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Mindware: Tools for Smart Thinking by Richard E. Nisbett
affirmative action, Albert Einstein, availability heuristic, big-box store, Cass Sunstein, choice architecture, cognitive dissonance, correlation coefficient, correlation does not imply causation, cosmological constant, Daniel Kahneman / Amos Tversky, dark matter, endowment effect, experimental subject, feminist movement, fundamental attribution error, glass ceiling, Henri Poincaré, Isaac Newton, job satisfaction, lake wobegon effect, libertarian paternalism, loss aversion, low skilled workers, Menlo Park, meta analysis, meta-analysis, quantitative easing, Richard Thaler, Ronald Reagan, Socratic dialogue, Steve Jobs, Steven Levy, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, William of Occam, Zipcar
The failure to recognize the importance of contexts and situations and the consequent overestimation of the role of personal dispositions is, I believe, the most pervasive and consequential inferential mistake we make. The social psychologist Lee Ross has labeled this the fundamental attribution error. As it happens, there are big cultural differences in propensity to make this error. This fact offers the hope that people in more susceptible cultures may be able to overcome the error to some degree. The Fundamental Attribution Error Bill Gates is the richest person in the world. At the ripe old age of nineteen, Gates dropped out of Harvard to start Microsoft, and in a few short years he made it the most profitable corporation in the world. It’s tempting to think that he must be one of the smartest people who ever lived.
As the communications theorist Robert Logan has written, the Greeks were enslaved to the rigid linearity of their either/or logic.11 The Greek insistence on an unchanging or highly stable world echoes down through the centuries. The extreme Western insistence on attributing human behavior to a person’s enduring dispositions rather than to situational factors—the fundamental attribution error—is directly traceable to Greek metaphysics. One of the clearest examples of the damage done by the fundamental attribution error has to do with Western (mis)understanding of some important influences on intelligence and academic achievement. I began to have trouble with math in the fifth grade. My parents assured me that was to be expected: Nisbetts had never been much good at math. I was delighted to have the alibi. But in retrospect I can see that my parents—and I—neglected to see that my problems with math began after a two-week bout of mononucleosis sidelined me from school.
Second, the situations we find ourselves in affect our thoughts and determine our behavior far more than we realize. People’s dispositions, on the other hand—their distinctive traits, attitudes, abilities, and tastes—are much less influential than we assume. So we make mistakes in assessing why it is that people—including ourselves—believe particular things and behave in particular ways. But it’s possible to overcome this “fundamental attribution error” to a degree. Finally, psychologists have increasingly come to recognize the importance of the unconscious mind, which registers vastly more environmental information than the conscious mind could possibly notice. Many of the most important influences on our perceptions and behavior are hidden from us. And we are never directly aware of the mental processes that produce our perceptions, beliefs, and behavior.
Switch: How to Change Things When Change Is Hard by Chip Heath, Dan Heath
Atul Gawande, Cass Sunstein, clean water, cognitive dissonance, corporate social responsibility, en.wikipedia.org, fundamental attribution error, impulse control, medical residency, Piper Alpha, placebo effect, publish or perish, Richard Thaler, shareholder value, Silicon Valley, Steve Jobs
We are frequently blind to the power of situations. In a famous article, Stanford psychologist Lee Ross surveyed dozens of studies in psychology and noted that people have a systematic tendency to ignore the situational forces that shape other people’s behavior. He called this deep-rooted tendency the “Fundamental Attribution Error.” The error lies in our inclination to attribute people’s behavior to the way they are rather than to the situation they are in. The Fundamental Attribution Error complicates human relationships. Marriage therapist Michele Weiner-Davis said, “Most people attribute their marital problems to some deeply engrained personality characteristics of their spouse.” A wife might say, “My husband is a stubborn person.” But Weiner-Davis might respond: “You’ve got to admit that your husband isn’t always stubborn.
(This doesn’t excuse his stubbornness, of course, but it should provide hope for a solution, since situations should be easier to tweak than people’s core character.) The Fundamental Attribution Error is the reason why we love TV shows like The Dog Whisperer or Supernanny, in which seemingly irredeemable dogs and kids are tamed by outsiders who come in with a new system of discipline. At the beginning of the episodes, we’re presented with a dog that bites everything in sight, or a child who won’t obey the simplest of commands, and we simply can’t avoid jumping to conclusions about their character: That dog is vicious. That boy is a terror. And when they’re reformed, in the course of a short intervention, it blows our minds. If we could cure ourselves of the Fundamental Attribution Error, these shows would seem obvious to the point of absurdity. (It would be like watching a show whose premise was that if you take scalding-hot liquids—dangerous and slippery—and stick them in the freezer for a long time, they renounce their fiery former selves and turn to ice!)
We are a zero-reject business. That’s a big, big difference.” Chapter Eight W. Edwards Deming. See Deming (1982), Out of the Crisis. Boston: Massachusetts Institute of Technology Center for Advanced Engineering Study. The fires story is on p. 325. Fundamental Attribution Error. See Lee Ross (1977), “The Intuitive Psychologist and His Shortcomings: Distortions in the Attribution Process,” in L. Berkowitz (ed.), Advances in Experimental Social Psychology (vol. 10), New York: Academic Press. Echoes of the Fundamental Attribution Error are found in the conventional wisdom of many fields. Marketers talk about finding the right psychographic for a consumer good. Health psychologists talk about the importance of targeting people who are “ready” to stop smoking. Human resources people talk about getting the right people on the bus.
