The economics of advice

by on January 5, 2010 at 8:04 am in Education, Philosophy | Permalink

At times I believe the following propositions, in appropriately qualified fashion:

1. You don't know what a person really thinks until you hear his or her advice.  Along these lines, if you really want to know what a person thinks, ask for advice and he or she will open up.

2. In philanthropy there is a saying: "Ask for money and you will get advice.  Ask for advice and you will get money."

3. There are many exacting scholars who should be locked in a room, asked for advice of various kinds, and forced to speak into a tape recorder with no edits allowed.  The advice-giving mode mobilizes insights which otherwise remain dormant, perhaps for fear of falsification or ridicule or of actually influencing people.  All of the transcripts should be put on The Advice Website, with an open comments section, to limit the actual influence of the advice.  Some famous people would be revealed as foolish in critical regards.  The contents would be most interesting as non-advice and the site would carry a government warning that the advice is not to be taken seriously.

4. Often we do not trust people until we hear their advice.  We suspect in any case that they wish to control us, and until we know what they have in mind, we remain wary.  Sometimes it is necessary to give advice — even pointless advice — to establish trust.

These remarks are not intended to apply to medical or clinical advice.

Here is Bryan Caplan, offering direct advice to his colleagues (an excellent post).  Brett Arends questions whether you should take advice from people who write for a living.

1 C January 5, 2010 at 8:17 am

That is interesting as hell

2 Andrew January 5, 2010 at 9:01 am

This seems to assume that advice is objective. Is this because people don’t give advice unless asked because unsolicited advice is assumed to be unobjective and thus discarded? It seems like formalizing the method might taint it.

It’s interesting that the guy whose job it is to give me advice (advisor) never seems objective to me. Of course it is objective in a way, “help me or, well go die.” I don’t want to die.

3 Chuck January 5, 2010 at 9:58 am

In regard to asking for advice to find out what someone really thinks… that might work if they trust you.

In the absence of trust, you should ask the person what advice they think someone else would give, “So, what do you think most people would say is the right thing to do next?”

4 David J January 5, 2010 at 10:50 am

“…fear of actually influencing people.”

I am exposed to this fear quite a bit and it perplexes me. Those who would take advice and act upon it directly are probably going to have issues but for those who understand that such advice is biased, and results from different life experiences, gain more information and thus are better able to make any decision that said advice is geared toward.

Instead of being helpful those who would withhold such advice out of fear are being selfish; they are not sharing their experiences and views with others. The main counter-factor is that this requires sharing the biases and life experiences the adviser holds. The adviser, being aware of this fact, should make an effort to help put the advice into context and not simply say “do this”. For a casual meeting this may be impractical but when dealing with friends and long-term associates it is an investment in time well worth the effort. Particularly with respect to “advice”, one person cannot really attempt to control another (unless rewards/punishments are involved). The person “being controlled” may choose to follow said advice without question or comment but that is simply relinquishing their free will – the decision still rests with them.

As for fact versus judgment: if you limit yourself in this way you are going to ignore lots of potentially useful information. Also, many facts are simply generally accepted judgments. In the end, more information is rarely bad – no matter the type or source. The important thing is to filter said information and to understand the context of its source. If you cannot do this then by all means ignore and avoid advice givers and just do whatever you feel since you are equally as likely to get a beneficial result either way. An a potential advice giver, however, share your experiences and views and strive to provide context so that the receiver can more readily apply your insights onto their actual situation. Also, try to avoid providing a reward/punishment (from yourself) based upon the choices that are made.

Of course, I am unable to give lots of context for the above advice, but given the mass-distribution of said advice I assume the reader will perform the necessary critical analysis before simply ignoring me.

5 spencer January 5, 2010 at 11:46 am

Asking for advice is interesting, but how do you deal with uncertainty on this issue.

I provide portfolio managers with economic advice. I know they are aware of the uncertainty and that they are also getting advice from other economist. So I can give them my opinion without having to worry about the risk. But if a friend or relative asks the same question that my client does I am very reluctant to give them advice about the market because of this. I will give them different comments than I give my professional client.

Part of this difference is the risk of being wrong, something most academic economist pay little attention to. My professional client knows there is a significant risk that I will be wrong and that it is their job to seek alternative advice and weigh the risk of the various alternatives. But the average person is not in a position to weigh the risk in this manner.

I know I’m not expressing this well. But the typical academic economist that you are thinking about in the initial statement
probably is not thinking very clearly about it either.

6 Andrew January 5, 2010 at 12:18 pm

Bryan Caplan should write the book “The Rational Libertarian’s Guide to Winning In a World of Irrational Voters.”

7 David J January 5, 2010 at 5:08 pm

With investment advice if I am going to act upon said advice I’d either expect to be over-informed and make the final decision or work strictly on trust and let the adviser make the actual decision. My thinking was more around inter-personal and “life choices” advice as opposed to “professional” advice which I would prefer to get from a professional as opposed to a “friend” – or if gotten from a friend would analyze VERY critically – especially if they just say “Buy Microsoft” instead of “Here are Microsoft’s fundamentals and outlook and this is why you should buy them”.

