lake wobegon effect

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pages: 190 words: 53,409

Success and Luck: Good Fortune and the Myth of Meritocracy by Robert H. Frank


2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Amazon Mechanical Turk, American Society of Civil Engineers: Report Card, attribution theory, availability heuristic, Branko Milanovic, Capital in the Twenty-First Century by Thomas Piketty, carried interest, Daniel Kahneman / Amos Tversky, David Brooks, deliberate practice,, endowment effect, experimental subject, framing effect, full employment, hindsight bias, If something cannot go on forever, it will stop, income inequality, invisible hand, labor-force participation, labour mobility, lake wobegon effect, loss aversion, minimum wage unemployment, Network effects, Report Card for America’s Infrastructure, Richard Thaler, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, Rory Sutherland, side project, sovereign wealth fund, Steve Jobs, The Wealth of Nations by Adam Smith, Tim Cook: Apple, ultimatum game, Vincenzo Peruggia: Mona Lisa, winner-take-all economy

In any event, it’s easy to find examples of cases in which we embrace implausible beliefs about how good we are. Almost 70 percent of the faculty surveyed at one university believed themselves to be in the top 25 percent of their colleagues with respect to teaching ability.3 And another survey found that 87 percent of students in an elite MBA program believed their academic performance placed them in the top half of their class.4 This pattern has been called the Lake Wobegon Effect, after Garrison Keillor’s mythical Minnesota small town where “all the children are above average.” The pattern is typically more pronounced for traits or characteristics that are difficult to measure objectively, such as driving ability. Only 2 percent of high school students in one survey said they had below-average leadership ability, and virtually all rated themselves as better than average at getting along with others.5 False beliefs about luck are also common.

