Value Competition

Is Tiger Woods Irrational?

There's a nice article in yesterday's NYT highlighting a study by two Wharton professors, Devin Pope and Maurice Schweitzer, who found that pro golfers were about 3% more likely to make par putts than birdie putts from the same distance and were more likely to leave birdie putts short.  Over 72 holes, the "playing it safe" bias on birdie putts cost top players an average of a stroke per tournament , which works out to a $1.1 million average difference in  prize money for the top twenty players on the tour, all of whom showed the tendency to make fewer birdie putts than equally difficult par putts.

It's a nice paper, which deals with most of the obvious objections and some of the non-obvious ones as well.  (For example, Pope and Schweitzer show that the "playing it safe" bias is not compensated for by an increased probability of making the next putt and that the lower percentage of successful birdie putts at a given distance is not accounted for by their being on more difficult positions on the green.)  Assuming for present purposes the validity of the paper's empirical results, I have one minor issue, and a second, more fundamental issue with the claim that the golfers are acting in a suboptimal way by treating birdie putts and par putts differently.  First, the secondary point: Considering that the paper is entitled, "Is Tiger Woods Loss Averse?", I wish there had been some discussion of how less aggressive putting for birdies by a player clearly superior to his peers makes some sense, since being in position for a birdie gives Tiger a modest signal that he is on his game and therefore has a strong chance to win the tournament, while putting for a par is a modest signal that he may not be on his game and therefore needs to putt more aggressively to have a good chance to win.   Even though that reasoning wouldn't justify anyone but Woods playing it safe as a strategy to win a tournament--and might well not justify his actual degree of conservatism on birdie putts--given that the 188 PGA players studied rose from high schools and clubs where they were probably far superior to their peers, they may in their heart of hearts think of themselves as Tigers and play in a way appropriate for him but not for them, especially if they are also risk-averse and play to do acceptably in the tournament rather than to maximize their expected prize money.

Next, my more fundamental issue.  I strongly suspect that the apparently suboptimal difference between how pro golfers deal with birdie putts relative to par putts is part of a package in which apparent irrationality in the form of pattern-oriented, category-based behavior on par and birdie putts is conducive overall to the best level of performance of a complex physical and mental act.  In their putts and other shots, pro golfers are able to overcome problems of overconcentration as well as underconcentration, of excessive attention to a goal as well as insufficient attention, of blending the conscious and the unconscious, in a way that weaker golfers are not.  Doing so may well involve pattern-oriented behavior such as treating birdie and par putts slightly differently, which incurs some cost taken by itself but which contributes to the overall high-performing equilibrium of the pro golfer.   Effectively countering the "yips" and the internal tension between duty--"you must make this putt"--and letting go likely involves some degree of pattern-oriented, category-based conduct like different behavior on birdie and par putts.

The problem with my problem with Pope and Schweitzer's paper is that, without more, it amounts simply to a "the pros play optimally" assertion.   One way to test my claim would be a study of whether pointing out the "play it safe" bias to pros improves their performance relative to a control group of pros who don't hear about the bias.  I would say no. (Good luck to anyone in getting pro golfers to cooperate with such a study...)   Another way to make the claim better is to specify better how the calculating side of the brain if unchecked by a pattern-oriented side will run astray.   That better model may itself have problems with testability, but would move the discussion beyond a simple assertion that the pros are rational after all. 

One way to start constructing a better specified model: Suppose optimal putting depends on an optimal blend of conscious and unconscious factors.  Calculative reasoning is always in danger of allying with the conscious side and bringing on the yips.  Pattern-oriented principles, even if flawed in themselves, help counter that unfortunate tendency of calculation, and can do more good than harm. 

Another sport in which I believe that top level players could be shown to behave less optimally in some situations than others is baseball; my intuition is that pitchers could be shown to waste the next pitch more than is optimal on 0-2 counts, given the pitcher's command of the strike zone as shown by their behavior on other counts.   (The analysis would be trickier than with the golf study because it is indeed rational to waste the next pitch somewhat more on 0-2 than other counts.)  I suspect the psychology here is similar to that in golf, in that "relaxing" on the 0-2 pitch and the birdie putt are behavior that is sensible overall given the workings of the human brain and body, though irrational if taken in isolation.

The Positional PD in Economics and Culture

Robert Frank and others have made the argument that income is a positional good that leads people into a PD rat-race: If everyone pursued it less, we could all be better off, but everyone has an individual incentive to push ahead of one's peers.  The policy implication is an egalitarian, redistributionist one.

The positional PD model can also be applied to education.   Assuming that liberals who favor the positional PD as a basis for a strongly progressive income tax do not favor it as a basis for high taxation of education, or other measures to discourage an educational rat-race, why not?   is there an inconsistency that supports a skeptical perspective that sees liberalism as adhering to different principles on economics and culture (or a different skeptical perspective that sees liberalism as the reflection of the interests of a highly educated elite)?   Liberal willingness to redistribute on the basis income but not education can be defended on utilitarian grounds, but the basic two-part, Rawlsian statement of liberal principles proposed in the last post does not justify the different treatment of the two cases on non-utilitarian grounds.  That leaves open the question of whether there is a more nuanced statement of liberal principles that does work to distinguish the cases.

Defending Liberal and Conservative Consistency

Two attempts at stating liberal and conservative principles that apply to both economic and cultural issues--

Liberal principles: First, government and society should support individual freedom in economics and culture over compulsion or moral pressure, both because doing so is correct in itself and because freedom brings about a better economy and a better culture; second, government and society should support compulsion or moral pressure to reduce inequalities in economics and culture that are unfair and/or reduce utility under the principle of diminishing marginal utility.

