Coordinating without Communicating: Is Ignorance Bliss?

Our latest paper – just published!

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In Thomas Schelling’s classic New York game, two people need to pick a particular place in the city to meet the other. They cannot communicate. Because any place is as good as any other, the problem is hard in theory because each tries to outguess what the other is thinking at the same time.

In practice though people are remarkably good at picking the same as others in this example and others that were used in experiments like the one conducted by my PhD supervisor at UEA in the 1990s: Pick a name, a flower, a mountain, a car brand etc – both of you win a prize if you name the same one. The reason is that some options stick out to most people (they are focal points) and provide a solution to converge on.

This simple game has many important real-world applications: what language to speak, measurement or technological standard to adopt, which one among countless social media to use.

I think this game is also a great teaching tool. Students in class have to each write down their chosen location in a given city to meet everyone else. In class I write mine too. I played this in many countries using London as the city. While most do pretty well, every time there are students who write nothing because they are unable to name ANY location (there are apparently university students who cannot name a single place in London). They then complain that the game is unfair because they do not know the city. 

My normal reaction is that knowing little about a city can actually help you. Say I didn’t know London well at all, I would likely still be able to name Big Ben as the only place I ever heard of, and pick it. It turns out this is actually a pretty good solution to the problem, and one you arrive at more easily the less you know. For a Londoner, many places stick out in the same way.

To illustrate, in another study,  German and American students were asked which U.S. city is bigger, San Diego or San Antonio. Surprisingly, while all Germans got it right, only two-thirds of the Americans did. The Germans simply picked the one they recognised (San Diego) which, for the same underlying reason (city importance), is the bigger one.

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We found a positive correlation between knowledge of and ability to coordinate in a given category.

The experience in the classroom inspired an experiment we ran along the same lines as others in the past – participants get paid something if they pick they same option in a given category that a random other participant chooses too. But in our experiment, like in the classroom, we didn’t give them a list to choose from. We then paid them for every option in that category that they could name. This was repeated for a number of categories (like English football clubs, European countries, Shakespeare plays, Chinese Zodiac signs, Disney Princesses).

We then measured whether those who knew more category options did better in coordinating. The answer was yes (see diagram above – every dot is a participant). We did a number of tests suggesting that knowing more category options (e.g. being able to name more Shakespeare plays) is associated with knowing more about that category generally (e.g. the content, popularity and unique features of each play), including which sticks out most. This is true even when we control for the participant’s intelligence.

What this means is that my students were right – ignorance is not bliss, at least not here – knowing more enables you to coordinate better with others. According to another study, successfully coordinating with others enhances our sense of social unity, similarity and liking. It seems that it’s possible to hack these important social skills by learning about the things that matter to others: Strategic small talk.

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The legacy of a master strategist

Click here for my article in The Conversation.

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Thomas Schelling (1921 – 2016)

 

My coordination game answers:

  1. Name a mountain: Mount Everest
  2. Name a flower: The rose
  3. Name a place to meet in London: Big Ben.
  4. Name one side of a Dollar coin: Heads.

Other coordination games Schelling experimented with include the following (taken from Schelling 1960, p. 55-56):

  1. Circle one of the numbers in the line below. You win if you all succeed in circling the same number.
    7     100     13     231     99     55

2. Put a check mark in one of the sixteen squares. You win if you all succeed in checking the same square:

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3. Write some positive number. If you all write the same number, you win.

4. Name an amount of money. If you all name the same amount, you can have as much as you named.

5. You and another person parachuted unexpectly into the area shown, each with a map and knowing the other has one, but neither knowing where the other has dropped nor able to communicate. Where do you meet?

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Most common answers: 1: 7 (the first) or 100. 2: top left. 3:1. 4: One million. 5: At the bridge.

 

Further reading

Call for Papers: Behavioral Business Research and its Stakeholders

Special Issue in the Journal of Behavioral Economics for Policy

Guest Editors:

Submission deadline: May 1, 2017

Traditional research in economics and the other social sciences is sometimes criticized for questionable relevance to business and public policy, inability to prepare students for work or responsible citizenship, and as stymied by internal disciplinary divisions. Behavioral approaches have been touted as a way forward by unifying the social sciences based on the empirical facts of evolved human psychology that are relevant to the concerns of diverse stakeholders.

Business schools can nurture this process as forums where researchers from different disciplines, practitioners and students interact. However, misaligned incentives and differences in scientific conventions, epistemology and methods impede the emergence of a behavioral business discipline from economics, psychology and management.

This Special Issue is devoted to the case for, prospects and challenges of a unified behavioral business research that has public policy implications and/or enhances the skills of policy makers. Within this framework, topics of interest include discussions of whether and how behavioral approaches can be help to (1) integrate the social sciences which enhances public policy, (2) bridge the gap to business and public policy audiences, and (3) better serve students and their future employers.

