Tiger Woods, Polygamy and Charles Darwin

At Christmas lunches everywhere, it has been inescapable no doubt to avoid a discussion about the extra marital affairs of golfing legend Tiger Woods. Such is the following of this athlete that the media has been relentless in pursuing new leads to this story.

At my Christmas lunch with fellow work mates, it inspired such robust conversations that it got me thinking about and investigating the theme of polygamy. According to Ted Bergstrom, the topic is more than just a curiosity. Of the 1170 different societies that have been ethnographically classified, 850 practice polygamy. The so-called marriage market in polygamous settings has been theoretically modelled by Bergstrom. He states that

(i)n human societies, males who inherit economic wealth from parents or other relatives can increase their reproductive success substantially by acquiring additional wives, mistresses, or concubines. For females, on the other hand, an extra husband adds little to her lifetime fertility. Once a female has achieved moderate prosperity, additional wealth does little to relax the biological constraints on the number of offspring she can have.

Aside from ensuring the propagation and extension of his genes to subsequent generations, research has uncovered another benefit: longevity for the male. Ewen Callaway in the New Scientist wrote last August that ecologists from the University of Sheffield, have found that

men aged over 60 from 140 countries that practice polygamy to varying degrees lived on average 12% longer than men from 49 mostly monogamous nations (...) The explanation could be both social and genetic. Men who continue fathering kids into their 60s and 70s could take better care for their bodies because they have mouths to feed. But evolutionary forces acting over thousands of years could also select for longer-lived men in polygamous cultures.

There are of course possible pitfalls in the scoring method adopted for measuring polygamy among societies, something which admittedly could be improved for future research, but this finding is interesting considering that this year marks the bicentenary of Darwin's birth and the 150th year since he published On the Origin of Species which details his theories on evolution.

Deal or No Deal Part 2

I received a curious comment to the last post Revenue Write-Down: Deal or No Deal:

Rudd's budget strategy exhibits extreme political risk aversion. It would be a mistake to view it in economic terms.

This is in line with what many commentators have said was the way the budget addressed the economic recession in the near-term while avoiding the hard choice of dealing with the long-term structural imbalances identified by the Federal Treasury in its budget papers.

In part 1 of this entry, I had contended that Prospect Theory explained the way the Labor government was behaving in assessing the risks associated with the budget allocation decisions on spending and taxation. The theory predicts (accurately in my view) that faced with losses, the government would increasingly become risk-seeking as shown by its having thrown caution to the wind and engaging in deficit spending.

I failed to mention another aspect to this risky decision. This has to do with what US Defense Secretary Donald Rumsfeld made famous: the “known unknowns” or the things that we know we don’t know. In a word it’s called ambiguity.

As it turns out, the human brain has a bias against it, an aversion. When faced with a decision involving risk where the probabilities attached to events are unknown, humans prefer not to decide or to postpone a decision until the known unknowns turn into known knowns even when the risky decision involves a higher expected value. Ambiguity aversion has been shown to exist when the decisionmaker is experiencing the fear of negative evaluation (FNE) from others.

Here is a neat video explaning the theory of ambiguity aversion in relation to the Ellsberg paradox posted by another blogger.

Getting back to the comment, perhaps it was not a case of political risk aversion, but a form of ambiguity aversion. The government has in effect postponed the decision to rein in tax cuts, given the FNE associated with reliving the Keating Labor government’s experience in the last recession. And given that one single event assumed in the budget would resolve the issue for them (this is the GDP growth projection of 4.5% over six years) the probability of which was (and will remain for some time) unknown, it probably felt justified in delaying this hard choice.

As neuroeconomics shows, this is a powerful, evolutionary response that fits in perfectly with the human condition. Until ample evidence arises to clear the ambiguity or reduce the FNE associated with the structural adjustment task, we cannot reasonably expect the government’s response to be otherwise.