Re: Biases, Belief and Economics

While working at a bank, I once worked (in collaboration with experts from a top accounting firm  and an expert on behavioral economics from MIT) on designing workshop questions to generate samples of perceived risk estimates from banking experts. I was amazed at the huge array of biases to deal with in generating unbiased opinions.

Anyone interested, this may give you a preliminary idea.

http://en.wikipedia.org/wiki/List_of_cognitive_biases

On Thu, Oct 2, 2014 at 1:57 PM, Mo Chaudhury <mochaudhury@gmail.com> wrote:

As an ordinary human being, I have long struggled with my personal biases. My dear and learned (has literally read everything on earth) friend Shoroz have at times reminded me how often we act/opine/see things as captives of our own biases. My better half (Shimi) has also at times reminded me of my personal biases.

I hope readers will contribute on this thread toward understanding our personal biases and suggesting ways to overcome them.

Here are some thoughts to get it started.

1. Biases are blinding: More often than not we are totally unaware that we are acting in a biased manner.

2. Biases make us intolerant: We act as if everyone else is misguided.

3. Biases make us obstinate: In instances when we become aware of our biases, we are reluctant to admit that we are biased and keep rolling down the slippery slope of untruth.

4. Fighting off biases is the greatest struggle: Achieving material and physical goals and even winning hearts and minds of others is relatively easier than winning over the demons of our personal biases. Motivations may help, but in the end, each of us has to learn controlling our mind that to start with controls us. I know it sounds paradoxical, but that is exactly why it is the greatest jihad of our lifetime.

5. Biases and belief: If we believe in any form of divinity, it is our biases that stand between us and divinity. Winning over our biases is the path to salvation/emancipation because that truly frees us from the shackles of earthly frictions, competitions and an urge to prove our positions to be right/superior. It is only with the purification of our thoughts, we have any hope of aligning our feeble human frequency/pulses with that of divinity. For those not subscribing to divinity, overcoming biases is the route to the bliss of zero gravity on earth.

6. Biases, Belief and Economics:  Quite unwittingly I found Economics to be a way of understanding the apparently disjoint issues of biases and belief. Given a set of assumptions/axioms, Economics yield predictions of human behavior that is rational or logically consistent. Bias is then defined as systematic departure from such behavior. Note that erratic (random) behavior can be of high variance, but is unbiased. The beautiful thing about this Economics construct is that when we change the assumptions/axioms, we may end up with completely different predictions of rational behavior and what was thought to be a bias may turn out to be a rational behavior after all.

If we assume/believe that there exists a single divinity, rationality prediction of Economics is to collaborate with all believers regardless of apparently differential codes and to engage in personal jihads of purifying our thoughts, and the vital link between these two ventures is "compassion" (most eloquently explained by Shoroz). Instead, human history is fraught with tensions/animosity between believers of divinity than between believers and non-believers. Given the assumption/belief of a divinity, this seems like biased/irrational behavior according to Economics.  

Let me stop here, seeking the indulgence and forgiveness readers for my audacity, errors/inconsistencies/pitfalls and of course for any inadvertent hurt.