Results for “"control premium"”
5 found

How large is the control premium?

Cass Sunstein on Twitter directs us to this paper (AEA gate), by David Owens, Zachary Grossman, and Ryan Fackler, entitled “The Control Premium: A Preference for Payoff Autonomy.”  The abstract is here:

We document individuals’ willingness to pay to control their own payoff . Experiment participants choose whether to bet on themselves or on a partner answering a quiz question correctly. Given participants’ beliefs, which we elicit separately, expected-money maximizers would bet on themselves in 56.4 percent of the decisions. However, participants actually bet on themselves in 64.9 percent of their opportunities, reflecting an aggregate control premium. The average participant is willing to sacrifice 8 percent to 15 percent of expected asset-earnings to retain control. Thus, agents may incur costs to avoid delegating and studies inferring beliefs from choices may overestimate their results on overconfidence.

There are ungated versions here.

Dan Klein responds to Bryan Caplan on immigration

Here is one bit from the longer piece, graciously reproduced by Bryan on his Substack:

Big changes have large and unknowable consequences, including critical consequences about basic political stability, functionality, and integrity. Liberal civilization is not entirely natural to man. Alexis de Tocqueville worried that despotism is.

And:

Would Bryan call for Sweden to open its country of 10 million people to the world’s 8 billion people? (Listen to the UnHerd conversation with Swede Ivar Arpi here.)

Would he call for New Zealand to do so?

If the ranking shown above would not go for Sweden or New Zealand but would go for the United States, why the difference? What is there in the Swedish case that changes the ranking?

On the same premise: You’d think that open border advocates would confront that matter directly, telling us which countries should have open borders and which shouldn’t. Maybe they do this. A discussion of where open borders is/is not recommended would, I should think, also elaborate the basis for the separating nations into those two bins.

I would stress that I favor a 3x increase in immigrant flow for the United States, but not Sweden.  I do not favor Open Borders for any country that large numbers of people might want to move to.  I also observe that the nations that have done the most to take in more immigrants — Canada and Australia — maintain a pretty “hard ass” control over their borders.  There is a lesson here.  When a citizenry feels “in control,” they are more likely to be generous to arriving outsiders.  Some of us call that “the control premium,” following I think Cass Sunstein.

*Three Identical Strangers*

Few movies serve up more social science.  Imagine three identical triplets, separated at a young age, and then reared separately in a poor family, in a middle class family, and in a well-off family.  I can’t say much more without spoiling it all, but I’ll offer these points: listen closely, don’t take the apparent conclusion at face value, ponder the Pareto principle throughout, read up on “the control premium,” solve for how niche strategies change with the comparative statics (don’t forget Girard), and are they still guinea pigs?  Excellent NYC cameos from the 1980s, and see Project Nim once you are done.

Definitely recommended, and I say don’t read any other reviews before going (they are mostly strongly positive).

Friday assorted links

1. Will wild puffins go extinct?

2. Do neurotics spend more time doing choresIs the control premium” lowest in Japan?

3. Is this good or bad advice?  (“Don’t mention the war!”)  And “The University of Colorado’s Board of Regents will consider a proposal to remove the word “liberal” from a description of the university’s academic freedom principles.

4. How Lebron James masters the media.

5. Alternatives to detention are usually cheaper.

6. Further update on EU internet regulation.

7. How corrupt are judges at musical competitions barter markets in everything?

Coin flip experiments as a measure of status quo bias

That is what the new Steve Levitt paper looks at and it does seem people stick with their current circumstances too much:

Little is known about whether people make good choices when facing important decisions. This paper reports on a large-scale randomized field experiment in which research subjects having difficulty making a decision flipped a coin to help determine their choice. For important decisions (e.g. quitting a job or ending a relationship), those who make a change (regardless of the outcome of the coin toss) report being substantially happier two months and six months later. This correlation, however, need not reflect a causal impact. To assess causality, I use the outcome of a coin toss. Individuals who are told by the coin toss to make a change are much more likely to make a change and are happier six months later than those who were told by the coin to maintain the status quo. The results of this paper suggest that people may be excessively cautious when facing life-changing choices.

Of course not all coin flips turn out the right way.  And furthermore we all know that the control premium is one of the most underrated ideas in economics…