It is a humid summer evening in Shenzhen. We are on the bus 43 to Windows of the World (WOTW). It is a theme park where all the wonders of the world have their miniatures on display and helps the innumerable citizens of the middle kingdom an expensive world tour. WOTW is also a metro station, where Ms. Grocery trip lover (GTL) and I will be taking an underground train to OCT loft. A place rife with budding artists in Shenzhen with one of the few Starbucks the city has- a place of refuge from the culture fatigue that can hit an alien any time after the first few months in China.
The 43 from Beijing Da Xue to WOTW left at 5pm. Ms GTL had her lunch at around one pm and her mid- evening snack at around four. A small water bottle kept her distracted till five-thirty pm. I, as usual, am discussing the expanding universe and the role of the Homo Sapien in the macrocosm of the larger order of things. I go on for about a good seven minutes when I realize that Ms GTL has no interest whatsoever in the earth shattering philosophy I have to offer. Despite her highly developed neo-cortex she is not moved by the opportunities of maximizing her utility with my intellectual banter. She has turned absolutely silent, is looking up at the digital ticker announcing the next station. She is fixated on that ticker, registering nothing but still nodding and making incomprehensible approving sounds with her lips sealed.
“Zainab, you are not listening to me!”
“Zainab!!!” – I raise my voice to get her attention
“You are not listening”- I snort at her with a fake angry face
“Umm, Of course I am Frand. You are talking about some, ummm universe thing. Microcosm of macrocosm of the universe and humans and ummm…”
“You find this conversation boring?”
“Uhh no of course not Deer. I am always listening to these things and I love it. I always do. Don’t I?”
“No. Not always. Not when you are hungry. Are you hungry?”
Head thrown down, a puppy face and an endearing voice- “Yes”
Ms GTL seems to not be consistent in her preferences. When asked whether she prefers food over intellectual conversation, she originally responded, obviously intellectual conversation. A few instances like the trip to WOTW and OCT loft revealed that such a preference is not consistently applied over different frameworks. With enough data points over many such trip, it was found that on an empty stomach, the preferences for intellectual conversation is superseded by thoughts of consuming food.*
*Of course there was statistical significance in reaching this conclusion.
Sounds familiar? Yet, does the utility maximization theory allow for such flipping over of preferences? Does it allow for biological factors like hunger into the utility curve?
The metro train moves at its usual pace. With each new passenger, Ms. GTL’s expressions become more entertaining. A frown, grimace, puke face. I see a plethora of emotions flash across her face as people get off and on the train. The digitalized woman voice finally announces OCT loft and the expression of joy in Ms. GTL’s face betray her excitement. The usual pasta in mushroom sauce and a Margherita Pizza. Sated, we decide to check out the vintage clothes’ shops nearby.
“Isn’t this such a lovely shirt, Frand?”
“Frand, this is RED!”
“Yeah and its great right? You think I should buy this?”
“Deer, it is RED! There is nothing else special about it”
“No. Just look at it. It’s got a great fabric and the color…”- My voice trails off as it suddenly hits me
I have a cognitive bias for the color red.
From the age of one, the color has held a strange lure for me. Anything red draws me towards it uncontrollably. The Homo Sapien simply ignores the Homo Economicus.*
*This conclusion too was reached after sufficient data points were gathered and demonstrated statistical significance.
Do I always buy things because they are red? No.
Am I always attracted to things red in color? No.
Then why do I find the color red has some kind of captivating power over me?
How does the utility maximization theory explain this inconsistency in buying behavior?
Neuroscience and psychology may have an answer.
Every time, I find myself uncontrollably drawn to consumer goods either packaged in red or containing red somewhere, I observed another element in the situation. I am distracted. My pre- frontal cortex( center of all decision making and critical thinking) is not active and my primal instincts take over. This has happened due to a variety of reasons. I have been hungry, sleep deprived, exhausted, multi- tasking (like talking about philosophy to a hungry friend), emotionally disturbed or planning something else that engages the Pre- frontal Cortex.
Do our existing utility functions factor in emotional volatility affecting our preferences?
Maybe it is time to rethink the utility functions, we sometime erroneously believe to be the Ten Commandments of economics as a social science. Maybe it’s time to introduce a more interdisciplinary approach to understanding economic decision making. It is really about understanding human behavior and maximizing human welfare, after all. Isn’t it?