The .Plan

The research suggests that the following phenomena are true:

When people suffer losses and confront the possibility of even greater reverses — it doesn’t matter if you are talking about a terrorist attack or a meltdown in retirement savings — it is psychologically difficult to do nothing, to hold course. This is true even when the action you contemplate produces an outcome that leaves you demonstrably worse than you were in the first place…

…different biases are activated in good and bad times. When things are going badly, it is difficult to choose inaction. When things are going well, however, it is difficult to make any changes — because who wants to be blamed for ruining something that is going well?

This is why, when your stock portfolio is performing spectacularly, the powerful temptation is to leave it exactly the way it is, rather than sell and take profits. But when your stocks are doing poorly, there is a powerful urge to cut and run. Buying high and selling low is a poor investment strategy, but it makes perfect psychological sense.
–Shankar Vedantam, “Hillary Clinton and the action bias”, Washington Post, March 31, 2008

(Sidebar:)

When something bad happens to us as a result of our actions, we kick ourselves harder than when bad things happen to us because of our inactions. As a result, because people want to minimize regret in their lives, Kahneman and Tversky argued that people were more likely to prefer inaction over action.

Marcel Zeelenberg at the University of Tilburg in the Netherlands, however, showed in a more recent psychological experiment that volunteers who were asked to play the role of a soccer coach pursued opposite strategies when they had a winning streak vs. a losing streak. When their teams were winning, the desire to avoid regret prompted the “coaches” to keep teams the way they were. When teams were losing, however, the desire to avoid regret prompted the “coaches” to prefer change. In each case, Zeelenberg argued, volunteers followed strategies that were the least likely to cause them regret — rather than strategies that were most likely to produce victory.

But is this behavior really self-reinforcing or self-extinguishing?

Two years ago, Arnold Hoon, a chef from Johannesburg, was driving along South Africa’s West Coast in search of lunch. On a whim, he and his wife, Annelise Bosch, followed an old wooden sign to Paternoster, a traditional fishing village about 90 minutes north of Cape Town.

What they found were whitewashed cottages overlooking Paternoster Bay, and a single restaurant, Voorstrandt (Strandloper Way; 27-22-752-2038), near a beach dotted with fishing boats. Soon, they were dining alfresco on fresh oysters and grilled lobsters, served with a crunchy green salad. “We never left,” said Ms. Bosch, a former actress.
–Nadine Rubin, “Cape Town’s Foodie Suburb”, New York Times, March 30, 2008

Lots of fodder here for Chris Rock…

For decades, social scientists, policy wonks, and politicians have studied and debated what’s come to be known as the “culture of poverty.” The consensus: A group of Americans is set apart from the mainstream by geography, class, and income. Its members adhere to norms that don’t apply to the rest of society and engage in self-destructive behavior that imposes significant costs on the nation at large…

We don’t hear as much about the culture of poverty these days. Perhaps it’s because the market turmoil is making us all feel a little poorer. Or perhaps it’s because a highly visible group is now exhibiting all the outward appearances of the underclass: the overclass. Forget welfare queens and the culture of poverty. Think Wall Street kings and the culture of affluence…

Critics point to a pervasive sense of victimhood in the underclass. But listen to what Bear Stearns CEO Alan Schwartz told the troops after his firm succumbed to wounds that were almost entirely self-inflicted. “We here are a collective victim of violence,” he said. Yep, just another case of the Man keeping the Man down.
–Daniel Gross, “Rich men behaving badly”, Slate, March 29, 2008

Back then, before the causeway was built, Mont St. Michel was an island. Pilgrims would approach across this mud flat mindful of a tide that swept in “at the speed of a galloping horse” (well, maybe a trotting horse … 12 mph, or about 2 feet per second).

Adding to the peril was quicksand, the thoroughly disorienting fog, and the fact that the sea can encircle unwary hikers. Braving these devilish risks for centuries, pilgrims kept their eyes on the spire crowned by their protector, St. Michael, and eventually reached their spiritual goal.

