Wednesday, November 11, 2015

Remembrance + Bob Shiller

Planted a remembrance poppy cross in memory of my great-aunt Susie Slade who was killed in the war flying a damaged plane back to the factory. It is thanks to her that we have the family house in Cornwall.

She and her sister Betsy (my grandmother) flew down in the 1930s (1936 I think) to stay with a friend who was also a pioneer aviatrix - daughter of the first man to win a VC in the air.  As they approached the landing field they saw a crashed plane and when they landed their hostess arrived with a black eye.  But the plane was made of wood and canvas and quickly patched up. My grandmother and her husband fell in love with the place, bought  a plot of land from the local farmer and built the house my mother now lives in.

Last night went to Bob Shiller to hear him speak at the British Academy about his new book Pfishing for Pfools . He said that this was the second book he and Akerlof had co-authored, despite the adage that co-authorship usually ends in divorce. He was particularly motivated to debunk the myth of a "utility function" and the "Fundamental Theorem of Welfare Economics". Pareto himself moved away from talking about "utility" and there is a lot of evidence that this just isn't how people think and work.

Bob said people are not very good at knowing their own pleasure, and mentioned the fact that people who are asked to hold their hand in a glass of iced water for 60s rate the experience as worse than those who hold their hand in a glass of water for 90s which is at the same temperature for 60s and then somewhat warmed. On the other hand this may rather be evidence that pleasure and pain are not simple opposites and are highly context-dependent.

They quite rightly rail against the evils of slot machines which are becoming more and more sophisticated. All the examples they quote are thought-provoking. But there is a continuum between the downright illegal and evil to the mildly questionable and possibly more could be done to disentangle the different cases. I'd love to have a dinner with Bob and Onora O'Neill!

He also said that he and Akerlof had cut lots of the book, and one important part that was left out pointed out that Pfishing scams were even worse in non-free market societies. People may get the impression that they are attacking the free market rather than pointing out the limitations of free market fundamentalism.

I asked him about Pfighting back and we discussed some ideas briefly, but I had to rush off so no time to chat properly.

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