8 BPM January 6, 2010 at 1:03 am

It’s really interesting blog. For the first time I visited the blog where I found that response is larger than post. It’s really cool.

9 Debt Rescue February 2, 2010 at 12:57 am

The advice-giving mode mobilizes insights which otherwise remain dormant, perhaps for fear of falsification or ridicule or of actually influencing people. All of the transcripts should be put on The Advice Website, with an open comments section, to limit the actual influence of the advice

10 above ground pool covers July 29, 2010 at 2:06 pm

Kind of funny, but I guess it’s really true. To win, anyone would do anything no matter how ridiculous it sounds.

11 MikeMeith September 24, 2010 at 8:18 am

It can use as a pass card too. Just swipe your card, and all the information about you can be read. Term Life Insurance quote

12 Jean M September 28, 2010 at 11:04 pm

We need objective advice. They cna easily influence the right target if they do it properly. It’s like proposing one small difference upfront.
London Escorts

13 AndyPro October 7, 2010 at 11:12 am

We neead many young people like her that have a very creative ideas. Im very appreciate this.
document management software

14 Sherlythumbs October 27, 2010 at 4:22 am

Beside know and hear the music of him, I know that he is a good person too. He is so mature in his age. I mean mature in that cllasic music. Many young poeplo like pop musis you know, nut he likes classic. Its good for our generations.
e cigarette

15 Acnezine November 4, 2010 at 12:27 pm

It’s no wonder why our government can’t function. I think people need to stop the games and get to work on our economy.

16 HerlyMou November 8, 2010 at 3:00 pm

Every doctor that they have in here qualified for all their field. They will help you to cure your disease. Im sure you will the the benefots of this site. After all we need a good docter that take care of us for 24 hours a day. Industry Magazines

17 Frank November 14, 2010 at 12:14 pm

It’s fine step. Good idea.
Fast Cash

18 dennyrika November 18, 2010 at 3:11 am

A food mission mean that you have a good concept in that mission. People need to make a good concep[t then we have a good mission like this. Take a part in this is very good.
starting credit

19 JuwitaBlend December 1, 2010 at 12:26 am

Me and my friend have a different taste in choossing a game. He like to play the racing game, where you have to steal a car as fast as you can and make sure that car just allright. I like to play the sims.
Favors for Weddings

20 Bonnyresty December 2, 2010 at 12:14 pm

People buy a several fancy car and put that in their garage. I want to know, where they have a lot of money? Okay they work for that. But, what kind of work? This is a big question in my head.
Timeshare scam

21 aron December 2, 2010 at 6:43 pm

Yeah I like that movie too. antivirus firewall software

22 Online same day payday loans December 10, 2010 at 5:50 am

Thanks for giving such a great advice. Ths is really inspiring and encouraging.
Online same day payday loans

23 BelindaMui December 13, 2010 at 9:22 am

They spend a lot of money in the making of this movie. They really know that this is a good movie and they sure that a lot of people will watch this movie. I want to spend money more to watch a good movie.
Personalized Items

24 maxidus December 16, 2010 at 5:12 pm

My advice is that you should get your undergrad diploma, work full-time for a couple of years then do your MBA.

25 Ronaldgreg December 16, 2010 at 10:19 pm

If you want which ciountry that need help, this site have a list of several country that they want to help. They already make several mission too to all this country. body wraps

26 tekkySukky December 21, 2010 at 5:43 am

A lot of people change when they are grown up. People have their own life, but still they always come back to their parent house. This is where our heart is. At home. With parent and siblings.
A&E Glazing

27 BeggyWush December 29, 2010 at 8:08 am

This is important thing to discuss for sure. You cant discuss bout this if you don’t have problrm with other country that do something wrong with the borderline between your country.
Chicago bar & clubs deals

28 Solifelt January 4, 2011 at 9:15 am

Technology always bring the good thing to all of us if we know what to do with that. For me, this is better rthan anything. I can chat and met people from another side of the world and that is really great.
solid oak wardrobes

29 SashaCow January 7, 2011 at 11:14 pm

I don’t know when this internet reach us and spread like a plaque between us. But of course is a good thing. I just trying to remember when this thing started. But until now, I cant remember that.
Cremation Jewelry

30 JeremyNathe January 11, 2011 at 8:47 am

Any country in this world must have concversation first before they decide their cou ntry borderline. Why do they still have problem in this? They should remember all the things that they have discuss before. Free Slots No Download no Registration

31 hanky January 20, 2011 at 12:32 am

great advise. i am reading it repeatedly to understand.
Cheap navel Rings

32 compostable bags February 11, 2011 at 12:03 am

Although sometimes, things around you can be quite hard to understand especially at macro perspective, try relax and lower down the scale and everything become easy to understand.

33 chat February 18, 2011 at 10:55 pm

That is very good comment you shared.Thank you so much that for you shared those things with us.Im wishing you to carry on with ur achivments.All the best.

34 bedbug February 27, 2011 at 6:32 am

take everything you read online with a pinch of salt everyone it seems has a hidden agenda

35 Heel Tastic Reviews March 1, 2011 at 5:19 am

Wow…this was a really good article. Probably one of the best I’ve read on

Comments on this entry are closed.

Previous post:

Next post: