The Knackered Hack office window looks out onto Solsbury Hill (or more precisely Little Solsbury) made famous by our local bard, one Peter Gabriel.

If you strip Gabriel’s song down, it tells a story about options and decision-making, and a powerful one at that. It alludes to the turmoil the lead-singer of Genesis went through after he left that iconic band. He got out in 1975, just before punk arrived, though that was not his motive: more creative exhaustion, as I understand it (one of our broken things, you could say).

If you are my age, you’ll know that admitting to liking Genesis as a teenager amounted to what kids these days call “social death.” However, in our modern eclectic world, all the sins of the past are forgotten; my friend Andy (see Journey of a Lifetime) even went to the Led Zep concert, and he was a dyed-in-the-mohair punk, if ever there was one.

Solsbury Hill (Looking down on)

I doubt that the world of decision-making research is going to anoint Gabriel with any honorary degrees, and it’s a long shot that he might be considered for a Nobel Prize in Economics. But why not? Perhaps he could share it jointly with Paul Simon, who did pioneering work in spreading the understanding of the confirmation bias through the song The Boxer, with what I consider one of the best lines in pop:-

Still, a man sees what he wants to see and disregards the rest”

But anyway, our options, and how we exercise them are really fundamental to success, or the avoidance of failure. So I was delighted when the Knackered Hackette’s cousin, Greg, brought to my attention the following New York Times story on Dan Ariely’s new book Predictably Irrational: The Hidden Forces That Shape Our Decisions, because it shows our aversion toward losing options — even when logic dictates that they will have no value to us. Ariely constructed a game to test how we respond to particular pay-offs. Players had to click on doors with rewards behind them:-

As each player went through the 100 allotted clicks, he could switch rooms to search for higher payoffs, but each switch used up a click to open the new door. The best strategy was to quickly check out the three rooms and settle in the one with the highest rewards.

Even after students got the hang of the game by practising it, they were flummoxed when a new visual feature was introduced. If they stayed out of any room, its door would start shrinking and eventually disappear.

They should have ignored those disappearing doors, but the students couldn’t. They wasted so many clicks rushing back to reopen doors that their earnings dropped 15 percent. Even when the penalties for switching grew stiffer — besides losing a click, the players had to pay a cash fee — the students kept losing money by frantically keeping all their doors open.

According to the report, what seemed to motivate was not the desire for future flexibility, but the pain of watching a door close.

“Closing a door on an option is experienced as a loss, and people are willing to pay a price to avoid the emotion of loss,” Dr. Ariely says. In the experiment, the price was easy to measure in lost cash. In life, the costs are less obvious — wasted time, missed opportunities. If you are afraid to drop any project at the office, you pay for it at home.

In my experience too, there is a lot of mental accounting that goes on just as the NYT says, and it takes real effort, or the words of a poet, to provide a consolidated view.

And because anywhere that the words diversity and complexity appear together Knackered Hack alerts go off, this is a treat for the weekend from a group called Hyannis Sound:-

Rather guiltily I was nursing a sense of schadenfreude when England were 2-0 behind against Croatia on Wednesday. And I was not at all anxious ahead of the earlier Israel v Russia match, which Russia had to lose (apparently unlikely, but it did happen) for England to stand a chance of qualifying for the 2008 European Championships (ie by beating Croatia). So England are out, and the manager Steve McClaren has been kicked into touch.

I don’t follow football so closely to judge whether this a fair comment on McClaren, and wish him no ill. In any event, as the Croatia game wore on, my nationalism was asserting itself, hoping for a reversal of the reversal. It came and went, England clawed back two goals and all too inevitably, it seemed, conceded a third.

But the reason for my mixed emotions was that I was secretly hoping that if McClaren went, the job would go to Aston Villa manager Martin O’Neill, even though he’s ruled himself out today, it appears. The reason for my enthusiasm was simple. He once quoted William Goldman’s famous line: Continue reading ‘nobody knows anything (football version)’

Reading Football Club manager Steve Coppell was being criticised for fielding a weakened team against Manchester United in the Fifth Round FA Cup replay Tuesday, devaluing the competition in pursuit of League ambitions and a place in European competition (a good source of extra cash).

It would seem to be symptomatic of the British disease of short-termism that he should face these brickbats. Anyone watching the first 20 minutes of the game would have agreed the team was below par, as Reading quickly conceded three goals. In the end, the result was 3-2 to the League leader, which also was not at full strength. But the quality of the home team was certainly vindicated, even if its early match strategy was not.

But competition is not just about one game. Confidence and success are threaded together. Overburden too few players with responsibility for carrying all the hopes of fans, particularly as a team becomes more successful, and that success may be short-lived. Rest and recovery are central to sustained success.

The low point-scoring value of a single goal makes football a particularly chancey game. So it may well pay to take a risk with a weaker team sometimes anyway. This is why football is more exciting according to statisticians. It produces more reversals of fortune.

But fans are a bit like investors. And club chairmen very definitely are. Losing is painful. This works against the hapless manager who needs time to build a long-term strategy, and may explain why key players are fielded too often, only to compound team weakness when they become re-injured.

Coppell seems to be a very tactical manager in any event. The Reading team compensates for its relative weakness against “super clubs” by aggressive practising of set-piece plays. In that respect, he creates a lot of his own luck. Hats off to him. He also has a degree in economics . As comedian Harry Hill would say: “what are the chances of that happenin’?”

It may be a punishment for being rude about economists on the Marginal Revolution blog. These people have supernatural power, you know. But for 24 hours I’ve been feeling a bit ropey again. It’s definitely the man-flu feeling. Heart rate was up this morning after a rest day Monday. Looks like it might pass in a day though, fingers crossed.

I don’t think I overdid it with the long run. There was no pre-indicator I was ailing, but the previous few days involved some significant stress. Twice in eight weeks I’ve been in situations where elderly relatives have been critically, disturbingly ill, including a New Year’s Eve near-death vigil, followed by a miraculous recovery.

They say stress weakens the immune system. Given that the running, certainly in the short period after each exercise, causes a redistribution of white blood cells away from the upper respiratory tract, it should not be a surprise that I might be more vulnerable to virus than usual. Mild weather also seems to be spreading more around this year than I remember. But even a week out now will seriously jeopardise my position come April 22.

I will aim to do some light exercise Wednesday, come what may, and avoid taking potshots at the economics profession until I’m better.

Resting heart rate 49

Weight 70.5 kg

Mood

Unscheduled rest day