[url=http://www.washingtonpost.com/politics/romney-health-care-mandate-is-a-tax/2012/07/04/gJQApL8XNW_story.html?hpid=z2]Here’s a related bit of semantic quibbling, from our buddy Mr. Romney, who declared the mandate a tax today:
I feel like these people need to have a conversation with Lewis Carroll.
Actually, I’m not happy with my post #79, and would like to have given the reply of LHoD’s post #80 instead. The salient issue isn’t whether taxes paid went up or down and for who; the salient issue is whether achieving the exact same effect by another name would have been more acceptable.
It’s all yours!
That seems the difference between us. In that case, here is a partial list of mundane magics we can do.
There are others, like Multidimensional Kinesis, the Eye, and the Ultimate Power. There is not one baseline here, not one inherently valid way of looking at things. There are psychological differences, but they are logically equivalent. It’s up to each of us individually to decide whether these things are mundane or magic, commonplace or profound.
But I know which frame I choose.
I’m not entirely clear what that link has to do with the discussion. But I am entirely clear that it’s AWESOME.
Next you’re going to tell me that math proves that certain web pages can simultaneously be totally insane and the most sane possible at the very same time, depending on how one frames his reference.
I’m just going to stick my neck out there and say that the dude who wrote that stuff is bonkers.
Cool story, bro.
I’m not sure of your question. Are you asking that since I don’t believe that taxes should be used to control behavior then it logically follows that the child tax credit must be unconstitutional, no matter if it is structured as a penalty or an incentive? I’ll make sure this is what your contention is before I type out an answer. 
The importance of these things is that they have significant policy implications. If you are assuming rational behavior, and people don’t work that way, you are not going to get the results you expect. I’m not sure about this exact example, but defaults make a lot of difference in participation on 401Ks and in organ donation.
When we teach behavioral economics for engineering we do an anchoring experiment. The effect is so strong that we repeatedly get statistically significant results for only 20 subjects.
As for dollar versus gold, does Ron Paul really understand this?
Yeah, he is. I wish I could say this is the first Yudkowsky piece I have tried to read. Am not a fan.
I don’t think the problem is that people are unable to cognize abstractions. It’s that people disagree on when abstractions are appropriate and when the actual meaning of words matters. Quantities may be equivalent in formal models of taxation just as it is possible to frame speech as some kind of magical activity. But both of these sleights of hand are highly questionable and should be used only when there is some gain. There is real information loss in both abstraction and in pretending that two words that connote very different things are equivalent because they share some common property (i.e.,speech and telepathy because they both involve communication of thought). This is a kind of sophistry that most people rightly find irritating and uninformative. Likewise whether a question is framed as a tax, a penalty, an exemption, whatever has real consequences because these words themselves connote different things. They are not simply interchangeable because they all involve increasing or decreasing one’s money. People occasionally care about normative questions. People are certainly not incapable of abstract thinking but that they recognize that there is important information coded in language that cannot just be lopped off when it is inconvenient. Some of us, myself certainly included, have a strong preference for abstraction even when it is not entirely appropriate. This invites the kind of sophistry in the linked piece and the kind of semantic frustration that I think is going on here and there in this thread. It is a very open question whether people ought to use more abstract thinking or whether those of us already prone to it should be more sensitive to the details.
What might be an example of how the connotations lead to real consequences, even if the amounts people have to pay in various situations are exactly the same?
Isn’t that a false dilemma?
Shouldn’t we be telling the abstractionist “well and good, but don’t forget you need to communicate this to people in a way they can connect with” while at the same time telling the non-abstract thinkers “you’re missing out on a lot of possibilities by demanding that things be communicated to you in a way that connects with you”…?
I am taken aback, btw, at the strong negative reactions to the “superpowers” link.
I thought it was, at least, amusing. And even in its way a decent illustration of the effect of framing.
“Bonkers?” I don’t even have the first clue why someone would think it “bonkers.”
Well, people are extremely loss averse, for one. Studies have shown that people will go farther in their actions to avoid losing something they have than to gain the same amount. So a penalty, in this regard, would be a stronger motivation than a credit.
But loss-aversion presumably means hypothetical people who have $100 will put more effort into avoiding dropping to $80 than they will into climbing to have $120.