., 27 gratitude, 98–103 Great Recession, the, 124, 134 Gross, Terry, 5 H&R Block, 43 Harvard University, 34, 36, 48, 72, 136 headwinds, 63, 64, 80, 81 height, 8 Hewlett-Packard, 53 High School Baseball Web, 62 high-speed rail, 87 hindsight bias, 21 Homo economicus, 129 hostile takeover litigation, 36 human capital, 40, 66 Huo, Yuezhou, 95 Huxley, Aldous, vii IBM, 34, 35, 51 Ice King, 37 income inequality, 52–55, 112, 113; and bankruptcy rates, 114, 115; and divorce rates, 114, 115; and government stimulus policy, 162, 163; and hours worked, 115; and long commute times, 114, 115; and spending by the wealthy, 165 individual vs. collective incentives, 17, 110, 117, 169 infrastructure, 12, 18, 87, 90, 91, 98, 111, 119, 120, 124, 147, 162 jealousy, 122 Johnson, Harold, 134–41 Journal of Political Economy, 28 JVC, 44 Kahneman, Daniel, 28, 70 Kardashian, Kim, 9 keeping up with the Joneses, 112 Keillor, Garrison, 72 Kildall, Gary, 34–36 Koble, Amy, 102 Koufax, Sandy, 142 Kristof, Nicholas, xiv, xv Krueger, Alan, 8 LaBelle, Patti, 103 Lake Wobegon Effect, 72 Landier, Augustin, 50 Langone, Kenneth, 104 last-name effects, 39 Lazarsfeld, Paul, 21 Leonard, Elmore, 5 Leslie, Ian, 22 Lewis, Michael, xii, xiii, xv, xvi Liar’s Poker, xiii liberals, xi, 17, 83 Little League baseball, 142 Lockdown, 30 Locke, John, 96 Lokkins, Elmer, 106 London School of Economics, 4 Long Tail, The, 47 lost-envelope thought experiment, 130 lottery winners, 69, 72 Louvre, the, 22 Major League Baseball, 62, 141 Manove, Michael, 74 markets for classical music, 46, 47 Marshall, Alfred, 41 Martin, Brett, 31 material living standards, 14, 90 Matthew Effect, 24 Mauboussin, Michael, 69 McCullough, Michael, 102 Mechanical Turk, 95, 137 meritocracy, xi, xii Merton, Robert K., 24 Mialon, Hugo, 14 Microsoft, 34, 35, 44 Milanovic, Branko, 7 Mlodinow, Leonard, 35 Mona Lisa, 9, 22–23 Morocco, 87 motivated cognition, 72 MS DOS, 35 Munger, Charlie, 39 Murphy, Liam, 97 Music Lab, 30, 45 Nagel, Thomas, 97 naïve optimism, 11, 12, 70–72, 75 National Center for Education Statistics, 87 National Institutes of Health, 135 natural selection, 73, 116 natural stupidity, 70 Nepal, 7, 14, 86, 112 Nepotist, The, 30, 49 Netflix, 47 Netherlands, 20 network effects, 43–45, 48 New Orleans, 25 New York City, 107; cost of weddings in, 110; dwelling sizes of the wealthy in, 120; hypercompetitive music scene in, 30; penthouses with sweeping views in, 121 New York Metropolitan Opera, 47 New York Times, xiv, 4, 29 New Yorker, 61, 103 New Zealand, 20 Nixon, Richard, 105 no-free-lunch principle, 109 Nobel Prize, 28 Northeastern University, 98 NPR, 5, 126 numerical simulation, 64 Nunn, Sam, 126 Obama, Barack, 84, 91 Ohio State University, 135 O’Neal, Ryan, 23 Organization for Economic Cooperation and Development, 115 orthodox (or standard, or traditional) economic theories, 13, 69, 70, 112, 115 Our Kids, 144 Pacino, Al, 23 Palomar, 128 Patterson, Tim, 35, 36 Peace Corps, 7, 86 Perkins, Tom, 104 Peruggia, Vincenzo, 22 piano manufacturing, 42 Piketty, Thomas, 55 political polarization, 17 Porsche, 15, 16, 91, 119 positional arms control agreements, 118 positional arms races, 116, 117, 118, 144 positional concerns, 115, 116, 118, 122 positive feedback loops, 9, 44, 51, 104, 105 potholes, 16, 91 poverty, 14 Prince Ali Lucky Five Star, 72 Princeton University, xii, 133 progressive consumption tax, 118–27, 158–71; and consumption by retirees, 164; and regressivity, 160; as a Pigouvian tax, effect on economic growth, 161, 162; as a Pigouvian tax, effect on wealth inequality, 166; transition from the current tax system, 162; treatment of durable purchases, 160; treatment of loans, 159, 160; versus taxes on specific luxuries, 163, 164 public investment (see also infrastructure), 13 Putnam, Robert, 144 Puzo, Mario, 23 QDOS (“quick and dirty operating system”), 35 Rai, Birkhaman, 7, 86 Reagan, Ronald, 90 Reardon, Sean, xv Reddit, 56 Reese, PeeWee, 142 Regan, Dennis, 131 relative purchasing power, 92 Review of Economics and Statistics, 28 Rhodes, Frank H.


pages: 383 words: 108,266

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


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

OUR PROPENSITY TO overvalue what we own is a basic human bias, and it reflects a more general tendency to fall in love with, and be overly optimistic about, anything that has to do with ourselves. Think about it—don’t you feel that you are a better-than-average driver, are more likely to be able to afford retirement, and are less likely to suffer from high cholesterol, get a divorce, or get a parking ticket if you overstay your meter by a few minutes? This positivity bias, as psychologists call it, has another name: “The Lake Wobegone Effect,” named after the fictional town in Garrison Keillor’s popular radio series A Prairie Home Companion. In Lake Wobegone, according to Keillor, “all the women are strong, all the men are good-looking, and all the children are above average.” I don’t think we can become more accurate and objective in the way we think about our children and houses, but maybe we can realize that we have such biases and listen more carefully to the advice and feedback we get from others.

