I have read many behavioural economics books recently, such as Thinking, Fast and Slow, Wait: The Art and Science of Delay, and How We Decide. Also in the last couple of years, I have read books like Predictably Irrational: The Hidden Forces That Shape Our Decisions , and its critic's book The Logic of Life: The Rational Economics of an Irrational World.
All of these books describe the same
famous psychological experiments which try to prove that humans are
not rational beings always weighing the costs and benefits of their
actions and then taking actions that are in their own self-interest
as described by economic theory. However, they often draw different
conclusions. It can be quite confusing.
Kurzban's book seems to be the
exception. It makes the other books look silly. His concept of the
modular mind explains how our brains have developed over millions of
years of evolution. Our minds contain many parts or “modules”
each with different functions. Sometimes these modules don't
communicate very well to each other.
So saying “I think” or “Someone
is acting in their self-interest” begs the question who is "I" and
what is a "self".
As Kurzban describes most of us have
the impression that somewhere inside our head is a central control
that is the brains controlling our thoughts. Also, we have the
impression that the part of the brain that controls speech actually
speaks for all of our modules.
However, split brain patient
experiments prove that parts of the right side of the brain can
become disconnected from the speaking part of our brain on the left
side.
Similar experiments with normal people
show that there are many parts of the brain that are not connected to
our speaking part. Kurzban suggests that this is why we may have
strong opinions about subjects like legalizing abortion.
recreational drugs or prostitution without being able to explain the
logic behind our opinions.
I highly recommend Kurzban's book.
However, my own field of expertise is
optimism bias in project management. Late in my career in the
Department of National Defence after I had completed my PhD
dissertation entitled Cost Estimation and Performance Measurement in Canadian Defence, I remarked to the Director of Costing
Services that Project Managers' estimates of costs should not be
trusted. They are unrealistically optimistic about their projects
and will systematically underestimate the costs and overestimate the
benefits. The Director brushed my comments aside and quickly
replied, “Project managers have to be optimistic”.
Kurzban has an interesting insight into
this optimism bias from an evolutionary point of view. Being
unrealistically optimistic should have put people at an evolutionary
disadvantage over time. If some people were unrealistic about their
chances of survival in risky situations and acted irrationally,
evolution would suggest that their genes would be killed off.
Kurzban hypothesizes that there might
be an evolutionary advantage from optimism or being “strategically
wrong” in social settings. Namely, it may be helpful in persuading
others to do your wishes if you truly belief your plans will be
successful.
Although part of your brain may know
the facts about the likely success of your plans, the part of your
brain that wants to persuade people is able to take control of your
behaviour. In that way, you can be convincing in your overly
optimistic statements about your project and not actually be lying in
the sense of saying something that you don't actually believe.
Therefore, project managers are not
really lying about the future costs of their projects. The part of
their brain that controls speech may truly believe what they are
saying. No amount of factual information about the costs of similar
projects will be able to convince them that they are being
unrealistic. In fact, it is likely that part of their brain already
knows the facts. Unfortunately, that part of their brain is not able
to take control of their behaviour.