Economic Psychology

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Economic Psychology

How and why markets aren't rational. Navigational tips for charting the Bermuda Triangle of human economic behavior.

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Global Voices Online - The world is talking. Are you listening?
Fundamental Attribution Error
A fine quote from Adam Gopnik's Paris to the Moon, concerning our tendency to over-attribute to individuals the primary responsibility for their, and our, economic outcomes.

We surf the waves of capitalism, from crest to trough and back again, but the funny thing is that
no matter how often we ride the wave, nobody notices that it's wet. When we are on the crest,
we believe that we have climbed a mountain through our own virtuous efforts, and when we are
in the trough, we believe we have fallen into a pit through our own vice.

Did the coiner of the phrase, "template for change" mean to imply that forms are the answer? Recently I spent the day at a corporate meeting, intended by its planners to be a pivotal event in an ambitious change initiative. The organization in question is fragmented, suffers from inconsistency in values and practices, and makes individual 'one-off' deals all over the place--which is not good for profitability. And so, you ask, what is the answer?

Forms!! Better yet, computerized forms!!!

Notably, executive management and its minions have designed more and more, longer and longer *computerized forms,* and are now holding front line staff hostage in multi-day meetings designed to impress upon them the virtues of form-dom. If this doesn't motivate compliance, they'll turn to the stick.

As the day wound on, we moved from flattery to threats to lengthy, detailed "demo's" of the forms.

Then the software salesmen came in.

Boy did these guys have some forms! A person could spend his or her entire life "populating" the forms--as filling them out is so elegantly described. Each form required layer upon layer of data entry; each had categories and sub-categories; worksheets; fields and functions. This "learning" process seemed to take documentation to a level of complexity--even grandeur--rarely achieved by some of the world's great religions.

Actually there was something kind of charming and whimsically delusional about the 'interaction effect' between corporate bureaucrats' belief that forms are the solution to life's knotty problems, and software engineers' faith in technology as the silver bullet.

Quote of the day (a random feature)
"Only free men can negotiate. Prisoners cannot enter into contracts."

Nelson Mandela, Feb. 10, 1985. Statement made from prison, refusing the terms offered for his release by President P.W. Botha.

Released from prison on February 11 1990, Mandela was democratically elected President of South Africa in its first-ever multi-racial election. Inaugurated on May 10, 1994, he presided over a peaceful transition to multi-racial democracy.