., 273–74 job performance. 320–24 public scrutiny and, 322 relationship between compensation and, 320–21, 322–24 Jobst suit, 192–94 Johnston, David Cay, 204 JP Morgan Chase, 280 judgment and decision making (JDM), xxviii see also behavioral economics “Just say no” campaign, 100, 101 K Kahneman, Daniel, 19, 129 Keeney, Ralph, 264 knee surgery, arthroscopic, 174–76 Knetsch, Jack, 129 Knight-McDowell, Victoria, 277 Koran, 215 L “Lake Wobegone Effect,” 268–69 Latin America, lack of trust in, 214 Lay, Kenneth, 219 learned helplessness, 312–16 experiments on, 312–14 in financial meltdown, 314–16 recovering from, 315–16 Leaves of Grass (Whitman), 40–41 Lee, Leonard, 21, 157–59, 161, 337 legal profession: attempts at improving ethics of, 213–14 decline of ethics and values in, 209–10 Lehman Brothers, 280, 310 leisure, blurring of partition between work and, 80, 81 Leland, John, 122–23 Leo III, Pope, 188 Leonardo da Vinci, 274 Levav, Jonathan, 231–37, 337 Levitt, Steven, xvi Li, Jian, 166–68 Lincoln, Abraham, 177 Linux, 81 List, John, xvi loans: punitive finance practices and, 300–301, 304 see also mortgages lobbyists, congressional restrictions on, 205 Loewenstein, George, 21, 26, 30–31, 39, 89,, 320–21, 337–38 Logic of Life, The (Harford), 291–92 Lorenz, Konrad, 25, 43 loss: aversion to, 134, 137, 138, 148–49 fear of, 54–55 Lost World, The (Crichton), 317–18 loyalty: in business-customer relations, 78–79 of employees to their companies, 80–84 M Macbeth (Shakespeare), 188 Madoff, Bernard, 291 Maier, Steve, 312-13 major, college students’ choice of, 141–42 manufacturer’s suggested retail price (MSRP), 30, 45 marketing: high price tag and, 24–25 hype of, related to satisfaction derived from product, 186–87, 190–91 relativity and, 1–6, 9–10 “trial” promotions and, 136–37 zero cost and, 49–50 market norms, 67–88 companies’ relations with their customers and, 78–80 companies’ relations with their employees and, 80–84, 252–54 doing away with, 86–88 education and, 85 mere mention of money and, 73–75 mixing signals of social norms and, 69, 73–74, 75–77, 79, 214, 250–52 reducing emphasis on, 88 social norms kept separate from, 67–69, 75–76, 77–78 willingness to risk life and, 84 working for gifts and, 72–74 working under social norms vs., 69–72 Maryland Judicial Task Force, 210 Mazar, Nina, 196–97, 206, 219–20, 224, 320–21, 338 McClure, Sam, 166–68 Mead, Nicole, 74–75 medical benefits, recent cuts in, 82 medical care, see health care medical profession: conflicts of interest and, 293, 295 decline of ethics and values in, 210 salaries of, as practicing physicians vs.


pages: 1,351 words: 385,579

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


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

The winner of the contest was the player who had more money, if their nation survived at all, at the end of several rounds of play. The players interacted with each other by computer and could not see each other, so the men didn’t know whether they were playing with another man or with a woman, and vice versa. Before they began, participants were asked to predict how well they would do relative to everyone else playing the game. The experimenters got a nice Lake Wobegon Effect: a majority thought they would do better than average. Now, in any Lake Wobegon Effect, it’s possible that not many people really are self-deceived. Suppose 70 percent of people say they are better than average. Since half of any population really is above average, perhaps only 20 percent think too well of themselves. That was not the case in the war game. The more confident a player was, the worse he or she did. Confident players launched more unprovoked attacks, especially when playing each other, which triggered mutually destructive retaliation in subsequent rounds.

