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Tommy McThenia
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Economics can generally be summer up as "incentives matter". this paper acknowledges this fundamental idea and fills a hole in the existing literature. I felt the model itself was solid and outlined the incentives in a clear manner. The technological incentive, the changing net sizes, was interesting. For a poor fisherman, is the legality of their livelihood a meaningful concern, and it should it really be? We talk about firms being profit maximizing and that is their clear objective, but i was uncertain what the returns to labor were being measured as in this instance? I assume it is food yields, but i don't know if we can equate that to profits. This is the only form of sustenance for these people, and i feel that the weighted importance of fishing is higher for the villagers than for a profit based enterprise (which we are undoubtedly trying to proxy for). Thinking of the examples we discussed in class with Perth Australia vs. Boston, it is all the more amazing to me that Perth decided to accept the fishery limitations. Game theory or a prisoners dilemma would suggest it is in my best interests to always fish, b/c if I don't then someone else will and the number of fish will be fewer. The article concludes that the effectiveness of these MPA's depends on the availability of alternative livelihood projects. The gap in welfare between alternatives and the original fishing seems like the key factor to measure. The opportunity cost drives the decision. To me, this article suggests that maybe we should be looking at ways to strongly positively incentivize alternative livelihoods in these key fishing areas, rather than just imposing negative incentives to fish.
Toggle Commented Feb 11, 2015 on Reading for Thursday at Jolly Green General
In Krutilla's piece, he cites the work of Davidson, Adams, and Seneca, who examine the formations of demand. These authors suggest that if facilities and opportunities are made available, demand for these activities will increase over time as people come to enjoy them. They cite water sports as an example, and Krutilla ties this concept into his ideals of conservation. To me, this suggests that connecting individuals with nature and the environments around them would make conservation efforts more productive. This may seem intuitively obvious, but it is not clearly evident that environmentalists are acting in this direction. From my experience in Neuro-Econ, the importance of attachment and emotion in decision making cannot be overstated. While nature is abstract and sometimes foreign, all measures made to connect consumers emotionally with the world around them will facilitate more demand for nature, and increase the demand for conservation. I know Prof. Casey has looked into this idea with his studies of wale sharks, but this idea should be understood and embraced by environmentalists uniformly. Like it or not, humans are inherently selfish creatures. The best way to overcome our natural selfishness is to align our interests, and developing an emotional attachment to the outdoors through experience could be an effective way of doing this.
Toggle Commented Jan 21, 2015 on Readings for Thursday at Jolly Green General
This paper reinforces how social we are as humans and how perception, framing, and our society really shape our decision making. We've seen these themes across many of our readings, and as always emotion throws a wrench into our typical analytical frameworks. The paper cites an article that finds that the disparity between WTP and WTA was greatest for lottery tickets that evoked the most significant emotional response.... I really liked that the author's were conscious of the framing differences with the WTP and WTA groups. I think framing doesn't get enough credit across disciplines and is a fascinating topic. It really impacts about every decision we make. Every choice is relative to something else: our other alternatives, the situation we find ourself in, the way we view our options. Decisions aren't made it complete vacuums,the lens you see it through often dictates the response. Individuals who understand how to frame choices can really move others to act how they want them too. This appears like it may be manipulative, but is it really? I think that people we deem to be effective communicators all have the ability to frame their arguments and beliefs in a way that shows the merits of their statements... This brings us around back to the authors' conclusions and conjectures. The authors conclude that emotional experiences and moral perceptions may explain WTP and WTA gap being bigger for public goods vs. private goods. Society has created a sense of collective duty as it relates to public goods. The environment and its resources supposedly belong to all of us, and our constructed society informs us that letting others down should inspire guilt and negative emotions. Public goods are framed in a different manner than private goods, which aren't connected to others beyond ourselves. The moral perception the authors refer to is nothing other than our societal framing of public goods... I found this paper fascinating and appreciated the framing discussion, certainly an underrated decision making driver that should be explored more as neuroecon continues to develop.
Toggle Commented Nov 18, 2014 on Econ 398 Papers at Jolly Green General
In the intro, Wilson states that new conservation efforts are focused on incorporating public involvement. He acknowledges that conservation goals are not solely defined by science but also by "values and social objectives." I think this really gets at the core reason why understanding decision making is so important. We have to realize that every individual has unique perspectives and values, and effective conservation requires understand the aggregation of these values across society. Along the lines of what Sommer said about pandas, scientists need to understand how society makes decisions in order to motivate changes and influence people. Policy makers promoting conservation must keep in mind the perspectives of others, even if they seem uneducated or irrational. People do not always adequately understand risks (say of environmental catastrophe) do to affect and the limitations on decision making. How do scientists make these risks real so that people can properly gauge risk and process information? It's almost like a marketing problem for a firm. How do you influence the perceived importance and value of conservation to millions of individuals who may never interact with ecosystems or understand how global warming works? Economists and policy makers in this field would be wise to turn to our discussions of behavioral economics. As seen in the second experiment in the article, affect can outweigh analytical processes in decision making. Rather than just throw facts and science at the populace, policy makers must balance the impact affect has and find a way (beyond scare tactics) to connect people to conservation. Only through this will societal engagement and change be likely and effective.
Toggle Commented Nov 11, 2014 on Econ 398 for Tuesday at Jolly Green General
^*deck of cards.
Toggle Commented Nov 3, 2014 on Econ 398 for Tuesday at Jolly Green General
I particularly enjoyed the intuition cited in the Bechara et al. (1997). This study created a game with 4 decks of cars, 2 considered high risk-high return and 2 considered safer. Bechara noted that individuals who incurred heavy losses were immediately more cautious and avoided the higher risk decks. This idea of loss aversion and immediacy bias has come up time and again in our studies of behavioral economics. It seems to me though that most people are unaware of of their own tendencies to exhibit this pattern of behavior... The Bechara study also found that individuals with damage to their VMPFC resumed risk taking more quickly than those who had no damage. Bechara reasoned that these individuals were aware of the risk but "failed to experience fear when sampling". This sort of analysis makes so much sense to me that I am amazed that classical economics has not tried to reconcile with these integral emotions. I can think of plenty of instances in my own experiences where I've done something I knew I shouldn't have b/c of an overriding emotion (or the lack thereof). When combined with the idea that probability weighting is non-linear (as shown by Kahneman and Tversky), we understand that our own biases create and the strength of emotions play a huge part in the choices we make... Thinking about all this made me humbled and gave me a new perspective on judging the decision of others. I was reminded of our discussions of how high stress can lead individuals in poverty to exhibit risky decisions repeatedly. You never know what someone is going through or how their situation is impacting their psyche, and I feel like many of people's "irrational" choices could be understood if we looked beyond the surface. Perhaps these individuals recognize the risks involved but emotional scarring or constant negative emotion dulls their ability to act in their best interests.
Toggle Commented Nov 3, 2014 on Econ 398 for Tuesday at Jolly Green General
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Nov 3, 2014