Stealing Wheelbarrows

There is an anecdote told by Slavo Zizek about a factory boss who was certain that one of his workers was stealing something from the factory. He hires some detectives who monitor the particular worker. Every day at closing, they see the worker leaving the factory with his empty wheelbarrow and, despite inspections, they never pin anything on the guy. Eventually, the detectives figure out that the worker is stealing wheelbarrows from the factory.

I have been thinking about this during the week as the vast majority of Irish public attention was dominated by a story about our Taoiseach (prime minister) sounding hoarse on an early morning radio interview (the implication being he had a hangover from a political social event the night before). This comes at a time when staggering sums of money are being transferred from the state to private banking institutions. Increasingly, behavioural economics is beginning to look at coarse thinking and attention processes as underlying distortions in political markets. It is worth thinking about how media cycles are working in the current recession in Ireland and the extent to which they are helping to draw attention to the major issues that will affect our welfare or conversely crowding out critical thought and attention to these issues.

As well as attention, the media is used as a tool of persuasion for different interest groups, again something that is being looked at more and more by people in behavioural economics research (see e.g. Shleifer's IDEAS page). Karl Whelan on irisheconomy has been doing a good job throughout the last two years of pointing out how plainly absurd arguments for large scale policy are trotted out routinely in the course of this financial crisis. One line of inquiry that needs to be developed further in the Irish case is how arguments for massive transfers from the state to private institutions are framed and the techniques used by proponents to hide huge damage in plain sight. An analysis of the stated positions of various interest groups on the Anglo bailout would be a good place to start. In general, the extent to which readers can gain access to unbiased news stories is discussed in this paper by Shliefer and Mullainathan.

Framing on Seinfeld

Frames and brains: elicitation and control of response tendencies

Using magnetic resonance imaging, De Martino and colleagues investigated the neural signature that is associated with decisions between small sure amounts of money and large riskier amounts when the framing of the outcomes is varied. We interpret their results within a dual-system framework, in which different frames evoke distinct emotional responses that different individuals can suppress to various degrees. The study advances the integration of brain imaging results into cognitive theory.

Kahneman and Frederick (2007)

Human choices are remarkably susceptible to the manner in which options are presented. This so-called "framing effect" represents a striking violation of standard economic accounts of human rationality, although its underlying neurobiology is not understood. We found that the framing effect was specifically associated with amygdala activity, suggesting a key role for an emotional system in mediating decision biases. Moreover, across individuals, orbital and medial prefrontal cortex activity predicted a reduced susceptibility to the framing effect. This finding highlights the importance of incorporating emotional processes within models of human choice and suggests how the brain may modulate the effect of these biasing influences to approximate rationality.

De Martino: Frames, Biases, and Rational Decision-Making in the Human Brain


The Kahneman 'Trends' article demonstrates the cross-talk between several areas of psychology and how they can relate to economic decision-making. In general we are talking again about dual-systems models of human behaviour. This is a given at this stage in the research and different versions have been proposed by Loewenstein in a working paper with Ted O'Donoghue, in several neuroeconomics papers, and most comprehensively in the Reflective-Impulsive model of Social Behaviour proposed by Strack and Deutsch in '04.

The model of the brain that is suggested is an emotional/impulsive system which primes motivational tendencies of approach or avoidance. These responses are monitored largely through the anterior cingulate cortex which recognises conflict between the emotional/impulsive system and the more reflective/deliberate system. Self-regulatory resources have been proposes as the source of the power for the deliberate system.

In relation to framing effects, we must be able to monitor our emotional reactions (ACC monitoring amygdala) in order to inhibit an impulsive tendency (the action of the prefrontal) and we must have societally induced standards to work from in order to do this (no specific brain area to my knowledge). Some specific words are likely to prime motivational tendencies of approach or avoidance (e.g. 'keep' or 'lose'). If we have a good reflective system and our regulatory resources are available we should be able to use deliberation to come to a mathematically rational conclusion.

Framing effects, like the implicit association test, are a good way of testing the influence of an automatic system. Introducing response time pressure would probably have similar effects as would depleting self-regulatory resources prior to economic decision-making.

An interesting finding which is touched on in the Kahneman paper is that the concordance of a response action with a motivational tendency evoked by a stimulus is important. So pulling a lever towards oneself is easier if you are responding to a positive word (e.g. gain) where as pushing a lever away is easier if you are responding to a negative word (e.g. loss). If we compare response times of people doing this and those forced to do the opposite we have a measure of the magnitude of the active component of the framing effect which would be a good accompaniment to an economic decision-making task involving framing.