The Loss of Loss Aversion: Will It Loom Larger Than Its Gain?

“Loss aversion, the principle that losses loom larger than gains, is among the most widely accepted ideas in the social sciences. The first part of this article introduces and discusses the construct of loss aversion. The second part of this article reviews evidence in support of loss aversion. The upshot of this review is that current evidence does not support that losses, on balance, tend to be any more impactful than gains. The third part of this article aims to address the question of why acceptance of loss aversion as a general principle remains pervasive and persistent among social scientists, including consumer psychologists, despite evidence to the contrary.”

The Laffer curve for high incomes (pdf)

“Revenue-maximizing rates accordingly range between 60 and 76 percent. In five cases, the country is estimated to be on the wrong side of the Laffer curve, implying
a degree of self-financing exceeding 100 percent. The average effective marginal tax rate is 57 percent, while the average estimated revenue-maximizing tax rate is 68 percent.”

Where Do We Come From?

from: October 18, 2017 at 04:25PM

For Me To Win, You Have to Lose

“Trump’s idea of business is basically cheating. That doesn’t necessarily mean breaking the law, though Trump does plenty of that. It means making money by trickery and hard dealing in which the other party usually ends up screwed. Those just aren’t the skills that end up being effective for a President. But that’s all Trump knows. That’s why we currently have what amounts to governance via chaos and outburst. Trump doesn’t know how to be President.”

A Systems Approach to Social Disintegration

“Conventional thinking can work for straightforward problems such as healing a wound, but it is not suitable for social problems with all their interlocking features. For example, ending homelessness cannot be accomplished just by providing shelter. It requires a set of long-term initiatives encompassing changes to housing policy, expansion of support services, strengthening family structures and community cohesion, enhancing work opportunities, and so on.”

I have a message for you…

from: October 13, 2017 at 02:22PM

The excellent Kevin A. Bryan on innovation

from: October 10, 2017 at 10:13PM

SSC Journal Club: Serotonin Receptors

from: October 10, 2017 at 09:09PM

SSC Survey Results On Trust

from: October 5, 2017 at 11:36PM

Six Principles of Political Realism by Hans J. Morgenthau

  1. …politics, like society in general, is governed by objective laws that have their roots in human nature.
  2. …the concept of interest defined in terms of power
  3. …power is an objective category which is universally valid, but it does not endow that concept with a meaning that is fixed
  4. …aware of the ineluctable tension between the moral command and the requirements of successful political action
  5. Political realism refuses to identify the moral aspirations of a particular nation with the moral laws that govern the universe. […] it is exactly the concept of interest defined in terms of power that saves us from both that moral excess and that political folly.
  6. Political realism is based upon a pluralistic conception of human nature.

    …Real man is a composite of “economic man,” “political man,” “moral man,” “religious man,” etc. A man who was nothing but “political man” would be a beast, for he would be completely lacking in moral restraints. A man who was nothing but “moral man” would be a fool, for he would be completely lacking in prudence. A man who was nothing but “religious man” would be a saint, for he would be completely lacking in worldly desires.

    Intellectually, the political realist maintains the autonomy of the political sphere, as the economist, the lawyer, the moralist maintain theirs. He thinks in terms of interest defined as power, as the economist thinks in terms of interest defined as wealth; the lawyer, of the conformity of action with legal rules; the moralist, of the conformity of action with moral principles. The economist asks: “How does this policy affect the wealth of society, or a segment of it?” The lawyer asks: “Is this policy in accord with the rules of law?” The moralist asks: “Is this policy in accord with moral principles?” And the political realist asks: “How does this policy affect the power of the nation?” (Or of the federal government, of Congress, of the party, of agriculture, as the case may be.)

Different Worlds

from: October 4, 2017 at 05:42PM

VAT — full text

from: October 4, 2017 at 04:59PM

From Political Ignorance to Political Polarization

“Each of us knows that we aren’t villains, or crazy, or liars, or evil. Uncharitable accusations work only when applied to the other side. But unlike uncharitable interpretations of the other side’s mistakenness, charitable interpretations can apply to ourselves. Each of us knows that we can make logical errors and that we aren’t omniscient. Nobody’s perfect. So if logical error or inadequate information may explain the views of our political opponents, logical error or inadequate information may also explain our own views. It’s hard to hate one’s political opponents if they, like we, are merely victims of their humanity.”

Book Review: Mastering The Core Teachings Of The Buddha

from: September 18, 2017 at 08:24PM

The Gender Gap in STEM is NOT What You Think

from: September 12, 2017 at 03:01PM

Book Review: Surfing Uncertainty

from: September 5, 2017 at 10:42PM

The Endowment Effect

from: August 24, 2017 at 04:30PM

Stubborn Attachments

Tyler Cowen: “A sufficiently long time horizon will favor growth over redistribution even if we are counting only the interests of the very poor in the social welfare function. The benefits of radical redistribution are one-time in nature. We can try to equalize all wealth today, but we would not be able to draw on comparable resources for the next generation. Such a widespread collective redistribution would lead rapidly to negative economic growth. In contrast the benefits of economic growth will compound over time.”

Model hallucinations

“Any time that the mind encounters such a flow of feelings and perceptions, it irresistibly attributes them to some underlying entity that accounts for what’s going on. Just like the play of colours and shapes makes us see a bus careening towards us on the street, when happiness gives way to sadness, the mind infers that ‘someone’ (me) must have experienced a loss. The result is a model of a unified entity that allows us to act, think and interact – especially with other people – coherently and effectively. Self-modelling is simply an optimising strategy that allows us to bind together certain properties of the world so that they’re easier to grasp. By striving to maximise predictive success, the mind irresistibly succumbs to the substantialist temptation.”

Contra Grant On Exaggerated Differences

from: August 7, 2017 at 09:37PM