Rules, Discretion, Appeals & Audit

Summary
Many decisions in life require a delicate balance of trade-offs in order to get the best results. Recent examples highlight the need to restore such balance to everyday policies especially for so-called "Zero-Tolerance" policies.

(Photo: Wikimedia)

Commentary
Schneier wrote a nice article on zero-tolerance policies which he refers to as "zero-discretion" policies. He brings up the recent story of the cub scout who brought a camping utensil to school as an example of an unbalanced policy gone awry.

Zero-discretion policies stem from the need to avoid inappropriate discrimination, that is to be "fair". To that end, no discrimination-- no matter how warranted-- must be allowed. You know you're dealing with a zero-discretion policy when the enforcer of the policy agrees with you, but "those are the rules, I can't do anything about it."

Schneier recommends a four-pronged solution:

1. Rules - Start with the rules & procedures.
2. Discretion - Throw in a dash of discretion to taste.
3. Appleals - Add plenty of opportunities for people to appeal.
4. Audit - Stir occasionally to ensure smooth consistency.

In short, provide some room for interpretation (discretion), and then make sure that that room doesn't get abused (appeals & audit).

Meta
What are some examples of situations where you've encountered "zero-tolerance" policies?

Boredom & Body Language

Summary
Figuring out if you're boring someone is a non-trivial task for some people. This is especially true for people who have a hard time reading social cues, such as people with autism.

(Image: Wikimedia)

Related

• PsychologyToday has a nice writeup about eight cues that indicate you're boring someone.
• Wired has an article about a robot that read body language.
• There's also The Definitive Book of Body Language by Barbara and Allen Pease which is more like a reference guide.
• Slashdot brings us news of a company that hires people with autism to test software. (I remember reading about a similar company, but cannot find the reference right now.) The claim is that they are good at predictable, repetitive tasks and are very attentive to details.

Meta
What do you do when you realize you're boring someone?

Intrinsic & Extrinsic Motivation

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Summary
Motivation is an important part of our lives. Managers seek motivated employees, teaches search for ways to motivate their students, and investigators try to piece together people's motives. Dan Pink discusses the "mismatch between what science knows and what business does."

(Video: TED)

Commentary
The important distinction in motivation is whether the motivator is intrinsic or extrinsic. Intrinsic motivators are ones that you feel you can control, such as your level of effort, whereas extrinsic motivators are outside of your control: rewards, punishments, etc.

Pink quotes from a 2005 commissioned by the Federal Reserve of Boston called "Large Stakes and Big Mistakes". Some random excerpts (emphasis added):

• "With some important exceptions, we observed that high reward levels can have detrimental effects on performance" (abstract).
  
  
• "[O]ne mechanism via which increased motivation can backfire is when it leads to greater self-consciousness" (p. 3).
  
  
• "[T]he performance of participants was always lowest in the high-payment condition when compared with the low- and mid-payment conditions together..." (p. 13).
  
  
• "Many existing institutions provide very large incentives for exactly the types of tasks we used here – those that require creativity, problem solving, and concentration. Our results challenge the assumption that increases in motivation necessarily lead to improvements in performance" (p. 19).
  
  
• "[W]e were surprised by the robustness of the effect..." (p. 19).

Meta
How do you cater to people's intrinsic motivations?

See Also

• Maslow's Hierarchy of Needs
• Psychological Barriers

Review: Economics in One Lesson

(Photo: Amazon)

Review
Economics in One Lesson (PDF version) is an excellent primer to economic thought. If I didn't know that it was published in 1940's, I could easily have assumed that it was a pamphlet discussing the modern financial, automotive, music, or newspaper industries.

The main purpose of the book is expose common economic fallacies that "are at last so prevalent that they have almost become a new orthodoxy" (Hazlitt vii). This is accomplished through two dozen "lessons" that derive from a single lesson summed up by Hazlitt as the essence of economics:

From this aspect, therefore, the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
(emphasis his; Hazlitt 5)

The Broken Window
The first of the "applied" lessons is based on the parable of the broken window as explained by Frédéric Bastiat.

(Photo: Wikimedia)

What follows is my brief paraphrase of the parable. Imagine a hoodlum throws a brick through a baker's window. The baker runs out of his shop and starts chasing after the rock-thrower, but is unsuccessful. As the baker walks back to his shop, a small crowd of people gather around the his window-less shop. After the customary outrage, someone points out a bright side: some glass-maker just got $200 worth of business. Moreover, the glass-maker can use those $200 to spend on other merchants who, in turn, can spend money on yet other merchants; the flow of money benefits all. The logical conclusion, then, is that the hoodlum should continue to break people's windows for the benefit of society.

If the conclusion sounds strange it is only because the crowd failed to consider the larger picture. While it is true that some glass-maker will receive $200 worth of business, it is also the case that the baker, who started the day with $200 and a window, is now left with only a window. That is, the net worth of society went down by the value of a window; that other windows can be manufactured is irrelevant because had the hooligan not broken the window, the baker would not need a new window.

While it may seem obvious that destruction leads to reduced net-worth, there are many ways of obscuring the destruction to make it more palatable to the masses, and Hazlitt covers many such fallacies in eminently accessibly prose.

The reader is urged to read at least the first two chapters of the book because many future posts will depend on understanding the "Fundamental Lesson of Economics" and it's applications.

Arrow's Impossibility Theorm

I seem to be posting a lot about paradoxes recently. I'll probably take a little break from paradoxes after this one.

Summary
In 1951, Kenneth Arrow demonstrated that it is not possible to have a "fair" voting system that satisfied the following three criteria (imagine the group is voting on which fruit to eat: apples or pears):

1. If every voter prefers apples to pears, then the group prefers apples to pears. (Sound familiar? It's called Pareto efficiency.)
2. If every voter prefers apples to pears, then even if bananas are added to the set of options, the group will still prefer apples to pears.
3. There is no dictator.

This is known as Arrow's Impossibility Theorem.

(Photo: Wikimedia)

Commentary
The actual details of the theorem are interesting, and I refer you to Wikipedia (for those who are interested). There are situations, however where item 2 (where we added bananas) doesn't hold: imagine the game rocks-paper-scissors. In such a case, adding an alternative transforms the straightforward choice into a cyclic choice. I sometimes see this scenario when people compare different aspects of multiple candidates' platforms (or when they're choosing which car / laptop / soap / pants to purchase).

Sometimes, the trade-offs are hard; but sometimes they're impossible.