Prospect theory, locating the mind and biggest betrayals: Setting the mood for 2012

Three books are lined up for reading this January, books by Kahneman, Eagleman and Beevor.



Absolute v. relative happiness

'Thinking, Fast and Slow' by Nobel Economics laureate Daniel Kahneman I chose purely because of his work in prospect theory, rather his work in laying the basis of prospect theory. For too long, mathematical models have been constructed to determine the set of optimal choices that a human will make given a set of fixed assets and personal preferences. On the other hand, those made in real life are quite deviant from theory.

According to expected utility theory, one such 'ideal' model, choices are broken down as betting preferences made in the face of uncertain outcomes, or gambles. Next, each choice is depicted as a function of the payout, the probabilities of occurrence of each event, how important the event is to other people (it's "utility"), and the behavioural pattern of the chooser in the face of uncertainty (risk aversion).

According to Kahneman's theory, the process of prospecting is broken down into two stages. In the first editing stage, the outcomes of each experiment are ordered according to a set of guidelines set out speculatively. As part of the same process, the preference of each outcome is gauged according to a reference point and ordered accordingly. To this point, the theory is spot-on, and it is in the following evaluation phase that computation comes in and makes me uneasy.

[caption id="attachment_21151" align="aligncenter" width="259" caption="Daniel Bernoulli, one of the uber-smart Bernoullis, conceived the expected utility theory in 1738."][/caption]

I can recall no computations that I've made, consciously or no, while deciding which laptop to buy or what move to make in a game of chess apart from asking myself "what will hurt more?". Fortunately, prospect theory carefully asserts that losses hurt more than gains feel good, whereas in the expected utility theory, the reference point is scalar and doesn't provide a parameter to judge for how much losses hurt.

Kahneman's book, I feel, is a good place to begin when thinking about how a behavioural economist's conception of a problem affects the characterization of the problem and the subsequent solutions that present themselves. Another reward is the understanding of utility as a reference-based entity: think Sheldon Cooper's example in The Big Bang Theory.

Is freewill real?

Next in line is David Eagleman's 'Incognito: The Secret Lives of the Brain'. Eagleman is a neuroscientist with the Baylor College of Medicine, Texas, and is reputed in the fields of synesthesia, time perception and the emerging field of neurolaw. Neurolaw draws on cognitive psychology, criminology and philosophy to assess the interaction between jurisprudence and neuroscience.

[caption id="attachment_21152" align="aligncenter" width="529" caption="Synesthesia is the phenomenon whereby the stimulation of one cognitive pathway in the brain leads to the automatic stimulation of another pathway. Depicted above is an example of colour-graphemic synesthesia, where the visual input of letters and their shapes provokes the perception of an inherent colour as well."][/caption]

However, I picked his book for just three reasons: he's young, Ed Yong recommended his book, and his experimental methodology when attempting to understand time perception in high-adrenaline situations. They each translate to progressive-mindedness and an easily established non-adherence to old-school techniques and concepts, Ed Yong recommended his book, and a practical approach when it comes to satiating his curiosity.

In keeping with what I was looking for in Kahneman's book, I'm going to read the book keeping in mind my questions about freewill: whether we really have it or if it's just an illusion of choices created by a brain that already has some idea about the outcome (just the way it knew what the choices were going to be because it put them together based on years of experiences).

[caption id="attachment_21153" align="aligncenter" width="520" caption="The HAL 9000 computer, from '2001: A Space Odyssey', holds a special place in the minds of geeks because it was and is one of the most prominent AIs that, seeking to secure a greater interest, subverts mankind. Will a cylon seek to do the same?"][/caption]

The good thing about getting closer to the future and, better yet, the technological singularity is that we're more likely to work in the direction of man-machine unification - or at least I'd like to think so. To clarify, I'm a skeptic of such an idea, but I am hopeful; if anything, we'll always be 10 years away from realizing such a tech-intense marriage.

At the same time, such ambitions keep us working on understanding how we piece together different bits of information to generate an image of reality that we can meaningfully interact with. In fact, in the words of Eagleman himself, "[my long-range goals are] to understand how neural signals processed by different brain regions come together for a temporally unified picture of the world."

The battle that was the beginning of the end

The last book is the one I'm most eager to read: 'Stalingrad: The Fateful Siege 1942-1943' by Antony Beevor is a humanist take on the siege of Stalingrad during World War II that resulted in the loss of 1.9 million lives, making it one of the bloodiest conflicts in human history.

[caption id="attachment_21154" align="aligncenter" width="360" caption="A building in Stalingrad in ruins in the aftermath of the battle that liberated the city"][/caption]

Being a longstanding World War II enthusiast (and hoping it comes across as an academic pursuit more than anything else), Beevor's work is a gem because it brings together the strategies, regions, power shifts, resources, rewards and losses, and the people of Germany, eastern Europe, Finland, Russia, northern China and Japan into one vast but unrelenting study of conflict and fate.

I came across the book when I was sifting through Amazon's recommendations after I'd taken a look at Kennan's biography (written by National Humanities Medal recipient John Lewis Gaddis). There's one thing I always look for in a war chronicle: I want the historian to have presented every fact in the capacity of cause, effect or parallel, and then present his conclusions of their various relationships. I'd like to think the reader of a chronicle is a historian, too, and should be given the opportunity to interpret as he or she so chooses to.