Submission

We welcome submissions from researchers but also research stakeholders from the public, business and teaching arenas. Full papers submission should adhere to the Journal’s 3500 word limit but shorter, insightful comments are also invited.

Please use JBEP’s online submission system using “SI: Behavioural Business” as article type. Information for authors including author guidelines which also apply to the Special Issue can be found on the journal website. All submissions will be subject to standard refereeing.

Herbert Simon 100 today: the eyes have it

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One of my greatest acdemic heroes, the polymath Herbert Simon, would have been 100 today. In addition to his transformational contributions to economics, psychology, computer science and organisation theory, you can find rare gems in his autobiography. Here’s one of my favourites:

“As [Jacob Marschak] had assembled a spectacular group of stars in the Cowles Commission, I asked him what qualities he looked for in selecting staff. “Oh,” said he, “I pick people with good eyes.” I stared at him. Good eyes, what could he mean? I told him he was joking, but he insisted: He looked at their eyes.” And then I began thinking of the clear dark Armenian eyes of Arrow, the cool blue Frisian eyes of Koopmans, and the sharp black Roman eyes of Modigliani. It was certainly true that they all had remarkable eyes. Ever since, I think I have included that among my own selection criteria; intelligence shines through the eyes.”

 

Malaysian Chinese Fortune Telling

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Personal experience has always inspired my research. The four years I spent working in Malaysia are no different. My first culture shock was being exposed to the grotesque racial stereotypes that Malaysians of Malay, Chinese and Indian heritage peddle about each other quite openly (to experience this, all you need is to ride taxis there regularly). Malaysia is truly multicultural, but the dividing lines remain deep in all things except food. Required reading for any “expat” in Malaysia (a term seemingly reserved for white immigrants everywhere) was Tiziano Terzani’s remarkable A Fortune Teller Told Me, precisely because he illustrated the situation best:

The hotel’s owner and all the employees were Chinese. The only Malay was the doorman who carried the luggage of the guests who were also Chinese. After about two words of conversation he too started telling about the problem that divides Malaysia: race. `Look,’ he said with a sweeping wave of the hand. `The skyscrapers are Chinese, the market stalls are Chinese, the shops are Chinese, the supermarkets are Chinese … So tell me: is this Malaysia?’ Just then a motorcycle with a sidecar pulled up in front of the hotel. The rider took his helmet off and set to work. In the space of a few minutes he had turned the sidecar into a miniature restaurant […] The man was Chinese. Chinese were all the people I saw in the streets, busily running here and there with all sorts of errands. With such competition the poor Malay felt he would never get anywhere.

What is true in Malaysia holds for Southeast Asia generally: ethnic Chinese make up less than 10% of the total population of the region but own and control anything between half and three-quarters of the regional economy. Exact statistics on the fortunes of the Diaspora Chinese are hard to get hold of for obvious reasons: Chinese businesses tend to operate opaquely.

What could be the reason for the Overseas Chinese fortunes compared to other groups? Most social scientists accept that the biggest effective difference between peoples across the world lies more in their cultures than in their biologies. Ever since Max Weber many have therefore attributed the economic success of a people to the values they share. Weber thought that Protestantism, through frugality and hard work, was the engine of the success of Northern Europe and the USA.

The same logic was later applied to explain the rise of Japan and the Tiger nations (Taiwan, South Korea, Singapore and Hong Kong) after World War 2. Here the cultural explanation was (Neo-)Confucianism, in particular, its emphasis on frugality and, you guessed it, hard work. Ironically Weber himself, writing early in the 20th century, thought that Confucianism retarded the economies of the Far East. Nonetheless Confucian theories abounded in the latter part of the 20th century when globalisation made people in the West take note of other cultures. An endless stream of intercultural business manuals were the result.

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Economists are instinctively sceptical of anecdotal accounts and storytelling and prefer the analysis of cold, hard data. If culture was measurable one could use sophisticated statistical methods to find out whether it explains economic success. In the last 25 or so years questionnaire surveys have indeed been developed painstakingly and deployed to figuratively and literally map the cultures of the world.

In our own research we wanted to see whether we could use these measurements to attribute the differences in the economic fortunes of the three main ethnic groups in Malaysia to the differences between their cultures. We uncovered a mixed bag of evidence. For one thing , despite their ostensibly  different cultures and religions,  Malays,  Indians and Chinese in Malaysia are no different in their adherence to “Confucian” values. To put it another way, what many think of as Chinese Confucianism (conformity, respect for elders, tradition, collectivism) is not uniquely Chinese but rather common to Asian cultures generally. Because these values do not differentiate Malaysian ethnic groups they cannot explain economic differences between them either. What we found instead is that the Malaysian Chinese differ from the other two groups in a deep-seated mistrust of the state and a belief in private entrepreneurship. Perhaps a reliance on their own kind explains something else we found: Malaysian Chinese were more cooperative within their own ethnic group than either Malays and Indians.

