Interview with Richard Thaler
Interview with Richard Thaler, University of Chicago behavioral economist, by Douglas Clement Editor, The Region: “…Region: One thing we haven’t talked about yet is your work on reciprocity and cooperation. And let’s use another British example, Golden Balls. You did some fascinating research on this British game show. Can you tell that story and what it illustrated?
Thaler: You know, it’s funny, this goes back to Gary’s line [about behavior in real markets as opposed to labs]. As you know, this game show ends in a prisoner’s dilemma. And there have been thousands of experiments run on one-shot prisoner’s dilemmas. We know that economic theory says that the rational strategy is to defect; theory says everyone will defect. It’s the dominant strategy.
In experiments, about 40 to 50 percent of the people cooperate, but it involves small stakes. In this paper we write about the actual game show, there’s one trial, a round in the actual game show—you may have seen the clip of it—where it’s not small stakes at all; it’s around 100,000 pounds. And that’s one of the things we were interested in: What happens when you raise the stakes?
This is what happens: You get a plot like this (see hand-drawn plot and actual plot). I just happened to have drawn this for another visitor, a grad student.
So, yes, the economists were right. If you raise the stakes, cooperation falls. But it falls to the same level you see in the lab. The interesting behavioral thing is, when the stakes are small, compared to what other people are playing for in the game show, then cooperation gets even higher.
This goes to bounded self-interest. Economists assume people are unboundedly unscrupulous—or I’ll say self-interested, a more polite term. But there have been lots of experiments where you leave a wallet out and depending on the place—I don’t remember the exact data—but a large percentage get returned. Now, some wallets also get picked clean first, but … so I wrote about this too. (He displays a photo of a roadside rhubarb stand.)
Region: What is this?
Thaler: This is significant. Notice the features of this. It’s a roadside stand; they’re selling rhubarb. And it’s got an honor box with a lock on it.
I think this is exactly the right model of human nature, that if you put this stuff out there, enough people will leave money that it’s worth the farmer’s time to put it out. But if you left the money in a box that was unlocked, somebody would take it.
Region: It takes just one dishonest person to “undo” the honesty of many others …
Thaler: Right. If you ask somebody directions, most people will tell you. It’s very fortunate that we don’t live in a society where everybody is out to take advantage of us. For instance, if you have work done in your house or on your car, there’s absolutely no way for you to monitor what they’re doing, unless you’re willing to spend the time watching them and you happen to know a lot about the work, materials and methods being used.
So it has to involve trust. Trust is really important in society, and anything we can do to increase trust is worthwhile. There’s probably nothing you could do to help an economy grow faster than to increase the amount of trust in society….
Platform Strategies for Open Government Innovation
New paper by B. Cleland, B. Galbraith, B. Quinn, and P. Humphreys: “The concept of Open Innovation, that inflows and outflows of knowledge can accelerate innovation, has attracted a great deal of research in recent years (Dahlander and Gann, 2010; Fredberg et al, 2008). At the same time there has been a growing policy interest in Open Government, based in part on the assumption that open processes in the public sector can enable private sector innovation (Yu and Robinson, 2012). However, as pointed out by Huizingh (2011), there is a lack of practical guidance for managers. Furthermore, the specific challenges of implementing Open Innovation in the public sector have not been adequately addressed (Lee et al., 2012). Recent literature on technology platforms suggests a potentially useful framework for understanding the processes that underpin Open Innovation (Janssen and Estevez, 2013; O’Reilly, 2011). The paper reviews the literature on Open Innovation, e-Government and Platforms in order to shed light on the challenges of Open Government. It has been proposed that re-thinking government as a platform provider offers significant opportunities for value creation (Orszag, 2009), but a deeper understanding of platform architecture will be required to properly exploit those opportunities. Based on an examination of the literature we identify the core issues that are likely to characterise this new phenomenon.”
And Data for All: On the Validity and Usefulness of Open Government Data
Paper presented at the the 13th International Conference on Knowledge Management and Knowledge Technologies: “Open Government Data (OGD) stands for a relatively young trend to make data that is collected and maintained by state authorities available for the public. Although various Austrian OGD initiatives have been started in the last few years, less is known about the validity and the usefulness of the data offered. Based on the data-set on Vienna’s stock of trees, we address two questions in this paper. First of all, we examine the quality of the data by validating it according to knowledge from a related discipline. It shows that the data-set we used correlates with findings from meteorology. Then, we explore the usefulness and exploitability of OGD by describing a concrete scenario in which this data-set can be supportive for citizens in their everyday life and by discussing further application areas in which OGD can be beneficial for different stakeholders and even commercially used.”
