Sunday, March 09, 2008

Footnote Bulletpoint

I just wanted to expand on something I probably skimmed over in the footnote in my last post.

"You've also, as a counter-intuitive sweetener, paid an awful lot of money for this information. Everything leads you to believe, despite the fact that nothing is based directly on personal observation."

This is a sort of magic beans scenario. What happens is, if you sell your last cow for some magic beans, you are going to be all the more insistent that the beans are indeed magic than if you'd sold the beans for, say, a chicken. No-one wants to be a sucker, especially to the tune of $30,000, so if you've bought into some information for that kind of money, the last thing you will want to do is turn around and say that you've been suckered. Relate it to police statistics on scam-based fraud; they always have a reported figure and then an unreported estimate based on this same understanding, that if you've bought into a scam, you may prove to proud to admit it.

And if we think of money in terms of something more general, "investment", then we see that this same mechanism is at work elsewhere. If money changes hands for a course of auditing, say, then not only is the individual putting money towards it, but time and effort too. All the more reason to not want to admit that such work has all been for nothing.

Finally, a study that sadly I cannot read on account of it being behind a firewall, explains that the more expensive a placebo is the more effective it becomes (though I assume there is a cut-off point; a million dollar sugar pill won't cure cancer), which surely has a bearing on all this too.

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