An early exposé was the sociologist Erving Goffman’s The Presentation of Self in Everyday Life, and recent summaries include Carol Tavris and Elliot Aronson’s Mistakes Were Made (but Not by Me), Robert Trivers’s Deceit and Self-Deception, and Robert Kurzban’s Why Everyone (Else) Is a Hypocrite.23 Among the signature phenomena are cognitive dissonance, in which people change their evaluation of something they have been manipulated into doing to preserve the impression that they are in control of their actions, and the Lake Wobegon Effect (named after Garrison Keillor’s fictitious town in which all the children are above average), in which a majority of people rate themselves above average in every desirable talent or trait.24 Self-serving biases are part of the evolutionary price we pay for being social animals. People congregate in groups not because they are robots who are magnetically attracted to one another but because they have social and moral emotions.

Capacity for evil: Baumeister, 1997; Baumeister & Campbell, 1999. 20. Narratives of harm: Baumeister, Stillwell, & Wotman, 1990. 21. Rate of anger: Baumeister et al., 1990. 22. Harm narratives with harm controlled: Stillwell & Baumeister, 1997. 23. Self-serving biases: Goffman, 1959; Tavris & Aronson, 2007; Trivers, in press; von Hippel & Trivers, 2011; Kurzban, 2011. 24. Cognitive dissonance: Festinger, 1957. Lake Wobegon Effect and other positive illusions: Taylor, 1989. 25. Moral emotions as the basis for cooperation: Haidt, 2002; Pinker, 2008; Trivers, 1971. 26. Advantages of the Moralization Gap: Baumeister, 1997; Baumeister et al., 1990; Stillwell & Baumeister, 1997. 27. Self-deception as an adaptation: Trivers, 1976, 1985, in press; von Hippel & Trivers, 2011. 28. Orwell: Quoted in Trivers, 1985. 29. Problems with self-deception: Pinker, 2011. 30.


pages: 486 words: 148,485

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, 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

.* In other words, if we want to discredit a belief, we will argue that it is advantageous, whereas if we want to champion it, we will argue that it is true. That’s why we downplay or dismiss the self-serving aspects of our own convictions, even as we are quick to detect them in other people’s beliefs. Psychologists refer to this asymmetry as “the bias blind spot.” The bias blind spot can be partly explained by the Lake Wobegon Effect, that endlessly entertaining statistical debacle whereby we all think that we are above average in every respect—including, amusingly, impartiality. But a second factor is that we can look into our own minds, yet not into anyone else’s. This produces a methodological asymmetry: we draw conclusions about other people’s biases based on external appearances—on whether their beliefs seem to serve their interests—whereas we draw conclusions about our own biases based on introspection.

