding.com, 123 Little Zheng, 123, 124 Lloyd Webber, Andrew, 234–5, 236 lobbying, 7, 8, 88, 115, 123, 125, 146, 230, 231, 238 loft-insulation schemes, 172–3 logic, mathematical, 74–5 The Logic of Life (Tim Harford, 2008), 130 London School of Economics (LSE), 4, 48 Long-Term Capital Management (LTCM), 201, 257 Machiavelli, Niccoló, 89, 94 Mafia, 30 malaria treatments, 125, 149 management science, 153–4, 155 Mandelbrot, Benoît, 195, 196, 201 Mankiw, Greg, 11 marginal productivity theory, 223–4 Markowitz, Harry, 196–7, 201, 213 Marx, Karl, 11, 101, 102, 104, 111, 223 lumpenproletariat, 237 mathematics, 9–10, 17–18, 19, 21–4, 26, 247, 248, 255, 259 of 2007 financial crash, 194, 195–6 and Ken Arrow, 71, 72, 73–5, 76–7, 82–3, 97 axioms (abstract assumptions), 198 fractals (scale-invariance), 194, 195–6, 201, 219 and orthodox decision theory, 190–91, 214 Ramsey Rule on discounting, 208–9, 212 and Savage, 189–90, 193, 197, 198, 199, 205 and Schelling, 139 Sen’s framework on voting systems, 80–81 standard deviation, 182, 192, 194 and stock market statistics, 190–91, 195–6 use of for military ends, 71–2 maximizing behaviour and Becker, 129–31, 133–4, 147 and catastrophe, 211 and Coase, 47, 55, 59, 61, 63–9 economic imperialism, 124–5, 129–31, 133–4, 147, 148–9 Posner’s wealth-maximization principle, 57–63, 64–7, 137 profit-maximizing firms, 228 see also wealth-maximization principle; welfare maximization McCluskey, Kirsty, 194 McNamara, Robert, 138 median voter theorem, 77, 95–6 Merton, Robert, 201 Meucci, Antonio, 222 microeconomics, 9, 232, 259 Microsoft, 222 Miles, David, 258 Mill, John Stuart, 102, 111, 243 minimum wage, national, 96 mobility, economic and social correlation with inequality, 226–8, 243 as low in UK, 227 as low in USA, 226–7 US–Europe comparisons, 226–7 Modern Times (Chaplin film, 1936), 154 modernism, 67 Moivre, Abraham de, 193 monetarism, 87, 89, 132, 232 monopolies and cartels, 101, 102, 103–4 public sector, 48–9, 50–51, 93–4 Mont Pèlerin Society, 3–9, 13, 15, 132 Morgenstern, Oskar, 20–22, 24–5, 28, 35, 124, 129, 189, 190 Mozart, Wolfgang Amadeus, 91, 92–3 Murphy, Kevin, 229 Mussolini, Benito, 216, 219 Nash equilibrium, 22–3, 24, 25, 27–8, 33–4, 41–2 Nash, John, 17–18, 22–3, 24, 25–6, 27–8, 33–4, 41–2 awarded Nobel Prize, 34–5, 38, 39, 40 mental health problems, 25, 26, 34 National Health Service, 106, 162 ‘neoliberalism’, avoidance of term, 3* Neumann, John von ambition to make economics a science, 20–21, 24–5, 26, 35, 125, 151, 189 as Cold War warrior, 20, 26, 138 and expansion of scope of economics, 124–5 as father of game theory, 18, 19, 20–22, 25, 26, 28, 30, 34, 41 final illness and death of, 19, 34, 35, 43–4 genius of, 19–20 as inspiration for Dr Strangelove, 19 and Nash’s equilibrium, 22–3, 25, 38* simplistic view of humanity, 28 theory of decision-making, 189, 190, 203 neuroscience, 14 New Deal, US, 4, 194, 231 Newton, Isaac, 223 Newtonian mechanics, 21, 24–5 Nixon, Richard, 56, 184, 200 NORAD, Colorado Springs, 181 nuclear weapons, 18–19, 20, 22, 27, 181 and Ellsberg, 200 and game theory, 18, 20, 21–2, 24, 27, 33–4, 35, 70, 73, 198 MAD (Mutually Assured Destruction), 35, 138 and Russell’s Chicken, 33–4 and Schelling, 138, 139 Nudge economists, 13, 171–5, 177–8, 179, 180, 251 Oaten, Mark, 121 Obama, Barack, 110, 121, 157, 172, 180 Olson, Mancur, 103, 108, 109, 119–20, 122 The Logic of Collective Action (1965), 103–4 On the Waterfront (Kazan film, 1954), 165 online invisibility, 100* organs, human, trade in, 65, 123, 124, 145, 147–8 Orwell, George, Nineteen Eighty-Four, 42–3 Osborne, George, 233–4 Packard, David, 159 Paine, Tom, 243 Pareto, Vilfredo 80/20 rule’ 218 and inequality, 217, 218–19, 220 life and background of, 216–17 Pareto efficiency, 217–18, 256* Paul the octopus (World Cup predictor, 2010), 133 pensions, workplace, 172, 174 physics envy, 9, 20–21, 41, 116, 175–6, 212, 247 Piketty, Thomas, 234, 235 plastic shopping bag tax, 159–60 Plato’s Republic, 100–101, 122 political scientists and Duncan Black, 78, 95–6 Black’s median voter theorem, 95–6 Buchanan’s ideology, 84–5 crises of the 1970s, 85–6 influence of Arrow, 72, 81–2, 83 see also public choice theory; social choice theory Posner, Richard, 54, 56–63, 137 ‘mimic the market’ approach, 61–3, 65 ‘The Economics of the Baby Shortage’ (1978), 61 precautionary principle, 211–12, 214 price-fixing, 101, 102, 103–4 Princeton University, 17, 19–20 Prisoner’s Dilemma, 26–8, 29–32, 42–3 prisons, cell upgrades in, 123 privatization, 50, 54, 88, 93–4 probability, 182–4 and Keynes, 185, 186–7, 188–9, 210 Linda Problem, 202–3 modern ideas of, 184–5 Ramsey’s personal probabilities (beliefs as probabilities), 187–8, 190, 197, 198, 199, 204–5 and Savage, 190, 193, 197, 198, 199, 203, 205 ‘Truth and Probability’ (Ramsey paper), 186–8, 189, 190 see also risk and uncertainty Proceedings of the National Academy of Sciences, 22 productivity Baumol’s cost disease, 90–92, 93, 94 and efficiency wages, 237–8 improvement in labour-intensive services, 92–3 labour input, 92 protectionism, 246, 255 psychology availability heuristic, 226 behaviourism, 154–8, 237 and behavioural economics, 12, 170–71 cognitive dissonance, 113–14 and financial incentives, 156–7, 158–60, 163–4, 171 framing effects, 170–71, 259 of free-riding, 113–14, 115 intrinsic motivations, 158–60, 161–3, 164, 165–6, 176 irrational behaviour, 12, 15, 171 learning of social behaviour, 163–4 moral disengagement, 162, 163, 164, 166 motivated beliefs, 227 ‘self-command’ strategies, 140 view of in game theory, 26–31 view of in public choice theory, 85–6 and welfare maximization, 149 ‘you deserve what you get’ belief, 223–6, 227–8, 236, 243 public choice theory as consensus view, 84–5 and crises of the 1970s, 85–6 foolish voter assumption, 86–8 ‘paradox of voter turnout’, 88–9, 95–6, 115–16 partial/self-contradictory application of, 86, 87–9 ‘political overload’ argument, 85, 86–7 ‘public bad, private good’ mantra, 93–4, 97 and resistance to tax rises, 94, 241 self-fulfilling prophecies, 95–7 and selfishness, 85–6, 87–8, 89, 94, 95–7 as time-bomb waiting to explode, 85 public expenditure in 1970s and ’80s, 89 Baumol’s cost disease, 90–92, 93, 94 and Keynesian economics, 4 and public choice theory, 85–8, 89, 241 and tax rises, 241–2 public-sector monopolies, 48–9, 50–51, 93–4 Puzzle of the Harmless Torturers, 118–19 queue-jumping, 123, 124 QWERTY layout, 42 racial discrimination, 126–7, 133, 136, 140 Ramsey, Frank, 186–8, 189, 190, 205, 208 Ramsey Rule, 208–9, 212 RAND Corporation, 17, 41, 103, 138, 139 and Ken Arrow, 70–71, 72–3, 74, 75–6, 77, 78 and behaviourism, 154 and Cold War military strategy, 18, 20, 21–2, 24, 27, 33–4, 70, 73, 75–6, 141, 200, 213 and Ellsberg, 182–4, 187, 197–8, 200 and Russell’s Chicken, 33 Santa Monica offices of, 18 self-image as defender of freedom, 78 rational behaviour assumptions in game theory, 18, 28, 29–32, 35–8, 41–3, 70, 124 axioms (abstract mathematical assumptions), 198 Becker’s version of, 128–9, 135, 140, 151 behavioural economics/Nudge view of, 173, 174–5 distinction between values and tastes, 136–8 economic imperialist view of, 135, 136–8, 140, 151 and free-riding theory, 100–101, 102, 103–4, 107–8, 109–10, 115–16 and orthodox decision theory, 198, 199 public choice theory relates selfishness to, 86 term as scientific-sounding cover, 12 see also homo economicus Reader’s Digest, 5, 6 Reagan, Ronald, 2, 87–8, 89, 104, 132 election of as turning point, 6, 216, 220–21 and top-rate tax cuts, 231, 233 regulators, 1–2 Chicago view of, 40 Reinhart, Carmen, 258 religion, decline of in modern societies, 15, 185 renewable energy, 116 rent-seeking, 230, 238 ‘right to recline’, 63–4 risk and uncertainty bell curve distribution, 191–4, 195, 196–7, 201, 