Collaborative Internet Governance: Terms and Conditions of Analysis
New paper by Mathieu O’Neil in the special issue on Contested Internet Governance of the Revue française d’études américaines: “Online projects are communities of practice which attempt to bypass the hierarchies of everyday life and to create autonomous institutions and forms of organisation. A wealth of theoretical frameworks have been put forward to account for these networked actors’ capacity to communicate and self-organise. This article reviews terminology used in Internet research and assesses what it implies for the understanding of regulatory-oriented collective action. In terms of the environment in which interpersonal communication occurs, what differences does it make to speak of “public spheres” or of “public spaces”? In terms of social formations, of “organisations” or “networks”? And in terms of the diffusion of information over the global network, of “contagion” or “trajectories”? Selecting theoretical frames is a momentous decision for researchers, as it authorises or forbids the analysis of different types of behaviour and practices”.-
Other papers on Internet Governance in the Revue:
Divina Frau-Meigs (Ed.). Conducting Research on the Internet and its Governance
The Internet and its Governance: A General Bibliography
Glossary of Key Terms and Notions about Internet Governance
Julia Pohle et Luciano Morganti The Internet Corporation for Assigned Names and Numbers (ICANN): Origins, Stakes and Tensions
Francesca Musiani et al. Net Neutrality as an Internet Governance Issue: The Globalization of an American-Born Debate
Jeanette Hofmann Narratives of Copyright Enforcement: The Upward Ratchet and the Sleeping Giant
Elizabeth Dubois et William H. Dutton The Fifth Estate in Internet Governance: Collective Accountability of a Canadian Policy Initiative
Mathieu O’Neil Collaborative Internet Governance: Terms and Conditions of Analysis
Peng Hwa Ang et Natalie Pang Globalization of the Internet, Sovereignty or Democracy: The Trilemma of the Internet Governance Forum
Data Discrimination Means the Poor May Experience a Different Internet
MIT Technology Review: “Data analytics are being used to implement a subtle form of discrimination, while anonymous data sets can be mined to reveal health data and other private information, a Microsoft researcher warned this morning at MIT Technology Review’s EmTech conference.
Kate Crawford, principal researcher at Microsoft Research, argued that these problems could be addressed with new legal approaches to the use of personal data.
In a new paper, she and a colleague propose a system of “due process” that would give people more legal rights to understand how data analytics are used in determinations made against them, such as denial of health insurance or a job. “It’s the very start of a conversation about how to do this better,” Crawford, who is also a visiting professor at the MIT Center for Civic Media, said in an interview before the event. “People think ‘big data’ avoids the problem of discrimination, because you are dealing with big data sets, but in fact big data is being used for more and more precise forms of discrimination—a form of data redlining.”
During her talk this morning, Crawford added that with big data, “you will never know what those discriminations are, and I think that’s where the concern begins.”
Towards an effective framework for building smart cities: Lessons from Seoul and San Francisco
New paper by JH Lee, MG Hancock, MC Hu in Technological Forecasting and Social Change: “This study aims to shed light on the process of building an effective smart city by integrating various practical perspectives with a consideration of smart city characteristics taken from the literature. We developed a framework for conducting case studies examining how smart cities were being implemented in San Francisco and Seoul Metropolitan City. The study’s empirical results suggest that effective, sustainable smart cities emerge as a result of dynamic processes in which public and private sector actors coordinate their activities and resources on an open innovation platform. The different yet complementary linkages formed by these actors must further be aligned with respect to their developmental stage and embedded cultural and social capabilities. Our findings point to eight ‘stylized facts’, based on both quantitative and qualitative empirical results that underlie the facilitation of an effective smart city. In elaborating these facts, the paper offers useful insights to managers seeking to improve the delivery of smart city developmental projects.”
From Collective Intelligence to Collective Intelligence Systems
Towards an information systems perspective and research agenda on crowdsourcing for innovation
New paper by A Majchrzak and A Malhotra in The Journal of Strategic Information Systems: “Recent years have seen an increasing emphasis on open innovation by firms to keep pace with the growing intricacy of products and services and the ever changing needs of the markets. Much has been written about open innovation and its manifestation in the form of crowdsourcing. Unfortunately, most management research has taken the information system (IS) as a given. In this essay we contend that IS is not just an enabler but rather can be a shaper that optimizes open innovation in general and crowdsourcing in particular. This essay is intended to frame crowdsourcing for innovation in a manner that makes more apparent the issues that require research from an IS perspective. In doing so, we delineate the contributions that the IS field can make to the field of crowdsourcing.
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Reviews participation architectures supporting current crowdsourcing, finding them inadequate for innovation development by the crowd.
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Identifies 3 tensions for explaining why a participation architecture for crowdsourced innovation is difficult.
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Identifies affordances for the participation architectures that may help to manage the tension.
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Uses the tensions and possible affordances to identify research questions for IS scholars.”