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Intro to Concepts in Behavioral Economics and Decision Making - Mar 2010
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Discussion Assignment Week Two
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Hi everyone.
Are we posting comments, and they are disappearing again, or are we all made nervous by the task of making an 'original contribution' to the field? I know I am.
Anyway, I enjoyed Dan Ariely's talk. I wondered about his 'bandage pulling example'. Apart from his own (understandable) desire to reduce the total amount of pain he experienced, and the 'pain' his nurses felt when they inflicted suffering upon him, I wondered about the other costs involved. He wanted them to spend twice as long doing it, in order to reduce his pain, but presumably that would mean that some other patient wouldn't get his bandages pulled off, or you'd have to hire twice as many nurses to pull bandages off the same number of patients. To me, this illustrates the difficulty of applying 'economic' analysis to many healthcare issues. If you could half the amount of pain by spending twice as much, would it be worth it? Asking the patient to decide seems cruel: 'for $1000 you can have excruciating pain for an hour, or for $2000 you can have horrible pain for two hours, you choose'.
I suppose the question could be asked with all sorts of 'framing effects' too. How would the choice be changed if we offered a third choice. Or if we used a pain scale which measured pain as a reduction from the maximum possible pain, or as an increase from no pain at all?
Fascinating stuff.
Watching the video makes me wonder about the relativity of our decisions and perceptions of reality. Case in point is the feeling of pain. Phil to your point if the nurse told Ariely to expect the maximum amount of pain, then the excruciating process of getting bandages removed would've been more bearable than if he were told not to anticipate much pain. So our expectations make all the difference.
I wonder too about framing’s effect on memory. When Ariely discovered that he could’ve suffered less pain retroactively, this knowledge changes the endpoint of the pain scale and makes his experiences seem worse off than they had been originally. Since memory is constantly altered and colored by our present experiences, his investigations into pain may be sharpening his recollection of it. In other words, ignorance IS bliss. He might have been better off not remembering!
We do tend to remember things differently and expectations do matter. If I recall correctly there was one study where in one group people were being shocked and they knew when the shocks were going to come. In another group they were being shocked with a lesser voltage but didn't know when the shocks would occur. I believe the latter group reported feeling more pain!
When I joined this course , It was after viewing Dan Arieli video that I was impressed .
Having learned basic economics years ago , I certainly did not even considered the effect of BE.
Today I believe that the impact of BE in our daily choices is more than relevant .
Maybe the basic economic equations used daily should include a variable in their projections and this one should the THE EB VARIABLE
I do have a case study where I would like to hear the comments .
Please let me know when it would be the right time to present the case.
Once again thank you for the opportunity in attending this course
David