Rational Decisions?

In addition to serving as priest-in-charge of St. John's Episcopal Church in Newtonville, MA, Mark is executive director of the Harvard Decision Science Laboratory at Cambridge.  As we drove over to Petoskey on Thursday I asked Mark what the heck a "decision science laboratory" does!

He explained that for decades the academic field of decision-making has been dominated by a "rational actor" model.  This theory assumes that, most of the time, most people employ their reasoning faculty to make choices which best serve their interests or those of their community.  This theory has dominated many fields of study, including economics, politics, and international relations.  "But there's a problem with the rational-actor theory," Mark explained.  "It doesn't work!"

Mark — Judy's husband, Amy's pet, university administrator,
and hands-down the best preacher I've ever heard.

To illustrate this surprising assertion, he cited a study conducted at his department, which is part of Harvard University's John F. Kennedy School of Government.  Researchers assembled a group of 100 Harvard students, gave them a specific amount of money, handed them a list of items commonly available in Cambridge stores, and sent them off to do their shopping.  Afterward the researchers noted how much this group of subjects spent.

Next, they assembled a second group of student shoppers, and gave them the same amount of money and the same list of items to buy.  However, before leaving on their shopping trips, the subjects were asked to watch the last few minutes of a very, very sad movie.  Later, the subjects were asked if the movie played any role in their shopping decisions.  They said no.  Yet, to a statistically significant degree, the second group of students spent more money than the first.  Clearly this second group responded to the sad movie by engaging in "retail therapy"!

We might conclude that one is well advised not to watch sad movies before heading off to Walmart.  But it goes deeper than that.  Research being conducted in Mark's department makes it clear that our decisions are influenced — to a far greater degree than anyone to date has imagined — by emotion and  even bodily chemistry.  Reason certainly plays a role.  But is it the primary, or even the most important, basis for our decisions?  And if not, what does this say about our economic, political, and geopolitical choices?

For more information, go to: decisionlab.harvard.edu

Let's consider this in light of what's in the news of late.  President Obama wants us to believe that investment in infrastructure, education, alternative energy, and health care will generate higher employment, economic growth, and recovery from the worst recession since the 1930s.  That is a very rational argument — being made to people who, like their grandparents in 1938, recognize that the economy is getting better, but who are nonetheless very anxious about their present and future.  Will Mr. Obama's rational argument have legs?

Meanwhile, Mr Romney argues that cutting taxes for wealthy "job creators" and getting rid of EPA and Wall Street regulations will "free" private enterprise to create jobs.  That is to some an eminently rational approach to the current unemployment problem, because it will remove the "uncertainty" which, Mr. Romney and his associates say, has made business unwilling to create jobs.  (I should note that advocates of this position suggest that these new jobs will be created regardless of whether anyone wants to buy the goods and services they will produce, i.e., regardless of economic demand.  But then, what do I know?)  Will this argument play well in the coming election?

Stay tuned.  And keep your TV remote, with its ever-useful mute button, close at hand. •••