203–4, 257 catastrophes, 181–2, 191, 192, 201, 203–4, 211–12 delusions of quantitative ‘risk management’, 196, 213 Ellsberg’s experiment (1961), 182–4, 187, 197, 198–200 errors in conventional thinking about, 191–2, 193–4, 195–7, 204–5, 213 financial orthodoxy on risk, 196–7, 201–2 and First World War, 185 and fractals (scale-invariance), 194, 195–6, 201 hasard and fortuit, 185* ‘making sense’ of through stories, 202–3 ‘measurable’ and ‘unmeasurable’ distinction, 185–6, 187–9, 190, 210–11, 212–13 measurement in numerical terms, 181–4, 187, 189, 190–94, 196–7, 201–2, 203–5, 212–13 orthodox decision theory, 183–4, 185–6, 189–91, 193–4, 201–2, 203–5, 211, 212–14 our contemporary orthodoxy, 189–91 personal probabilities (beliefs as probabilities), 187–8, 190, 197, 198, 199, 204–5 precautionary principle, 211–12, 214 pure uncertainty, 182–3, 185–6, 187–9, 190, 197, 198–9, 210, 211, 212, 214, 251 redefined as ‘volatility’, 197, 213 the Savage orthodoxy, 190–91, 197, 198–200, 203, 205 scenario planning as crucial, 251 Taleb’s black swans, 192, 194, 201, 203–4 ‘Truth and Probability’ (Ramsey paper), 186–8, 189, 190 urge to actuarial alchemy, 190–91, 197, 201 value of human life (‘statistical lives’), 141–5, 207 see also probability Robertson, Dennis, 13–14 Robinson, Joan, 260 Rodrik, Dani, 255, 260–61 Rogoff, Ken, 258 Rothko, Mark, 4–5 Rumsfeld, Donald, 232–3 Russell, Bertrand, 33–4, 74, 97, 186, 188 Ryanair, 106 Sachs, Jeffrey, 257 Santa Monica, California, 18 Sargent, Tom, 257–8 Savage, Leonard ‘Jimmie’, 189–90, 193, 203, 205scale-invariance, 194, 195–6, 201, 219 Scandinavian countries, 103, 149 Schelling, Thomas, 35* on access to lifeboats, 150–51 awarded Nobel Prize, 138–9 and Cold War nuclear strategy, 138, 139–40 and economic imperialism, 141–5 and game theory, 138–9 and Washington–Moscow hotline, 139–40 work on value of human life, 141–5, 207 ‘The Intimate Contest for Self-command’ (essay, 1980), 140, 145 ‘The Life You Save May be Your Own’ (essay, 1968), 142–5, 207 Schiphol Airport, Amsterdam, 172 Schmidt, Eric, 105 Scholes, Myron, 201 Schwarzman, Stephen, 235 Second World War, 3, 189, 210 selfishness, 41–3, 178–9 and Becker, 129–30 and defence of inequality, 242–3 as free marketeers’ starting point, 10–12, 13–14, 41, 86, 178–9 and game theory, 18 and public choice theory, 85–6, 87–8, 89, 94, 95–7 Selten, Reinhard, 34–5, 36, 38, 40 Sen, Amartya, 29, 80–81 service sector, 90–93, 94 Shakespeare, William, Measure for Measure, 169 Shaw, George Bernard, 101 Shiller, Robert, 247 Simon, Herbert, 223 Skinner, Burrhus, 154–5, 158 Smith, Adam, 101, 111, 122 The Wealth of Nations (1776), 10–11, 188–9 snowflakes, 195 social choice theory, 72 and Ken Arrow, 71–83, 89, 95, 97, 124–5, 129 and Duncan Black, 78, 95 and free marketeers, 79, 82 Sen’s mathematical framework, 80–81 social media, 100* solar panels, 116 Solow, Bob, 163, 223 Sorites paradox, 117–18, 119 sovereign fantasy, 116–17 Soviet Union, 20, 22, 70, 73, 82, 101, 104, 167, 237 spectrum auctions, 39–40, 47, 49 Stalin, Joseph, 70, 73, 101 the state anti-government attitudes in USA, 83–5 antitrust regulation, 56–8 dismissal of almost any role for, 94, 135, 235–6, 241 duty over full employment, 5 economic imperialist arguments for ‘small government’, 135 increased economic role from 1940s, 3–4, 5 interventions over ‘inefficient’ outcomes, 53 and monetarism, 87, 89 and Mont Pèlerin Society, 3, 4, 5 and privatization, 50, 54, 88, 93–4 public-sector monopolies, 48–50, 93–4 replacing of with markets, 79 vital role of, 236 statistical lives, 141–5, 207 Stern, Nick, 206, 209–10 Stigler, George, 50, 51, 56, 69, 88 De Gustibus Non Est Disputandum (with Becker, 1977), 135–6 Stiglitz, Joseph, 237 stock markets ‘Black Monday’ (1987), 192 and fractals (scale-invariance), 194, 195–6, 201 orthodox decision theory, 190–91, 193–4, 201 Strittmatter, Father, 43–4 Summers, Larry, 10, 14 Sunstein, Cass, 173 Nudge (with Richard Thaler, 2008), 171–2, 175 Taleb, Nassim, 192 Tarski, Alfred, 74–5 taxation and Baumol’s cost disease, 94 and demand for positional goods, 239–41 as good thing, 231, 241–2, 243 Laffer curve, 232–3, 234 new doctrine of since 1970s, 232–4 property rights as interdependent with, 235–6 public resistance to tax rises, 94, 239, 241–2 and public spending, 241–2 revenue-maximizing top tax rate, 233–4, 235 tax avoidance and evasion, 99, 105–6, 112–13, 175, 215 ‘tax revolt’ campaigns (1970s USA), 87 ‘tax as theft’ culture, 235–6 top-rate cuts and inequality, 231, 233–5, 239 whines from the super-rich, 234–5, 243 Taylor, Frederick Winslow, 153–4, 155, 167, 178, 237 Thaler, Richard, 13 Nudge (with Cass Sunstein, 2008), 171–2, 175 Thatcher, Margaret, 2, 88, 89, 104, 132 election of as turning point, 6, 216, 220–21 and Hayek, 6, 7 and inequality, 216, 227 privatization programme, 93–4 and top-rate tax cuts, 231 Theory of Games and Economic Behavior (Von Neumann and Morgenstern, 1944), 20, 21, 25, 189 Titanic, sinking of (1912), 150 Titmuss, Richard, The Gift Relationship, 162–3 tobacco-industry lobbyists, 8 totalitarian regimes, 4, 82, 167–8, 216, 219 see also Soviet Union trade union movement, 104 Tragedy of the Commons, 27 Truman, Harry, 20, 237 Trump, Donald, 233 Tucker, Albert, 26–7 Tversky, Amos, 170–72, 173, 202–3, 212, 226 Twitter, 100* Uber, 257 uncertainty see risk and uncertainty The Undercover Economist (Tim Harford, 2005), 130 unemployment and Coase Theorem, 45–7, 64 during Great Depression, 3–4 and Keynesian economics, 4, 5 United Nations, 96 universities auctioning of places, 124, 149–50 incentivization as pervasive, 156 Vietnam War, 56, 198, 200, 249 Villari, Pasquale, 30 Vinci, Leonardo da, 186 Viniar, David, 182, 192 Volkswagen scandal (2016), 2, 151–2 Vonnegut, Kurt, 243–4 voting systems, 72–4, 77, 80, 97 Arrow’s ‘Independence of Irrelevant Alternatives’, 81, 82 Arrow’s ‘Universal Domain’, 81, 82 and free marketeers, 79 ‘hanging chads’ in Florida (2000), 121 recount process in UK, 121 Sen’s mathematical framework, 80–81 Waldfogel, Joel, 161* Wanniski, Jude, 232 Watertown Arsenal, Massachusetts, 153–4 Watson Jr, Thomas J., 181 wealth-maximization principle, 57–63 and Coase, 47, 55, 59, 63–9 as core principle of current economics, 253 created markets, 65–7 extension of scope of, 124–5 and justice, 55, 57–62, 137 and knee space on planes, 63–4 practical problems with negotiations, 62–3 and values more important than efficiency, 64–5, 66–7 welfare maximization, 124–5, 129–31, 133–4, 148–9, 176 behavioural economics/Nudge view of, 173 and vulnerable/powerless people, 146–7, 150 welfare state, 4, 162 Wilson, Charlie, 215 Wittgenstein, Ludwig, 186, 188 Wolfenschiessen (Swiss village), 158, 166–7 Woolf, Virginia, 67 World Bank, 96 World Cup football tournament (2010), 133 World Health Organization, 207 Yale Saturday Evening Pest, 4–5 Yellen, Janet, 237 THE BEGINNING Let the conversation begin … Follow the Penguin twitter.com/penguinukbooks Keep up-to-date with all our stories youtube.com/penguinbooks Pin ‘Penguin Books’ to your pinterest.com/penguinukbooks Like ‘Penguin Books’ on facebook.com/penguinbooks Listen to Penguin at soundcloud.com/penguin-books Find out more about the author and discover more stories like this at penguin.co.uk ALLEN LANE UK | USA | Canada | Ireland | Australia India | New Zealand | South Africa Allen Lane is part of the Penguin Random House group of companies whose addresses can be found at global.penguinrandomhouse.com First published 2019 Copyright © Jonathan Aldred, 2019 The moral right of the author has been asserted Jacket photograph © Getty Images ISBN: 978-0-241-32544-5 This ebook is copyright material and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased or as strictly permitted by applicable copyright law.


