Revealed preferences aren't just exposed lies

by jml 1 min read30th Dec 2018No comments

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I wrote about two frameworks you can use when someone seems to be acting against their self-stated goals: revealed preference theory and misaligned incentive theory. Often times, the RPT view can become an accusation that someone is lying, but this isn’t always the case. Here are some good-faith reasons someone’s self-proclaimed preferences may not match their actions:

  • Aspirational projection: for some people, the first step to becoming a certain type of person is by talking about it. When I first moved to San Francisco, I spent the first 8 months noticing and talking to people about the homelessness, and it was only once those thoughts had fully percolated through my head that they transitioned into action in the form of the giving pledge. If you had come to me during those 8 months and pushed me to put my money where my mouth was, or else admit that I was a hypocrite, you would have been technically right, but that’s definitely not the push I needed at that moment in my journey, and it might have actually been counterproductive.
  • Unknown preferences: it can be surprisingly hard to understand your own preferences, especially if you are constantly second guessing whether your failure to achieve your stated goals is actually a revealed preference (i.e. those aren’t your real goals) or just a case of misaligned incentives (i.e. long term goals are hard to achieve). Like if you enjoy playing video games but then occasionally feel vaguely ashamed that you don’t spend your time doing more productive things, you might be unsure whether the time you spend playing games reveals your true preference for them, or whether you’re just giving in to short-term incentives.