[extropy-chat] Meta Peak Oil news

[Keith Henson]

At 12:31 PM 3/7/2006 -0800, Hal wrote:

snip

>http://www.newyorker.com/critics/books/articles/051205crbo_books1
>
>One sample quote:
>
> > People who are not experts in the psychology of expertise are likely
> > (I predict) to find Tetlock's results a surprise and a matter
> > for concern. For psychologists, though, nothing could be less
> > surprising. "Expert Political Judgment" is just one of more than a
> > hundred studies that have pitted experts against statistical or actuarial
> > formulas, and in almost all of those studies the people either do no
> > better than the formulas or do worse...

I might have an explanation that would fit this observation.  I make the 
case that humans have (a) psychological mechanism(s), selected by wars with 
neighbors and ultimately caused by resource shortages--usually as a result 
of unchecked population growth.

It seems these mechanisms were selected by inclusive fitness in situation 
where genes were conspiring against the individual to do something stupid 
that was likely to get him killed in favor of his relatives.  (His, rarely 
hers.)

Drew Westen demonstrated in his fMIR scans of "partisans" that when people 
are in "partisan mode" the part of their brains that are used for rational 
thinking is inhibited and the action is in the emotional reward circuits 
parts of the brain.

Given that politics is "war by other means" this isn't all that surprising 
(in retrospect anyway).  I think Dr. Westen has located the psychological 
mechanism I proposed in the war paper.

Like the capture-bonding mechanism which seems to account for an 
astonishing range of human weirdness from hazing to S&M, this "partisan 
mode" mechanism may account for a lot of other strange human traits, all 
the way from wars to divergent opinions on peak oil.

Just like we know we have to use double blind with humans because they are 
good at fooling themselves, there are probably whole classes of knowledge, 
particularly predictions, where human judgment just can't be trusted.

>I seem to recall reading something about the theory of market consensus
>that is quite dramatic.  I'm probably remembering it wrong at least in
>part, but I'll present it for your consideration.
>
>Suppose you have a belief about some future event, and then you are
>informed of the market consensus and it is very different from your
>belief.

snip--good stuff

>Most people with these beliefs don't actually try to participate
>in the markets.  I see this as irrational, to not take advantage of
>free money.  Now, granted, there are some practical difficulties with
>opening commodities accounts, and not everyone has $5,000 to invest.
>But I don't think that is the real reason people aren't taking advantage
>of these offers.  I suspect that people are fundamentally being irrational.

Bingo.  For reasons rooted in the stone age.

>In fact, I believe that at root, it is not rational to hold a different
>position from the market consensus.

Certainly that is the case unless you have knowledge the market does not have.

>This is what I was referring
>to above, my dim understanding of an economic theorem.  To disbelieve
>in the consensus is to believe in a world where money grows on trees,
>and yet (for most people) not to take it.  There's something seriously
>inconsistent with this way of thinking.
>
>As I put it to the guy who believed in Simmons' $200/barrel, his belief
>implies a risk-free expectation of 20-fold profits.  That sounds too good
>to be true.  And as they say, when something sounds too good to be true,
>it usually is.
>
>So I would not be too quick to disparage the market consensus.  There is
>sound logic behind it, and few if any institutions apply the same
>discipline and motivation to people making forecasts.

True, though the market can be "surprised."  I can see a dozen ways that 
could happen.

It is a shame the limits to growth "world dynamics" models were 
fudged.  That discredited the entire field when their predictions failed to 
come in as "predicted."  (Graphs showed the world of 1972 not far from the 
peak.)

When Dr. Peter Vajk was trying to fold in energy from solar power 
satellites to the model he found an unexplained factor of 4 in the 
(FORTRAN) code that when changed to 1 pushed the serious declines from the 
late 70s to the early decades of the 21st century.  But I suspect there 
would have been little attention paid to predictions that far into the 
future.  (Discount factor)

At least part of the problem is non-linear behavior of the model.  A proper 
model of human behavior will have to include some very non-linear 
characteristics to account for cartoons triggering riots where hundreds of 
people have died.

Keith Henson