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

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, basic income, Benevolent Dictator For Life (BDFL), 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, Douglas Engelbart, Edward Snowden, Elon Musk, en.wikipedia.org, Eratosthenes, Ethereum, 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, Intergovernmental Panel on Climate Change (IPCC), intermodal, Internet of things, invisible hand, Jacob Appelbaum, Jaron Lanier, Joan Didion, John Markoff, Joi Ito, Jony Ive, Julian Assange, Khan Academy, liberal capitalism, lifelogging, linked data, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Masdar, McMansion, means of production, megacity, megastructure, Menlo Park, Minecraft, MITM: man-in-the-middle, Monroe Doctrine, Network effects, new economy, offshore financial centre, oil shale / tar sands, packet switching, PageRank, pattern recognition, peak oil, peer-to-peer, performance metric, personalized medicine, Peter Eisenman, Peter Thiel, phenotype, Philip Mirowski, Pierre-Simon Laplace, place-making, planetary scale, RAND corporation, recommendation engine, reserve currency, RFID, Robert Bork, 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, undersea cable, universal basic income, urban planning, Vernor Vinge, Washington Consensus, web application, Westphalian system, 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

Andrei Shleifer, Atahualpa, barriers to entry, Berlin Wall, British Empire, business climate, Cass Sunstein, central bank independence, collective bargaining, colonial rule, conceptual framework, creative destruction, 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, 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, zero-sum game

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

affirmative action, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Berlin Wall, Black Swan, Bretton Woods, business cycle, capital controls, Cass Sunstein, central bank independence, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, 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, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Just-in-time delivery, Kenneth Rogoff, Long Term Capital Management, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, money market fund, 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, Westphalian system, WikiLeaks, 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: 573 words: 115,489

Prosperity Without Growth: Foundations for the Economy of Tomorrow by Tim Jackson

"Robert Solow", bank run, banking crisis, banks create money, Basel III, basic income, bonus culture, Boris Johnson, business cycle, carbon footprint, Carmen Reinhart, Cass Sunstein, choice architecture, collapse of Lehman Brothers, creative destruction, credit crunch, Credit Default Swap, David Graeber, decarbonisation, dematerialisation, en.wikipedia.org, energy security, financial deregulation, Financial Instability Hypothesis, financial intermediation, full employment, Growth in a Time of Debt, Hans Rosling, Hyman Minsky, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, liberal capitalism, Mahatma Gandhi, mass immigration, means of production, meta analysis, meta-analysis, moral hazard, mortgage debt, Naomi Klein, new economy, offshore financial centre, oil shale / tar sands, open economy, paradox of thrift, peak oil, peer-to-peer lending, Philip Mirowski, profit motive, purchasing power parity, quantitative easing, Richard Thaler, road to serfdom, Robert Gordon, Ronald Reagan, science of happiness, secular stagnation, short selling, Simon Kuznets, Skype, smart grid, sovereign wealth fund, Steve Jobs, The Chicago School, The Great Moderation, The Rise and Fall of American Growth, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, universal basic income, Works Progress Administration, World Values Survey, zero-sum game

Mechanisms which make it a little easier for us to curtail our appetite for immediate arousal and protect our own future interests. And indeed – although this is less obvious in Offer’s exposition – the interests of affected others. The idea that paternalistic interventions in the ‘choice architecture’ can help us counter short-termism and overcome social traps has been proposed by economist Richard Thaler and Harvard law professor Cass Sunstein in their enormously popular book Nudge: Improving Decisions about Health, Wealth, and Happiness. So, for example, by placing healthy foods rather than sweets near the checkout or making people opt out of pension fund contributions rather than having them opt in are seen as ways of ‘nudging us’ towards good long-term decisions and away from bad short-term ones.18 It’s an appealing idea. Nudge did a lot to enhance the legitimacy of the idea that government has a role to play in helping people to live better lives.

