What makes you an economist?

Dominique Strauss-Kahn has been arrested, taken off a plane to Paris, and accused of a shocking crime.  When I hear of this kind of story, I always wonder how the “true economist” should react.  After all, DSK had a very strong incentive not to commit the crime, including his desire to run for further office in France, not to mention his high IMF salary and strong network of international connections.  So much to lose.

Should the “real economist” conclude that DSK is less likely to be guilty than others will think?  If you are following the social consensus estimate of p, does that make you less of an economist?  A lesser economist?  Is everyone else an economist anyway and thus you can agree with them?  How many economists seriously use the concept of incentives — more than non-economists do — to understand everyday events?  Is the notion that incentives predict individual behavior actually so central to economics?  Should it be?

So run my thoughts this evening.  I asked similar questions when legal charges were levied against Kobe Bryant.


Does the fact that DSK is an economist change our analysis? How about the fact that he is a Socialist?

On average, a person with much to lose is less likely to commit a stupid crime like this
But that tells us little about any particular individual

Rich and or powerful people are use to getting away with thing that average people can't so they do not see their behavior as risky.

This doesn't work. Rape is more common among 'average' people and the poor as it is among the rich. It just goes on the front page when a rich person does it, and the police blotter on page J37 when a poor person does it.

I think incentive is important, but it's a probabilistic concept. If 100 people have an incentive not to rape, that means that fewer will rape than those who lack such incentive, not that none will rape. Incentive is not fate. It increases the likelihood of incentivized behavior, it doesn't guarantee it.

It's true that rapists -- rape is a highly stigmatized and discouraged crime -- sometimes attain surprisingly high positions in society before they are discovered. See: Bill Clinton.

If we are arguing incentives, then reduced likelihood of being punished definitely matters. Do you have any data to support your claim that rape is more common amongst poor people than rich people? I had not previously heard that.

I did not mean they are more likely to be rapist only that they see less risk in breaking laws and social conventions because they are use to receiving special treatment by authorities, can pay off victims, and are more likely to be believed when they deny guilt so this may compensate to the greater incentive not to.

I did notice the the police did not handcuff him when they took him off the plane which is contrary to standard procedure when making arrest,

"Rape is more common among ‘average’ people and the poor as it is among the rich."

[citation needed]

Is it less common among the rich, or are rich offenders just less likely to be reported, prosecuted, and convicted?

Slightly modified model: the powerful are used to being protected. So, they get 'caught' when the protection is withdrawn. Maybe too conspiratorial still, but it's a model. Remember, economists do it with models.

Men risk death for sex.

You're right. Much more interesting than what is happening to the IMF Managing Director is what has been happening at Sidwell Friends for some time. Read this complaint submitted two days ago to the Superior Court of the District of Columbia


I'm waiting for the movie.

Heuristics are a numbers game. Science is a different kind of numbers game.

Oustanding. They are one, but not the same. Scientists use heuristics all day long. They save the 'science' for the pubs.

I think probability is the best lens through which to view this. 1) Yes, for the reasons you mention (and others I imagine) the base rate on high status economists committing crimes is lower than for others. 2) Law enforcement is aware of this lower base rate as well so for that and other reasons (social status bias?) it probably takes more evidence to get law enforcement to arrest a high status economist. This creates a selection effect. So the question is, does law enforcement effectively treat the base rate as higher or lower than it deserves. If law enforcement adjusted proportionally for the difference in base rates between different populations, then given that a person A is arrested their probability of having committed the crime is the same for different sub populations.

I always thought that given the incentives of him and his handlers, that there was good reason to think that Michael Jackson didn't molest those boys. I guess that's a similar argument,

Of course, if he knew that everyone believed that, he'd have less reason to worry about being caught. That suggests k-level thinking. My understanding is that outside of limited contexts, k is rarely observed to be much above 2, suggesting that their probabilities of committing crimes should not fully offset.

"When I hear of this kind of story, I always wonder how the “true economist” should react."

Well I went to law school and and have observed American politics for decades, so....

"When I hear of this kind of story, I always wonder IF
1. Is it true? Could well be -- there are lots of sexual assaults -- and especially by powerful men.
But then again, do I have to form a judgment? What's the necessity for me, personally, now, to have an opinion? Might I reserve judgment?
2. Was the VIP being blackmailed by political enemies? After all, if starting a war is enough to increase political power, blackmail is small change.

Doesn't the fact that you're already invoking the theory of blackmail betray the fact that you've already reached a partial judgment?

Does assuming it was rape involve any less judgement? Why? What's the null hypothesis?

Had I reached a partial judgement I would have said so.
More importantly, I would not have used a QUESTION MARK at the end of my sentence, which for most people indicates _uncertainty._
If you had read my entire comment. in fact I wrote " Is it true? Could well be — there are lots of sexual assaults — and especially by powerful men."