Andrew Keen, Brewster Kahle, Burning Man, citizen journalism, corporate social responsibility, Dean Kamen, experimental economics, experimental subject, fundamental attribution error, invention of movable type, invention of the telegraph, Kevin Kelly, means of production, meta analysis, meta-analysis, New Urbanism, Nicholas Carr, social software, Steve Ballmer, The Nature of the Firm, the scientific method, ultimatum game
You’d think this transformation would have broken people of their faith in such generalizations, but the desire to attribute people’s behavior to innate character rather than to local context runs deep. It runs so deep, in fact, that psychologists have a name for it: the fundamental attribution error. The fundamental attribution error is at work when we explain our own behavior in terms of the constraints on us (“I didn’t stop to help the stranded driver because I was late for work”) but attribute the same behavior in others to their character (“He didn’t stop to help the stranded driver because he’s selfish”). Similarly, we fell into the fundamental attribution error when we thought Gen Xers weren’t working hard because they were lazy. Theories of generational difference make sense if they are expressed as theories of environmental difference rather than of psychological difference.
Theories of generational difference make sense if they are expressed as theories of environmental difference rather than of psychological difference. People, especially young people, will respond to incentives because they have much to gain and little to lose from experimentation. To understand why people are spending so much time and energy exploring new forms of connection, you have to overcome the fundamental attribution error and extend to other people the set of explanations that you use to describe your own behavior: you respond to new opportunities, and so does everybody else, and these changes feed on one another, amplifying some kinds of behavior and damping others. People in my generation and older often tut-tut about young people’s disclosing so much of their lives on social networks like Facebook, contrasting that behavior with our own relative virtue in that regard: “You exhibitionists! We didn’t behave like that when we were your age!”
We didn’t behave like that when we were your age!” This comparison conveniently ignores the fact that we didn’t behave that way because no one offered us the opportunity (and from what I remember of my twenties, I think we would have happily behaved that way if we’d had the chance). The generational explanations of Napster’s success fall apart because of the fundamental attribution error. The recording industry made that error when it became convinced that young people were willing to share because their generation was morally inferior (a complaint with obvious conceptual appeal to the elders). This thesis never made sense. If young people had become generally lawless, we’d expect to see a rise not just in sharing music but also in shoplifting and other forms of theft. Instead, the recording industry was bemoaning the rising criminality of youth in a period characterized by a reduction in crime almost everywhere in the industrialized world.
The Organized Mind: Thinking Straight in the Age of Information Overload by Daniel J. Levitin
airport security, Albert Einstein, Amazon Mechanical Turk, Anton Chekhov, big-box store, business process, call centre, Claude Shannon: information theory, cloud computing, cognitive bias, complexity theory, computer vision, conceptual framework, correlation does not imply causation, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, delayed gratification, Donald Trump, en.wikipedia.org, epigenetics, Eratosthenes, Exxon Valdez, framing effect, friendly fire, fundamental attribution error, Golden Gate Park, Google Glasses, haute cuisine, impulse control, index card, indoor plumbing, information retrieval, invention of writing, iterative process, jimmy wales, job satisfaction, Kickstarter, life extension, meta analysis, meta-analysis, more computing power than Apollo, Network effects, new economy, Nicholas Carr, optical character recognition, pattern recognition, phenotype, placebo effect, pre–internet, profit motive, randomized controlled trial, Skype, Snapchat, statistical model, Steve Jobs, supply-chain management, the scientific method, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, theory of mind, Turing test, ultimatum game
Social roles, social control, and biases in social-perception processes. Journal of Personality and Social Psychology, 35(7), 485–494, p. 485. the cognitive illusion of the fundamental The fundamental attribution error has received lots of critiques, including that social, and not just inferential processes are at work, see, e.g. Gawronski, B. (2004). Theory-based bias correction in dispositional inference: The fundamental attribution error is dead, long live the correspondence bias. European Review of Social Psychology, 15(1), 183–217. and also, it may be unique to Western culture, reflecting an individualist bias: Clarke, S. (2006). Appealing to the fundamental attribution error: Was it all a big mistake? In D. Coady (Ed.), Conspiracy theories: The philosophical debate (pp. 130–140). Burlington, VT: Ashgate Publishing. and, Hooghiemstra, R. (2008).
The amount of time the students had was the situational factor that predicted how they would behave, and the paragraph they read had no significant effect. This finding comes as a surprise to most people. There have been dozens of demonstrations of people making incorrect predictions, overweighting the influence of traits and undervaluing the power of the situation when attempting to explain people’s behavior. This cognitive illusion is so powerful it has a name: the fundamental attribution error. An additional part of the fundamental attribution error is that we fail to appreciate that the roles people are forced to play in certain situations constrain their behavior. In a clever demonstration of this, Lee Ross and his colleagues staged a mock game show at Stanford. Ross plucked a handful of students from his classroom and randomly assigned half of them to be Questioners and half to be Contestants in a trivia game.
Not only was the game rigged, but so were the mental reactions of the participants—indeed, the mental responses of all of us. We succumb to the cognitive illusion of the fundamental attribution error regularly. Knowing that it exists can help us to overcome it. Suppose you’re walking down the halls of your office and pass a new coworker, Kevin. You say hello and he doesn’t respond. You could attribute his behavior to a stable personality trait and conclude that he is shy or that he is rude. Or you could attribute his behavior to a situational factor—perhaps he was lost in thought or was late for a meeting or is angry at you. The science doesn’t say that Kevin rarely responds to situational factors, just that observers tend to discount them. Daniel Gilbert has gone on to show that this fundamental attribution error is produced by information overload. Specifically, the more cognitive load one is experiencing, the more likely one is to make errors in judgment about the causes of an individual’s behavior.
