Positive-sum Games

Imagine you want to buy a cup of coffee on your way to work one morning. You are really craving for a fresh cup of coffee, but there’s obviously a limit to how much you are willing to pay to fulfill your desire. As a consumer, your best case scenario is to get a free cup of coffee. But assuming that free coffee is not available, you would like to pay as little as possible, and not a penny more than $2. This establishes the value of a cup of coffee for you.

On the other hand, a local coffee store owner would like to sell you a cup of coffee, and preferably charge as much as possible. Assuming that it costs $1 to produce a cup of coffee, the coffee store owner would not sell it for anything less than $1.

You go to this coffee store, and find out that a cup of coffee is priced at $1.50.coffee cup You buy a cup of coffee thinking that it’s a good deal — 50 cents less than what you were willing to pay for it. In a sense, you made a profit of 50 cents in this transaction; 50 cents that you can use somewhere else. The coffee store owner also made a profit of 50 cents. Both parties tried to maximize their own profit, but as a result of this voluntary trade, both benefited.

Now there are other factors — like competition, scarcity, demand — that add complexity, but in its simplicity, this example demonstrates how in a free market, a trade between two parties will take place only when both parties benefit. Suppose there are no other coffee stores nearby, and the coffee store owner starts charging $5 for a cup of coffee. This will distance consumers like you away from them, and create an untapped market of consumers who are looking for cheaper coffee. If there are no artificial barriers to entrance (license requirements, etc.), new coffee stores will open quickly to capitalize on that segment of consumers.

This is a profound, but not widely understood, economic concept: when two parties voluntarily trade with each other in a free market they both benefit. Trade is a positive-sum game. Unlike a zero-sum game, like a robbery, where one party’s loss is other party’s gain, a positive sum game is a win-win for both parties.

A couple of years ago, Egde online magazine posed the following question: “What scientific concept would improve everybody’s cognitive toolkit?”, and Steven Pinker suggested the concept of positive-sum games. Also, check out this illuminating TED talk (linked below) in which Matt Ridley wonders how we became the only species that became more prosperous as we became more populous. And the answer, he argues, is exchange. He gives some interesting examples that demonstrate how exchange (trade) helps elevate living standards.

In the old days, if you were rich, you literally had people working for you. That’s how you got to be rich; you employed them. Louis XIV had a lot of people working for him. They made his silly outfits, and they did his silly hairstyles, or whatever. He had 498 people to prepare his dinner every night. But a modern tourist going around the palace of Versailles and looking at Louis XIV’s pictures, he has 498 people doing his dinner tonight too. They’re in bistros and cafes and restaurants and shops all over Paris, and they’re all ready to serve you at an hour’s notice with an excellent meal that’s probably got higher quality than Louis XIV even had. And that’s what we’ve done, because we’re all working for each other. We’re able to draw upon specialization and exchange to raise each other’s living standards.

Watch the whole thing, it’s quite fabulous.

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The Better Angels of Our Nature

I am immersed in Steven Pinker’s engrossing new book The Better Angels of Our Nature that released few months ago. I am not even half-way through this 700-page epic but I can say that it is one of most interesting, thought-provoking, and intellectually satisfying books I have read in a long time. (Bill Gates would nod in approval!)

For the longest time, I have been an advocate of the fact that we live in a much better world today than our ancestors did. The world has become a safer, healthier, peaceable, and in general, better place. We may grumble about how technological advancements have made us lazy and “stupid”, how we have lost touch with the culture and tradition, how were are increasingly becoming less considerate about the climate. But a basic introductory lesson in cognitive psychology will explain how we are inclined to have what’s called “pessimistic bias”: practically every generation believes that their own generation, and especially the next generation, is not up to the standards of their parents and grand-parents. [See my earlier post Cultural Pessimism.] In reality, while there are occasional detrimental effects of modernization, we have grown by leaps and bounds when it comes to timeless intellectual values (like objectivity, truth, factual discovery), physical values (like overall health, safety, life-span), and civil values (tolerance and fairness, liberty, justice).

The Better Angels of Our Nature immensely helped me to consolidate this worldview yet again. The central argument of this book is that we may be living in the most peaceful era of our species’ existence. However,

[t]he very idea invites skepticism, incredulity, and sometimes anger. Our cognitive faculties predispose us to believe that we live in violent times, especially when they are stoked by media that follow the watchword “If it bleeds, it leads.” The human mind tends to estimate the probability of an event from the ease with which it can recall examples, and scenes of carnage are more likely to be beamed into our homes and burned into our memories than footage of people dying of old age! No matter how small the percentage of violence deaths may be, in absolute numbers there will be always enough of them to fill the evening news, so people’s impression of violence will be disconnected from the actual proportions.

