Last time, I tried to show the larger implications of our fondness for Monk. This time, I want to take the argument one step further, this time right into the teeth of economic assumptions. (This is no idle metaphor. I have no illusions about the limits of my knowledge when I tread on the patch of another discipline especially one so productive of illumination as the field of economics.)
The argument so far:
1) popular culture shows a new sympathy for those afflicted with psychiatric symptoms (i.e., Monk),
2) we are inclined to suppose that a range of psychiatric conditions somehow apply to ordinary individuals,
3) this is, I think, a symptom in itself. It seems to me we are now rather frantically casting about for ways to characterize reformations and deformations of the self as these are occasioned by a newly dynamic world,
4) we would do better to start again, cast off the DSM paradigm, and look for a new model that does a better job of capturing how and why the self is changing (and just say “no to the pathologizing),
5) complexity theory offers us one new model for the self. It says that any creature is more adaptive to a dynamic environment when it allows a new complexity, multiplicity, messiness, and changeability. The new symptoms of the self are, in this view, adaptive responses to the world. Indeed, they are the very structural characteristics we would expect the self to assume as it learns to live with a highly various, changeable and unpredictable environment. In order to live in his world, we are taking on the characteristics of the world.
6) one of the characteristics of the human CAS is, I think, the ability to entertain simultaneously a number of “preference registers and the ability to skip back and forth between them. (I used as my example here a friend of mine who has three bosses, one coming, one going and one competing, and she must entertain all of their different points of view, when she is on the job and know when to evoke one and suppress the others, or how to finesse all three.)
I see now that this has some interesting implications for economics. Thanks to Prestopundit, I read a post by Donald Boudreaux. Donald makes the following point about ‘transitive preferences.
Preferences are transitive when the following is true: If John prefers apples to bananas, and if he also prefers bananas to cantaloupe, then John prefers apples to cantaloupe. Despite the hoity-toity jargon, the concept is straightforward. It’s also an assumption that clearly applies to everyone.
Heres the problem. If the newly complex consumer is entertaining multiple registers of taste and preference, it is possible that s/he will prefer, to use Dons example, apples at one moment and cantaloupe the next. Or to use a more concrete example, lets take Brooks interesting book Bobos in paradise. Brooks suggests that baby boomers are cultivating a very particular duality of self definition. Sometimes they see themselves as bourgeois. Sometimes they see themselves as bohemian. In the first instance, one set of preferences applies. In the second, a very different one does. Still more concretely: sometimes we eat out at the most sophisticated and expensive Italian restaurant, sometimes we prefer a humble coffee shop.
This is another way of saying that not only is there a variety of taste and preference across consumers, there is a variety within any given consumer. This variety doesnt only come from the lifestyle hybridization of the kind that Brooks identifies. It can come from the archeological accumulation of preferences that build up in each of us. We have our present tastes and preferences, but because we are moving through an ever more rapid change in these tastes and preferences, it is not unheard of for us to return to recent patterns for a moment. We could call this nostalgia, but this is a term that is now so outdated it has a certain nostalgia of its own. It posits one set of former tastes and preferences that we return to occasionally. The archaeological model says, no, actually we end up slipping back and forth between recent patterns without a passage “down memory lane. We are not so much “going back in time as we are skipping about in our near history. The concrete example: until I hit the cooler at my local grocery store, I am not certain whether I will reach for Becks, a long time favorite, Keiths, a new enthusiasm, or Molsons, a favorite of the middle term.
I dont know what to do with this. And of course I understand that it is, as my father would have said, a “mugs game to point out inconsistencies in the economic paradigm. In point of fact, this paradigm remains so robust as to put the rest of the social sciences to shame. (It never ceases to amaze me when my McGill students, who are anti-economic to a man and a woman, will happily and with no sense of contradiction engage in economic man behavior.)
But I think this might be a “muddle in the muddle as the late University of Chicago anthropologist David Schneider used to say. And if I am right to think that as the world becomes more various, as choice becomes more multiple and as the consumer cultivates or endures more and more taste and preference registers within, we are looking at a problem that will not go away.
Notice that I am not saying that the consumer has ceased to be rational. Merely that he or she has several rationalities going on at any given moment. Somehow we have to take account of the many compartments of taste and preference within the consumer.
References
Boudreaux, Donald. 2004. Sound Assumptions. Tech Central Station.
http://www.techcentralstation.com/062104A.html
Hey Grant,
I want to point out a couple things about Professor Boudreaux’s example and your use of it. The first deals with that old economist chestnut: ceteris parabis, and the conditional tense. The second, related, point is a little more exploratory, but I think it’s germane to the question at hand, the choice between possible worlds.
First, the example Boudreaux presents is a simplification of the actual principle of transitivity. The important simplication is in the tense. He says “If John prefers apples to bananas,,” A more rigorous formulation might be:
When faced with a given decision problem, at a given time, with a given fixed existential situation (all else equal), John _would prefer_ apples to bananas. In the _exact same situation_, with the sole exception of the choice presented, John _would prefer_ bananas to cantaloupe. The axiom of preference trasitivity then leads us to concludes that if John had been faced with that same situation but with the choice between apples and cantaloupe, he _would prefer_ apples.