Rapt: Attention and the Focused Life by Winifred Gallagher
Albert Einstein, Atul Gawande, Build a better mousetrap, Daniel Kahneman / Amos Tversky, David Brooks, delayed gratification, epigenetics, Frank Gehry, fundamental attribution error, Isaac Newton, knowledge worker, loss aversion, Mahatma Gandhi, McMansion, music of the spheres, Ralph Waldo Emerson, Richard Feynman, Richard Feynman, Rodney Brooks, Ronald Reagan, Silicon Valley, Walter Mischel
“‘He’s the problem,’ and ‘She’s the problem.’” The risk is that as time passes, the rift between those parallel universes can grow: “That’s why you have to make the effort to come together and process your experiences jointly, so you really are paying attention to the same world.” Often, the all-too-natural tendency to see things only from your own point of view and to blame the other guy first can be traced to a “fundamental attribution error,” which undermines the common focus required to solve problems. Once you’re in the thrall of such a self-protective distortion, you see your mate’s behavior in terms of what kind of person he or she is. When you think of your own behavior, however, you see it in a larger, explicatory context. If you have a car accident, you rationalize: “I was caught in a terrible downpour,” or “My coffee cup started leaking.”
If you have a car accident, you rationalize: “I was caught in a terrible downpour,” or “My coffee cup started leaking.” If your partner has a crash, however, you think, or even say, “A maniac behind the wheel! Always tailgating!” As Bradbury puts it, “For you, the problem resulted from a situation that anyone would have responded to in that same way. But the other driver has no business being on the road.” Domestic life offers numerous opportunites to succumb to fundamental attribution errors. When your mate acts grouchy after dinner, you might silently or vociferously react thus: “Moody again! That’s just who you are. How did I ever end up with you?” A better plan, suggests Bradbury, would be to take a deep breath, then ask him about his day. He gets to vent about colleagues who haven’t been doing their fair share of the work, and you get to focus on the situation from his perspective, grasp the circumstances that constrain his behavior, and respond in a way that benefits you both.
James, Henry James, William on attentional styles cognitive therapy and on improving attention Langer compared with on length of focus on rapt attention on wisdom Japan, Japanese Jefferson, Thomas Jha, Amishi Johns Hopkins Hospital Johnson, Samuel joy Jung, Carl justice Kabat-Zinn, Jon Kahneman, Daniel bounded rationality and effects of adaptation and fortune cookie maxim and Nobel Prize of personality tests and Kaiping Peng Kant, Immanuel Kaplan, Rachel Kaplan, Stephen Karney, Benjamin kindness Kine, Starlee King, Martin Luther Kismet (robot) knowledge, previous, integration of new information with knowledge workers Kohut, Heinz Langer, Ellen language Lazarus, Richard learning explicit vs. implicit of language leisure decision-making and Leonard, Elmore leverage points Levertov, Denise life, as creation of what is focused on see also meaning; quality of life Limb, Charles Listening to Prozac (Kramer) Locke, John longevity “look for the silver lining” loss risk vs. lottery winners love unconditional LSD Lykken, David McCain, John McClelland, David McGinty, Joe MacLean, Paul magnetoencephalography (MEG) Marceau, Marcel Marcus Aurelius marriage attentional flexibility in balance of power in biased rose-colored vision in demand-withdraw pattern in fundamental attribution errors and housework and self-esteem differences in marriage counseling martial robots Maslow, Abraham Maugham, Somerset meaning meditation and virtues and meditation attentional training and health and mindfulness Meditations (Marcus Aurelius) memory as biased and unpredictable championship competition and improvement of orgasm and remembering vs. experiencing self and Mertz (robot) Merzenich, Michael Mesulam, Marsel meteoric mode of paying attention Meyer, David Michelangelo Michigan, University of Mies van der Rohe, Ludwig Milarepa Miller, Arthur Milton, John mind “mind/brain problem” mindfulness meditation and mindfulness-based stress reduction program (MBSR) Mindless Eating (Wansink) mind-wandering Mischel, Walter modafinil monks Morrison, Toni mothers motivation ADHD and dieting and emotions and grit and self-esteem and unconscious willpower and movies see also specific movies Mozart, Wolfgang Amadeus Multidimensional Personality Questionnaire (MPQ) multitasking Murray, Henry Murray, Sandra music, musicians alertness and childhood experience of creativity and leisure and mystery moods names, forgetting of narcissism National Institutes of Health nature motivation and see also genes, genetics negativity bias theory Neisser, Ulric Nelson, Horatio nervous system neurons, mirror neuroscience Newton, Isaac New York, N.Y.
Alfred Russel Wallace, Arthur Eddington, Atul Gawande, Black Swan, British Empire, call centre, Captain Sullenberger Hudson, Checklist Manifesto, cognitive bias, cognitive dissonance, conceptual framework, corporate governance, credit crunch, deliberate practice, double helix, epigenetics, fear of failure, fundamental attribution error, Henri Poincaré, hindsight bias, Isaac Newton, iterative process, James Dyson, James Hargreaves, James Watt: steam engine, Joseph Schumpeter, Lean Startup, meta analysis, meta-analysis, minimum viable product, quantitative easing, randomized controlled trial, Silicon Valley, six sigma, spinning jenny, Steve Jobs, the scientific method, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Toyota Production System, Wall-E, Yom Kippur War
In fact, there are many possible mitigating factors. To most observers looking from the outside in, these do not register. It is not because they don’t think such possibilities are irrelevant, it is that often they don’t even consider them. The brain just plumps for the simplest, most intuitive narrative: “He’s a homicidal fool!” This is sometimes called by the rather inelegant name of the fundamental attribution error. It is only when the question is flipped—“What happened the last time you jumped lanes?”—that volunteers pause to consider the situational factors. “Oh, yeah, that was because I thought a child was about to run across the street!” Often these excuses are self-serving. But they are not always so. Sometimes there really are wider issues that lead to mistakes—but we cannot even see them if we do not consider them, still less investigate them.