Online at http://doc.teebweb.org/wp-content/uploads/Study%20and%20Reports/Reports/Synthesis%20report/TEEB%20Synthesis%20Report%202010.pdf (accessed 30 December 2015). Teulings, Coen and Richard Baldwin 2014. ‘Secular Stagnation: facts, causes and cures’. London: Centre for Economic Policy Research. Online at www.voxeu.org/sites/default/files/Vox_secular_stagnation.pdf (accessed 17 October 2015). Thaler, Richard H. and Cass Sunstein 2009 Nudge: Improving Decisions About Health, Wealth and Happiness. London and New York: Penguin. Timmer, Marcel, Mary O’Mahony and Bart van Ark 2007. EU KLEMS growth and productivity accounts: overview, November 200 release. Groningen: University of Groningen. Online at www.euklems.net/data/overview_07ii.pdf. Townsend, Peter 1979. Poverty in the United Kingdom – A Survey of Household Resources and Standards of Living.


pages: 409 words: 112,055

The Fifth Domain: Defending Our Country, Our Companies, and Ourselves in the Age of Cyber Threats by Richard A. Clarke, Robert K. Knake

A Declaration of the Independence of Cyberspace, Affordable Care Act / Obamacare, Airbnb, Albert Einstein, Amazon Web Services, autonomous vehicles, barriers to entry, bitcoin, Black Swan, blockchain, borderless world, business cycle, business intelligence, call centre, Cass Sunstein, cloud computing, cognitive bias, commoditize, computer vision, corporate governance, cryptocurrency, data acquisition, DevOps, don't be evil, Donald Trump, Edward Snowden, Exxon Valdez, global village, immigration reform, Infrastructure as a Service, Internet of things, Jeff Bezos, Julian Assange, Kubernetes, Mark Zuckerberg, Metcalfe’s law, MITM: man-in-the-middle, move fast and break things, move fast and break things, Network effects, open borders, platform as a service, Ponzi scheme, ransomware, Richard Thaler, Sand Hill Road, Schrödinger's Cat, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, Skype, smart cities, Snapchat, software as a service, Steven Levy, Stuxnet, technoutopianism, Tim Cook: Apple, undersea cable, WikiLeaks, Y2K, zero day

“I know it’s none of my business,” the career official said, “but you guys remember it’s an election year, right?” Instead, she suggested, might they think about a “nudge”? No one in the room had any idea what she was talking about. She pulled out a copy of a book called Nudge: Improving Decisions About Health, Wealth, and Happiness, and suggested they do some reading. The book was coauthored by her boss, Cass Sunstein. Sunstein, a Democrat, was not necessarily a fan of regulation. A former colleague of President Obama’s at the University of Chicago Law School, Sunstein had advocated for simple but not always popular ideas, such as subjecting regulation to cost-benefit analysis. With the economist Richard Thaler, Sunstein had written Nudge, arguing that government may be more effective when it shapes voluntary action rather than when it sets mandatory requirements.

Chapter 7: Nudges and Shoves the White House delivered to Congress: “Fact Sheet: Cybersecurity Legislative Proposal,” White House, May 12, 2011, obamawhitehouse.archives.gov/the-press-office/2011/05/12/fact-sheet-cybersecurity-legislative-proposal. The CSIS commission report: “Securing Cyberspace for the 44th Presidency,” Report of the CSIS Commission on Cybersecurity for the 44th Presidency, Center for Strategic and International Studies, December 2008, https://csis-prod.s3.amazonaws.com/s3fs-public/legacy_files/files/media/csis/pubs/081208_securingcyberspace_44.pdf. She pulled out a copy of a book: Richard Thaler and Cass Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New York: Penguin, 2009). Twenty years ago, when President Clinton: “Defending America’s Cyberspace: National Plan for Information Systems Protection,” White House, 2000, https://fas.org/irp/offdocs/pdd/CIP-plan.pdf. Surprisingly, the Department: U.S. Department of Homeland Security Cybersecurity Strategy, May 15, 2018, www.dhs.gov/sites/default/files/publications/DHS-Cybersecurity-Strategy_1.pdf.


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

A Declaration of the Independence of Cyberspace, activist lawyer, 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, Donald Davies, Douglas Engelbart, Edward Snowden, Etonian, European colonialism, eurozone crisis, failed state, Fall of the Berlin Wall, Ferguson, Missouri, Filter Bubble, financial independence, Firefox, Galaxy Zoo, George Santayana, global village, index card, Internet Archive, invention of movable type, invention of writing, Jaron Lanier, jimmy wales, John Markoff, Julian Assange, Mark Zuckerberg, Marshall McLuhan, mass immigration, megacity, mutually assured destruction, national security letter, Nelson Mandela, 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.


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

activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Boris Johnson, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, disruptive innovation, 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, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, 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, starchitect, stem cell, Steve Jobs, the new new thing, 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, zero-sum game

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: 918 words: 257,605

The Age of Surveillance Capitalism by Shoshana Zuboff

Amazon Web Services, Andrew Keen, augmented reality, autonomous vehicles, barriers to entry, Bartolomé de las Casas, Berlin Wall, bitcoin, blockchain, blue-collar work, book scanning, Broken windows theory, California gold rush, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, citizen journalism, cloud computing, collective bargaining, Computer Numeric Control, computer vision, connected car, corporate governance, corporate personhood, creative destruction, cryptocurrency, dogs of the Dow, don't be evil, Donald Trump, Edward Snowden, en.wikipedia.org, Erik Brynjolfsson, facts on the ground, Ford paid five dollars a day, future of work, game design, Google Earth, Google Glasses, Google X / Alphabet X, hive mind, impulse control, income inequality, Internet of things, invention of the printing press, invisible hand, Jean Tirole, job automation, Johann Wolfgang von Goethe, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, knowledge economy, linked data, longitudinal study, low skilled workers, Mark Zuckerberg, market bubble, means of production, multi-sided market, Naomi Klein, natural language processing, Network effects, new economy, Occupy movement, off grid, PageRank, Panopticon Jeremy Bentham, pattern recognition, Paul Buchheit, performance metric, Philip Mirowski, precision agriculture, price mechanism, profit maximization, profit motive, recommendation engine, refrigerator car, RFID, Richard Thaler, ride hailing / ride sharing, Robert Bork, Robert Mercer, Second Machine Age, self-driving car, sentiment analysis, shareholder value, Shoshana Zuboff, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, slashdot, smart cities, Snapchat, social graph, social web, software as a service, speech recognition, statistical model, Steve Jobs, Steven Levy, structural adjustment programs, The Future of Employment, The Wealth of Nations by Adam Smith, Tim Cook: Apple, two-sided market, union organizing, Watson beat the top human players on Jeopardy!, winner-take-all economy, Wolfgang Streeck

Picard, Affective Computing, 119, 123, 244, 123–24, 136–37. See also Chapter 4. 121. Rosalind Picard, “Towards Machines That Deny Their Maker—Lecture with Rosalind Picard,” VBG, April 22, 2016, http://www.vbg.net/ueber-uns/agenda/termin/3075.html. 122. Joseph Weizenbaum, “Not Without Us,” SIGCAS Computers and Society 16, nos. 2–3 (1986): 2–7, https://doi.org/10.1145/15483.15484. CHAPTER TEN 1. Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness, rev. ed. (New York: Penguin, 2009). 2. Elizabeth J. Lyons et al., “Behavior Change Techniques Implemented in Electronic Lifestyle Activity Monitors: A Systematic Content Analysis,” Journal of Medical Internet Research 16, no. 8 (2014), e192, https://doi.org/10.2196/jmir.3469. The commercial theory and practice of behavior modification assume an inescapable networked presence and its cornucopia of digital tools.