I think the traditional economist answer to such imponderables is "ah, but at what margin?", perhaps putting it in italics if one is particularly distraught. The incentive for an IMF head to be a sex criminal is as you say quite low, but presumably the incentive for a sex criminal to be the head of the IMF is high. So it's all down to relative elasticities of sex criminality versus IMF headness.

+1, if we could give +1s on this comment thread. Exactly what I was thinking. Why must we assume this is the first (alleged) sexual assault Mr Strauss-Kahn has committed? If I could make such a bet, I'd bet he was a sexual assaulter before he was an IMF Chief, since being a criminal is less about accumulation than personality.

Ah, but what if DSK is aware of these thoughts? Thus, knowing that others are unlikely to suspect him of this crime given his incentives, he believes himself to have greater ability to actually commit them without punishment?

Accused is not convicted.

C'mon Bill, when a woman accuses a man of something, he is automatically guilty. Because women are angelic creatures who would never lie for their own selfish interests, and men are expendable and evil! You should know this.

But when it's rape, the man is automatically innocent because the woman must have wanted it (at least arguing at your level). So that doesn't help us here.

It is my understanding that most criminals underestimate how likely they are to be caught and punished. An especially powerful individual has some good reasons for thinking he might be able to get away with his crimes; if the natural human tendency is to underestimate the risk, and someone also knows that their circumstances genuinely make the risk lower, combining those tendencies could give someone a very low risk estimate. I don't think stories like this do more than to confirm that powerful people do sometimes come up with such extremely low risk estimates.

It is my understanding that most criminals underestimate how likely they are to be caught and punished.

...because people who don't underestimate it are unlikely to become criminals.

The incentives *as evaluated by DSK* are based on the expected outcomes actually expected by DSK, which may differ from the real outcomes (and in this case very likely did).

After all, DSK had a very strong incentive not to commit the crime

But you don't specify what it is; you only list incentives not to be caught committing the crime.

I like that you question fundamental assumptions that are often taken for granted in economics. Personally, I question the assumption that people behave rationally.

It drives me a little crazy when people assert that a fundamental tenant of modern economic thought is that all individuals behave rationally at all times. It's not! Models may assume that on large scales that a rationally supported outcome occurs, but only because a small number of rational actors can cancel out a large number of irrational ones (if there's money on the table from 9 previous irrational actors, the efficient outcome is restored once a 10th rational actor takes it).

What number of people rationally not raping hotel maids does it take to cancel out DSK's alleged actions, if they actually occurred?

In addition to Bo's point, I would like to point out that "people are irrational" is not a model of human behaviour since irrational people could do anything. You need a specific model of irrationality (like behavioural economics) in order to challenge rational decision-making.

That isn't necessarily true. You do not have to know what is correct to know that something is wrong. It's both possible and helpful to criticize a model without having a model to replace it.

It's good to question the assumption that people behave rationally. However, it's also at least as good to question the assumption that other people behave irrationally. After all, both you are a person too, so if you see someone behaving in a way that you think is irrational, one possibility is that you are too irrational to work out the rationality behind their behaviour.
(Another possibility is that you don't fully know the situation you are in).

I often think this when I see some cognitive scientist publishing a study saying that we are convinced of things not because of logic and good arguments, but because of our emotions - how much should I believe said scientist? Hasn't the scientist just shown that I should place a low weight on their conclusions?

I often think this when I see some cognitive scientist publishing a study saying that we are convinced of things not because of logic and good arguments, but because of our emotions – how much should I believe said scientist? Hasn’t the scientist just shown that I should place a low weight on their conclusions?

No, they've only shown that you *will* place a low weight on their conclusions. And apparently, they were right!

Serious question: how have they only shown that? It could simultaneously be true that I *will* put a low weight on their conclusions and that I *should* put a low weight on their conclusions.

As it happens, I am somewhat inclined to put a high weight on their conclusions, but given their conclusions, I'm not sure if I should be doing that. :)

If DSK were motivated by status, and saw molesting random service staff as part of the reward for achieving his lofty position, can we not see him as merely attempting to maximize utility?

+1. People in power tend to get there because they like power, and one element of power is the ability to coerce random people into doing various things.

I've thought about this in a different way. If I were going to sexually assault a woman, where would the cost / benefit have to be for it to make sense to me to risk jail? It seems sensible that if the girl were hot like a Hollywood actress and there was little chance of negative repercussions then risking jail seems right. The hotter she is, the higher the chance of being punished could be before it becomes not worth it.

But a random 32 year old maid? No, that doesn't make sense to me at all. If I'm going to prison for rape, the girl is going to have to be HOT.