., 70–71, 90–91 of the body, 67–69, 79–82 certainty vs., 163–64 confabulations and, 77–86 memory failures and, 71–77 perception and, 53–54 reliance on other people’s, 137–44 Kocourek, Tom, 380n Kolbert, Elizabeth, 367n Kraepelin, Emil, 82 Krugman, Paul, 90 Kübler-Ross, Elisabeth, 229–30 Kuhn, Thomas, 125–27, 126n, 167, 186, 187n, 208, 349n Ku Klux Klan (KKK), 273–79, 284n, 294–95 Lake Wobegon Effect, 106–7 Lancaster Sound, 48–50, 353n Landsgemeinde, 147–48, 151 language, 97, 98, 116n, 119–21, 252–53, 307–9 Lanir, Zvi, 374n Laplace, Pierre-Simon, 34–35 La Rochefoucauld, François de, 263 Larousse, 29, 348n Laser Interferometer Gravitational-Wave Observatory, 94 laughter, 321–26, 389–90n Lee, Keunwoo, 210n Leka, Donald, 122–23 Leno, Jay, 175 Letters on Natural Magic (Brewster), 63–64 Levin, Harry, 390n Levitt, Arthur, 90 Levy, Paul, 301, 302, 304–5, 316, 385n Lewis, Meriwether, 48 Lewis, Michael, 89 Limits to Growth, The, 25–26 Linton, Ralph, 31 listening, 309–11 Liszt, Franz von, 223–24, 377n Locke, John, 22, 139, 253 “losing face,” 26 love, 259–72 characteristic emotions of falling in, 261–62 in literarature, 251–52, 260–61 notion of, 259–66 rift between us and the world, 253–59 self-knowledge and the self, 283n tools for understanding one another, 251–53 Lynch, Jessica, 64n Lynd, Helen Merrell, 191, 373n Lysenko, Trofim Denisovich, 154n lysenkoism, 154n McArdle, Megan, 196–97n McCain, John, 177 McGrath, Michael, 234–37, 245–46, 379n McGregor, Angus, 128 machines, and belief, 334–35 Mack, Maynard, 172n, 390n MacMillan, Donald, 52n Madison, James, 314 madness, 35, 38–40, 41, 190 Madoff, Bernie, 187, 215–16 Magliozzi, Ray, 141 Magliozzi, Tom, 141 Maistre, Joseph-Marie de, 312 “management by fact,” 305–6 Margalit, Avishai, 142, 250n Mariana Trench, 141 market self-regulation, 87–90 Markus, Greg, 185, 371–72n Masada, 161, 161n May, Rollo, 178–79, 326 Mbeki, Thabo, 232, 379n Meadows, Donella, 26 medical errors, 299–302, 301n, 304–6, 316, 317, 386n Mele, Alfred R., 375–76n Melnikoff, Arnold, 235 melted by fire, 189–90 memories, 71–77, 184–85 Menand, Louis, 34 Midnight Cry, The, 204 military psychological operations (psyops), 64n Miller, William (Millerites), 201–16, 218–19, 373n, 374–75n mind belief.


Everydata: The Misinformation Hidden in the Little Data You Consume Every Day by John H. Johnson


Affordable Care Act / Obamacare, Black Swan, business intelligence, Carmen Reinhart, cognitive bias, correlation does not imply causation, Daniel Kahneman / Amos Tversky, Donald Trump,, Kenneth Rogoff, labor-force participation, lake wobegon effect, Long Term Capital Management, Mercator projection, Mercator projection distort size, especially Greenland and Africa, meta analysis, meta-analysis, Nate Silver, obamacare, p-value, PageRank, pattern recognition, randomized controlled trial, risk-adjusted returns, Ronald Reagan, statistical model, The Signal and the Noise by Nate Silver, Tim Cook: Apple, wikimedia commons, Yogi Berra

See also misrepresentation and misinterpretation brain’s hardwiring for, 60–61 challenges in, 54–55 Ioannidis, John, 75 iPhones, 46–48, 58 “Ipse dixit” bias, 94 J Japan earthquake of 2011, 123–125 Jordan, Michael, 53 Journal of Epidemiology and Community Health, 80 Journal of Finance, 139–140 Journal of Safety Research, 20 Journal of the American Medical Informatics Association, 148 Journal of the National Cancer Institute, 69–70 K Katz, David, 22 Keillor, Garrison, 43 221158 i-xiv 1-210 r4ga.indd  197 197 L Lake Wobegon effect, 42–43 Landon, Alfred, 132 Law360, 146–148 Lawyer Satisfaction Survey, 146–148 Literary Digest, 132 longevity, 4, 87–92 Los Angeles Times, 17–18 Lotto Stats, 133 Lund, Bob, 10 M magnitude, 77–78, 81 in birth month and health study, 149 map projections, 83–85 margins of error, 38, 68–69 Marie Claire, 34–35 math mistakes, 101–102, 103 mayors/deputy mayors salaries, 35–36 McCarthy, Jenny, 61 McGwire, Mark, 39 meaning, difficulty of extracting from too much data, 4.