Whether scurrying across the treacherous mud flats or just driving across the modern causeway, the sight of the distant silhouette of the Gothic island-abbey Mont St. Michel sends tired sightseers’ spirits soaring, just as it did the spirits of weary pilgrims in centuries past…

Hang out until after dark when the tourists are gone and the island is magically floodlit. Ramble on the ramparts. Ponder the promise of desolation and a simple life of solitude that attracted monks to this dramatic spot so long ago.
–Rick Steves, “Mont St. Michel: Magnificence on a mud flat”, CNN, March 28, 2008

We may be seeing a first glimpse of South Africa revisiting its longstanding policy barring foreign physicians from working within its borders:

The health department has appointed over 500 foreign medical doctors to public health sector posts over the past 16 months, Health Minister Manto Tshabalala-Msimang said on Thursday.

In a written reply to a question in the National Assembly, she said altogether 507 doctors — predominantly from developing countries — were on record as having been placed in specific institutions around SA since November 2006…

Commenting on Tshabalala-Msimang’s reply, DA spokesperson Mike Waters called for a policy review.

On the one hand Tshabalala-Msimang claimed to enforce a policy of not allowing health professionals from other developing countries to work in South Africa, and on the other hand this policy was blatantly ignored in practice.
–South African Press Association, “Hundreds of foreign docs working in SA”, March 27, 2008

A new study by some German researchers provides the first in vivo evidence that release of endogenous opioids occurs in fronto-limbic brain regions after running, and further that this is correlated with self-perceived euphoria. (Too bad this doesn’t really happen for me.)

Dr. Boecker and colleagues recruited 10 distance runners and told them they were studying opioid receptors in the brain. But the runners did not realize that the investigators were studying the release of endorphins and the runner’s high. The athletes had a PET scan before and after a two-hour run. They also took a standard psychological test that indicated their mood before and after running.

The data showed that, indeed, endorphins were produced during running and were attaching themselves to areas of the brain associated with emotions, in particular the limbic and prefrontal areas.

The limbic and prefrontal areas, Dr. Boecker said, are activated when people are involved in romantic love affairs or, he said, “when you hear music that gives you a chill of euphoria, like Rachmaninoff’s Piano Concerto No. 3.” The greater the euphoria the runners reported, the more endorphins in their brain.
–Gina Kolata, “Yes, Running Can Make You High”, New York Times, March 27, 2008

Give to the winds thy fears,
Hope and be undismayed.
God hears thy sighs and counts thy tears,
God will lift up,
God will lift up
God will lift up thy head

Leave to His sovereign sway
To choose and to command;
Then shalt thou, wandering, own His way,
How wise, how strong,
how wise, how strong
How wise, how strong His hand.

Far, far above thy thought,
His counsel shall appear
When fully He the work hath wrought
That caused thy need,
that caused thy need
That caused thy needless fear

Through waves and clouds and storms,
He gently clears the way;
Wait thou His time; so shall this night
Soon end in joy,
soon end in joy
Soon end in joyous day.

Yale development economist Chris Blattman has had a few recent and very compelling entries about his fears of turning into an academic tourist who retains no local commitments. He’s now headed to Monrovia (a new site for them) to start a new project with his wife and research partner, Jeannie Annan.

I have a love-hate relationship with new field sites. The excitement is palpable (mine, not theirs). And the first week is a pleasurable free fall down the learning curve. But I hate the feeling of being an imposter. The academic poseur.

No academic should be allowed to open their mouth to a policymaker their entire trip if they are reading the Economist Intelligence Unit Country Profile on the way in, frantically searching for the name of the local currency. I’m not quite that bad (I’ve already read the EIU profile!) but I’m not much better. So it is with some alarm that the express purpose of our trip is to give technical advice to ministers and bureaucrats.

My friends at the World bank find my angst quaint and endearing.

Working in Kenya and Uganda for the past six years, I was beginning to feel like an old hand. People treat you differently when you stick around. I remember seeing a familiar village leader after I’d been absent for a year. “You came back!” he exclaimed. “So you are the kind that returns,” said another public official. I knew the history, I had a SIM card full of numbers, I was beginning to get the language, I knew the players, I could get things done.

And here I go again.