Meet your elephant: More dual-self behavioral economics concepts

1. Meet your elephant:More dual-self behavioral economics concepts

2. Review At this point, we have a whole host of descriptors for each of our two systems.

3. Examples so far of dual-self models in behavioral economics Short-term/impulsive Doer Passions Affective/Visceral Hot state

4. In fact, we could keep going� �In this paper we provide a new model of consumption-saving decisions� Agents have the ability to invoke Automatic processes that are susceptible to impulses or temptations, or alternative Control processes which are immune to such temptations.� J. Benhabib (Professor of Economics, NYU) & A. Bisin (Professor of Economics, NYU), 2005, Modeling internal commitment mechanisms and self-control: A neuroeconomics approach to consumption-savings decisions. Games and Economic Behavior, 52, p. 464.

5. And we could make the list longer� Short-term/impulsive Doer Passions Affective/Visceral Hot state Thaler and Sunstein in �Nudge� talk about the automatic system and the reflective system.Thaler and Sunstein in �Nudge� talk about the automatic system and the reflective system.

6. Nudge Table 1.1: Two cognitive systems

7. We could even switch to philosophy� �I divided each soul into three: two horses and a charioteer� the right-hand horse� is a lover of honor and modesty and temperance� The other is a crooked lumbering animal � companion to wild boasts and indecency.� -Plato, Phaedrus

8. � or religion �For the sinful nature desires what is contrary to the Spirit, and the Spirit what is contrary to the sinful nature. They are in conflict with each other, so that you do not do what you want.� � Paul�s letter to the Galatians Popular Jewish theologian Dennis Prager writes, �When God declares in Genesis, �Let us make man in our image,� the us may be understood to be God and the animals� There is a place for our animal nature, and there is a place for our divine nature.�

9. Or we could look at biology �A crucial fact is that the human brain is basically a mammalian brain with a larger cortex. This means human behavior will generally be a compromise between� animal emotions and instincts, and� human deliberation and foresight.�

10. Can we see two systems in the brain? Areas of the prefrontal cortex are associated with rational, higher cognitive thought. The more central limbic system is the immediate reward system (�dopaminergic�). http://en.wikipedia.org/wiki/File:OFC.JPG http://www.flickr.com/photos/labguest/3497647067/http://en.wikipedia.org/wiki/File:OFC.JPG http://www.flickr.com/photos/labguest/3497647067/

11. Watching decision-making happen By making decisions in an fMRI machine, we can see which areas of the brain are activated. http://www.flickr.com/photos/macronin47/85006920/http://www.flickr.com/photos/macronin47/85006920/

12. Limbic system reactions Choices between more $ later, less $ sooner. Earliest option: Today Earliest option: 2 Weeks Earliest option: 1 month

13. Higher cognitive system reactions Choices between more $ later, less $ sooner. Earliest option: Today Earliest option: 2 Weeks Earliest option: 1 month Note: The Kable & Glimcher article in Nature Neuroscience proports to have falsified the hypothesis that the ventral striatum, medial prefrontal cortex, and posterior singulate cortex form a reward system that primarily values immediate reward. �However, their experiment was structured such that (1) there were no choices between two delayed rewards and (2) the immediate reward was always the same and was never presented visually. �It appearrs that their experimental structure created an endowment effect, i.e., where the immediate $20 was already planned/known/expected/owned in every trial, and thus the only impact on immediate reward would be couched in terms of loss. �In other words, if these systems only cared about immediate reward, it is possible that the activation related to the predicted probability of loss of the endowment. Note: The Kable & Glimcher article in Nature Neuroscience proports to have falsified the hypothesis that the ventral striatum, medial prefrontal cortex, and posterior singulate cortex form a reward system that primarily values immediate reward. �However, their experiment was structured such that (1) there were no choices between two delayed rewards and (2) the immediate reward was always the same and was never presented visually. �It appearrs that their experimental structure created an endowment effect, i.e., where the immediate $20 was already planned/known/expected/owned in every trial, and thus the only impact on immediate reward would be couched in terms of loss. �In other words, if these systems only cared about immediate reward, it is possible that the activation related to the predicted probability of loss of the endowment.

14. What about this description from the brain science of addiction & relapse? Does the �go system�/�stop system� model described by Dr. Childress (U. Pennsylvania School of Medicine) correspond to the previous dual-self models? http://www.flickr.com/photos/tedpercival/2621455898/ http://www.flickr.com/photos/50906336@N00/2896787167/http://www.flickr.com/photos/tedpercival/2621455898/ http://www.flickr.com/photos/50906336@N00/2896787167/

15. We could try using a long list� When given a big bowl of cookies before lunch, what is the natural reaction of your Short-term/ Impulsive/ Doer/ Passions/ Affective/ Visceral/ Hot state/ Core mammalian/ Limbic/ Go/ Automatic system?

16. Let�s use a simple analogy �The image that I came up with � was that I was a rider on the back of an elephant. I�m holding the reins in my hands, and by pulling one way or the other I can tell the elephant to turn, to stop, or to go. I can direct things, but only when the elephant doesn�t have desires of his own. When the elephant really wants to do something, I�m no match for him.� Dr. Jonathan Haidt, (University of Virginia), The Happiness Hypothesis, 2006, p. 4, Basic Books: New York.

17. The �elephant� and the �rider� Short-term Impulsive Doer Passions Affective/Visceral Hot state