heuristic

You are currently browsing articles tagged heuristic.

1) Cass Sunstein writes in the Wall Street Journal about new money-saving regulations.

2) Disney creates scarcity with its content.

3) New MPG labels for cars will include information about greenhouse gases.

4) A call for the Indian government to think about behavioral economics.

5) Traffic light interest rates – A heuristic for microfinance loans.

6) The U.K. government wants to make digital delivery a default. Hat tip Amol Agrawal.

7) Choice Architecture in the Wild Pt. 12 by Jonathan McDonald.

Tags: , , , , , ,

Worse than the all Big Ten strategy.

Say you’re a loyal partisan living in Washington D.C. who doesn’t know much about college basketball. To keep your cognitive strain to a minimum, you adopt the red state/blue state strategy. The heuristic is simple. Pick teams from the blue states (or from red states). If two blue state teams play each other, pick the bluer one. If two teams from the same blue state play each other, revert to county level data. (Note: the same results would not apply if you used county level data the whole way through – but it’s computationally much more difficult.) The same logic applies for red states. If you’re a political junkie you can fill out your brackets in a few minutes.

The red state strategy yields an all Utah-Oklahoma final four (BYU, Utah, Oklahoma State, and Oklahoma), with BYU taking the crown. The blue state strategy yields a Boston College, Cornell, American University, and Syracuse final four with American winning the championship. The red state strategy is particularly lousy at the beginning. Three of the four No. 1 seeds get knocked off in the first round.

Tags: ,