Even in an absurdly simple event like this, then, it pays to pause, to look beneath the surface, to challenge the most obvious, reductionist narrative. This is not about being “soft,” but about learning what really went wrong. How much more important is it to engage in this kind of activity in a complex, interdependent system, like a hospital or business? It is noteworthy that even experienced aviation investigators fall prey to the fundamental attribution error. When they are first confronted with an accident, the sense-making part of the brain is already creating explanations before the black box has been discovered. This is why studies have shown that their first instinct is almost always (around 90 percent of the time) to blame “operator error.” As one airline investigator told me: “When you see an incident, your brain just seems to scream out: ‘What the hell was the pilot thinking!’
See Connelly, Peter (Baby P case) Bacon, Francis, 134n, 279, 280, 283 ballistic model of success, 145–46 Banja, John, 88–89 banking, 233 bankruptcy, 130 Barker, Steven, 236 Bayles, David, 140–41 Baylis, Trevor, 195 Becker, Jasper, 110 Beckham, David, 253–55, 265, 267, 274–76 Beebe, Rodrick, 21 Behavioural Insights Team (BIT), 291 Being Wrong (Schulz), 78 Berglas, Steven, 273–74 Berlinger, Nancy, 16, 90 Bernanke, Ben, 94–95, 98 Beyond Scared Straight (TV show), 166 Bible, the, 281 Birmingham Six, 117 black boxes, 8, 9, 25, 26, 221 black box thinking, 31 Blackstone, William, 65 Blair, Tony, 90–93, 94 blame, 12, 217–49 aviation and, 232, 239–49 cognitive dissonance and, 231 consequences of blame culture, 226–29, 231, 237–39 in corporate and political world, 225–31 fundamental attribution error and, 232 just culture and, 229–30 Libyan Arab Airlines Flight 114 and, 217–19, 221–25 media and, 234–35, 236–38 November Oscar incident and, 239–49 nursing/health care administration and, 226–27, 230–31 pervasiveness of, 225 politics and, 234 second victim and, 239 for social workers following Baby P case, 236–38, 239 Blind Watchmaker, The (Dawkins), 128 Blockbuster, 190 bloodletting, 13–14, 54, 154–56, 161–62 Boaler, Jo, 271, 272 Boeing B-17 bomber, 19, 54 bomber aircraft Boeing B-17 bomber, poor cockpit design of, 19, 54 Wald’s analysis of returning bomber aircraft, 35–37 Borchard, Edwin, 67 Boskin, Michael J., 95 Bounce (Syed), 45n Brailsford, Sir David, 171–73, 178, 179, 182, 183, 189 brainstorming, 196–97 Branson, Richard, 271 Brin, Sergey, 199 British Airways, 240, 241, 242, 246, 247 British Board of Trade, 56 Bromgard, Jimmy Ray, 77–79, 116 Bromiley, Adam, 4, 7, 294 Bromiley, Elaine, 3–7, 12, 15–16, 18, 28, 31, 60, 89, 292 Bromiley, Martin, 3–4, 6–7, 15–16, 18, 59–60, 292–94 Bromiley, Victoria, 4, 7, 294 Burns, Sir Terry, 98 Bush, George W., 73, 93, 111–12, 117 business blame and, 225–31 evolutionary, 129–31 mindset and, 259–61 randomized control trials (RCTs) and, 184–86 cadet training, at West Point, 261–63 Callace, Leonard, 69 Cameron, Julia, 200 Campbell, Alastair, 94 Campbell Collaboration, 164 Capello, Fabio, 135–36 Capital One, 185–86 capital punishment, 76 Carnot, Nicolas Léonard Sadi, 132 Catmull, Ed, 207, 208–9, 210 centrally planned economies, 130, 284 Chabris, Christopher, 117 Chapanis, Alphonse, 19 charities, 147–49 checklists, 30, 39, 53, 59 Chicago Convention, 224–25 China, 110, 271–72 Christianity, 279–80 Clinical Human Factors Group, 60, 293 clinical trials, 14 Clinton, Bill, 187 close crop planting, 110 closed loops, 13–14, 29–30, 58, 165 criminal justice system and, 66, 67 Iraq War decisions and, 93 justice system and, 85 randomized control trials (RCTs) and, 154–59 science and, 44 Cobley, Dan, 185 cognitive dissonance, 74–77, 86–107 ambiguity of failure and, 87 blame and, 231 confirmation bias and, 101–3 denial and, 74 disposition effect and, 101 economic forecasting and, 94–97 external versus internal deception and, 87, 88 health care and, 87–90, 103–7 initiation experiment and, 75–76, 86–87 Iraq War and, 90–94 justification and, 88–89, 90, 97–99 Lord’s capital punishment research project findings and, 76 reputation or influence of individual and, 98–100 responses to, 74 self-deception, 110–11 self-esteem and, 75–76 war, 278 wrongful convictions and, 79–83 collapsible stroller, 195, 199 Collins, Jim, 144, 204, 205, 206 communication, 28–29, 30, 39, 59 Communism, 108, 109, 110 complexity, 11 confirmation, 44 confirmation bias, 101–3, 280 connectivity, 199, 204 Connelly, Peter (Baby P case), 236–38, 239 Connelly, Tracey, 236 Conner, Aimee, 40 Convicting the Innocent and State Indemnity for Errors of Criminal Justice (Borchard), 67 Cook, Linda, 69 Corporate Creativity (Robinson & Stern), 179 counterfactual, 90n, 155, 157, 162, 165, 174, 175 court of criminal appeal, 67 cover-ups, 12–13, 88–89 Cowell, Andy, 182 Crandall, Bob, 179 creationism, 42–43 creative destruction, 130 Creativity, Inc.
