Tim Harford, otherwise known as the Undercover Economist and author of the same-titled bestselling book, was speaking about how he came to write his latest book, The Logic Of Life. He has a Financial Times column and appears on the BBC.
Each Citigold member was given a copy of the book. Alas, as a guest I didn’t get any :(
Tim drew inspiration from professor Gary Becker whose standing in social economics won him a Nobel Prize. Another person he mentioned was Steve Levitt, author of Freakonomics. If I recall correctly, Levitt wrote a less-publicised paper on how criminal behaviour changed in some states which had lenient juvenile laws but tough adult laws, once the offenders became adults themselves.
Tim also entertained us with his personal anecdotes. He described how a family outing to buy ice-cream was marred by a violent attack by a madman on a woman on a nearby street. Was it really irrational? People have a split-second to react and quite often, we apparently have a logic behind it. When he got to this point, I thought of Malcolm Gladwell’s Blink. I’m sure there’s a correlation somewhere.
Another point was how, in various experiments, most people would choose a chocolate bar over fruit as a reward, if they were told they’d get it immediately. However, if they were told it would be sent to them next week, more opted for the fruit. Likewise, if they were told they could get movie tickets to watch a lighthearted show as opposed to a serious one, most would choose the former if they were watching it immediately, but the latter if it was in a few weeks’ time. However, if the same people showed up on movie night a few weeks later and were told they could switch back to the lighthearted movie, many would do so.
In short, people tend to choose something that they find more palatable for them in the short term, while they may aspire to something more challenging in the long term. This theory could supposedly be extended to convince people to stop smoking (!). If governments said they’d raise the price next year, cost-conscious smokers would start quitting now because they need time to be smoke-free. That is an interesting theory although I am not so sure if it’s been tried and tested.
He also touched on Game Theory and how people were more likely to form relationships when they know they have to meet often with other parties for transactions - as opposed to those who knew they’d only meet once. As I’m typing this, it’s occurring to me that this could be why we have terrible road manners - we don’t know (or care for) most of the people beside us on the street and don’t think we’ll see them again. Yet when I bump into a friend or relative in another car, we usually give way to each other.
It was an entertaining soliloquy until the Q&A session, where the audience, mostly Singaporean/Asian and presumably rich and smart enough to qualify for Citigold status, asked pretty profound and relevant questions, some drawing comparisons with his first book and other works. This talk was certainly of a different calibre.
The time came for us to get his autograph. I brought a copy of his first book. I had planned to finish reading the book before his talk, so I could engage in some intelligent conversation with him. However, my persistent business and a short attention span prevented me from doing so.
All I could say to Tim, honestly, was “Hi. I’m halfway through your first book”.
Tim smiled and said this was the American edition. Oops. I recalled him poking fun at Americans and their edition of his books at the beginning of his talk. Even the Logic of Life books that were distributed to us were the UK edition. So I cheekily apologised for bringing the American copy. He responded, with a smile, that I didn’t have to apologise. He called out, as I moved away from the table, that I was the first person to bring along his first book.