As tempting and colourful as they are, cultural explanations have had their fair share of criticism. One is cultural determinism, a tendency to overlook other explanations such as the resources different peoples have due to their physical environments or institutions. Also, researchers sometimes use cultural explanations as a catch-all when all else fails, much in the same way as religion is often used. Cultural explanations are malleable and can be made to fit any fact until they lose scientific value (Karl Popper called this unfalsifiability). Another is a chicken-and-egg problem: are the values we observe the result or the cause of economic success? Perhaps changing economic fortunes cause and necessitate  value change.

A further issue with cultural theories is that people’s values are generally modest predictors of their behaviour: we often don’t practice what we preach. Perhaps a different cultural stereotype about the Chinese explains the popularity of Chinese culture theories. Western researchers interviewing Chinese businesspeople about the reasons behind their success may have overlooked an important fact: for the Chinese, pride in traditional culture is a cultural norm. Little wonder they offered it as an explanation even if it had no part in their success. Ambrose King and Michael Godley called this rationalistic traditionalism: a‘‘new kind of Chinese’’ with an ‘‘amazing willingness to split their personalities’’ and a ‘‘remarkable ability to move in and out of the two traditions’’. I, for one, also witnessed what Gordon Redding described:

One observes a present-day high-tech office full of well-qualified and highly efficient operatives of modern office equipment going through a feng-shui ritual to appease the spirits which control the fortune of the location.

There are cultural differences for sure, but it is hard to tell conclusively how and whether they explain the economic reality of the Chinese economic dominance in Southeast Asia. The Chinese to me remain, as in the cliché, inscrutable. And this even though some of my best friends are ethnic Chinese.

Odd science: electioneering

What’s wrong with this picture?

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Bernie Sanders at the Sunrise Cafe in Terre Haute

Terre Haute, or to be more precise the the small county it sits in, Vigo county, is the most accurate bellwether in the country. The people here have voted for the winning candidate in presidential elections more often than any other county in the United States in the past 120 odd years. To put it another way, if you want to be president, you’ve got to convince the people here. And you’ve got to convince these 11 women meeting for breakfast in the Crossroads Cafe.  (BBC The World Tonight 28 April 2016)

The Blair Faith Project

The former UK prime minister Tony Blair remains a controversial figure almost ten years after he left office, not least because of his role as one of the architects of the ill-fated invasion of Iraq in 2003. Improbably, Blair began his political retirement by repositioning himself as a peacemaker. He served as envoy of the so-called Quartet to bring peace to the Middle East. He also founded the Tony Blair Faith Foundation to promote inter-religious dialogue and converted to Catholicism.

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These ostensible contradictions made many wonder about Tony Blair’s stance towards religion. While in office, his press secretary Alastair Campbell famously stopped an interview with the Prime Minister stating, “We don’t do God”. Out of office Blair has more scope to express his personal views. In 2012 he resurfaced into the spotlight as a panelist at the Westminster Faith Debates with some insightful remarks regarding his personal faith and its role in his political decision making. We learned he never prayed with George W. Bush (as rumoured) but did pray alone before taking momentous decisions on UK military actions. I was part of the audience of (with?) Tony Blair that night and was particularly struck by two of his observations:

 

What I notice in the world today is two types of religious feeling … One is a religious feeling where your faith drives you to acts of compassion in the service of others and you see that across all the faiths, and the other is a feeling where faith becomes a badge of identity almost in exclusion to others.

Some background: The Westminster Faith Debates were organised by Professor Linda Woodhead as part of the Religion & Society research programme funded by the UK’s  Arts and Humanities Research Council, the Economic and Social Research Council and Lancaster University. I was part of one of the  projects funded by the programme. In our study we used experiments to examine the effects of two different dimensions of religion on a person’s social behaviour: the role of individual religious values or `religiosity’, and the role of someone’s particular religious group affiliation. In short, the way someone treats others may depend on how strongly religious the person is, but also on whether these others are of the same or of a different religious community. We found, as Blair suggested, these two dimensions of an individual’s religion have their own effects. Later in the debate Blair made another telling remark:

I find a connection with people who are of faith, even though a different faith to my own, precisely because there is a certain space, intellectually, philosophically and emotionally, that we can congregate around.

I call this the Blair Hypothesis: essentially he suggested that one’s religiosity in itself can be a group identity, irrespective of which religious faith one belongs to. It suggests that highly religious people from two different religious groups may have more in common than do a staunch believer and a mere passenger within the same religion. We tested the Blair hypothesis in our experiment and found support: more religious participants of any religious denomination believed more strongly (than less religious ones) that highly religious others of any religious group can be trusted. In short, there is stronger trust among highly religious people no matter what particular faith groups they belong to.

Our paper has a number of other results, such that more religious people tend to attach more significance to what social groups others belong to: more highly religious people discriminate more against those of other social groups and also show greater favouritism towards those of the same faith. Surprisingly, neither our  own nor other people’s study find support that religiosity in its own right makes people kinder towards others, like the proverbial Good Samaritan.