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, Netflix Prize, new economy, PageRank, paypal mafia, Peter Thiel, recommendation engine, RFID, sentiment analysis, shareholder value, Silicon Valley, Silicon Valley startup, social graph, social software, social web, speech recognition, Startup school, statistical model, stem cell, Steve Jobs, Steven Levy, Stewart Brand, technoutopianism, the scientific method, urban planning, Whole Earth Catalog, WikiLeaks, Y Combinator
It’s part of why digital animation of real people still hasn’t hit the big screens: When an image looks almost like a real person, but not quite, it’s unsettling on a basic psychological level. We’re now in the uncanny valley of personalization. The doppelgänger selves reflected in our media are a lot like, but not exactly, ourselves. And as we’ll see, there are some important things that are lost in the gap between the data and reality. To start with, Zuckerberg’s statement that we have “one identity” simply isn’t true. Psychologists have a name for this fallacy: fundamental attribution error. We tend to attribute peoples’ behavior to their inner traits and personality rather than to the situations they’re placed in. Even in situations where the context clearly plays a major role, we find it hard to separate how someone behaves from who she is. And to a striking degree, our characteristics are fluid. Someone who’s aggressive at work may be a doormat at home. Someone who’s gregarious when happy may be introverted when stressed.
Airbnb, airport security, Al Roth, Andrei Shleifer, attribution theory, autonomous vehicles, barriers to entry, Brownian motion, centralized clearinghouse, clean water, conceptual framework, constrained optimization, continuous double auction, deferred acceptance, Donald Trump, Edward Glaeser, experimental subject, first-price auction, framing effect, frictionless, fundamental attribution error, George Akerlof, Goldman Sachs: Vampire Squid, helicopter parent, Internet of things, invisible hand, Isaac Newton, iterative process, Jean Tirole, Jeff Bezos, Johann Wolfgang von Goethe, John Nash: game theory, John von Neumann, Joseph Schumpeter, late fees, linear programming, Lyft, market clearing, market design, market friction, medical residency, multi-sided market, mutually assured destruction, Nash equilibrium, Occupy movement, Peter Thiel, pets.com, pez dispenser, pre–internet, price mechanism, price stability, prisoner's dilemma, profit motive, proxy bid, RAND corporation, ride hailing / ride sharing, Robert Shiller, Robert Shiller, Ronald Coase, school choice, school vouchers, sealed-bid auction, second-price auction, second-price sealed-bid, sharing economy, Silicon Valley, spectrum auction, Steve Jobs, Tacoma Narrows Bridge, technoutopianism, telemarketer, The Market for Lemons, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, two-sided market, uranium enrichment, Vickrey auction, winner-take-all economy
If a waiter is curt we assume it’s because he’s ornery instead of observing that he’s dealing with the lunchtime rush (or responding to your own rudeness at his delay in taking your order). If a hedge fund manager earns 30 percent on returns, we assume she’s a genius, when in fact she almost certainly just got lucky.4 This failure in judgment was so central to how we judge others that Ross termed it the fundamental attribution error, and it serves as a potent illustration of the power of circumstance rather than individual volition in explaining the choices we make. A 2004 study by Ross and a pair of coauthors provides some intriguing insights into how “the market” affects how we behave. The study focused on a game called the prisoners’ dilemma, a staple of game theory, which presents the following quandary to a pair of criminals.
