The mechanism of the Einstellung (set) effect: A pervasive source of cognitive bias

Copyright @ The Authors 2010The eye movements of expert players trying to solve a chess problem show that the first idea that comes to mind directs attention towards sources of information consistent with itself and away from inconsistent information. This bias continues unconsciously even when the player believes he is looking for alternatives. The result is that alternatives to the first idea are ignored. This mechanism for biasing attention ensures a speedy response in familiar situations but it can lead to errors when the first thought that comes to mind is not appropriate. We propose that this mechanism is the source of many cognitive biases from phenomena in problem solving and reasoning, to perceptual errors and failures in memory

Designed to fail : a biopolitics of British Citizenship.

Tracing a route through the recent 'ugly history' of British citizenship, this article advances two central claims. Firstly, British citizenship has been designed to fail specific groups and populations. Failure, it argues, is a design principle of British citizenship, in the most active and violent sense of the verb to design: to mark out, to indicate, to designate. Secondly, British citizenship is a biopolitics - a field of techniques and practices (legal, social, moral) through which populations are controlled and fashioned. This article begins with the 1981 Nationality Act and the violent conflicts between the police and black communities in Brixton that accompanied the passage of the Act through the British parliament. Employing Michel Foucault's concept of state racism, it argues that the 1981 Nationality Act marked a pivotal moment in the design of British citizenship and has operated as the template for a glut of subsequent nationality legislation that has shaped who can achieve citizenship. The central argument is that the existence of populations of failed citizens within Britain is not an accident of flawed design, but is foundational to British citizenship. For many 'national minorities' the lived realities of biopolitical citizenship stand in stark contradistinction to contemporary governmental accounts of citizenship that stress community cohesion, political participation, social responsibility, rights and pride in shared national belonging

Overcoming the Impasse in Modern Economics

This document is the Accepted Manuscript version of the following article: Francesca Gagliardi, and David Gindis, 'Overcoming the Impasse in Modern Economics', Competition and Change, Vol. 15 (4): 336-42, November 2011, doi: 10.1179/102452911X13135903675732. Published by SAGE.Peer reviewe

Farmland Prices: Is This Time Different?

The historical behavior of farmland prices, rental rates, and rates of return are examined by treating farmland as an asset with an infinitely long life. It is found that high (low) farmland prices relative to rents have historically preceded extended periods of low (high) net rates of return, rather than greater (smaller) growth in rents. Our analysis shows that this attribute is shared with stocks and housing, and the financial literature provides ample evidence that other assets feature it as well. The long-run relationship linking farmland prices, rents, and rates of return is analyzed. Based on this relationship, we conclude that recent trends are unlikely to be sustainable. The study explores the expected paths that farmland prices and rates of return might follow if they were to eventually conform to the average values observed in the historical sample, and concludes with a discussion of the policy implications. Recommendations for policy makers include close monitoring of farmland lending practices and institutions to allow early identification of potential problems, and identifying in advance appropriate interventions in case recent farmland market trends were to suddenly change

On the Computational Complexity of Measuring Global Stability of Banking Networks

Threats on the stability of a financial system may severely affect the functioning of the entire economy, and thus considerable emphasis is placed on the analyzing the cause and effect of such threats. The financial crisis in the current and past decade has shown that one important cause of instability in global markets is the so-called financial contagion, namely the spreading of instabilities or failures of individual components of the network to other, perhaps healthier, components. This leads to a natural question of whether the regulatory authorities could have predicted and perhaps mitigated the current economic crisis by effective computations of some stability measure of the banking networks. Motivated by such observations, we consider the problem of defining and evaluating stabilities of both homogeneous and heterogeneous banking networks against propagation of synchronous idiosyncratic shocks given to a subset of banks. We formalize the homogeneous banking network model of Nier et al. and its corresponding heterogeneous version, formalize the synchronous shock propagation procedures, define two appropriate stability measures and investigate the computational complexities of evaluating these measures for various network topologies and parameters of interest. Our results and proofs also shed some light on the properties of topologies and parameters of the network that may lead to higher or lower stabilities.Comment: to appear in Algorithmic

Financialization and the monetary circuit : a macro-accounting approach

This paper aims to cross-breed the standard monetary circuit accounting model with elements from the Post-Keynesian literature. The goals are: (i) to analyse the implications of credit-based household consumption fed by capital asset inflation for the soundness of a pure credit-money economy of production; and (ii) to provide a more sophisticated description of the working of modern financial systems than the one grounded in the usual 'bank-based vs. market based' distinction

Risks, alternative knowledge strategies and democratic legitimacy: the conflict over co-incineration of hazardous industrial waste in Portugal.

The decision to incinerate hazardous industrial waste in cement plants (the socalled ‘co-incineration’ process) gave rise to one of the most heated environmental conflicts ever to take place in Portugal. The bitterest period was between 1997 and 2002, after the government had made a decision. Strong protests by residents, environmental organizations, opposition parties, and some members of the scientific community forced the government to backtrack and to seek scientific legitimacy for the process through scientific expertise. The experts ratified the government’s decision, stating that the risks involved were socially acceptable. The conflict persisted over a decade and ended up clearing the way for a more sustainable method over which there was broad social consensus – a multifunctional method which makes it possible to treat, recover and regenerate most wastes. Focusing the analysis on this conflict, this paper has three aims: (1) to discuss the implications of the fact that expertise was ‘confiscated’ after the government had committed itself to the decision to implement co-incineration and by way of a reaction to the atmosphere of tension and protest; (2) to analyse the uses of the notions of ‘risk’ and ‘uncertainty’ in scientific reports from both experts and counter-experts’ committees, and their different assumptions about controllability and criteria for considering certain practices to be sufficiently safe for the public; and (3) to show how the existence of different technical scientific and political attitudes (one more closely tied to government and the corporate interests of the cement plants, the other closer to the environmental values of reuse and recycling and respect for the risk perception of residents who challenged the facilities) is closely bound up with problems of democratic legitimacy. This conflict showed how adopting more sustainable and lower-risk policies implies a broader view of democratic legitimacy, one which involves both civic movements and citizens themselves

Looking into the abyss? Brazil at the mid-2010s

The Brazilian economy in 2015 was afflicted by a lethal combination of decelerating activity and accelerating inflation. Expectations for 2016 are equally or even more adverse, since the effects of rising unemployment emerge only after a lag. The domestic debate has pitted analysts who believe the crisis is due exclusively to past policy mistakes against those who believe that all was well until the government decided to implement austerity policies in 2015. A closer examination of the evidence shows that, in fact, both causes contributed to the crisis. But it also suggests that its depth has a more proximate cause in the political collapse of the federal government in 2015, which led Brazilian society to an impasse for which one cannot yet visualize the solution

Facts, Values and Quanta

Quantum mechanics is a fundamentally probabilistic theory (at least so far as the empirical predictions are concerned). It follows that, if one wants to properly understand quantum mechanics, it is essential to clearly understand the meaning of probability statements. The interpretation of probability has excited nearly as much philosophical controversy as the interpretation of quantum mechanics. 20th century physicists have mostly adopted a frequentist conception. In this paper it is argued that we ought, instead, to adopt a logical or Bayesian conception. The paper includes a comparison of the orthodox and Bayesian theories of statistical inference. It concludes with a few remarks concerning the implications for the concept of physical reality.Comment: 30 pages, AMS Late

Come back Marshall, all is forgiven? : Complexity, evolution, mathematics and Marshallian exceptionalism

Marshall was the great synthesiser of neoclassical economics. Yet with his qualified assumption of self-interest, his emphasis on variation in economic evolution and his cautious attitude to the use of mathematics, Marshall differs fundamentally from other leading neoclassical contemporaries. Metaphors inspire more specific analogies and ontological assumptions, and Marshall used the guiding metaphor of Spencerian evolution. But unfortunately, the further development of a Marshallian evolutionary approach was undermined in part by theoretical problems within Spencer's theory. Yet some things can be salvaged from the Marshallian evolutionary vision. They may even be placed in a more viable Darwinian framework.Peer reviewedFinal Accepted Versio