This sounds pretty disturbing.

Well yeah, that too.

We don't know that the maid wasn't "hot", but assuming she wasn't, it's possible she was compatible with some fetish or fantasy that had the same effect.

Seriously? The old "she wasn't hot enough to get raped" trope? Rapists don't choose victims based on hotness, but rather on powerlessness and opportunity to rape. Immigrant hotel maids are people who usually have little power or standing in society. Perhaps he assumed that she was unlikely to report his assault or be taken seriously.

I was thinking along the same lines. I find the thread here very interesting because, while I'm interested in economics, I usually spend my time on civil rights and feminist websites. And the feminists have a very different view of rape.

The assumption by many here is that (if DSK is guilty, and he hasn't been convicted, innocent until proven guilty, etc.) the "motivation" to rape is to have sex with a woman.

People who have studied psychology, though, separate the motivation to rape and the motivation to have sex. The former is about power and domination, the latter is about connection and pleasure and possibly reproduction. That she was a maid only meant that she was present at a moment when a rapist wanted to rape and that she was alone with him in a hotel room; it says nothing about her attractiveness or how well she protected herself or anything else about her.

I find it hard to believe that he would have raped for the first time at his age and just like that, while being sent abroad for work. If he is a rapist, he probably raped other women before, and he didn't get caught because the chances of being caught, charged, and convicted of rape are fairly low in the Western world.

I disagree with the person above who says that people are simply irrational as an explanation for his behavior, but certain rightwing economists' assumption that "rational" means "will do whatever makes more money" is about as ridiculous. There is a motivation here, or a sickness, if you will; it's just not related to money.

And just to respond to the people saying this is because he's a Socialist: he's a careerist before he's a socialist. My French father-in-law talked about this last night - he called DSK a "rightwing Socialist." My partner disagreed and said, "No, he's just a corporate centrist." We all settled on "careerist" - the first town where he could be elected to political office wasn't going to elect someone who wasn't a member of the Socialist Party.

But the dude isn't an ideological socialist.

I was at first going to consider the possibility of the maid having an even stronger incentive to accuse him if she knew that he was in a high position of power, but seeing as how DSK has done something like that in the past then maybe he does believe that his position is a get out of a jail free card.

If you are talking about his past with Piroska Nagy then I differ. That was a consensual affair (made worse by a power differential) and favoritism. This is violent rape. Quite different I'd say. Do we know that rape is correlated with having affairs?

In the aftermath of the Nagy scandal, a French writer named Tristane Banon asserted that DSK had attempted to rape her during an interview. I believe this is what Octahedron is referring to.

What exactly would be her incentive to make a false accusation? I'm not saying it couldn't happen, but I think the amount of scrutiny and victim-blaming that often accompanies rape (high profile or not) is a strong disincentive to report rape. What's in it for her?

"The culture that is France"

Sure, politicians in other countries would never do something like this... Not.

Culturally relevant tidbit: The maid was an African immigrant.

.... from a former French colony!

Maybe a "deeply-rooted cultural subconcious force" played a part in this. Do economics account for it?

So when rich and successful people are charged with a crime, they are less likely to have done it? This isn't "thinking like an economist" it's "thinking like a Republican."

Rich and powerful people, at the margin, are more likely to think they can get away with things. They have a harder time imagining that they can go to jail. They have a sense of being better than other people. They are less likely to have been victims of physical crime themselves. They are less likely have seriously contemplated what it is like to be raped, beaten up, or otherwise humiliated or harmed.

If anything, I think it's more likely to be true of this guy than if it were some Joe Schmoe.

"Rich and powerful people, at the margin, are more likely to think they can get away with things." Thinking like a Democrat.

What type of passport does Dominique Strauss-Kahn have?
If it is of the proper diplomatic level, then he cannot be charged.

This crime was serious and unconnected with his diplomatic role. I bet IMF board of governors or maybe even France, his home nation, would waive his diplomatic immunity after an incident like this. I'm curious about the chain of command though. Who does the IMF head answer to? Is Strauss' diplomatic passport France issued or UN issued?

One of the articles I read stated that he does not have diplomatic immunity.

According to the Telegraph, he doesn't have diplomatic immmunity.

I don't think Strauss is a diplomat. As head of the IMF he would really be in the same position as a Chief Executive of an international corporation. Although the IMF is a quasi-governmental organization it is not necessarily acting on behalf of a specific country, I would see no reason why IMF employees would have diplomatic immunity.

"The IMF’s articles of agreement say that its officials “shall be immune from legal process with respect to acts performed by them in their official capacity except when the fund waives this immunity”."

That most likely wouldn't cover rape.