See mathematics models, 15, 24–29 of platforms, 107–112 reality-based, 35–37, 45, 49–51, 141 traditional, 110, 133 See also lemon markets theory; markets; platforms Edelman, Ben, 123–124 efficiency optimization, 85–86 eighteenth-century book markets, 90–91 Eisenstein, Don, 154 Elfenbein, Daniel, 73–75 empirical economics, 45 English auctions, 83, 100 equilibrium, existence of, 29, 31–34, 36–37, 40, 45, 76 Euler’s buckling equation, 141 exploding offers, 140 Federal Communications Commission (FCC), 102–103 feedback ratings, customer, 52, 74–75 Feeding America, 154 Findlay, Ronald, 85 first-price (live) auction, 84 first-price sealed-bid auction, 86–87, 99–100 Fisman, Ray Airbnb experience, 171–172 lesson on selling lemons, 59 study on eBay seller motivation for giving to charities, 73 fixed prices, auction versus, 96–97 food bank market system, 154–160 Foundations of Economic Analysis (Samuelson), 28 Fourcade, Marion, 20 fraternity rush, 140 free markets See markets frictions, market, 169–174 “Friday Car,” 46 Friedman, Milton, 72, 151 fundamental attribution error, 178 fundamentalists, market, 16–17 Future Shop (Snider and Ziporyn), 42 Gale, David, 136, 137–138 Gambetta, Diego, 68 game theory, 25–27, 136, 178–179 gang markings as signals, 61–62, 67–68 general equilibrium model, 31–34, 36–37, 40, 76 German POW camps, marketplaces at, 7–10, 13 Giving Works program (eBay for Charity), 73–75 global thermonuclear war, game of, 26 Goethe, Johann Wolfgang von, 89–92, 101 greed, in platforms, 128–129 Groves, Theodore, 93 guarantees, money-back, 69–71 Hall, Robert, 94 Hayek, Friedrich, 13 health markets, lemon problems and, 58–59 Healy, Kieran, 20 Heilbroner, Robert, 20, 21 Henry, John, 80–81, 87–89 Hermann and Dorothea (Goethe) royalties, 90–92, 101 Hernandez, Frances, 61–62 Herodotus, 81 Hicks, John, 34 hierarchy in POW camps, survival rates and, 10–13 Holderness, Clifford, 11–12 home contractors, 119–120 Hoshijima Susumu, 10–11 hotel lobbies, Airbnb vs., 172 Hoteling, Harold, 30 house exchange algorithm, 163–164 “How to Spot Fake Tiffany Jewelry” (yvonne9903), 52–53 human capital theory, 35 income, distribution of, 22 industrial organization, 117–118 inferior good, 180 information management system, 41–42 “Inside the School Assignment Maze” (article), 146 insights, market, 14–15 internet commerce, 41–43 lifestyle changes with creation of, 2–3 scams, 52–55 See also auctions invisible hand metaphor, 21, 33, 182 Japanese POW camps, 10–13, 175–177 Kakutani, Shizuo, 32 Das Kapital (Marx), 23 Keynes, John Maynard, 49–50 “Kidney Exchange” (Roth et al.), 164–165 kidneys sales, 160–161 transplant exchange algorithm, 162–166 King Rat (Clavell), 175–177 Klein, Joel, 143–144 labor markets, 48, 64–66 labor theory of value, 23 ladies night at bars, 123 laundry service platform, 112 lemon markets theory, 44–51, 58–59, 64, 112 “Let Them Eat Pollution” (article), 167 life insurance, 1840s, 153 Lincoln Elementary, 1–2 Little, I.
Pedigree: How Elite Students Get Elite Jobs by Lauren A. Rivera
affirmative action, availability heuristic, barriers to entry, Donald Trump, fundamental attribution error, glass ceiling, income inequality, job satisfaction, knowledge economy, meta analysis, meta-analysis, new economy, performance metric, profit maximization, profit motive, school choice, Silicon Valley, Silicon Valley startup, The Wisdom of Crowds, unpaid internship, women in the workforce, young professional
See http://www.nalpdirectory.com/ (accessed October 24, 2014). 50. See, for example, http://www.betterlegalprofession.org/mission.php (accessed October 24, 2014). APPENDIX A. WHO IS ELITE? 1. See http://www.youtube.com/watch?v=ismksjp10q0&feature=youtube (accessed October 21, 2014). 2. See Bellah et al. 1985. 3. Although individualism has deep cultural and philosophical roots in the United States, it also has broader, psychological ones. The fundamental attribution error documents the general psychological tendency of people who live in individualistic cultures to explain things that are good that happen to them—such as getting into college or getting a promotion—as stemming from internal and stable characteristics, such as their drive or effort, rather than external factors such as luck, chance, or help. By contrast, we explain the failings of others—if, for example, they don’t get into college or if they lose their job—as stemming from internal shortcomings (e.g., deficiencies in intelligence or ambition).
See also interviewer evaluations of candidates fit, 116–17, 135–45, 270, 283–84, 329n14, 332n4; class background and, 137, 143–44, 242; definitions of, 136, 333n8; extracurricular activities and, 94–95, 136–38, 140–42, 242, 254, 277–78, 329n15, 330n17, 333n10; gender and, 143, 222, 230; impact on calibrations and callbacks of, 222, 230; impact on final hiring decisions of, 238–39, 242, 244–46; inequality and, 137, 143–44, 222, 230, 242; interviewer measures of, 140–42, 333n17, 337n11; vs. polish, 137, 332n5; ratings of importance of, 142–43; screening of résumés for, 94–95, 332n4 fit interviews, 337n11 fly outs, 331n8. See also super days full-time recruiting, 18 fundamental attribution error, 344n3 Garth, Bryant, 40–41, 327n28 gated playing field. See recruiting sources Gaztambide-Fernández, Rubén, 327n25 gender, 269, 281, 285; case interviews and, 227–30; champion roles and, 340n24, 340nn26–30; communication skills and, 224–25; cultural capital and, 342n5; equal opportunity legislation on, 275–76; in evaluation of prior employment, 108–9; in final hiring decisions, 247–51; fit and, 143, 222, 230; of Holt interviewers, 297t, 298; impact on calibrations and callbacks of, 222–24, 228–30; interviewer biases and, 212, 243; of interview sample, 291–96; math skills and, 189, 228–30, 255, 337n9; physical appearance and, 255; polish and, 224–27; stereotypes of competence and, 180–81, 224–27, 230–31, 243, 339nn8–9; work-life balance questions and, 205–6 gender diversity, 41–42, 207–9, 324n32; attrition rates and, 333n13; hiring decisions, 15, 139–40; HR professionals and, 331n11.