Strategies that produce economies of action vary according to the methods with which these approaches are combined and the salience of each. “Tuning” occurs in a variety of ways. It may involve subliminal cues designed to subtly shape the flow of behavior at the precise time and place for maximally efficient influence. Another kind of tuning involves what behavioral economists Richard Thaler and Cass Sunstein call the “nudge,” which they define as “any aspect of a choice architecture that alters people’s behavior in a predictable way.”1 The term choice architecture refers to the ways in which situations are already structured to channel attention and shape action. In some cases these architectures are intentionally designed to elicit specific behavior, such as a classroom in which all the seats face the teacher or an online business that requires you to click through many obscure pages in order to opt out of its tracking cookies.


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

4chan, Affordable Care Act / Obamacare, Airbnb, Bernie Sanders, Burning Man, call centre, Cass Sunstein, Chelsea Manning, collective bargaining, creative destruction, crony capitalism, crowdsourcing, don't be evil, facts on the ground, Firefox, hive mind, immigration reform, informal economy, jimmy wales, Julian Assange, Kickstarter, liquidity trap, Mark Zuckerberg, obamacare, Occupy movement, offshore financial centre, peer-to-peer, 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? 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.”


pages: 494 words: 142,285

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

AltaVista, Andy Kessler, barriers to entry, business process, Cass Sunstein, commoditize, computer age, creative destruction, dark matter, disintermediation, disruptive innovation, Donald Davies, 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, Kenneth Arrow, Larry Wall, Leonard Kleinrock, linked data, Marc Andreessen, Menlo Park, Mitch Kapor, Network effects, new economy, packet switching, peer-to-peer, peer-to-peer model, price mechanism, profit maximization, RAND corporation, rent control, rent-seeking, RFC: Request For Comment, Richard Stallman, Richard Thaler, Robert Bork, 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, zero-sum game

.: 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: 515 words: 143,055

The Attention Merchants: The Epic Scramble to Get Inside Our Heads by Tim Wu

1960s counterculture, Affordable Care Act / Obamacare, AltaVista, Andrew Keen, anti-communist, Apple II, Apple's 1984 Super Bowl advert, barriers to entry, Bob Geldof, borderless world, Brownian motion, Burning Man, Cass Sunstein, citizen journalism, colonial rule, East Village, future of journalism, George Gilder, Golden Gate Park, Googley, Gordon Gekko, housing crisis, informal economy, Internet Archive, Jaron Lanier, Jeff Bezos, jimmy wales, Live Aid, Mark Zuckerberg, Marshall McLuhan, McMansion, Nate Silver, Network effects, Nicholas Carr, placebo effect, post scarcity, race to the bottom, road to serfdom, Saturday Night Live, science of happiness, self-driving car, side project, Silicon Valley, slashdot, Snapchat, Steve Jobs, Steve Wozniak, Steven Levy, Ted Nelson, telemarketer, the built environment, The Chicago School, the scientific method, The Structural Transformation of the Public Sphere, Tim Cook: Apple, Torches of Freedom, Upton Sinclair, upwardly mobile, white flight, zero-sum game

In retrospect, the first wave of bloggers and their fellow travelers can be likened to a first wave of visitors to some desert island, who erect crude, charming hostels and serve whatever customers come their way, and marvel at the paradise they’ve discovered. As in nature, so, too, on the web: the tourist traps high and low are soon to follow; commercial exploitation is on its way. Such, unfortunately, is the nature of things. * * * * The micro-fragmentation represented by blogging audiences caused panic to some thinkers like Noam Chomsky and Cass Sunstein. Chomsky argued that blogs lacked the power to constrain powerful actors. “There’s plenty to criticize about the mass media, but they are the source of regular information about a wide range of topics. You can’t duplicate that on blogs.” Natasha Lennard, “Noam Chomsky, the Salon Interview: Governments Are Power Systems, Trying to Sustain Power,” Salon, December 29, 2013. Sunstein, at the height of blogging’s popularity, wrote a rare academic attack on the choices made possible by technologies like cable or the Internet.

He argued that blogs and other technologies were dividing the country into informational factions who pay attention only to what they care to hear. “In a Democracy,” wrote Sunstein, “people do not live in echo chambers or information cocoons. They see and hear a wide range of topics and ideas.” This vision of democracy, says Sunstein, “raise[s] serious doubts about certain uses of new technologies, above all the Internet, about the astonishing growth in the power to choose—to screen in and to screen out.” Cass Sunstein, Republic.com 2.0 (Princeton: Princeton University Press, 2007). Both he and Chomsky preferred an environment where the nation regularly tuned in, together, to something like NBC or CBS or perhaps a public broadcaster. CHAPTER 22 THE RISE OF CLICKBAIT Back in 2001, at MIT’s media laboratory in Cambridge, Massachusetts, a former schoolteacher named Jonah Peretti was sitting at his desk and, like so many graduate students, not doing his work.


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

Berlin Wall, Cass Sunstein, corporate governance, corporate personhood, corporate social responsibility, creative destruction, 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: 501 words: 145,943

If Mayors Ruled the World: Dysfunctional Nations, Rising Cities by Benjamin R. Barber

Affordable Care Act / Obamacare, American Legislative Exchange Council, Berlin Wall, bike sharing scheme, borderless world, Boris Johnson, Bretton Woods, British Empire, car-free, carbon footprint, Cass Sunstein, Celebration, Florida, clean water, corporate governance, crowdsourcing, David Brooks, desegregation, Detroit bankruptcy, digital Maoism, disintermediation, edge city, Edward Glaeser, Edward Snowden, Etonian, failed state, Fall of the Berlin Wall, feminist movement, Filter Bubble, George Gilder, ghettoisation, global pandemic, global village, Hernando de Soto, Howard Zinn, illegal immigration, In Cold Blood by Truman Capote, income inequality, informal economy, information retrieval, Jane Jacobs, Jaron Lanier, Jeff Bezos, London Interbank Offered Rate, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Masdar, megacity, microcredit, Mikhail Gorbachev, mortgage debt, mutually assured destruction, new economy, New Urbanism, Nicholas Carr, Norman Mailer, nuclear winter, obamacare, Occupy movement, Panopticon Jeremy Bentham, Peace of Westphalia, Pearl River Delta, peer-to-peer, planetary scale, plutocrats, Plutocrats, profit motive, Ralph Waldo Emerson, RFID, Richard Florida, Ronald Reagan, self-driving car, Silicon Valley, Skype, smart cities, smart meter, Steve Jobs, Stewart Brand, Telecommunications Act of 1996, The Death and Life of Great American Cities, The Fortune at the Bottom of the Pyramid, The Wealth of Nations by Adam Smith, Tobin tax, Tony Hsieh, trade route, UNCLOS, UNCLOS, unpaid internship, urban sprawl, War on Poverty, zero-sum game

A few states, such as Arizona and Michigan, experimented with online primary voting, but within a few months a review undertaken by the Internet Policy Institute issued a judgment devastating to fans of politics on the web: “Remote Internet voting systems,” the report concluded, “pose significant risk to the integrity of the voting process and should not be fielded for use in public elections until substantial technical and social science issues are addressed.”38 Little progress has been made in the decade following. The result has been a pretense of participation that has spread thinly across what is little more than a participatory gloss on traditional top-down, one-way politics. President Obama’s White House website has hardly been any more interactive than anyone else’s, the spirited efforts in his administration of digital advocates like Cass Sunstein and Beth Noveck notwithstanding. And try to communicate with one of those election-year fund-raising websites with more than a “Contribute Now!” link, or write back to a politician asking for your support (and dollars) to explain why you don’t like her pitch . . . well, you can’t. It is once again clear that new technology is used first of all to conduct old business. Shopping is still the web’s main activity today, and about one-third of net traffic follows the road to porn.