Pinker starts with an elaborate exploration of our evolutionary instincts that make us violent. Drawing from one of his favorite philosophers, Hobbes, he explains how there are three incentives of violence that applies to members of an intelligent species: competition, diffidence/fear, and glory. This discussion leads into some fascinating concepts, like the Hobbesian trap and Prisoner’s dilemma, that I was familiar with but never considered them from such distinct vantage point. The psychology of violence remains the main focus for a large part of this book. For me, those are the most interesting chapters. Once that foundation is established, he marches on to persuade the reader that violence has gone down over the years. By using myriad data sources, statistics, and illuminating charts he portrays a robust picture of the gradual, persistent and unmistakable retreat from violence over time. The first major shift in the trend came when we settled down into agricultural societies. The production, preservation and protection of crops eventually led to administrative mini-states that further reduced violent feuds and confrontations. There were other major factors that Pinker delves into, like commerce and women empowerment, each having a profound impact on our retreat from violence.

One of the most important points he makes is that not only violence has declined over time, but our tolerance towards violence has also waned. As a result, we are more sensitive to a level of violence that may be pretty mild stuff by historical standards. Due to this heightened sensitivity, when we see violent crimes, we focus on how low our behavior has sunken, not on how high our standards have risen.

Now, modern technologies have produced lethal weapons that can wreck mass destruction on the scales that were unimaginable to prior generations. Pinker is not claiming that everything has improved, neither does he ignore the fact that our retreat from violence may not necessarily continue into the future. But the arc of history is certainly in the positive direction – understanding that is essential if we were to truly reap the benefits of living in a (relatively) peaceful society and even more importantly, maintain the growth curve to build more peaceful societies.

The conventional view that glorifies the past, and laments the current state of the society, is seriously flawed. This book is a powerful blow to that romanticized nostalgia. However, this is also a very long book – a serious and monumental study, albeit filled with a lot of humor, wit, and interesting tidbits from the history – so I would recommend it to only those who are keenly interested in this subject. For all others, the book can get a bit too comprehensive and exhaustive. Instead, this brilliant TED talk (by the man himself) should suffice:

Beyond the Biological Imperative

Do children make us happy? Is reproduction rational? Questions like these usually evoke knee-jerk reactions and the default answer from someone who has children is:  “Of course, children make us happy!”

However, various academic studies and research have shown – again and again – that married couples with kids are less happy in general than their childless peers. (See footnote for more details.) An individual’s happiness rises upon getting married. And it takes a heavy beating when the first child is born. The marital satisfaction also declines by the presence of children. If these scientific studies are right, and having children does make us less happy, then why do we keep producing them? Is the biological imperative just too strong that everyone finally ends up caving in? I haven’t met a single person who had expressed a buyer’s remorse after having kids. Are they blinded by the momentary peaks of happiness that they can’t realize the decline of their overall happiness?

Evolution has hard-wired numerous urges and traits in our psyche — but the desire to procreate, leaving our footprints behind in this world, is certainly one of the strongest innate emotions we ever experience. From the species’ point of view, why people have children is no mystery. If you imagine some species that didn’t like to reproduce, their genes would very quickly become extinct. Alternatively, if some species have survived over the years, a strong proclivity to reproduce has to be one of their strongest features.

However, from an individual’s point of view, having children can’t be as easily rationalized as in the case of species. And I am not talking about the emotional pull of having children, which is easily explained by the evolutionary point of view. (We love kids, because if we didn’t then we would have gone extinct long time ago.) I am particularly interested in the rational, economical and practical pros and cons of having children… Thinking beyond the biological imperative. Having children benefits the species, but does it improve the well-being of an individual? Do the gains outweigh the pains? Are sleepless nights, dirty diapers, and the nineteen-year grind worth the joy a child brings to someone’s life? The emotional gratification of having a child is probably unparalleled. But is that reward worth the loss of freedom, autonomy and leisure time? As someone emphatically put it:

They’re a huge source of joy, but they turn every other source of joy to shit.