Finance and the Good Society by Robert J. Shiller
bank run, banking crisis, barriers to entry, Bernie Madoff, capital asset pricing model, capital controls, Carmen Reinhart, Cass Sunstein, cognitive dissonance, collateralized debt obligation, collective bargaining, computer age, corporate governance, Daniel Kahneman / Amos Tversky, Deng Xiaoping, diversification, diversified portfolio, Donald Trump, Edward Glaeser, eurozone crisis, experimental economics, financial innovation, full employment, fundamental attribution error, George Akerlof, income inequality, invisible hand, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, land reform, loss aversion, Louis Bachelier, Mahatma Gandhi, Mark Zuckerberg, market bubble, market design, means of production, microcredit, moral hazard, mortgage debt, Occupy movement, passive investing, Ponzi scheme, prediction markets, profit maximization, quantitative easing, random walk, regulatory arbitrage, Richard Thaler, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, self-driving car, shareholder value, Sharpe ratio, short selling, Simon Kuznets, Skype, Steven Pinker, telemarketer, The Market for Lemons, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, Vanguard fund, young professional, Zipcar
People naturally categorize other people, and we place them into groupings that take on exaggerated signi cance in our imaginations. We tend to think that those in careers other than our own are fundamentally di erent kinds of people. Personality and character di erences are indeed somewhat associated with occupations. But this overly strong tendency to categorize people is related to what psychologists have dubbed “the fundamental attribution error.”1 It is a known fact that we tend to attribute the behavior of others to personality differences far more often than is warranted. We tend to think of the philosopher, artist, or poet as the polar opposite of the CEO, banker, or businessperson. But it is not really so. The idea that businesspeople have personalities fundamentally di erent from those in other walks of life is belied by the fact that people often combine or switch careers.
See bonds Forbes 400 list, 188, 194–95, 207, 256n7 foreign direct investment, 229 foreign exchange swaps, 75 forward markets, 75 foundations, 126, 165, 199, 207–8. See also philanthropists Franco-Prussian War, 221–22 Frank, Robert H., 192 Franklin, Benjamin, 104 Franz Ferdinand, Archduke, 183, 223 Freddie Mac (Federal Home Loan Mortgage Corporation), 53 French, Kenneth, 48 Freud, Sigmund, 129 Fried, Jesse, 24, 25 Friedman, Milton, 94, 95 fundamental attribution error, 135 futures markets, 4, 13, 61, 62, 75, 246n6 (Chapter 9) G20. See Group of Twenty Gale, David, 73 gambling, 140, 160–61, 168, 175. See also risk taking Gartner, John D., 173 Gartzke, Erik, 229 Gates, Bill, 9–10, 126, 199 Gates Foundation, 126 Gaviria, Hermilda, 237–38 GDP shares, 117 Geanakoplos, John, 156 Germany: accounting regulators, 101; corporate boards, 121, 249n4 (Chapter 17); DAX stock index, 171; hyperinflation, 146–47; Marshall Plan, 158; Nazi rule, 146, 156–57, 210; philanthropic giving, 199; World War I reparation debt, 156–57 gifts: from lobbyists, 90; tax deductions, 203–5; taxes on, 204–5.
Unhealthy societies: the afflictions of inequality by Richard G. Wilkinson
attribution theory, clean water, correlation coefficient, experimental subject, full employment, fundamental attribution error, Gini coefficient, income inequality, income per capita, Indoor air pollution, invisible hand, land reform, means of production, purchasing power parity, rising living standards, upwardly mobile
Essentially, self-perception is a product of beliefs about the causes of behaviour and, because of the weakness of genuinely introspective sources of self-awareness, has much in common with our perception of each other. We read what we take to be the inner world from socially and institutionally motivated and structured external behaviour. However, in our conscious understanding we assume the process works the other way round. Indeed, the tendency—mentioned earlier—to see social institutions as if they were expressions of human nature seems to be supported by what has been called ‘the fundamental attribution error’. This is a systematic tendency noted by social psychologists for people to underestimate the impact of external situational factors and to overestimate the role of internal motivating dispositions in their perception of other people’s behaviour (Ross, L. 1978). In other words, instead of seeing the real constraints of the situation, behaviour is perceived as if it were simply an expression of an inbuilt disposition.
Superforecasting: The Art and Science of Prediction by Philip Tetlock, Dan Gardner
Affordable Care Act / Obamacare, Any sufficiently advanced technology is indistinguishable from magic, availability heuristic, Black Swan, butterfly effect, cloud computing, cuban missile crisis, Daniel Kahneman / Amos Tversky, desegregation, Edward Lorenz: Chaos theory, forward guidance, Freestyle chess, fundamental attribution error, germ theory of disease, hindsight bias, index fund, Jane Jacobs, Jeff Bezos, Mikhail Gorbachev, Mohammed Bouazizi, Nash equilibrium, Nate Silver, obamacare, pattern recognition, performance metric, place-making, placebo effect, prediction markets, quantitative easing, random walk, randomized controlled trial, Richard Feynman, Richard Feynman, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Reagan, Saturday Night Live, Silicon Valley, Skype, statistical model, stem cell, Steve Ballmer, Steve Jobs, Steven Pinker, the scientific method, The Signal and the Noise by Nate Silver, The Wisdom of Crowds, Watson beat the top human players on Jeopardy!
Beyond that, it says nothing. But imagine you see someone who snaps, shouts, then apologizes and explains that he has insomnia and hasn’t slept properly in days. What does that incident say about that person? Logically, it should say about him what it said about you, but decades of research suggest that’s not the lesson you will draw. You will think this person is a jerk. Psychologists call this the fundamental attribution error. We are fully aware that situational factors—like insomnia—can influence our own behavior, and we rightly attribute our behavior to those factors, but we routinely don’t make the same allowance for others and instead assume that their behavior reflects who they are. Why did that guy act like a jerk? Because he is a jerk. This is a potent bias. If a student is told to speak in support of a Republican candidate, an observer will tend to see the student as pro-Republican even if the student only did what she was told to do—and even if the observer is the one who gave the order!