Eli Pariser, The Filter Bubble: How the New Personalized Web Is Changing What We Read and How We Think, New York: Penguin Books, 2012. William F. Baker, former president of WNET, thus speaks of “Google’s Internet grab,” and suggests the issue is monopoly in this “dominant new information medium.” “Google’s Internet Grab,” The Nation, February 11, 2013. 22. Nicholas Kulish, “Twitter Entering New Ground, Blocks Germans’ Access to Neo-Nazi Account,” New York Times, October 19, 2012. 23. Cass Sunstein’s prescient book Republic.com focused on the web’s tendency to separate and isolate rather than bring us together. See Sunstein, Republic.com, Princeton, NJ: Princeton University Press, 2009. 24. An important aside: the “cloud” sells itself as a miraculous and invisible nonspace to its users, but for its owners and providers it is an electronic network of linked servers no less real than the personal devices on which it is accessed by ordinary users. 25.


pages: 243 words: 61,237

To Sell Is Human: The Surprising Truth About Moving Others by Daniel H. Pink

always be closing, Atul Gawande, barriers to entry, business cycle, call centre, Cass Sunstein, Checklist Manifesto, choice architecture, complexity theory, Credit Default Swap, Daniel Kahneman / Amos Tversky, disintermediation, future of work, George Akerlof, information asymmetry, Jeff Bezos, Kickstarter, longitudinal study, Marc Andreessen, Menlo Park, out of africa, Richard Thaler, rolodex, Ronald Reagan, Steve Jobs, The Market for Lemons, Upton Sinclair, Wall-E, zero-sum game

(Trust me—it makes sense.) Mindless Eating: Why We Eat More Than We Think by Brian Wansink. The opposite of clarity is murkiness. And murkiness’s close cousin is mindlessness—the state of being unaware. Wansink shows how mindlessness allows us to fall prey to hidden persuaders that make us overeat without even knowing it. Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard H. Thaler and Cass R. Sunstein. Two professors harvest the field of behavioral economics to reveal how altering “choice architecture” can nudge people to make better decisions about their lives. Ask the Five Whys. Those of you with toddlers in the house are familiar with, and perhaps annoyed by, the constant why-why-why. But there’s a reason the little people are constantly asking that question. They’re trying to figure out how things work in the crazy world we live in.


pages: 232 words: 70,361

The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay by Emmanuel Saez, Gabriel Zucman

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Berlin Wall, business cycle, Cass Sunstein, collective bargaining, corporate governance, Donald Trump, financial deregulation, income inequality, income per capita, informal economy, intangible asset, Jeff Bezos, labor-force participation, Lyft, Mark Zuckerberg, market fundamentalism, Mont Pelerin Society, mortgage debt, mortgage tax deduction, new economy, offshore financial centre, oil shock, patent troll, profit maximization, purchasing power parity, race to the bottom, rent-seeking, ride hailing / ride sharing, Ronald Reagan, shareholder value, Silicon Valley, single-payer health, Skype, Steve Jobs, The Wealth of Nations by Adam Smith, transfer pricing, trickle-down economics, uber lyft, very high income, We are the 99%

Cambridge, MA: MIT Press, 2017. Spahr, Charles. An Essay on the Present Distribution of Wealth in the United States. New York: TY Crowell, 1896. Teles, Steven. The Rise of the Conservative Legal Movement: The Battle for Control of the Law. Princeton, NJ: Princeton University Press, 2012. Thaler, Richard H. Misbehaving: The Making of Behavioral Economics. New York: W. W. Norton, 2015. ———, and Cass R. Sunstein. Nudge: Improving Decisions about Health, Wealth, and Happiness. New Haven, CT: Yale University Press, 2008. Thorndike, Joseph J. “Historical Perspective: Pecora Hearings Spark Tax Morality, Tax Reform Debate.” Tax Notes 101, November 10, 2003. Toder, Eric. “Explaining the TCJA’s International Reforms.” Tax Policy Center, Urban Institute and Brookings Institution, February 2, 2018. Tørsløv, Thomas, Ludvig Wier, and Gabriel Zucman.


pages: 580 words: 168,476

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

"Robert Solow", affirmative action, Affordable Care Act / Obamacare, airline deregulation, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, business cycle, 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, information asymmetry, invisible hand, jobless men, John Harrison: Longitude, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, London Interbank Offered Rate, lone genius, low skilled workers, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, negative equity, obamacare, offshore financial centre, paper trading, Pareto efficiency, patent troll, Paul Samuelson, 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%, wealth creators, women in the workforce, zero-sum game

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: 252 words: 70,424

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

business cycle, Cass Sunstein, Colonization of Mars, corporate raider, 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, old-boy network, 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: 272 words: 64,626

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

23andMe, Andy Kessler, bank run, barriers to entry, Berlin Wall, Bob Noyce, British Empire, business cycle, business process, California gold rush, carbon footprint, Cass Sunstein, cloud computing, collateralized debt obligation, collective bargaining, commoditize, computer age, creative destruction, disintermediation, Douglas Engelbart, 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, Kickstarter, 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, wealth creators, 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: 261 words: 70,584

Retirementology: Rethinking the American Dream in a New Economy by Gregory Brandon Salsbury

Albert Einstein, asset allocation, buy and hold, carried interest, Cass Sunstein, credit crunch, Daniel Kahneman / Amos Tversky, diversification, estate planning, financial independence, fixed income, full employment, hindsight bias, housing crisis, loss aversion, market bubble, market clearing, mass affluent, Maui Hawaii, mental accounting, mortgage debt, mortgage tax deduction, negative equity, new economy, RFID, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, side project, Silicon Valley, Steve Jobs, the rule of 72, Yogi Berra

The point is, it is important to distinguish between decisions that should be made by intuition and those that require careful thought and calculation. I highly recommend you explore this field in more detail, as the scholars of behavioral finance have put years of sweat equity into fascinating research and study. Notably, I recommend Choices, Values, and Frames by Kahneman and Tversky; Beyond Greed and Fear by Hersh Shefrin; Nudge, written by Richard Thaler and Cass Sunstein; the investor behavior studies on 401(k)s by Shlomo Benartzi; articles, books and research by Meir Statman; Against the Gods, The Remarkable Story of Risk by Peter Bernstein, as a keen understanding of risk is more relevant than ever given the current economy; and Investment Madness by John Nofsinger, which is a good introductory book on behavioral finance written for the “lay” reader. Dr. Kahneman and I covered a wide array of behavioral finance concepts during our interview, and throughout the book, I’ll explore some of these concepts and the impact they can have on your retirement.


pages: 276 words: 71,950

Antisemitism: Here and Now by Deborah E. Lipstadt

anti-communist, Ayatollah Khomeini, Boycotts of Israel, Cass Sunstein, Donald Trump, en.wikipedia.org, epigenetics, fixed income, ghettoisation, Stephen Hawking, Steven Pinker, The Bell Curve by Richard Herrnstein and Charles Murray, union organizing, WikiLeaks, zero-sum game