Conservative principles: First, government and society should support right action--overriding impulse in favor of judgment--in economics and culture, which may involve compulsion or moral pressure, both because doing so is right in itself and because right action leads to a better economy and a better culture; second, government and society should avoid compulsion or moral pressure to reduce inequalities in economics and culture as long as such inequalities are an outcome of a fair process.

Assuming these principles are an acceptable shorthand for what liberals and conservatives believe, do they explain the flipped stances of the sides on compulsion in the economic and cultural spheres?  I believe so, in that liberals can say they support inequality-reducing but not inequality-increasing uses of compulsion while conservatives can say they support virtue-enhancing but not virtue-reducing uses of compulsion.  To undermine the defense of liberal consistency, one would want to show that liberals will support inequality-reducing compulsion in the economic sphere but not in a comparable case in the cultural sphere.    Similarly, to undermine the defense of conservative consistency, one would want to show that conservatives will support a virtue-enhancing intervention in the cultural sphere but not in a comparable case in the economic sphere.

A Flipped Prisoner's Dilemma: The Need for Hierarchy

A and B are engaged in a venture--which could be a non-profit one as opposed to a business--in which there is free exit and benefits to be gained from mutual cooperation.  Although the relationship is long-term, so uncooperative behavior can be punished, such lack of cooperation is imperfectly observable.   Given this background, there is a PD-based case for managerial hierarchy rather than equality between A and B, with one party having the right to monitor the other's behavior for lack of cooperation and to remove the other from the venture, with these rights being backed up by the coercive power of the state. 

This culturally-oriented case for internal hierarchy parallels the case for external hierarchy in the standard exchange-oriented PD.   The political valences are reversed, though.  In the standard PD, it is liberals who are more receptive to the case for government intervention to respond to the PD and conservatives who are more skeptical about the broad application of the model.  In the flipped cultural PD just given, it's reasonable to posit that conservatives would be more receptive to the model's case for hierarchy and that iberals would be more skeptical of the model.  Assuming that's the case, we have some support for the proposition that liberals and conservatives shift their positions on compulsion to support cooperation, with liberals being more receptive to it in economics and conservatives being more receptive to it in culture.   That leaves open the question of whether a principled position for liberalism and/or conservatism can be identified under which the different stances on the two PDs make sense given those principles. 

Testing the Hypothesis of a Culture-Economics Flip

Suppose it is the case that modern liberalism and conservatism are unprincipled in the sense that they change positions on freedom, equality, and utility according to whether the issue falls into the economic or cultural domain, with liberals favoring equality on economics and freedom on culture (and a large pie in culture and an equally divided one in economics), while conservatives favoring the reverse.

Now suppose we flip the basic stories/models of economic exchange--the prisoner's dilemma/tragedy of the commons, supply-demand equilibrium, comparative advantage, asymmetric information/lemons, the Coase Theorem, etc.--to turn them into cultural stories involving long-term relationships or non-pecuniary activities.  If the hypothesis of a culture-economics flip is correct, then the cultural stories/models should feature a side-switching, with liberals and conservatives who were on one side for the economic models changing sides for the cultural model.  If the hypothesis is not correct--say if the logic of liberalism is to support underdogs in culture as well as economics--one would expect all else equal that the sides would not shift.

The Decline of Economic History

According to an American Historical Association survey described in the NYT, the percentage of American history departments with an economic historian has gone down from 55% to 32% from 1975 to 2005; diplomatic historians and intellectual historians are also less broadly represented than they once were. One question: Has the decline in economic history in history departments been made up for by an increase--in numbers if not in percentage representation--in economics or business departments?   My guess is that the large expansion of business education at the undergraduate and graduate level over the last generation has led to the hiring of more economic and business historians than in 1975; the counter hypothesis would be that business faculties have grown increasingly dominated by a scientific model of appropriate research, resulting in no increase or even a decrease in the hiring of economic and business historians by business programs. 

Efficiency Modeling in the 2009 AEA Conference

The May 2009 issue of AER consists of a selection of 2009 AEA conference papers.  How many of them engage in efficiency modeling?   Of the first 53 papers (from the Ely lecture by David Card to the Lee and Moretti paper on prediction markets, only 6 do efficiency modeling; 4 others are devoted to modeling but not efficiency modeling.

A Fehrness Model

The new issue of AER has a short behavioral econ paper by Bartling, Fehr, Marechal, and Schunk on egalitarian attitudes and competitiveness.  German mothers chose between payoffs to themselves and an anonymous other of 10:10 or 10:6, 10:10 or 16:4, 10:10 or 10:18, and 10:10 or 11: 19.  95 of the 118 subjects chose 10:10 in the first two games in which the egalitarian 10:10 choice was the efficient or neutral choice; 88 out of 95 did so in the second two games in which the egalitarian choice was inefficient.

An outline for a model of how having one player who is known to be an egalitarian ("prefer a minimum difference between payoffs") and one player who is known to favor equity ("prefer a maximum difference between payoffs in order to reflect difference in contributions") can contribute to the two players making efficient choices between social processes: 1) assume the payoff differences between the players for the two choices (0 versus 6 in Fehr's first scenario), but not which player will have the higher payoff, are known prospectively; 2) assume the efficient choice is made if it is known; 3) assume if the efficient choice is not known player 1 decides between the choices; 4) assume efficiency is discoverable prospectively only with a costly investment, which has a value for the two players exceeding its cost but is in the interest of neither one to make; and 3) assume the costly investment is rational for player 2 to make if player 2 knows that player 1 will pick the egalitarian choice and if player 2 values equity OR if player 2 knows that player 1 will pick the inegalitarian choice and player 2 values equality. 

Given the foregoing conditions, the costly investment to determine which choice is optimal will be made when one player is egalitarian and the other is equity-oriented, but not when they share value-orientations or lack them.