Geek Heresy: Rescuing Social Change From the Cult of Technology by Kentaro Toyama
Albert Einstein, Berlin Wall, Bernie Madoff, blood diamonds, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, cognitive dissonance, computer vision, conceptual framework, delayed gratification, Edward Glaeser, en.wikipedia.org, epigenetics, Erik Brynjolfsson, Francis Fukuyama: the end of history, fundamental attribution error, germ theory of disease, global village, Hans Rosling, happiness index / gross national happiness, income inequality, invention of the printing press, invisible hand, Isaac Newton, Khan Academy, Kibera, knowledge worker, libertarian paternalism, M-Pesa, Mahatma Gandhi, Mark Zuckerberg, means of production, microcredit, mobile money, Nicholas Carr, North Sea oil, pattern recognition, Peter Singer: altruism, Peter Thiel, post-industrial society, randomized controlled trial, rent-seeking, RFID, Richard Florida, Richard Thaler, school vouchers, self-driving car, Silicon Valley, Simon Kuznets, Steve Jobs, Steven Pinker, technoutopianism, The Fortune at the Bottom of the Pyramid, Upton Sinclair, Walter Mischel, War on Poverty, winner-take-all economy, World Values Survey, Y2K
The hard questions are not whether there can be progress or not, but what aspects of culture admit a notion of moral progress (as opposed to nonmoral differences of taste or tradition), and how cultures can engage with one another on moral progress without one culture imperially imposing its own ideas. 45.Though economists and anthropologists both vehemently insist that they believe in individual agency – or free will – their agents supposedly respond rationally or intelligently to external circumstances, which again pushes the cause of different outcomes to different external conditions, not to different internal states. Other social sciences have similar debates. Psychology has its person-situation debate, which pits internal personality against external situation as determinants of behavior. Sociologists talk about social structures versus individual agency. And in the public sphere, it’s become fashionable to note the “fundamental attribution error,” which says that behavior is more often a result of circumstances than of some underlying stable personality. It’s obvious, though, that behavior is caused by a complex interaction of both internal states and external situations. Which matters more is difficult to answer in a general way. You can contrive contexts in which one matters more than the other. It’s like asking whether an athlete’s skill or the quality of his/her equipment matter more in her performance, but that depends on the sport, on the athlete, and on the range of skill and quality being considered.
air freight, Andrei Shleifer, battle of ideas, Bretton Woods, British Empire, business process, business process outsourcing, Carmen Reinhart, clean water, colonial rule, correlation does not imply causation, Daniel Kahneman / Amos Tversky, Deng Xiaoping, desegregation, discovery of the americas, Edward Glaeser, en.wikipedia.org, European colonialism, Francisco Pizarro, fundamental attribution error, germ theory of disease, greed is good, income per capita, invisible hand, James Watt: steam engine, Jane Jacobs, John Snow's cholera map, Joseph Schumpeter, Kenneth Rogoff, M-Pesa, microcredit, Monroe Doctrine, oil shock, place-making, Ponzi scheme, risk/return, road to serfdom, Silicon Valley, Steve Jobs, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas L Friedman, urban planning, urban renewal, Washington Consensus, World Values Survey, young professional
We will do a more specific test of benevolent autocrats below. But let’s first review some more of the psychological biases that also determine which explanations we prefer. THE WISH FOR HEROES This chapter is starting to look like one of those action movies in which the hero slays one monster only to find it replaced by a more formidable one, over and over. An even more potent bias in favor of stories of benevolent autocrats is called the “fundamental attribution error.” Demonstrated in many experiments, this error refers to the tendency of people to attribute an outcome too much to individual personality, intentions, and skill and not enough to external factors. The typical experiment takes some volunteers (known as test subjects) and shows them a situation and asks them to interpret it. An experimenter in the 1960s assigned individuals to write letters about Fidel Castro.
If You're So Smart, Why Aren't You Happy? by Raj Raghunathan
Broken windows theory, business process, cognitive dissonance, deliberate practice, en.wikipedia.org, epigenetics, fundamental attribution error, job satisfaction, Mahatma Gandhi, market clearing, meta analysis, meta-analysis, new economy, Phillip Zimbardo, placebo effect, science of happiness, Skype, The Fortune at the Bottom of the Pyramid, Thorstein Veblen, Tony Hsieh, working poor, Zipcar
., “Explaining Altruistic Behavior in Humans,” Evolution and Human Behavior 24(3) (2003): 153–72. five trustworthy behaviors: J. Gottman, and N. Silver, The Seven Principles for Making Marriage Work: A Practical Guide from the Country’s Foremost Relationship Expert (New York: Harmony, 2015). found in a set of studies: R. Raghunathan, and E. J. Han, “Default Social Cynicism: Asymmetries in the Fundamental Attribution Error,” working paper, University of Texas at Austin, 2014. Interpersonal Trust Scale: The items in the scale have been adapted from J. Rotter, “A New Scale for the Measurement of Interpersonal Trust,” Journal of Personality (1967). Smart Trust: Covey, Link, and Merrill, Smart Trust. Chapter 5B: The Fifth Habit of the Highly Happy: Exercising “Smart Trust” more trustworthy than we give them credit: Several findings that I reviewed in the last chapter provide support for this conclusion, including those from the “wallet drop” studies as well as those from the “trust game” studies.