Reference Points

by lionhearted 9y17th Nov 201045 comments

32


I just spent some time reading Thomas Schelling's "Choice and Consequences" and I heartily recommend it. Here's a Google books link to the chapter I was reading, "The Intimate Contest for Self Command."

It's fascinating, and if you like LessWrong, rationality, understanding things, decision theories, figuring people and the world out - well, then I think you'd like Schelling. Actually, you'll probably be amazed with how much of his stuff you're already familiar with - he really established a heck of a lot modern thinking on game theory.

Allow me to depart from Schelling a moment, and talk of Sam Snyder. He's a very intelligent guy who has lots of intelligent thoughts. Here's a link to his website - there's massive amounts of data and references there, so I'd recommend you just skim his site if you go visit until you find something interesting. You'll probably find something interesting pretty quickly.

I got a chance to have a conversation with him a while back, and we covered immense amounts of ground. He introduced me to a concept I've been thinking about nonstop since learning it from him - reference points.

Now, he explained it very eloquently, and I'm afraid I'm going to mangle and not do justice to his explanation. But to make a long story really short, your reference points affect your motivation a lot.

An example would help.

What does the average person think about he thinks of running? He thinks of huffing, puffing, being tired and sore, having a hard time getting going, looking fat in workout clothes and being embarrassed at being out of shape. A lot of people try running at some point in their life, and most people don't keep doing it.

On the other hand, what does a regular runner think of? He thinks of the "runner's high" and gliding across the pavement, enjoying a great run, and feeling like a million bucks afterwards.

Since that conversation, I've been trying to change my reference points. For instance, if I feel like I'd like some fried food, I try not to imagine/reference eating the salty greased food. Yes, eating french fries and a grilled chicken sandwich will be salty and fatty and delicious. It's a superstimulus, we're not really evolved to handle that stuff appropriately.

So when most people think of the McChicken Sandwich, large fry, large drink, they think about the grease and salt and sugar and how good it'll taste.

I still like that stuff. In fact, since I quit a lot of vices, sometimes I crave even harder for the few I have left. But I was able to cut my junk food consumption way down by changing my reference point. When I start to have a desire for that sort of food, I think about how my stomach and energy levels are going to feel 90 minutes after eating it. That answer is - not too good. So I go out to a local restaurant and order plain chicken, rice, and vegetables, and I feel good later.

Schelling talks about in Choice and Consequences about how traditional economics applies a discount rate, but how that fails to explanation many situations. Schelling writes, "[The person who] furiously scratches would have to be someone whose time discount is 100% per hour or per minute, compounding to an annual rate too large for a calculator."

Schelling raises more questions than answers. But I think one of the answers is clear, and that answer is reference points. The man who scratches his rash at the expense of a much worse condition immediately isn't discarding the future. He simply isn't referencing it when he makes his decision. He itches, he references scratching with an immediate abatement of the itch.

Eliezer writes in the theory of fun that to sell an idea to someone, you usually don't need to convince them it's a good thing to live with for their whole life. You only need to convince them that the first hour or day after they choose is going to be good.

And... I think that's scary, because it's true. People reference the immediate <em>very</em> short-term consequences of their actions, instead of the broader pictures. Whether that's exercise, junk food, scratching a rash, buying a bigger TV, or conceptualizing eternity.

This explains a lot of why people act the way they do. It also explains a way forwards for you - gradually evolve your reference points so that thinking of junk food is thinking about feeling that heavy weighted-in feeling in your belly and so that exercising is the rush of good hormones and pleasantness of a good workout. Imagine scratching a rash as doubling your discomfort instead of abating it and imagine how incredibly nicer your future surroundings if you save and invest that money for just a short time longer.

Your reference points establish how you value things. Change them, and how you value things will change.

32