Now this may seem like nit-picking, and in empirical work we loosen a lot of these assumptions, but it becomes really important when trying to theorize. Because how often is a person faced with the exact same set of initial conditions? In it’s strongest form, the axiom of preference transitivity is just that, an axiom, because it is completely unfalsifiable. An argument against axioms because come as an attack of the conclusions that follow from them, and that seems to be one of the things that you’re up to in this piece.
It is important, then to be clear what exactly follows from the axiom. It does not, for example, follow that if you prefer Molson to Keith’s today and Keith’s to Beck’s tomorrow, that you’ll prefer Molson to Beck’s on Friday. If I were better educated I’d know who said that you can never step over the same stream twice, but my ignorance doesn’t make it any less true. Likewise, I doubt you ever make the same decision twice.
So what good is a theory that can’t make simple predictions like beer preferences? It’s not to great by itself. But when combined with other assumptions economists usually make, you can build up a theory of decisions that is faily robust and helpful in understanding a lot of situations. I’ll let the pudding of economics be my proof in this instance.. now is not the time for this argument.
So what, then, of possible worlds? Well, a better way to understand the dificult, complex, decisions the seem to characterize the modern world might be to throw out all this talk of apples and bananas completely, and move to a higher level of analysis. I think it’s a mistake to drop the useful model of preference maximization, we don’t want to throw the baby out with the fruit. Instead of choosing between an apple and a banana, think instead of choosing between a world with a certain characteristics, including a banana in my pocket (world A) and a world with identical characteristics , except with me having an apple in my pocket (world B).
The different (higher?/broader?) perspective gained by forming the question in this way avoids confusing today’s decision with tomorrow’s. After all I’m now choosing between two completely different worlds: world C (with banana) and world D (with apple). There will certainly be similarities between the A/B choice and the C/D choice, but now no one would say they are identical. (We could further theorize, of course, about what sort of comparison rules you can make. Can you, for example, drop common characteristics to simplify the decisions? Maybe even to compare A and C?)
Applying this perspective to your friend’s decision problem allows us to view her preference structure as consistent, if exceedingly complicated. Surely she builds little models to help with these decisions, instead of surveying every aspect of the possible worlds, but these models are heuristics with the aim of approximating a (world)preference maximizing decision.
Alas, I seemed to have wandered fairly far afield this time. Well, see what you can make out of what I’ve said already.. give me some comments back and maybe I can try to give a little more on the problematic parts.
Patrick, thank you for a magnificent post. But you’ve got me, pushing me to the very edge of what I know about economics and right over. Your comments are interesting but, to evoke the Balinese metaphor for stupidity, they leave me feeling like a water buffalo listening to a symphony. I don’t really get it. Especially, I don’t see that you get at what is for me the big problem here: how it is we account for the back that economic actors use several, different registers to make their decisions. But that’s just me, I’m sure. Thanks again. Grant
I think part of what I’m trying to get at is that a tricky economists (and I’m certainly tricky, if not quite an economist, yet) could take your complaint and just move to a higher level. Ok, people have different registers, or different “selves.” Well, we can just model their behavior by positing some sort of uber-register or uber-self that, when faced with a given existential situation, chooses the most appropriate “self,” or the set of preferences which are more important to maximize in that situation. How does he judge between selves or between preferences? An economist is agnostic about that: we only require that the uber-preferences (preferences about preferences? metapreferences?) follow certain rules, such as the axiom of transitivity.
Note, also, that an outside observer (and maybe even the chooser himself) as no access to this uber-self. We only see actions.. he only sees preferences. So this sort of situation might look very similar to that of competiting selves, from the outside. Why prefer my account to yours? Well, if we hold on to a unitary preference maximizer, we get most of modern economics for free. The results following from the CAS account of personhood and decision-making are not (yet) so fruitful.
Patrick,
The water buffalo thanks you. Much clearer. You have a gift for exposition. Thanks.
So this is, it sounds like, a difference that makes no difference. What concerns me is that the same study performed at only marginally different times could catch the consumer in preference A or B and the outcome would be skewed. And here the difference would a difference.
And there is a problem here to do with the architecture of knowledge. If the model climbs ever upwards to protect its assumptions, it begins to take itself out of real explanatory range. Increasingly, it is only good at explaining the general and less and less good at explaining the particular.
This is not to say that I disagree with you. It is a very interesting comment and a useful part of this water buffalo’s education.
Thanks again, Grant
Patrick’s analysis is quite clear and incisive, but I would like to add another way of looking at the problem of individually varying choices over time. One can easily postulate state-dependent preferences, with an important state being my recent consumption history. It is then fairly easy to model a taste for variety as diminishing marginal utility of any given brand over time. In other words, I have one set of consistent preferences that always gets tired of Molson if I’ve consumed a lot of Molson’s lately.
This is even simpler than the meta-preference model proposed by Patrick, and even has some basis in psychology (habituation). A model like this can accommodate an intrinsic (state-independent) preference for one brand over another as well as brand addictions (past consumption increases marginal utility of consuming the same thing). So before going to multiple selves, I’d want to look at simple dynamic preferences of this sort.