Quote from http://www.ft.com/cms/s/0/418f6d50-7f1a-11e0-b239-00144feabdc0.html#ixzz1MRmad5lF

It may not cover rape but could it be used as a technicality by the defense lawyers? Even though France / IMF have the ability to waive his immunity they had not waived it at the point in time that DSK was arrested on the Air France Flight.

If so, then his very detention by the Port Authority cops would be illegal. And perhaps that could open a back door to at least get DSK out of the US for now. He might, of course, be later extradited.

If it doesn't cover rape then it obviously can't be used as a technicality by the defense lawyers to argue that it shoudl cover rape. That's, like, the exact opposite of how technicalities work.

And an illegal arrest would, at most, only invalidate evidence gathered as a result of the arrest. Obviously most of the substantive evidence (the accusation, any injuries to the victim, the condition of the hotel room, the fact that he tried to flee the country) was not discovered as a result of the arrest.

But I wonder what about the fact that he would have been in France by now if not for the illegal arrest? Then he would have needed to be extradited and it would depend on the agreement the countries have. Look at Roman Polanski's case.

So I wonder if the courts will consider the aspect that he was kept illegally in the US. At worst the lawyers might be able to use it as some mitigating circumstance. Also, if DSK's detention was indeed illegal out goes any confessions etc. that they might extract from him.

The maid was a Mengerian.

What matters is the aggregate, not the individual. The supply curve for the labor of an individual may slope in whichever direction it wants to slope, but in the aggregate, the slope of the supply curve for labor is very predictable. This means that at best you can only apply a statistical possibility as to the behavior of an individual by extrapolating from aggregate data. Sure, the incentives he faces make his guilt more improbable, but they don't make them impossible.

All people, economists and non-economists alike, should recognize that homo economicus—the purely rational actor—never existed. One problem: prospect theory suggests that actual assessments of the risks of a given situation often deviate sharply from what we'd expect under a strict expected utility model. In general though, human psychology evolved over time and contains many features which, while they may have been adaptive many thousands of years ago, cause us to deviate from the courses of action one would expect of a rational decision-maker.

Assuming there is "too much to lose" can be used as an explanatory model suggests that Gary Hart never had his photo taken on the Monkey Business, Bill Clinton really did not have sexual relations with that woman, Miss Lewinski, Henry VIII probably stuck with his first wife, and Mark Anthony probably broke it off with Cleopatra once it became clear that would cause him trouble. Sex scandals are a trope in our society and the only difference here is the allegation that force was used. That's just a small variation on the well-established pattern.

What a pointless observation!

You asked this only of Kobe? Not Woods, Spitzer, Clinton,Jackson ,Edwards,Ensign,..........
And how many more before deicding that may be its not a question worth asking?

...Sanford, Craig, Favre, O.J. Freaking Simpson...

.....Tiger Woods and the president of Israel

Having a consensual affair is not "shocking" behavior for successful men. Michael Jackson was all sorts of weird to begin with. Clinton I'll give you.

It is shocking if it will result in a large loss of career / wealth / power / prestige.

DSK has a reputation of being an unrepentant and particularly aggressive womanizer. The Roissy crowd would love him.

Normally, an individual with a lot to lose would hesitate to brazenly cheat on his wife, much less commit a crime (I don't know if DSK is married). However, with DSK, he may gotten away with this behavior in the past and consequently underestimated the risks of getting caught and/or the repercussions. This would especially be true if he had been accused in the past and beat the rap somehow. (I wouldn't be surprised if there are more stories about how he has used his power to cover up and intimidate past conquests that he forced himself on.)

I suppose that it is possible that he knew the correct odds of getting caught and has simply rolled the dice too many times. I don't like this explanation.

I haven't thought about the status of the victim. My guess is that the data shows that we punish those who commit crimes against maids less than we punish crimes against hot Hollywood actresses. A maid may be a more tempting target.

Predicting individual behavior isn't economic science -- Hayek

Or psychohistory -- Seldon

When I was a law student, I worked on a couple of death penalty cases. You'd think even your "ordinary" criminal could see that killing someone else might lead to their being imprisoned for life or lethally injected. But alas, people go on killing despite the very strong counter-incentives that society has established not to do so.

Personally, I think human beings are irrational and act according to passion more than sense (even in the "sacred" market), because really what would ever possess someone to rape another human being? But to the extent that you believe incentives matter to criminals, there's a passage from I think Thucydides many years ago that influenced my thinking on this. It's to the effect that it's not the harshness of the penalty, or in your case the extent of the negative consequences, that matter to the criminal. Rather, what matters is a criminal's belief that they can get away with the crime. Thucydides' argument was that it was more important that you had effective criminal justice than harsh penalties.