And Beevor has done just that - that is, if the first chapter is anything to go by. The siege of Stalingrad is a decisive turning-point in World War II, and a good understanding of the battles and smaller conflicts it encompassed presents a nigh miniaturized of the entire War itself. The siege and comeback marked the rise of Soviet nationalism, Stalin's invasion of Europe, and Hitler's downfall as a result of his stupidest mistake: the transgression of the Molotov-Ribbentrop Pact, and the subsequent birth of a 'judeo-bolshevik conspiracy'.

[caption id="attachment_21155" align="aligncenter" width="370" caption="Molotov signs the Pact on August 23, 1939, in the presence of Joachim von Ribbentrop and Josef Stalin (standing behind him)."][/caption]

But all that's history, and it makes for good reading. For now, I'm going to let my enthusiasm for the subject and Beevor's industry guide me into the book so that I can gauge the other, in this case less-prioritized, aspects of book-reading on the way. Starting with a 4 on 5, let's see how much Beevor improves or reduces the impact of raw facts.

Questions on micropolitical subjectivism & frameworks

First off, bounded rationality: this concept I came across in another form in computational linguistics. In the late 19th century, Benjamin Whorf and Edward Sapir put forth their eponymous hypothesis that “the difference in the significance of languages is the difference in the significance of the perceptions of its speakers.” In '57, Chomsky came up with universal grammar: all languages are accompanied by psychological nativism and a poverty of the stimulus.

These rules struck at the heart of the empiricist position of language acquisition. So, by being born with preset capabilities, are we also beset by preset deficiencies that limit the scope of our successes? Here, we come to bounded rationalism as an immediate consequence of the existence of a universal grammar - and perhaps also to Nietzsche's 'Amor fati'. But this is a purely psychosocial argument.

Secondly, structuralism and rationalist theory: here, mathematics avails a solution I've been fond of in the past—John Nash's game theory. Herbert Simon's three steps to arrive at a decision are identification of alternatives, consequences of alternatives, and evaluation of relevance of consequences. All three are modeled on the necessity of a stable system, the condition that finite variables exist, and the condition that only a finite number of consequences are possible. In that case,

1. Does the macropolitical structure transform into a metastructure when it comes to assessing the symbolism of a micropolitical reality?


2. What does that entail?


3. If it doesn't, then is the new mediator subjectivism?


4. In that case, is the purpose of subjectivist knowledge to reconcile the self-reflexive identity against the backdrop of a macropolitical entity?


5. Or, is subjective knowledge purely a micropolitical issue?

This, I think, leads to Carnap's question: can ontological questions have objective answers? Here, as an engineer, I'm reminded of metaphysical naturalism as well.

Finally, the question I find most pressing is whether or not it is necessary for us to adopt a framework - a structuralist tool - in the context of which we view this world. For example, consider the statement "The sun rises in the east after it has set in the west." This means that an eastern sunrise follows a western sunset, ergo there's east and west and there's a sun. All these answers are within the framework of the statement.

However, a question like "Is there really a sun?" prompts us to question the validity of the framework itself, thereby asking us to step outside and evaluate it. Now, how do we evaluate it?

Questions on micropolitical subjectivism & frameworks

First off, bounded rationality: this concept I came across in another form in computational linguistics. In the late 19th century, Benjamin Whorf and Edward Sapir put forth their eponymous hypothesis that “the difference in the significance of languages is the difference in the significance of the perceptions of its speakers.” In '57, Chomsky came up with universal grammar: all languages are accompanied by psychological nativism and a poverty of the stimulus.

These rules struck at the heart of the empiricist position of language acquisition. So, by being born with preset capabilities, are we also beset by preset deficiencies that limit the scope of our successes? Here, we come to bounded rationalism as an immediate consequence of the existence of a universal grammar - and perhaps also to Nietzsche's 'Amor fati'. But this is a purely psychosocial argument.

Secondly, structuralism and rationalist theory: here, mathematics avails a solution I've been fond of in the past—John Nash's game theory. Herbert Simon's three steps to arrive at a decision are identification of alternatives, consequences of alternatives, and evaluation of relevance of consequences. All three are modeled on the necessity of a stable system, the condition that finite variables exist, and the condition that only a finite number of consequences are possible. In that case,

1. Does the macropolitical structure transform into a metastructure when it comes to assessing the symbolism of a micropolitical reality?


2. What does that entail?


3. If it doesn't, then is the new mediator subjectivism?


4. In that case, is the purpose of subjectivist knowledge to reconcile the self-reflexive identity against the backdrop of a macropolitical entity?


5. Or, is subjective knowledge purely a micropolitical issue?

This, I think, leads to Carnap's question: can ontological questions have objective answers? Here, as an engineer, I'm reminded of metaphysical naturalism as well.

Finally, the question I find most pressing is whether or not it is necessary for us to adopt a framework - a structuralist tool - in the context of which we view this world. For example, consider the statement "The sun rises in the east after it has set in the west." This means that an eastern sunrise follows a western sunset, ergo there's east and west and there's a sun. All these answers are within the framework of the statement.

However, a question like "Is there really a sun?" prompts us to question the validity of the framework itself, thereby asking us to step outside and evaluate it. Now, how do we evaluate it?