To someone who is a parent, especially the new ones, this all probably sounds preposterous and even abominable. I don’t blame them. They are just too overwhelmed with sheer joy (and in some cases, obsessive parenting) that there’s no need (or time) to pause, reflect and reason. But I think these are perfectly sensible and important questions that one should ask before they decide to have children.

In a thoroughly engaging and thought-provoking book Selfish Reasons to Have More Kids: Why Being a Great Parent is Less Work and More Fun Than You Think economist Bryan Caplan argues that even from a selfish point of view an average person should have more kids. The crux of his argument is that kids don’t cost as much as parents pay for it. Parents overcharge themselves. If prospective parents realized this, their hesitation with having a child would dwindle. Here’s the list of some of those reasons that Caplan explores in his book:

  1. Nature versus Nurture: Most behavioral and physical traits are due to our genetic heritage. The long term effects of nurture (parenting) on children are minimal as compared to the impact of nature. If parents understood this, they would feel much relaxed by lightening some of that obsessive burden of teaching their kids the right thing. Children are not loaves of clay waiting to be shaped by their parents — who often perceive their kids as ‘projects to be perfected’. Their character, behavior and physical traits are pretty much hard-wired in the genes that they inherit from their parents. This doesn’t mean parenting doesn’t matter. It obviously does. Just not as much as a lot of parents think.
  2. Parents worry too much: We live in a much safer, healthier and better world today as compared to previous generations. Yet, today’s parents are obsessed with their child’s safety as compared to the parents of yesteryear. In the US, women spend more parenting time now than they did 40 years ago. This, in spite of the fact that (a) they are more likely to work outside the home, (b) men have started to help them in domestic work, and (c) today’s moms have fewer kids. Caplan argues that parents are much worried than they ought to be. Despite the horror stories in the media, today’s children are much safer than most parents think. To realize this, they just have to turn off their TV’s and look outside the window.
  3. Long term benefits: Kids have high start-up costs. But lot of the benefits of having children come later in life. The “desired number of children” for an individual changes over time. When young, one child (or no child) may seem like the best option, but as one grows older they wish they had more children — the dividends come in the form of grandchildren in the later stage of life.

It’s hard to argue against these meticulously analyzed and well-reasoned points. It makes us think beyond our biological inclinations; beyond shallow rationalizations like “The time is ripe”, and “If not now then when?” I recommend this book to anyone who has ever thought about having children, as well as to new parents.

***

Some of the quotes and reference to academic studies come from the aforementioned book, as well as this wonderful article from NY Magazine: All Joy and No Fun.

If anyone is interested in reviewing some academic studies, here’s a link (PDF) to a popular study by Robin W Simon. Also check out this another oft-cited study by Daniel Kahneman and Alan B. Krueger.

The Trolley Problem

Consider the following two scenarios:

Version 1 – A trolley is hurtling out of control along a track, bearing down on five people who have been tied to the track by a mad philosopher. You can avert the disaster by flipping a switch that diverts the trolley to another track. Unfortunately, there is one man tied to that other track. Is it morally permissible (or for that matter morally mandatory) to flip the switch?

Version 2 – A trolley is hurtling out of control along a track, bearing down on five people who have been tied to the track by a mad philosopher. You can stop the trolley by pushing a man in front of it. Is it morally permissible (or for that matter morally mandatory) to push the man in front of the trolley?

Most people would flip the switch in the first scenario, but wouldn’t push the man in the second version (according to a survey). Both scenarios have the exact same consequences, but for some (innate) reasons we prefer to kill the man by flipping a switch but not by pushing him.

Here’s slightly more convoluted versions of these hypotheticals:

Version 1 (a) – A trolley is hurtling out of control along a track, bearing down on five people who have been tied to the track by a mad philosopher. Across the track is a man sitting in front of his house, completely unaware of the trolley situation. If you say “hey, come here” to the man, he will walk towards you and in the path of that trolley, be killed and five lives will be saved as a result. You assess the situation and decide to call out. The man gets killed, and five people are saved.

Version 2 (a) – A trolley is hurtling out of control along a track, bearing down on five people who have been tied to the track by a mad philosopher. Across the track is a man walking towards you and in the path of that trolley, completely unaware of the trolley situation. If you shout “hey, watch out”, he will stop walking, be safe and five lives will be lost as a result. You assess the situation and decide not to call out. The man gets killed, and five people are saved.

Based on a survey (when people were asked to judge this behavior on a five point scale: from “morally impermissible” to “morally virtuous”), majority of the people believe that the harm caused by action (calling out) is more culpable than harm caused by inaction.