So, perhaps it is exactly because a low status individual might not be believed in comparison to a high status individual that leads that high status individual to think that they can get away with their crime. Perhaps DSK or Kobe Bryant think "This woman is too lowly to be believed." To them, they believe their status can protect them from the consequences of their actions and their victim's status will make her accusations suspect (as she is perceived as having something to gain). They want to engage in criminal behavior and their position acts as a powerful incentive in leading them to think they can get away with it.

And it was ever thus. In the play by Euripides, when Creusa told Ion that, contrary to Apollo's oracles, that Apollo had raped her and that it was the god that was his father and not Xuthus, Ion asked his mother, "Come; this is a private matter between us two -- anything you tell me shall be as secret as the grave. Are you certain that you did not -- as many a girl does -- they cannot help it -- become infatuated and yield to a secret love, and then lay responsibility on the god, and to avoid bringing disgrace on me, say that Apollo was my father when he was not?" Because, really, why should one not believe the word of a god over a mortal woman who said she was raped?

Make sure you don't fall into the same trap, Tyler, and start to believe that status is evidence of innocence. Unlike in the theatre, there is no deus ex machina to tell us the truth.

Great comment.

Do you really not see that you are a quack?

I have no good idea if the charges in the case are true or not, but like others, I wonder if this theory doesn't imply that Bill Clinton didn't have an affair with an, at best, modestly attractive and not terribly charming intern at the White House. If that's so, how useful is it?

"It is my understanding that most criminals underestimate how likely they are to be caught and punished. "

Give that the _vast_ majority of crimes are not solved- no one is cause and no one is punished- I suspect that this isn't true. Even in the case of very serious crimes, most are not solved. My impression is that people generally greatly _over estimate_ how likely it is that criminals are caught and punished, and also that much of the evidence indicates that fear of punishment is a relatively minor part of the reason why most people don't break the law.

Hollywood here I come!

(oh that was bad...)

Well, sex crimes like this are the perfect way to set someone up... because:

1. They almost always happen in private, and for the most part the only evidence is his side of the story vs. her side of the story.
2. People enter a lynch mob mentality when it comes to sex crimes. In the courts you are guilty until proven innocent, and no amount of evidence will ever absolve you in public opinion.

To me, this seems like a setup. However, given that this guy is a hardcore lefty, and probably is ideologically sympathetic to the radical feminism that doesn't acknowledge the possibility of false accusations of rape, I think the consequences are fitting. Live by the sword, die by the sword.

This one should be easy enough to resolve. I mean they will have used a rape kit and DNA testing should say if he had his dick in the wrong place or not?

What if she slept with him willingly, and then pretended she was "attacked" after the fact?

Possible. But would be hard to explain why DSK got on that flight leaving his cell and other belongings behind.

Also, why have they charged him with attempted rape and not rape? Maybe there was no DNA transferred?

Does economic theory require that "individuals respond to incentives" all the time or merely most of the time? Eternal unflinching rationality seems a poor assumption.

This may just be the first time someone has gone through with pressing charges. Most rape victims don't. I expect that this is especially true when the rapist has power and status and the victim doesn't.

It will be interesting to see if other women step forward with accusations now that someone else has already opened this can of worms.

Power and status come usually with wealth and the potential money transfer through a subsequent civil suit can add strong incentive to press criminal charges. I'm not saying this often happens, but to be crass, if I had this devils's alternative I'd rather want to sue a rich banker than a poor black guy from the 'hood.

Except that going after the rich banker, it's much harder to win, since they can afford expensive lawyers. You also have to consider the substantial emotional cost to pressing charges. While I'm sure remuneration enters into some people's calculus in this sort of decision, I think it's drowned out by other considerations.

I especially hope more women step up with false rape accusations for attention and sympathy. Can't believe we let those Duke Lacrosse guys get away with just their reputations ruined, and their time and money wasted! We have to be more diligent next time.

Economists tend to reject conventional morality, so someone being an economist makes him more likely to be a criminal than a non-economist, all things being equal.

Stiglitz earlier this month: "Strauss-Kahn is proving himself a sagacious leader of the IMF. We can only hope that governments and financial markets heed his words." Oops! http://www.project-syndicate.org/commentary/stiglitz138/English

That's certainly a creative way of introducing the "no true scotsman" fallacy...

The science of human behavior only applies to the aggregate, not (or at least not with much predictability) to a single individual. Do I have to quote Seldon here?

Perhaps a very high discount rate?

I would have thought the obvious explanation for the alleged despicable actions would be time-inconsistent or present-biased preferences, where in that moment the discount rate between present and future is an order of magnitude different to the discount rate between any two periods in the future. Hence the costs would seem minuscule.

