Skip to main content

Time inconsistency and mountaineering

It has been a bad season for the mountain rescue teams in Scotland - another avalanche yesterday, coming just days after a student from Leeds University died. I know nothing about these individual cases so would not want to comment on them. But, they are a reminder that the most important skill in mountaineering is not reading a map, using an ice axe, or knowing how to tie onto a rope - it is knowing when to ditch plan A and go onto plans B, C and D. The human propensity for time-inconsistency, however, makes this a surprisingly difficult skill too master.
   For example, I remember many years ago attempting a quick trip up Snowdon in Wales. I'd been marking essays or something and needed some respite. It was a gnarly day - the wind was very strong, visibility poor, snow, ice etc. I met a mountain guide half way up with a few clients and he confidently predicted that no one was getting to the top today. I carried on and got within 200m of the top before finally turning back. This example comes to mind as powerful reminder of the difficulties of being time-consistent. I have climbed Snowdon many, many times, and had already had a great day out on the mountain - there was nothing at all I would gain from walking that extra 200m - the optimal decision was obvious - yet the desire to go on was so strong. That desire is what behavioral economists call present bias. A bias that means the 'short-term self' can make a decision the 'long-term self' would not have made.
   Another example springs to mind. This time in the French Alps where I needed to cross an avalanche prone slope. On this occasion it was an absolutely beautiful day, but the sunlight was only going to increase the chances of the slope crashing down around me. I got 50m across the slope before sense prevailed and I retraced my steps. I mention this example because I remember standing on the slope, seemingly in slow motion, as one part of my brain did battle with another on the merits of continuing across the slope. Again, in the cold light of day - the decision is obvious - the slope was too dangerous. But the desire to go on was strong.
    Whether they know it or not experienced mountaineers are well aware of time-inconsistency. They will have a series of mental tricks that they use to overcome present bias. The most common trick, for example, is to set a cut-off time at which to turn around no matter what. Experience is the key thing here. With experience, people can learn to control present bias. For example, the good student might have mental tricks to make sure homework is not left until the last minute. Someone on a diet can have tricks to avoid eating chocolate. And someone who has quit smoking might have tricks to avoid the urge to smoke. Present bias is more of a problem when people are inexperienced, saving for retirement being the classic example. We only retire once, and then its too late to realise that we should have saved more while we could.
   What I find most thought proviking, however, about recent tragedies in the Scottish mountains is that they have involved groups of people. Behavioral economics is now pretty good at understanding an individual's decision. But, we are still woefully unaware of how group decisions compare to individual decisions. Are a group of people able to avoid the present bias of individual group members? Or, can the present bias of one group member infect others? We have no idea what the answer to these questions are. That seems like an intruiging challenge for future research. 
  



Comments

Post a Comment

Popular posts from this blog

Revealed preference, WARP, SARP and GARP

The basic idea behind revealed preference is incredibly simple: we try to infer something useful about a person's preferences by observing the choices they make. The topic, however, confuses many a student and academic alike, particularly when we get on to WARP, SARP and GARP. So, let us see if we can make some sense of it all.           In trying to explain revealed preference I want to draw on a  study  by James Andreoni and John Miller published in Econometrica . They look at people's willingness to share money with another person. Specifically subjects were given questions like:  Q1. Divide 60 tokens: Hold _____ at $1 each and Pass _____ at $1 each.  In this case there were 60 tokens to split and each token was worth $1. So, for example, if they held 40 tokens and passed 20 then they would get $40 and the other person $20. Consider another question: Q2. D...
Post a Comment
Read more

Nash bargaining solution

Following the tragic death of John Nash in May I thought it would be good to explain some of his main contributions to game theory. Where better to start than the Nash bargaining solution. This is surely one of the most beautiful results in game theory and was completely unprecedented. All the more remarkable that Nash came up with the idea at the start of his graduate studies!          The Nash solution is a 'solution' to a two-person bargaining problem . To illustrate, suppose we have Adam and Beth bargaining over how to split some surplus. If they fail to reach agreement they get payoffs €a and €b respectively. The pair (a, b) is called the disagreement point . If they agree then they can achieve any pair of payoffs within some set F of feasible payoff points . I'll give some examples later. For the problem to be interesting we need there to be some point (A, B) in F such that A > a and B > b. In...
Post a Comment
Read more

Prisoners dilemma or stag hunt

Over Christmas I had chance to read The Stag Hunt and the Evolution of Social Structure by Brian Skyrms. A nice read, very interesting and thought provoking. There’s a couple of things in the book that prompt further discussion. The one I want to focus on in this post is the distinction between the stag hunt game and the prisoners dilemma game.    To be sure what we are talking about, here is a specific version of both type of game. Adam and Eve independently need to decide whether to cooperate or defect. The payoff matrix details their payoff for any combination of choices, where the first number is the payoff of Adam and the second number the payoff of Eve. For example, in the Prisoners Dilemma, if Adam cooperates and Eve defects then Adam gets 65 and Eve gets 165. Prisoners Dilemma Eve Cooperate Defect Adam Cooperate 140, 140 65, 165 Defect 165,...
Post a Comment
Read more