The Socrates Parameter

A few days ago, I attended a seminar on the economics of obesity and overeating that left me thinking, not about obesity and metabolic syndrome, which are epidemic in the US and important contributors to both national health care costs and declining national health indicators, and not about medicine’s inability at present to provide satisfactory preventive remedies. It left me thinking about the “split” between our presumably rational, self-interested, fully-informed or near fully-informed deliberative selves and our primitive, acquisitive, also self-interested (if a trifle myopic), less than rational selves.

The seminar speaker motivated his analysis of overeating and obesity by providing a nice, albeit simplistic, overview of human brain areas and function. The limbic system, the primitive part of our brains, gives rise to impulsive behavior and affective (emotional) responses to stimuli that may have had and may still have value in promoting at least short-term survival of the individual, for example, fight or flight, “eat this now it will lay down fat for winter”, “mate now for tomorrow we may die.” Our deliberative functions, the thought, the marshaling and integration of cues, stimuli, signals, previous experience, and conjectures about future states of the world and our place in them that temper the primitive impulses emanating from our limbic system to form more complex and rational behavioral responses, resides in the frontal lobe.

The seminar provided a simplistic framework for thinking about what I think is a key metaphysical question that we economists are only recently starting to wrestle with: what really determines the behavior of homo economicus? Or perhaps more correctly, is there such a being as homo economicus, at least as economists have tended to conceptualize him?

As I listened to the seminar speaker, I kept thinking of John Stuart Mill’s famous quote from Utilitarianism:

It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. And if the fool, or the pig, are a different opinion, it is because they only know their own side of the question. The other party to the comparison knows both sides.

It seems to fit exactly the dilemma we face in understanding and in modeling human behavior.  (Note: use of this quote is in no way meant to imply that the obese and overweight are “pigs” or “fools.” This same model fits people making choices about saving for retirement or taking preventive measures against (bad) future health or income states. It also fits investment bankers making decisions about whether or not to continue to invest in mortgage backed securities even after being warned that they are on a collision course with disaster. It fits economists and bank regulators who were warned a decade ago that derivatives markets should be regulated.  We are all pigs and fools at some times in our lives, some more so than others.)

But there was another stark question raised by the seminar that economists in particular must come to grips with: are consumers really utility maximizers or are they, at best, preference satisfiers? It matters because our theory takes as given that consumers are utility maximizers. Implicit in this are the essential requirements of rationality, self-interest (presumably long-term and broad enough to encompass family, friends, and community), and full-information.  If we are primarily preference satisfiers and those preferences do not correspond to some approximation of “utility” where utility comprises more than immediate, uninformed happiness or satisfaction, we are at the heart of an epistemological conundrum: are consumers the best judges of what is best for them? We take as given in economics that they are and much of welfare economics rests on this assumption. We often take it as given regardless of uncertainties and information asymmetries that clearly compromise the assumption.

What then is it within us or without us that forms the bridge between affect and deliberation? What are the determinants and what are the public and health policies that would strengthen that bridge in ways that benefit the utility of both individuals and society?

One seminar participant suggested that the relationship between the ideal or utility maximizing state of the world (as judged by the individual, for example, their optimal body mass index  (BMI)) and the actual state of the world (in this case a person’s actual BMI) be modeled as a weighted average of the empirically observed or inferred desiderata of the two portions of the brain. A simplistic equation may help here:

B=θD + (1-θ)A

Let  B be the “bridge” between the two parts of the brain or between our primitive selves and our rationally self-interested, fully-informed selves. D is the empirically observed output or state of the world that results from the deliberative portion of reason. A is the empirically observed output or state of the world that results from the affective or primitive portion of reason, and 0 ≤ θ ≤ 1 is a weight.   (My words and interpretation, not his.)

What I liked about this suggestion is that it provides a nice conceptualization of what I like to think of as the “Socrates parameter, “ θ. The parameter that determines how deliberative, how reasoned, how fully-informed, how forward thinking we really are. A high value implies high deliberation, but it can also imply better information or better use of available information, or even openness to new, information that conflicts with preconceived ideas or ideology. A high value may also imply lower rates of time preference or a longer time horizon to a quasi-hyperbolic  “cliff.” Low values imply low deliberation and are consistent with poor information or poor use of available information, higher rates of time preference and/or very short time horizons, or an inability or unwillingness to consider novel information and perspectives.

(For those not used to thinking in equations, it may help to notice that θ can only take values between 0 and 1.  When θ = 1 (the highest value it can take),  (1- θ)=0, so a person with the highest possible value of θ had B=D, i.e., they are pure deliberative with no influence from the limbic portion of their brain. Conversely, a person with θ = 0, the lowest value it can take, has (1- θ) = 1. That person is pure limbic, affective with no deliberative influence on choices. A person with θ = ½ will have (1- θ) = ½  implying a 50/50 split between deliberative and affective influences on his/her decision making. Thus, varying values of θ describe the degree to which a person or group of people temper emotion and impulse with deliberation.)