NOTES A NOTE TO THE READER 1. L. Daniel Staetsky, Antisemitism in Contemporary Great Britain: A Study of Attitudes towards Jews and Israel (London: Institute for Jewish Policy Research, 2017), pp. 3–5. A DELUSION 1. Chip Berlet and Matthew Nemiroff Lyons, Right-Wing Populism in America: Too Close for Comfort (New York: Guilford Press, 2000), p. 9. 2. Cass R. Sunstein and Adrian Vermeule, “Conspiracy Theories” (working paper, Public Law & Legal Theory Working Paper No. 199, University of Chicago, 2008), pp. 6, 7. A DEFINITION 1. 378 U.S. at 197 (Stewart, J., concurring) (emphasis added). 2. Jane O’Reilly, “The Housewife’s Moment of Truth,” New York magazine, December 20, 1971 (Ms. originally appeared as a forty-page insert in New York magazine). 3.


pages: 333 words: 76,990

The Long Good Buy: Analysing Cycles in Markets by Peter Oppenheimer

"Robert Solow", asset allocation, banking crisis, banks create money, barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, Bretton Woods, business cycle, buy and hold, Cass Sunstein, central bank independence, collective bargaining, computer age, credit crunch, debt deflation, decarbonisation, diversification, dividend-yielding stocks, equity premium, Fall of the Berlin Wall, financial innovation, fixed income, Flash crash, forward guidance, Francis Fukuyama: the end of history, George Akerlof, housing crisis, index fund, invention of the printing press, Isaac Newton, James Watt: steam engine, joint-stock company, Joseph Schumpeter, Kickstarter, liberal capitalism, light touch regulation, liquidity trap, Live Aid, market bubble, Mikhail Gorbachev, mortgage debt, negative equity, Network effects, new economy, Nikolai Kondratiev, Nixon shock, oil shock, open economy, price stability, private sector deleveraging, Productivity paradox, quantitative easing, railway mania, random walk, Richard Thaler, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Simon Kuznets, South Sea Bubble, special economic zone, stocks for the long run, technology bubble, The Great Moderation, too big to fail, total factor productivity, trade route, tulip mania, yield curve

As one recent study put it, ‘there is increasing evidence that psychology plays a big role in economic developments. Results indicate that the economy is highly driven by human psychologies, a result which is in conformity with the prediction of Keynes (1930) and Akerlof and Shiller (2010).’27 The renewed focus on psychology in understanding responses to and behaviour regarding decisions is also increasingly used in public policy. In 2008, Richard H. Thaler and Cass R. Sunstein published Nudge: Improving Decisions about Health, Wealth, and Happiness, which focused on behavioural economics. The book became a bestseller and has had a widespread impact on policy. Mr Thaler went on to win the Nobel Prize for Economics in 2017 for his work in the field. So, despite all the political, economic and social changes that have occurred since the 1980s, and notwithstanding the extreme events and difficulty of predicting human sentiment and responses to conditions, there have been repeated patterns in economies and financial markets.


pages: 241 words: 78,508

Lean In: Women, Work, and the Will to Lead by Sheryl Sandberg

affirmative action, business process, Cass Sunstein, constrained optimization, experimental economics, fear of failure, gender pay gap, glass ceiling, job satisfaction, labor-force participation, longitudinal study, Mark Zuckerberg, meta analysis, meta-analysis, old-boy network, Richard Thaler, risk tolerance, Silicon Valley, social graph, women in the workforce, young professional

Gloria Steinem, “In Defense of the ‘Chick-Flick,’ ” Alternet, July 6, 2007, http://​www.​alternet.​org/​story/​56219/​gloria_​steinem%3A_​in_​defense_​of_​the_​‘chick_flick’. 2. Marianne Cooper, “The New F-Word,” Gender News, February 28, 2011, http://​gender.​stanford.​edu/​news/​2011/​new-​f-​word. 3. Susan Faludi, Backlash: The Undeclared War Against American Women (New York: Crown, 1991). 4. Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (New Haven, CT: Yale University Press, 2008). 5. Corinne A. Moss-Racusin et al., “Science Faculty’s Subtle Gender Biases Favor Male Students,” Proceedings of the National Academy of Sciences of the United States of America 109, no. 41 (2012): 16474–79. 6. For a study on job applicants, see Rhea E. Steinpreis, Katie A. Anders, and Dawn Ritzke, “The Impact of Gender on the Review of Curricula Vitae of Job Applicants and Tenure Candidates: A National Empirical Study,” Sex Roles 41, nos. 7–8 (1999): 509–28.


pages: 662 words: 180,546

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

"Robert Solow", Alvin Roth, 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, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, complexity theory, constrained optimization, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, dark matter, David Brooks, David Graeber, debt deflation, deindustrialization, do-ocracy, 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, information asymmetry, invisible hand, Jean Tirole, joint-stock company, Kenneth Arrow, Kenneth Rogoff, Kickstarter, knowledge economy, l'esprit de l'escalier, labor-force participation, liberal capitalism, liquidity trap, loose coupling, manufacturing employment, market clearing, market design, market fundamentalism, Martin Wolf, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Naomi Klein, Nash equilibrium, night-watchman state, Northern Rock, Occupy movement, offshore financial centre, oil shock, Pareto efficiency, Paul Samuelson, payday loans, Philip Mirowski, 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, Vilfredo Pareto, 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: 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

3D printing, 4chan, Albert Einstein, augmented reality, barriers to entry, Cass Sunstein, death of newspapers, en.wikipedia.org, Internet of things, Joan Didion, John Gruber, John Markoff, Marshall McLuhan, Nicholas Carr, QR code, 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: 253 words: 75,772

No Place to Hide: Edward Snowden, the NSA, and the U.S. Surveillance State by Glenn Greenwald

airport security, anti-communist, Cass Sunstein, Chelsea Manning, cognitive dissonance, David Brooks, Edward Snowden, Julian Assange, Mark Zuckerberg, Occupy movement, Panopticon Jeremy Bentham, Rubik’s Cube, Silicon Valley, Skype, Ted Kaczynski, WikiLeaks

Under the title “Magic Techniques & Experiment,” the document references “Legitimisation of violence,” “Constructing experience in mind of targets which should be accepted so they don’t realize,” and “Optimising deception channels.” Such government plans to monitor and influence Internet communications and disseminate false information online have long been a source of speculation. Harvard law professor Cass Sunstein, a close Obama adviser, the White House’s former head of the Office of Information and Regulatory Affairs, and an appointee to the White House panel to review NSA activities, wrote a controversial paper in 2008 proposing that the US government employ teams of covert agents and pseudo-“independent” advocates for “cognitive infiltration” of online groups, chat rooms, social networks, and websites, as well as off-line activist groups.


pages: 257 words: 77,030

A Manual for Creating Atheists by Peter Boghossian

Cass Sunstein, Filter Bubble, Henri Poincaré, Mahatma Gandhi, meta analysis, meta-analysis, Ray Kurzweil, selection bias, Socratic dialogue, stem cell, the scientific method

If a famous archeologist announced that he’d discovered the bones of Christ, what evidence would you need to believe that he was telling the truth? (End of the conversation) DIG DEEPER Articles Brock and Balloun, “Behavioral Receptivity to Dissonant Information” (Brock & Balloun, 1967) David Gal and Derek Rucker, “When in Doubt, Shout! Paradoxical Influences of Doubt on Proselytizing” (Gal & Rucker, 2010) Book Cass Sunstein, Going to Extremes: How Like Minds Unite and Divide (Sunstein, 2009) Videos Peter Boghossian, “Walking the Talk” https://www.youtube.com/watch?v=9ARwO9jNyjA Peter Boghossian, “Critical Thinking Crash Course” http://www.youtube.com/watch?v=A7zbEiNnY5M NOTES The Danish philosopher Kierkegaard writes that anxiety is a key human experience. Most people are afraid of feeling anxiety, and they’ll do anything they can to distract themselves from it.


