Rational Roundup #2 – Decisions, Disproportionate Punishment, Social Norms

The Rational Roundup, as previously announced, provides our readers with regular updates on rational thinking and behavioural economics. Our latest edition addresses inconsistent decisions, disproportionate punishment, social norms and more.

This week’s must-read article on inconsistent decision making is co-authored by Daniel Kahneman and was recently published on the Harvard Business Review. The article argues that human judgments are strongly influenced by irrelevant factors, such as our current mood. Professionals (including lawyers) make decisions that often deviate from those of their peers and, perhaps more worryingly, from their own previous decisions. This variability of judgments is called noise. The article looks at how decision makers can check the level of noise that they are facing and how they can make use of algorithms to reduce that noise (which have already been tested in the legal world). To read the full article, click here.

Our second pick is on the psychology of disproportionate punishment. In his article, Daniel Yudkin, a doctoral candidate in social psychology at New York University, explains how the choice of harsh punishments for particular individuals may be caused by psychological factors that are deeply ingrained in the human psyche. The article investigates the so-called ‘in-group bias’. This systematic error can be found in people who have to choose an adequate punishment for an offense. Interestingly, under certain circumstances, the ‘punishers’ tend to be influenced by whether the person to be punished belongs to their peer-group (e.g., affiliation with the same sports team). On the bright side, the author also indicates that there may be ways to overcome the bias. You can read the full article here.

Recent publications

A new report, published by the Behavioural Insight Team, considers how lawyers could use behavioural insights to effectively inform people of the possibility to make a charitable bequest. The research shows that social norms can be a powerful tool in this context: People writing their will for the first time, who were informed that others had also made a donation, ended up being much more open to the idea of donating themselves. To get the full report, click here.

Upcoming events

The next Zürich Behavioral Economics Network MeetUp will be held on Monday, 7 November 2016, under the title “Behavioral Economics & Management”. The first presentation will focus on evidence based business optimisation at Swiss Re. The second speaker will provide a taster session of LEGO SERIOUS PLAY, which is intended, among other things, to playfully tackle organisational challenges. What else could you ask for?! Further information about the event can be found here.

Job opportunities

BEWorks Inc., a firm co-founded by Dan Ariely applying behavioural economics to solving business and policy challenges, is looking for a new Associate. According to the job description, you would be addressing challenges in a variety of domains, including financial decision-making, healthcare and government policy. Interested? Click here to read the full job description.


Christian Tenkhoff works as an Associate in the Trade Marks & Designs Department of international law firm Taylor Wessing in Munich. You can follow him on twitter here.