Three systems: a mechanism for mental and social narrative

Alex Rosenberg says here that we are instinctively driven by stories, narrative and theory of mind - a very useful instinct on the small scale - although that instinct can be misleading on the larger scale of history and politics. His book on this claim is also out, though I haven't read it yet.

It seems uncontroversial that the idea of narrative has a powerful hold on how we think. There are thousands of discussions of storytelling as a way for us to bond with other people, and the biases that come from our desire to see a natural story behind events. I don't think many would disagree that stories are compelling to most people, and that we naturally like to see the world through narrative.

I've been exploring how the mind might implement this, and what the consequences might be.

Readers may recall the System 3 theory from earlier posts. This is how I think narratives fit into that, and how the process works in the mind:

People (and other animals) are very good at learning…

What people want, cognitive goods, models of persuasion and why we avoid important information: the cognitive economics session at the AEA conference

For the first time, there will be a session on Cognitive Economics at the American Economic Association’s conference. The conference, in association with the ASSA, is taking place from Friday 4 January to Sunday 6 January and will be a hugely interesting programme over the long weekend.

The Cognitive Economics session will take place on Sunday 6 January 2019 at 8-10am in Atlanta Marriott Marquis, International 10. I hope that any readers who are attending the conference are able to come along!

Let’s give you a quick overview of the session:
Dan Benjamin, University of Southern California; Kristen Cooper, Gordon College; Ori Heffetz, Cornell University and Hebrew University of Jerusalem; Miles Kimball, University of Colorado Boulder will be presenting a paper on What Do People Want? On the use of large-scale surveys to estimate multidimensional indifference maps over "fundamental" goods that include mental states such as emotions, perceptions and beliefs: answering the quest…

“Mysterious psycho-logic”, the “Nudge Unit” and irrational humans: tune in to Leigh Caldwell and Rory Sutherland on BBC Radio 4's show Thought Cages

“Mysterious psycho-logic”, the “Nudge Unit” and irrational humans - Leigh explores cognitive and behavioural economics and science with Rory Sutherland on BBC Radio 4’s show Thought Cages today and on Friday.

Tune in at 13:45 today to hear Leigh discussing behavioural and cognitive economics on Thought Cage’s next episode: Instinct Before Logic: The Postbox at the O2. During this episode, Rory and Leigh will be exploring why reason is no longer used to persuade us to change our behaviour, showing what the “Nudge Unit” of the UK government is and explaining all about behavioural science. 
Tune in to BBC Radio 4 live at 13:45, or listen to the episode on BBC iPlayer afterwards here.
If you can’t catch today’s episode, make sure you listen out for Leigh and Rory again this Friday at 13:45. Looking in more depth at the traditional shopping experience, this episode - The Sachet in the Pot Noodle - will reveal how behavioural and cognitive science is changing the future of retail.
You can liste…

A new team member and new plans

Hello, today it’s not Leigh posting, but me, Tara, his new colleague! I’ve recently started working for Inon and with Leigh on his cognitive economics work. I’ll be writing content on cognitive economics, spreading the word about cognitive economics to both academic and general audiences and also organising events around cognitive economics. I wanted to take this opportunity to introduce myself and also fill you in on some exciting events on cognitive economics coming up.
All cards on the table - my background is not in economics or psychology. I actually studied English Literature in my undergraduate and postgraduate degrees. However, I’ve always been passionate about spreading new ideas, working in an interdisciplinary fashion and writing. In my professional work for the past few years, I’ve been programming events for two cultural institutions. I started working with Leigh in early September and it’s been a real pleasure learning and writing about this new discipline. 
The first thre…

Rebuilding macroeconomics

Spending today and tomorrow attending the Rebuilding Macroeconomics conference at the Treasury.

The programme looks very interesting - highlights include:

Ekaterina Svetlova's opening talk on "Imagining the Future", which I think will be quite relevant to System 3 and an idea I have been working on, prospective expectations: the concept that actors based their decisions not on a Nash equilibrium (rational expectations) or on a simple extrapolation of the past (adaptive expectations), but on the future they are best able to imagine.Sam Johnson on "The cognitive and affective processes that give rise to emergent economic order", which sounds right up my street.David Laibson on "Using model free data to predict future outcomes" - more in this case for the speaker than the topic."Markets as a function of language: microfoundations of narrative economics" by Douglas Holmes - a topic that has been studied both by Robert Shiller and by Tuckett and …

Neuroscience, psychology and economics: the evidence for System 3 (long)

In my last post I outlined the concept of System 3, what it is and why it matters. In short, System 3 is the mental ability to imagine the future and evaluate how happy you will be in it – based on how pleasurable the process of imagining itself is.

A lot of different research strands have come together to result in the identification of System 3 as a distinct mental process. I summarise the key steps here:
The fundamental building block of System 3 is the stimulus-response relationship. It has been known for a long time that people easily learn stimulus-response relationships when they are rewarded for the response. The classic examples come from Pavlov (who rewarded dogs with food and discovered that they would start to get excited when they saw the experimenter’s white coat – as any pet owner will recognise), and Skinner (who trained pigeons to learn that pressing a lever was associated with getting fed). Although these original experiments were done on animals, there is plenty of …

Introducing System 3: How we use our imagination to make choices

In recent years we’ve become used to thinking about decisions as “system 1” or “system 2”. System 1 choices are automatic decisions, made without thinking, based on an immediate emotional or sensory reaction. System 2 is used to stop and rationally calculate the consequences of our choices, and determine the best cost-benefit tradeoff.

But these two processes don’t capture every decision. Indeed they might only encompass a minority of our daily choices.

Recent work in neuroscience and psychology has discovered another way of making choices: with the imagination. Customers imagine their possible futures: the outcomes they would experience after a choice, and how those outcomes will make them feel. The future that makes them feel happiest will be the one they choose. These choices use different parts of the brain than System 1 and 2. They are called System 3 choices.

Think about how you might buy a car. System 1 would suggest that you see a colour, or shape, or brand of car, immed…