I like to listen to podcasts when I run, mostly fun stuff from Slate and the BBC, also stories (both true and fictional) and sometimes great lectures. If you already listen to podcasts, or might want to get started, here’s a great one offering 20 minutes of econotainment to ease your commute or whatever: Planet Money’s Episode 481: The Economist’s Guide To Drinking While Pregnant.
Our week 1 exercise asks students to describe an instance of thinking like an economist — that is, trying to explain individuals’ choices as if each is doing the best they can under their circumstances, and then interacting with others towards a potentially predictable result. Looking at social life as an equilibrium among optimizers cannot explain everything, but it can be useful and also a lot of fun.
The Planet Money podcast interviews Emily Oster, a famous economist (meaning, famous among economists) who’s written a new book on choices in pregnancy. It turns out that most people don’t think like economists at all when they decide what to eat or do during pregnancy. For example, when people are optimizing, we think at the margin about incremental changes — should I drink one sip of wine? how about a half glass? or a whole glass? But when people are pregnant, the rules tend to be absolute: no wine!
Emily Oster’s great story is about that kind of paradox. It turns out, that real people don’t actually optimize all the time — the calculations and subtleties would make our heads explode. So we construct simple rules that clearly are not themselves optimal, but might be a predictable equilibrium among optimizing people — doctors who need to tell lots of people the same thing, and prospective parents who have better things to think about than relative risk ratios and complicated probabilities. When we become aware of that we can perhaps overcome some of those limitations, and make arrangements to reach a much better equilibrium.
In other words, actually thinking like an economist is pretty weird… but do you find it useful? fun? Listen and let us know how you see Plant Money’s great podcast on The Economist’s Guide To Drinking While Pregnant!