pages: 327 words: 103,336

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


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

Around 90 percent of Americans believe they are better-than-average drivers, and a similarly impossible number of people claim that they are happier, more popular, or more likely to succeed than the average person. In one study, an incredible 25 percent of respondents rated themselves in the top 1 percent in terms of leadership ability.7 This “illusory superiority” effect is so common and so well known that it even has a colloquial catchphrase—the Lake Wobegone effect, named for Prairie Home Companion host Garrison Keillor’s fictitious town where “all the children are above average.” It’s probably not surprising, therefore, that people are much more willing to believe that others have misguided beliefs about the world than that their own beliefs are misguided. Nevertheless, the uncomfortable reality is that what applies to “everyone” necessarily applies to us, too.


pages: 358 words: 95,115

NurtureShock: New Thinking About Children by Po Bronson, Ashley Merryman


affirmative action, Columbine, delayed gratification, desegregation, impulse control, index card, job satisfaction, lake wobegon effect, meta analysis, meta-analysis, randomized controlled trial, Steven Pinker, telemarketer, theory of mind

Now we turn the spotlight on children’s aggressiveness—a catchall term used by the social scientists that includes everything from pushing in the sandbox to physical intimidation in middle school to social outcasting in high school. The easy explanation has always been to blame aggression on a bad home environment. There’s an odd comfort in this paradigm—as long as your home is a “good” home, aggression won’t be a problem. Yet aggression is simply too prevalent for this explanation to suffice. It would imply a unique twist on the Lake Wobegon Effect—that almost every parent is below average. Aggressive behavior has traditionally been considered an indicator of psychological maladaptation. It was seen as inherently aberrant, deviant, and (in children) a warning sign of future problems. Commonly cited causes of aggression were conflict in the home, corporal punishment, violent television, and peer rejection at school. While no scholar is about to take those assertions back, the leading edge of research suggests it’s not as simple as we thought, and many of our “solutions” are actually backfiring.


pages: 364 words: 99,613

Servant Economy: Where America's Elite Is Sending the Middle Class by Jeff Faux


back-to-the-land, Bernie Sanders, Black Swan, Bretton Woods, BRICs, British Empire, call centre, centre right, cognitive dissonance, collateralized debt obligation, collective bargaining, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, currency manipulation / currency intervention, David Brooks, David Ricardo: comparative advantage, falling living standards, financial deregulation, financial innovation, full employment, hiring and firing, Howard Zinn, Hyman Minsky, illegal immigration, indoor plumbing, informal economy, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, lake wobegon effect, Long Term Capital Management, market fundamentalism, Martin Wolf, McMansion, medical malpractice, mortgage debt, Naomi Klein, new economy, oil shock, Plutocrats, plutocrats, price mechanism, price stability, private military company, Ralph Nader, reserve currency, rising living standards, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, school vouchers, Silicon Valley, single-payer health, South China Sea, statistical model, Steve Jobs, Thomas L Friedman, Thorstein Veblen, too big to fail, trade route, Triangle Shirtwaist Factory, union organizing, upwardly mobile, urban renewal, War on Poverty, We are the 99%, working poor, Yogi Berra, Yom Kippur War

They did not trust government. All of these were true. But the polls also revealed something else: a gap between people’s perception of the nation’s economic fate and their own. The same polls that reported that Americans were pessimistic about the country’s future and believed that the next generation would be poorer also showed that they were optimistic about their own prospects. What one might call the “Lake Wobegon effect” is strikingly persistent. In June 2010, for example, 71 percent of Americans reported that they were doing better than average. Their neighbors and coworkers might be in for a rough time, but they and their children would be fine. When asked by Pew Charitable Trust pollsters about the next forty years, 56 percent thought that the U.S. economy would be weaker, but 64 percent were optimistic about the prospects for themselves and their children.


