3BI: Gratitude, the importance of inattention, and hyperbolic discounting
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Happy Friday from Chicago!
The newsletter will be taking a break next week for Thanksgiving. Enjoy your holiday and I’ll see you again in December.
Hyperbolic discounting and vaccines
Hyperbolic discounting refers to our tendency to choose smaller rewards that come quickly over larger ones that arrive later. Basically, we usually choose short term satisfaction over more sizable long term gains.
The marshmellow test is a famous example of hyperbolic discounting. In the experiment, a marshmallow was put in front of children, who were told they can have a second one if they go 15 minutes without eating the first. The kids are left in the room alone and watched to see if they can handle the wait. See an adorable recreation of it below:
A John Hopkins professor pointed out on Twitter that the recent news of effective coronavirus vaccines may offer a mass scale experiment in hyperbolic discounting:
The most difficult part of pandemic preventative measures has been the uncertainty. After the initial urgency in the spring, fatigue set in as we became desperate for some normalcy, especially as it became clear that an end was nowhere in sight.
While experts like Anthony Fauci and Bill Gates had been expressing optimism about vaccines and a return to some normalcy in 2021, there was no concrete evidence until Pfizer and Moderna released the results of their trials in the last two weeks.
How will that affect our behavior? If Fauci is right and a vaccine can be widely distributed by April, does it make it easier to take precautions until then? Or is another 5-6 months simply too long?
I think that for me, personally, it makes it easier, especially after having been able to be more active in the summer and fall, but I’m curious to see how the broader population responds.
The importance of inattention
Behavioral economics is said to differ from traditional economics in its assumption that people are not rational actors making calculated choices. How true this is has been disputed between the two disciplines, but famed economist Steven Levitt, co-author of Freakonomics, gave an interesting perspective in a recent podcast:
I think [Richard] Thaler's real insight is that inattention is really important, because it doesn't actually make sense for people like you and me to fumble around, around the edges of exactly what's in our food, or is one shaving cream doing some particular thing different?
So, I think there's a lot of things where we just kind of assume that--I think you and I both assume that markets are going to take care of stuff. And, so, we don't worry about a lot of it.
He goes on to give the example of enrolling in a company’s retirement plan. Most of us don’t bother researching the details of each investment option, or even in understanding the topic of retirement saving more broadly. We simply trust that the HR person responsible for the program knows enough to make a better choice than we would.
I’ve written before about how we are cognitive misers who only have so much mental bandwidth for evaluating information and making decisions. We have to be selective in how we use that energy, so we outsource many choices, whether consciously to experts or unconsciously to the environment around us. Behavior change tends to happen in those outsourced choices.
Listen to the whole interview at Econ Talk.
The science and philosophy of gratitude
Thanksgiving is about being appreciative of what we have, but few years have been as difficult as this one to do so. Gratitude is an important part of well being, though, and even more so in trying times.
Dr. Martin Seligman is a psychologist and founder of the discipline of Positive Psychology, which aims to counter the traditional “disease model” of psychology, which focuses on how to relieve suffering, and instead amplify well-being. One of the biggest aspects of positive psychology is gratitude:
Gratitude can make your life happier and more satisfying. When we feel gratitude, we benefit from the pleasant memory of a positive event in our life. Also, when we express our gratitude to others, we strengthen our relationship with them.
Practicing gratitude is so important because it counters our inherent negativity bias.
For sound evolutionary reasons, most of us are not nearly as good at dwelling on good events as we are at analyzing bad events. Those of our ancestors who spent a lot of time basking in the sunshine of good events, when they should have been preparing for disaster, did not survive the Ice Age. So to overcome our brains’ natural catastrophic bent, we need to work on and practice this skill of thinking about what went well.
Gratitude redirects our attention in a constructive way. Two practices Seligman recommends are gratitude visits - meet someone in person (or perhaps over Zoom nowadays) to express your thanks for what they’ve done for you - and a “What Went Well Exercise” - taking time each night to write down three things that went well and why they went well. (Read more details on these practices here).
The Stoic philosophers of ancient Greece emphasized the importance of gratitude, as well, and encouraged a daily practice like the “What Went Well” exercise. From Epictetus:
It is easy to praise providence for anything that may happen if you have two qualities: a complete view of what has actually happened in each instance and a sense of gratitude. Without gratitude what is the point of seeing, and without seeing what is the object of gratitude?
Thanksgiving during a pandemic is a good time to start a gratitude practice.
Check out Martin Seligman’s book, read a summary of his exercises at Brainpickings, and learn more about Stoic gratitude at The Daily Stoic.
Other stuff
It’s Time to Hunker Down - Zeynep Tufekci has been my favorite writer through the pandemic with smart and balanced perspectives, and has some thoughts on managing the colder months ahead.
380 trillion viruses make up the human virome (Scientific American)
Click on the image to make it full size. See the tiny dot at the top? That’s earth, as seen from Mars. HT Paul Byrne