These moral biases and illusions (or contradicting moral instincts) don’t just exist in such philosophical and ethical experiments. For example, we seem to be much more comfortable with stealing music online (which involves hitting few keys on a computer keyboard) than stealing a music CD from a store. (Flipping a switch versus pushing a man.) Also, we are more forgiving when a terminally ill patient dies because of withheld medicine than when a doctor kills the patient by injecting a lethal dose of painkiller. (Action versus inaction.)

***

Talking about moral illusions, here’s one more (I promise, the last one!) moral scenario:

The Headache Problem – A billion people are experiencing fairly minor headaches, which will continue for another hour unless an innocent person is killed, in which case they will cease immediately. Is it okay to kill that innocent person?

Our moral instinct says that the answer is, quite obviously, ‘no’.

But here’s a counter-argument from an economist’s point of view: The answer is ‘yes’. We know that nobody wants to pay a dollar to avert a one-in-a-billion chance of death. (Surveys about our willingness to pay for auto safety devices have shown this.) Now, most people will happily pay a dollar to cure a headache. Which proves that most people think curing headache is more important than avoiding a one-in-a-billion chance of death.

This probably seems counter-intuitive, but think about how little we care about the risk of death when we drive. The risk of dying in a road accident in U. S. is 1 in 6,500. Every time you take your car out to drive to the grocery store, people (including you) become slightly more likely to die in a road accident. We know this. But we value our convenience more than the increased chance of death. We, consciously or otherwise, take that risk. As Steven E Landsburg argues in his book The Big Questions: Tackling the Problems of Philosophy with Ideas from Mathematics, Economics, and Physics:

[W]e all agree to kill random people all the time. We drive, install swimming pools, use drain cleaners, and drink tequila, knowing with certainty that some number of other people will die as a result. People have died so that other people can drive to the opera. Why shouldn’t they die to cure other people’s headaches?

Does that make sense, or do you think there’s a flaw in the argument?

***

The first two scenarios and The Headache Problem are taken from Steven E Landsburg’s book The Big Questions . And the other two versions of The Trolley Problem from Jonah Lehrer’s blog The Frontal Cortex.

The Century of the Self

Here’s an intriguing documentary ‘The Century of the Self’ made by Adam Curtis in 2002 (video link below). It explores and examines how politicians and PR professionals have been transforming people from citizens into consumers,  how people are persuaded to act irrationally, how their instincts and desires are stimulated and manipulated by focusing on product’s glamorization (rather than its virtues), and how consumerism became the central mantra of American culture. If any of these sounds interesting to you, you’ll find this story of the growth of the mass-consumer societies quite absorbing:

The documentary has total 4 parts – each an hour long – but I think it’s totally worth it. (The Youtube link above might not have the whole series. You can view the complete documentary on this link, or in four parts on veoh: Part I, Part II, Part III, and Part IV.)

The bottom-line? Man’s desires must not overshadow his needs. This is one of the best documentaries I’ve seen in a long time, thanks to Namit Arora.

Cultural Pessimism

Cultural pessimism has existed as long as culture itself. Just few weeks ago, I met with some friends over a party who bemoaned how new technologies, like GPS for instance, have made us less “intelligent” as compared to the prior generation(s) that did not have access to such technologies and had to rely on their own intuitions, knowledge and other (non-technical) resources. Although we didn’t talk about cultural or economic degradation, but this “google-makes-us-stoopid” mindset can be observed and generalized into these paradigms as well. The general belief and conviction is that things are going from good to bad, or bad to worse.

In a thought-provoking book The Myth of Rational Voter, economist Bryan Caplan calls it “pessimistic bias”. Virtually every generation has believed that people are not up to the standards of their parents and grandparents. Glorifying the past, and looking down at the present (and the future) is probably going on ever since the first caveman settled in a cave!

It is not improbable conjecture that the feeling that humanity was becoming over-civilized, that life was getting too complicated and over-refined, dated from the time when the cave-men first became such. It can hardly be supposed – if the cave-men were at all like their descendants – that none among them discoursed with contempt on the cowardly effeminacy of living under shelter or upon the exasperating inconvenience of constantly returning for food and sleep to the same place instead of being free to roam at large in wide-open spaces. [From Primitivism and Related Ideas in Antiquity, by Lovejoy and Boas]

In reality, the effects of technology and industrial progress on our collective intelligence, economy and culture have hardly been detrimental. Consider, for example, this question by Steven Pinker from the recent issue of Edge online magazine:

Take the intellectual values that are timeless and indisputable: objectivity, truth, factual discovery, soundness of argument, insight, explanatory depth, openness to challenging ideas, scrutiny of [perceived] dogma, overturning of myth and superstition. Now ask, are new technologies enhancing or undermining those values?

The answer is clear that the new technologies are, in fact, enhancing those core intellectual values. Still, the pessimistic illusion prevails – probably because it has strong roots in the human nature itself. In this decade-old article, Tyler Cowen defends against this myth and explores some reasons behind this wide gap between objective conditions and subjective perceptions:

It is easy to perceive the loss of what we know and harder to discern new developments and surprises. Even if long-term trends are positive, culture may appear to be deteriorating.

Observers often judge present culture against the very best of past culture, causing the present to appear lacking in contrast. But comparing the best of the past against the entirety of the present is unfair. No matter how vital contemporary culture may be, our favorite novels, movies, and recordings were not all produced just yesterday.

The past is always going to contain more accumulated achievements than a particular point in time (i.e. the present). Hence, present almost always pales in comparison to the ‘good old days’. Moreover, strong forms make us “open minded” to paranoid fantasies:

Some part of human nature connects with the apocalyptic. Time and again, pessimists among us have envisioned the world going straight to hell. Never mind that it hasn’t: A lot of us braced for the worst. Whether the source is the Bible or Nostradamus, Thomas Malthus, or the Club of Rome, predictions of calamity aren’t easily ignored, no matter how many times we wake up in the morning after the world was supposed to end. [Cox and Alm]

To end this post on a positive note, check out (1) the Flynn Effect – the consistence rise of I.Q. scores over generations, and (2) this illuminating TED talk (video below) by Steven Pinker in which he convincingly argues that we are probably living in the most peaceful time in our species’ existence!

If you liked this post, you might enjoy some of my older related posts:

The Myth of Rational Voter

Cognitive Biases and Nudge

Cognitive Illusions

Impatient Intelligence

Jack is looking at Anne, but Anne is looking at George. Jack is married, but George is not. Is a married person looking at an unmarried person?

(a) Yes

(b) No

(c) Can not be determined

***

If you chose (c) as the answer, you’re wrong! Here’s how, and also why:

And the answer is the first option. But over 80 percent of people choose the third option. Here’s the solution: the puzzle doesn’t say whether Anne is married or not, but she either is or she isn’t. If Anne is married, she’s looking at George, so the answer is “yes”; if she’s unmarried, Jack is looking at her, so the answer is still “yes.” The underlying reason why smart people get the wrong answer is (according to the article) that they simply don’t take the time to go carefully through all of the possibilities, instead taking the easiest inference. The patience required to go through all the possibilities doesn’t correlate very well with intelligence.

This is from Cosmic Variance blog on the Discover Magazine.

[If you liked this brain treaser, you might also enjoy A Mathematical Conundrum.]

Cognitive Illusions

Take a look at the picture below. Do you see spirals of green and blue colors embedded in pink and orange stripes? Would you believe me if I said that the green and blue are actually the same colors? Yes, they are identical! 

colors

This blog post (by Phil Plait) on the Discovery Magazine explains the reason why this (optical illusion) happens. It has to do with the way the brain judges the color of an object — by comparing it to the surrounding colors.

The upshot is that our eyes and our brains can be easily fooled. As Phil Plait writes:

This is why I tell people over and over again: you cannot trust what you see even with your own eyes. Your eyes are not cameras faithfully taking pictures of absolute truth of all that surrounds you. They have filters, and your brain has to interpret the jangled mess it gets fed. Colors are not what they appear, shapes are not what they appear […], objects are not what they appear.

So the next time someone swears they saw Jesus, or a UFO, or a ghost, show them this picture. What you see in life is absolutely and provably not what you get.

The cognitive illusions are not limited to visual perceptions. In a brilliant TED talk (see below), behavioral economist Dan Ariely shows how our behavior and our decisions are sometimes driven by things that seem completely irrelevant — how our seemingly rational behavior can be perfectly irrational. Quite shocking and insightful, this lecture. 