The whole idea of incentives becomes defunct with this type of human behaviour.

nooooo I can't believe it!!!!!!!!!!!how can he be soooo bloody stupid. oh god. we finally had the chance of someone on the left with a brain (not like Royal) and modern ideas (not like Aubry)....argh this is so frustrating!!! does this mean we will end up with Sarkozy, AGAIN ? downright depressing

There are awful lot of comments here without anybody mentioning the easily googled reports that he had engaged in similar behaviors before in France and that the incidents had been hushed up. If the allegations are true, his big mistake (other than being an violent amoral creep), was not understanding the difference between the probability of arrest & conviction in France (where his position and power had protected him and probably would again) and New York (where a chamber maid has no idea who he is and has no reason to fear retribution).

A) A Polish film director (Roman Polanski) can (allegedly) try to seduce a 13 year old girl in the US, get rebuffed, then give her Quaaludes and anally rape her, then infamously (not merely alleged) flee the US to France where they won't extradite him to the US.

B) A powerful Frenchman who walks out of his bathroom naked and then sees a (pretty?) maid, it is natural for his mind to leap to sex. (Note that I am not making further claims of "naturalness" regarding his alleged actions after that point).

C) Same Frenchman who seems to have done similar stuff before. http://www.telegraph.co.uk/news/worldnews/europe/france/7701145/Dominique-Strauss-Khan-in-sex-book-claims.html

the author claims the IMF affair may only be the tip of the iceberg, quoting French actress Danielle Evenou as saying: "Who hasn't been cornered by Dominique Strauss-Kahn?" She tells of another female Socialist MP who claims she makes sure she is never alone in a room with him.

Tristane Banon, a writer, claims she had to fend Mr Strauss-Kahn off with kicks and punches when he invited her to a meeting in a room furnished with a double bed and a television.

D) Gary Becker has written extensively about applying rational expectation economics to all sorts of things like drug use and crime. How does this situation differ? Does not risk/reward still not apply, with everyone having a different baseline?

It's telling - and typical of the British misunderstanding of French sexual mores - that the headline of the Telegraph article you cite describes DSK as "an incorrigible seducer". The allegations against DSK are not allegations of seduction, they are allegations of sexual assault. The French understand the difference (even if they are much less rigorous at pursuing allegations of assault than they should be). Most British journalists, especially those working for the Daily Telegraph, apparently do not.

Correct. Besides, in the also amply misunderstood case of Polanski the dispute has never been about the morality of his behavior but about legal technicalities.

DSK is a man who tends to be aggressive with women.



I am happy he finally got arrested.

To answer Tyler's questions I'd argue
1. Stupidity trumps everything else except success
2. In particular, stupidity trumps incentives
3. Neither economists nor politicians are exceptions to #2
4. Only successful people are exception to #2 because of #1.
5. Conclusion: DSK may be an economist and a politician but he's not successful (successful people are not appointed by others the way that DSK has been appointed to several positions). To be Clintonesque, he should have waited until winning France's Presidential election.

An Italian friend just sent me this
The author is the late economist Carlo M. Cipolla who was a professor of economic history at UC Berkeley for many years.


To make this work, you must assume an unreasonable degree of human rationality. Of course, if Dominique Strauss-Kahn were, say, held on suspicion of robbing some luxury retailer on 5th Avenue, then yes, we can use your approach.

But for crimes of passion, I think human rationality is weak. You give the examples of Kobe Bryant and Dominique Strauss-Kahn, both of which have a lot to lose. But what about Rafael Robb, a celebrated game theorist at UPenn who clearly fell victim to irrationality.

I would argue that he had a lot to lose also. As the times reports:

“Robb was an expert in game theory, a complex melding of psychology, human behavior and economics — all aimed at determining what one’s adversary will do next. With that background, police say, Robb may have thought he could outsmart them.” Although the police claim that his efforts to outwit them were amateurish.


So the point is, while Strauss-Kahn is innocent until proven guilty, this may just be a crime of passion in which he may indeed be guilty. Using rationality to make an inference in this case is unwarranted.


What would an economist say about this?

What would a behavioral economist say about this?

I'm glad I searched the comments for "behavioral" before I posted this exact comment... I think this makes the case for behavioral economics!

This arrest and the allegations by themselves might ruin his chances of becoming president, even if he is proven innocent eventually.

For that reason, it seems that any political rival of his had every incentive to set him up -- seems like an easy enough way to get rid of him.

This complication did not apply to Kobe Bryant, OJ Simpson, etc.

What I thought was interesting was that it was a $3000 a night hotel room.

Did the IMF pay for this?



WTF does a $3000 room have in it?! A silver shitter?