That’s fine. But that’s not the salient issue. The salient issue is a situation where a person is given a choice between having $100 and having $80, under various conditions, and the only difference is whether the $100 or the $80 case is framed as the default.
Are you saying, for example, people who have $100 will put more effort into avoiding dropping to $80 than people who have $80 will put into climbing to $100? That is, if I took a person with $100 and said “You could either run two miles and keep your $100, or you can pay me $20 and avoid running; it’s your chioce”, they would happily run the two miles, but if I took a similar person with $80 and said “You can either do nothing and earn nothing, or you can earn $20 by running two miles”, they will decline the run?
Well, that’s quite possibly true, but it’s an example of what I would happily consider foolishness in people’s decision-making process. Yes, it behooves the offerer to communicate their offer in such a way that people respond optimally to it, exploiting or defending against foolishness as need be. But if the offerer fails, for whatever reason, to choose the framing of their offer that would lead to greatest popularity, intelligent people should not denigrate the offer, qua offer, merely for having not been marketed better.
It matters self-evidently because of the number of people who get this thought experiment “wrong” and who resist its characterization. I’d argue that it further matters because there are non-tax implications to policies that define whom we penalize as deviants and reward as exemplars. Whether people view our major social choices and their accompanying language as nothing more than an incidental basket of individual little incentives and penalties or statement of more general underlying social preferences and ideas of fairness enshrined in institutions and rules is an empirical question. But I am going out on a limb to assert that a lot of people really do care about the latter. And all things being equal, I don’t think that people like to be penalized for things. We could probably figure out some scheme to incent people not to kill or steal instead of punishing them when they do that might yield the same rates of criminality in expectation. But punishing the guilty is probably more effective because like I said, people (sociopaths excepted for whom no scheme would probably work) hate to be punished.
Abortions for some, American flags for others.
I suppose I am a little bit jealous, all told. The author has a knack for taking simple ideas by other people, wrapping them in pretentious language, and repackaging them. Deep down, I’d love to be a well-paid hack.
That’s exactly what I’m saying. I’m pretty sure there is ample data to back this up. People very rarely in purely mechanical ways, maximizing returns for their actions. If you want someone to do it, it seems the best way to make that happen is to give them something and then threaten to take it away if they don’t do what you want. Whether this should inform policy or not is another question, but we can’t just assume that just because the math is the same that the effects will be the same.
I think there are also significant differences regarding how the transaction is carried out - people react differently to cold hard cash in their hands vs. credits/debits to their account (and even less to future payments/credits).
I actually think there has been some work in this area - cops rewarding people (youth in particular) for not committing crimes. I believe initial results were actually somewhat promising.
There was also a story recently of schools trying out paying students for test performance. Turns out the kids to significantly better on exams if you give them a small amount of cash before the test with the agreement that they have to give it back if they don’t do well. Better even than if you just tell them you’ll pay them if they do well.
I just did a quick search of the literature and it suggests very mixed results. In some large studies incentives had no effect on recidivism rates. This doesn’t say that the idea is impossible, since obviously the incentives might have been misaligned with the population.
But on some level I think a lot of people reject the idea that we should be paying people not to commit crimes, regardless of incremental gains in social welfare. They have that not so crazy belief that social rules should reflect their own views about fairness and justice.
There was also a recent study that showed that if you give kids five minutes to write about their feelings before the exam, it improves their performance as well. There might be something to this, but in general, I am very skeptical of the experimental literature.
Yeah, it’s definitely been mixed. Humans are complicated, and attempting to influence behavior is difficult at best. Whether it’s even worth trying is an entire separate discussion.
Right. It goes to the heart of complaints over generous social safety nets as well - paying people not to work feels unjust somehow, even it it actually increases prosperity for everyone else. There’s plenty of social science on this effect as well - that people will voluntarily reduce their own reward in order to punish people that cheat the system or somehow violate the rules.
Interesting. I hadn’t seen that one. It doesn’t seem implausible (nor does the one paying the students). Your giving the student a reason to think that they matter as individuals rather than just cogs in the school machine.
There does seem to be something wrong with the current incentive structure for schooling - there is little real-time punishment for doing poorly and any incentives for doing well are often years removed as well. Cutting down the length on the feedback might not be a bad idea, whether that’s emotional rewards or financial ones.