This is why I tell people over and over again: you cannot trust what you see even with your own eyes. Your eyes are not cameras faithfully taking pictures of absolute truth of all that surrounds you. They have filters, and your brain has to interpret the jangled mess it gets fed. Colors are not what they appear, shapes are not what they appear (that zoomed image above is square, believe it or not), objects are not what they appear.
So the next time someone swears they saw Jesus, or a UFO, or a ghost, show them this picture. What you see in life is absolutely and provably not what you get.

 

Here’s an earlier related post: Cognitive Biases and Nudge.

Racial Segregation

In a very brief video, Tim Harford, an economist and author of two very interesting books: The Logic of Life and The Undercover Economist, cleverly explains how a mild preference (of not wanting to get outnumbered) of  individuals in a mixed neighborhood can result in extreme segregation.

“We, as individuals, might be completely rational and tolerant, but the society that we produce together  may be neither rational nor tolerant” opines Harford, giving a nod to Thomas Schelling’s paper on racial segregation (“Models of Segregation”) that eventually got him a Nobel prize in 2005.

That a racist society (or neightborhood) does not necessarily contain racist individuals was very interesting to me. In essence, a racist society can be considered a gestalt. [A structure, configuration, or pattern of physical, biological, or psychological phenomena so integrated as to constitute a functional unit with properties not derivable by summation of its parts. – Definition from MW]

Congnitive Biases and Nudge

We all have inherent biases that offset our judgements and deviates us from making right decisions in many situations. For example, the universal status quo bias (inertia) makes us stick to the default and resist changes. (How many of us have selected the auto insurance terms once and then hardly ever changed it?) Another example is the confirmation bias that helps us believe what we want to believe. It’s a tendency to seek things that confirm our pre-conceived notions, while conveniently ignoring facts that defy them. Here’s a Wikipedia link that has a list of all congnitive biases.  What’s interesting about these biases is that most of them are adaptive and not necessarily caused by a malfunction in our brains. They are ingrained into our brains as a product of our evolutionary past. They are Darwinian in nature.

By and large, these cognitive biases are generated by what’s called the ‘Automatic System’. It’s an automatic, intuitive and often unconscious way in which our brain thinks. The second kind of thinking is called the ‘Reflective System’, which is more rational, deductive and self-conscious. (Both terms are borrowed from the book Nudge.) While watching a 3-D movie, the automatic system asks you to dodge a stone flung towards you, while the reflective system tells you that it’s not real. In our complex world, we often rely heavily on the automatic system (i.e. the gut feeling). And it’s often quite accurate and beneficial. After all, we acquired this trait through evolution, and the fact that we survived means that they must have better survival values! But unfortunately the automatic system also makes us vulnerable to numerous biases that can impair our judgements. We might not screw up big time, but we might be missing a lot of opportunities that could have made our lives much better. A lot of mistakes can be avoided if people used their reflective systems more, which in turn relies on knowledge and information.

This human fallibility is used as a justification for what Thaler and Sunstein has called nudge in their book Nudge: Improving Decisions About Health, Wealth, and Happiness. In this very interesting and perhaps very important book, Thaler and Sunstein, both professors, offer a new perspective (paraphrased) on how to prevent the countless bad mistakes we make in our lives – including ill-advised personal investments, consumption of unhealthy foods, neglect of our natural resources, and other numerous bad decisions regarding health care, our families, and education. Nudge can be defined as an approach that…

… tries to influence the choices that people make in a way that will make them better off without restricting their freedom of choice.

Thaler and Sunstein begins the first chapter in their book with an example of a school cafeteria. The order in which different food items are displayed in the cafeteria significantly impacts their consumption. It’s impossible to avoid some way of organizing food. Given what the choice architecture (the director of food services in this case) knows about the eating habits of students, she can choose to nudge them to eat more healthy food. By placing the fruits before dessert and juice before soda, for instance. 

To explain this approach more academically the authors have evoked a term that seems oxymoron at first: libertarian paternalism. They explain:

Libertarian Paternalism is a relatively weak, soft and non-intrusive type of paternalism because choices are not blocked, fenced off, or significantly burdened.

I am a big fan of behavioral economics, so I found this topic as well as the book quite fascinating. Being a libertarian, my initial reaction was hesitation because of the paternalistic flavor of the concept. However, in spite of my initial misgivings, I found this proposition, backed by numerous cutting-edge social science research results and day-to-day life examples, very convincing. My obvious concern is about being on a slippery slope towards paternalism (which the autors have recognized and addressed in the book). But that’s probably another post.

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