No, he paid for his suite. He was in NY for private matters, not for business. Hence no immunity.

actually having been a former staff of one of the bretton woods institutions i can inform you that staff of said institutions enjoy corporate negotiated rates in all major hotels and a suite at US$ 3000 is likely to have cost him a 1/5th of that rate. plus he is a high level french politician and wealthy and most probably got upgraded for free (which happens quite often). one of the perks of powerful people. this is such a non debate i really wonder why ppl just keep discussing this issue

Doesn't *everyone* have a lot to lose from a rape conviction - as in, just about everything they value? I don't think that millionaires perform more violent crimes that billionaires because the have less to lose. What's more, rich pricks who run shit and stay in $3,000/night hotel rooms tend to think they're above the law. I'm obviously not the jury, but I don't think that he had any unusual disincentives to rape that are absent in "normal" well-off people, so this a priori "incentives" argument for his innocence would have zero sway with me.

This post doesn't make a lot of sense. Even if you accept that a person like Dominique Strauss-Kahn is less likely to commit a certain type of crime then others does not mean Strauss-Kahn is innocent. He might be innocent that's for the court to decide but what you can say about a group on-average can't tell you that much about a particular incident.

Besides, I never really thought the concept of Incentives was sufficient to explain most decisions people make. Incentives can possibly explain long-term decisions but many snap decisions are made based on emotion, not logic.

However incentives are typically about emotion too. If you don't care about something for an emotional reason why bother doing it? There's nothing in logic alone to give a reason to step out of the way of a freight train.

Well,maybe like Newt, an economist who commits rape is just such a driven economist so committed to his profession that rape is just a sign of too much commitment to economics.

If there's one place where hyperbolic discounting makes sense, it's sex.

Many years ago, I met a young, high-flying academic economist who confessed that he had a fundamental dilemma in his career: he was producing competitors for his job. He said he never supervised his Ph.D. candidates more than the minimum he could get away with. I now realise that it is not surprising that a profession based on the notion that value should be measured by price and that all human actions should be chosen by rational analysis of costs and benefits would have a tendency to attract arseholes.

Logically, I suppose he could have stayed at a cheaper hotel room and used the savings to pay for consensual sex. But IMF expenses rules may prevent that.

There is also the possibility that risk adds enjoyment to behaviour of this kind, therefore making Tyler's assumption rather dubious.

Politicians and televangelists seem to engage in high-risk sexual behaviours more than most people, not less.

Smoking and drinking are never more enjoyable than at school, when these activities are forbidden.

>Should the “real economist” conclude that DSK is less likely to be guilty than others will think?

The phrase I'd use is "poor impulse control". One economics book I was reading recently (I think it was Predictably Irrational) had an experiment to determine if sexual arousal resulted in "worse than usual" decision making - something about wrapping a laptop in plastic and making the subject answer questions while he's fapping to smut, and comparing those answers to the same questions when he's not aroused. Based on that, I suspect that his economic sense was ignored as he was thinking with his little head.

>Is the notion that incentives predict individual behavior actually so central to economics?

It appears to be one of the central axioms. I think that people are not consistent in their decision making. And I think that the role of incentives are less important for some types of decision making. The book Identity Economics mentions several scenarios where a person's sense of identity will lead them to make decisions that are counter to their own interests.

Finally, I think you are forgetting that some people are sociopaths. The book Snakes in Suits gives some examples, and while sociopaths make up about 4% of the population, they tend to have little concern over backstabbing their way to the top of institutions. Is DSK a sociopath? I have no clue. However, as a rule of thumb, I expect everyone within the top tiers of a corporation, or other powerful institution (such as IMF and World Bank) to be a sociopath and to defend myself accordingly.

The next time someone asks me why so few women are libertarians, I'm going to direct them to this thread.

The head of the IMF a 'hardcore lefty.' Truly, the commenters here a class apart.

He might be an economist but he is also a human being. And humans are more emotional than rational - that's why we sometimes do things that doesn't make rationally sense. Like playing in the lottery; you may not only play to win but also to imagen how it would feel to win.

So the fact that he is an economist can have very little to do with his acts in this case which could be solely explained in old fashioned emotional behavior: She was hot and he was naked and there was rational part of the brain was ignored.

An out-of-the-box conjecture from an online forums, that is plausible:

"I think Strauss-Kahn must have ordered a prostitute dressed as a maid, and jumped the wrong “maid”."

For $3000 a night, shouldn't the maid come with the room? Sort of like a continental breakfast or a minibar?

You're not thinking it all the way through. When these people worked hard to amass their success, what were their incentives then? I don't think the ultimate incentive is money -- money is a means -- the ultimate incentive is sex. It's why everyone does everything, whether they're conscious of it or not, and it's why so many successful people are caught being unfaithful to their partners or otherwise violating sexual norms. They do it because they think they can, because they've worked so hard to "earn" the privilege, which is why they or anyone else works so hard in the first place.

talking about incentives and in 119 comments I just found 1 reference to Sarkozy.....