pages: 397 words: 109,631

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

European Americans at Berkeley rate themselves as more conscientious than do Asian Americans at Berkeley, but not when you have both groups compare themselves to the explicit reference group of “typical Asian American Berkeley students.”13 Other things being equal, people in most cultures believe they are superior to most others in their group. This self-enhancement bias is sometimes known as the Lake Wobegon effect, after Garrison Keillor’s mythical town where “all the children are above average.” Seventy percent of American college students rate themselves as above average in leadership ability, and only 2 percent rate themselves below average.14 Virtually everyone self-rates as above average in “ability to get along with others.” In fact, 60 percent say they are in the top 10 percent and 25 percent say they are in the top 1 percent!


pages: 340 words: 92,904

Street Smart: The Rise of Cities and the Fall of Cars by Samuel I. Schwartz


2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, active transport: walking or cycling, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, autonomous vehicles, car-free, City Beautiful movement, collaborative consumption, congestion charging, crowdsourcing, desegregation, Enrique Peñalosa, Ford paid five dollars a day, Frederick Winslow Taylor, if you build it, they will come, intermodal, invention of the wheel, lake wobegon effect, Loma Prieta earthquake, Lyft, Masdar, megacity, meta analysis, meta-analysis, moral hazard, Nate Silver, oil shock, Productivity paradox, Ralph Nader, rent control, ride hailing / ride sharing, Rosa Parks, self-driving car, skinny streets, smart cities, smart grid, smart transportation, the built environment, the map is not the territory, transportation-network company, Uber and Lyft, Uber for X, Unsafe at Any Speed, urban decay, urban planning, urban renewal, walkable city, Wall-E, white flight, Works Progress Administration, Yogi Berra, Zipcar

What was it that made moving to the suburbs so damned appealing? The answers are, like the subject, complicated. Some people did—and still do—dream of a house with a fence in front and a garden (or swimming pool!) out back. Others sought out suburbs as an escape from cities that seemed, and often were, dirty, crowded, and dangerous. A lot of families continue to shop for a suburban school district in search of what I call the Lake Wobegon Effect: a place where all the children are above average and therefore get an above-average education (though their math must be a little below average if they believe this to be true). But the best explanation for why Americans overwhelmingly chose suburban living for more than fifty years, and so many continue to do so today, is money. They voted with their wallets, for suburban houses whose cost per square foot was so much lower than that of the available housing stock in densely populated urban centers.


pages: 384 words: 118,572

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


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

We were simply not armed to deal with someone who lied on such an extraordinary scale.” In June 2013, Tilly’s appeal of his sentence came before the court. He had wanted clemency. It was too much to believe he had had the power over such discerning people. Surely they were to blame. The judge listened closely. And he did award him a new sentence: ten years, instead of the original eight. It goes by many names. The Lake Wobegon effect. The better-than-average effect. Illusory superiority. Superiority bias. Whatever you call it, it means the same thing: we believe we are singular, whatever the circumstances. It could be that we’re especially attractive and brilliant, in the case of Frampton, or that our family legacy is unique in history. Regardless of the specifics, we hold an unwavering commitment to the notion that we are special—and not just special, but more special than most anyone else.


pages: 898 words: 266,274

The Irrational Bundle by Dan Ariely


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

OUR PROPENSITY TO overvalue what we own is a basic human bias, and it reflects a more general tendency to fall in love with, and be overly optimistic about, anything that has to do with ourselves. Think about it—don’t you feel that you are a better-than-average driver, are more likely to be able to afford retirement, and are less likely to suffer from high cholesterol, get a divorce, or get a parking ticket if you overstay your meter by a few minutes? This positivity bias, as psychologists call it, has another name: “The Lake Wobegone Effect,” named after the fictional town in Garrison Keillor’s popular radio series A Prairie Home Companion. In Lake Wobegone, according to Keillor, “all the women are strong, all the men are good-looking, and all the children are above average.” I don’t think we can become more accurate and objective in the way we think about our children and houses, but maybe we can realize that we have such biases and listen more carefully to the advice and feedback we get from others.