pages: 302 words: 73,946

People Powered: How Communities Can Supercharge Your Business, Brand, and Teams by Jono Bacon

Airbnb, barriers to entry, blockchain, bounce rate, Cass Sunstein, Charles Lindbergh, Debian, Firefox, if you build it, they will come, IKEA effect, Internet Archive, Jono Bacon, Kickstarter, Kubernetes, lateral thinking, Mark Shuttleworth, Minecraft, minimum viable product, more computing power than Apollo, planetary scale, pull request, Richard Stallman, Richard Thaler, sexual politics, Silicon Valley, Travis Kalanick, Y Combinator

Behavioral Economics Homework If you are interested in learning more about behavioral economics, the following books are a great start: •Dan Ariely, Predictably Irrational: The Hidden Forces That Shape Our Decisions, rev. and expanded ed. (HarperCollins, 2009). •Dan Ariely, The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home (HarperCollins, 2010). •Daniel Kahneman, Thinking, Fast and Slow (Farrar, Straus & Giroux, 2011). •Richard H. Thaler and Cass Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness (Penguin Books, 2009). The SCARF Model Behavioral economics provides an enormously valuable blueprint for one of the most challenging elements of building communities and teams: Why do people behave the way they do, and how can we tune our work to map well to those automatic behaviors? While there are mountains of information about behavioral economics (see the highly recommended reading list above), we want to get going right away.


pages: 290 words: 76,216

What's Wrong with Economics? by Robert Skidelsky

"Robert Solow", additive manufacturing, agricultural Revolution, Black Swan, Bretton Woods, business cycle, Cass Sunstein, central bank independence, cognitive bias, conceptual framework, Corn Laws, corporate social responsibility, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, disruptive innovation, Donald Trump, full employment, George Akerlof, George Santayana, global supply chain, global village, Gunnar Myrdal, happiness index / gross national happiness, hindsight bias, Hyman Minsky, income inequality, index fund, inflation targeting, information asymmetry, Internet Archive, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, knowledge economy, labour market flexibility, loss aversion, Mark Zuckerberg, market clearing, market friction, market fundamentalism, Martin Wolf, means of production, moral hazard, paradox of thrift, Pareto efficiency, Paul Samuelson, Philip Mirowski, precariat, price anchoring, principal–agent problem, rent-seeking, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Coase, shareholder value, Silicon Valley, Simon Kuznets, survivorship bias, technoutopianism, The Chicago School, The Market for Lemons, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, Thorstein Veblen, transaction costs, transfer pricing, Vilfredo Pareto, Washington Consensus, Wolfgang Streeck, zero-sum game

Another finding of behavioural economics is that imperfect information, complexity, uncertainty, and limited calculating capacity force agents to use of rules of thumb, or heuristics, rather than ‘pure’ optimising behaviour. Widespread use of heuristics – short-cuts – produces systematic behavioural biases. These mean that it might be both possible and desirable for government to ‘nudge’ (aka incentivise) people to act more rationally. Nobel Laureate Richard Thaler (b.1945) and Cass Sunstein (b.1954) argue people might be ‘nudged’ to eat more healthily by taxing sugar or to save more by making wage increases conditional on savings commitments.15 How successful this last ‘nudge’ would be is open to question. Saving for the future implies a belief that money will hold its value, and that government will honour its commitment to keep savings for retirement tax-free or tax-deferred.


pages: 398 words: 86,023

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

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, Kickstarter, Marshall McLuhan, Mitch Kapor, 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: 411 words: 80,925

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

Airbnb, barriers to entry, Bernie Madoff, bike sharing scheme, Buckminster Fuller, buy and hold, carbon footprint, Cass Sunstein, collaborative consumption, collaborative economy, commoditize, Community Supported Agriculture, credit crunch, crowdsourcing, dematerialisation, disintermediation, en.wikipedia.org, experimental economics, George Akerlof, global village, hedonic treadmill, 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, peer-to-peer lending, peer-to-peer rental, 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: 340 words: 81,110

How Democracies Die by Steven Levitsky, Daniel Ziblatt

Affordable Care Act / Obamacare, Ayatollah Khomeini, basic income, Berlin Wall, Bernie Sanders, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, centre right, Charles Lindbergh, clean water, David Brooks, Donald Trump, Fall of the Berlin Wall, Gunnar Myrdal, illegal immigration, immigration reform, income inequality, Jeff Bezos, Nate Silver, Norman Mailer, old-boy network, Robert Gordon, Ronald Reagan, single-payer health, The Rise and Fall of American Growth, universal basic income

Citizens United ruling: Marty Cohen, David Karol, Hans Noel, and John Zaller, “Party Versus Faction in the Reformed Presidential Nominating System, PS (October 2016), pp. 704–5; Theda Skocpol and Alex Hertel-Fernandez, “The Koch Network and Republican Party Extremism,” Perspectives on Politics 14, no. 3 (2016), pp. 681–99. explosion of alternative media: Ibid., p. 705. Whereas the path to national name recognition: Ibid., pp. 703–4. “conservative entertainment complex”: David Frum, “The Great Republican Revolt,” The Atlantic, September 9, 2015. radicalized conservative voters: See Matthew Levendusky, How Partisan Media Polarize America (Chicago: University of Chicago Press, 2013); Cass R. Sunstein, #Republic: Divided Democracy in the Age of Social Media (Princeton, NJ: Princeton University Press, 2017). Although many factors contributed: See John Sides, Michael Tesler, and Lynn Vavreck, Identity Crisis: The 2016 Presidential Campaign and the Battle for the Meaning of America (Princeton, NJ: Princeton University Press, 2018). more endorsements than Trump: “The Endorsement Primary,” FiveThirtyEight, June 7, 2016, https://projects.fivethirtyeight.com/​2016-endorsement-primary/.


pages: 291 words: 81,703

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

Amazon Mechanical Turk, Black Swan, brain emulation, Brownian motion, business cycle, Cass Sunstein, choice architecture, complexity theory, computer age, computer vision, computerized trading, 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, Johannes Kepler, John Markoff, Khan Academy, labor-force participation, Loebner Prize, low skilled workers, manufacturing employment, Mark Zuckerberg, meta analysis, meta-analysis, microcredit, Myron Scholes, Narrative Science, Netflix Prize, Nicholas Carr, P = NP, 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: 281 words: 79,958

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

23andMe, agricultural Revolution, Anne Wojcicki, Any sufficiently advanced technology is indistinguishable from magic, Asilomar, 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: Challenger O-ring, Ronald Reagan, Simon Singh, Skype, stem cell, Ted Kaczynski, the scientific method, Thomas Malthus, twin studies, 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: 296 words: 82,501

Stuffocation by James Wallman

3D printing, Airbnb, back-to-the-land, Berlin Wall, big-box store, Black Swan, BRICs, carbon footprint, Cass Sunstein, clean water, collaborative consumption, commoditize, creative destruction, crowdsourcing, David Brooks, Fall of the Berlin Wall, happiness index / gross national happiness, hedonic treadmill, high net worth, income inequality, Intergovernmental Panel on Climate Change (IPCC), James Hargreaves, Joseph Schumpeter, Kitchen Debate, Martin Wolf, mass immigration, McMansion, means of production, Nate Silver, Occupy movement, Paul Samuelson, post-industrial society, 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: 270 words: 79,992