"For $3000 a night, shouldn’t the maid come with the room? Sort of like a continental breakfast or a minibar?"

Perhaps it was all a misunderstanding, and the man thought this was part of the arrangement. Afterall, we have to establish incentive to prove a crime. One would generally feel incentivized to consume things they purchase.

“I think Strauss-Kahn must have ordered a prostitute dressed as a maid, and jumped the wrong “maid”.”
If the apron doesn't fit, you must acquit? I can see that defense making ground.

true that, but at the same time the rich and well-connected also get away with their crimes so much easier than others by paying off their 'victims' in off-court settlements. worse, many of them willfully commit crimes *in expectation* of being able to pay off for their crimes cheaply. the economist that Tyler describes is a little bit too narrow-minded to be true

Of course at this point we have no idea whether the accusation is true or not, but the context looks pretty bad. If he did do it here's one answer to Cowen:

Economists as a profession are taught to look only at their self-interest, and to regard the market as a almost completely benign institution. This means in both cases looking at others and everything as "resources" and not anything more.

The psychological profile that most consistently looks at people a simply resources is often called a sociopath. Sociopaths cannot empathize with others and so literally are motivated by self-interest alone. I imagine sociopathy exists on a continuum, and those rather farther out on it might disproportionately be among the men who seek power over others, money, and so on. Like wanting to lead the IMF and be a big figure in politics.

But if you cannot empathize easily with another it would likely be true that you cannot empathize easily with your future self - who is not you at the moment.

In economics speak - the future is uncertain so let's consume, pollute, seek sexual thrills now. What do we owe to future generations? (By extension, to future selves?) Especially if we have difficulty putting ourselves in the shoes of some person in the future who just so happens to be ourselves.

Seems to follow from economists' logic plus what we know of psychology.

This doesn't prove him guilty, not at all, but if he is guilty it may explain how he could have done it with so much to lose.

What is it about critics of economics, that they persistently get economics completely, totally wrong?: I mean, if they were just ignorant, you'd expect that they'd get something right by chance, but the level of wrongness displayed is so consistently wrong that I sometimes think that they must have an econ 101 textbook beside them and go through and carefully reverse each idea in it.

Firstly, economists are taught to look at everyone's self-interest. If I only looked at my self-interest, I would never understand why shops don't just give me everything I want for free. Looking at it through an economists point-of-view gives the idea that hey, maybe the shopkeeper wants my money so they can buy goods and services of their own.

Secondly, if you look at humans as resources, and not as anything more, then you will never understand the idea that "people respond to incentives". After all, water doesn't respond to incentives, only to the laws of physics and chemistry. An economist who only looks at people as resources would be unable to understand the income-leisure split, or why we can't tell from theory alone whether an increase in the hourly wage increases hours worked.

Thirdly, any economist who doesn't think that people ever make decisions about the future can't understand why anyone would ever lend someone else money, and thus can't understand interest rates.

Trade, "people respond to incentives" and interest rates are covered in every Econ 101 textbook I have ever read or referred to. So, according to your description of economists, every single economist could never comprehend a basic econ 101 text book. One wonders who writes them.

Why can't critics of critics get the critics' arguments right?

Just one point until I recognize an actual rebuttal of my argument: resources, living ones, respond to incentives. Your choice of water as a counter example is proof positive that you did not even try to understand the argument. Ever hear of the incentive of good wages over worse? It's not because the corporation has a deep concern for the worker's well being beyond his or her ability to perform the job well.

But I'll let more discussion pass because I seem to have hit a irrational nerve.

He may have calculated that this would prove he is true European head of state material.

Must be a Silvio Berlusconi protege, or was that Sarkozy?

The Gillette-Torvik blog has some thoughts about this and about the criticism that the post received from Andrew Leonard at Salon.com.

Perhaps before asking a darn silly question, the economist should read up on rape and the motives of those who commit it.

This is not to say that Strauss-Kahn is guilty or innocent. That's for a court to decide, not the press or those with no involvement. But the statement that started this whole discussion is appalling.

For the record, turns out all Randall Munroe of XKDC comic fame needed was a couple of minutes with Google to answer Ben Stein's question "People who commit crimes tend to be criminals, for example. Can anyone tell me any economists who have been convicted of violent sex crimes?"

"[Economist Paul] Bernardo is one of the nastiest serial killers in history."



To be fair Bernardo may not have been a "true economist." And not just in the "no true economist" sense. Although he evidently began his serial-killer career while majoring in economics.


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