Behavioral economics and neurological economics are now helping us to understand the Socrates parameter; the dimensions of being, belief, and behavior that serve to bridge and temper affect with deliberation as well as the aspects of being, belief, and behavior grounded in emotion that serve as barriers between the good that we will to do and our actual behavior.

This is important stuff to understand. Right now, A in the equation above usually shows up in our error terms. If it is a genetic component we all share, then it may well generate correlation across individuals and communities as might also D, but in less easily measured and quantified ways.  In the absence of widely disseminated, easily understood information bolstered by regulation, A may well be a major contributor to bank bubbles and bailouts as well as to obesity and overweight, youthful smoking initiation, and unfettered appetites for risk and sweets to name a few.

The seminar speaker made the point that marketers of food and drink (and this could also apply to marketers of subprime mortgages and subprime political ideas) have tended to focus on the emotional, primitive part of our brains rather than the deliberative part. Foods have been engineered to contain more calories and fewer nutrients per portion as portion sizes have increased. To the extent that our limbic systems respond to such engineering by over-riding the judgment of our frontal lobe and to the extent that our frontal lobe is deprived of the information it requires to make a rationally self-interested judgment, we are not only pigs and fools, we are slaves.

Comments

[rjs]

a tangential thought: two winters ago i did a 36 hour DVD course on the neuroanatomy of the brain…(i was weird for a while: walked around for a couple weeks imagining how each of my thoughts and actions might be occurring in whatever specific area of the brain controlled that function)…its pretty humbling when you realize your loftiest thoughts can be reduced to thousands of simultaneous electrochemical molecular discharges at neural synapses…

but my greatest takeaway from that course was that those areas where our executive functions – moral and rational thought - are observed to occur are always proceeded by activity in the emotional areas; that in fact our rational thinking is driven by our feelings and emotions, and thus ultimately from our adaption based on our past experiences…

...so everyone has their own individual “morality” and “rationality”…what you or i might think is rational or moral is not the same as what another might think…that makes it clear why some people dont “just listen to reason” cause my “reason” is not based on the same set of learned experiences that another persons “reason” is…and why no matter how logical you might think you are being, you just cant win an argument…

[Peter Kurze]

I think your point about slaves is well taken, and the heart of the matter. But it’s not just the balance between impulse and deliberation. It seems to me that the imperative of the system that we have is to turn society into an ant farm. Is the economy the servant or the master?

This might be a good time for me to ask a question that I have always wanted to ask of an economist: How does advertising play into the theory of rational markets? Does it get treated as any other input, or does it get special treatment as a sort of "theta blocker"?

Setting aside my own interest for the moment, another interesting question might be: How does theta affect my perception of your interests (or the Greeks, to pick entirely at random), or the sense of consequence associated with those interests?

[Maxine Udall (girl economist)]

rjs, I think my blog came across as an argument for a dualistic view of the human psyche, which was not my intent. I was actually seeking to provide a means for unifying it. The problem (for the seminar speaker) was that he can only observe behavior, not the inner workings of survey respondent's minds. I was just trying to come up with a useful way of conceptualizing what was going on in the brain/psyche so that it could be linked to observed behavioral responses. As I wrote the blog, the Socrates weight seemed to have broader implications.

As I write this, I'm wondering if it was such a good idea since everyone seems now to think I view us all as dueling brain parts. :-)

I also wonder: even if all executive functions are preceded by activity in emotional brain centers, does it necessarily follow that reason cannot be purged of passion?

And, finally, is it really possible that all morality is subjective? Is it the underlying premise(s) that are subjective or is it the logic itself that is (subjectively) flawed? Or does the subjectivity arise because emotions cause us to reject or accept moral conclusions that we "like" rather than those that are logical or reasonable?

You raise questions to which I am ill-equipped to respond without further reflection and, perhaps, cannot ever answer. This should teach me not to stray from my narrow corner of econ. :-)

As always, thanks for your comments.

[Maxine Udall (girl economist)]

Peter, as I indicated in my reply to rjs, I'm feeling way over my head here, especially the questions in your last paragraph.

Advertising can be thought of as a demand shifter, the content of which may or may not convey objectively true things about the product. I would guess that to the extent the info conveyed diverges from objective truth or engages emotions and limbic responses, it could be viewed as a "theta blocker." If it conveyed reliable info, like how a product improved child health by being more nutritious (assuming the product is more nutritious), it could be viewed as a theta enhancer. I'm not familiar enough with the lit in this area to know how it has been treated either in theory or in practice.

I like your question: is the economy the master or the servant? I would say "servant," but you can tell from other things I've written that I think we have lost sight of its proper social role. I think the question warrants much more thought than any of us give it.

Thanks, Peter. :-)

[rjs]

maxine, i wasnt really reponding to anything specifically that you wrote, i was just free associating after reading it...im always out of my "narrow corner" of expertise...i dont even know where my narrow corner is!

as far as the dualistic view of the human psyche goes, that is pretty much a western cultural interpretation, and thinking about it again, maybe thats why i got that understanding out the course...i dont think hindus or buddhists would have the same problem...

[Maxine Udall (girl economist)]

:-)