Outsmarting Economists

I really wanted to love this book. I mean I really, really, really wanted to love this book.

Sigh.

It’s good, not great.

Oddly, with a different title, I think I would have liked it more. Then again, with a different title, I don’t think I would have ever read it.

The problem: there isn’t very much economics in this book. It is really just a puzzle book. Don’t get me wrong: if you are an economist or an economist in training, there is much in this book that will be very helpful in showing how to think through puzzles.

There are some interesting puzzles in which you have to use backward reasoning. There are quite a few problems in which you have to think deeply about probability. There are some interesting game theory exercises.

So, it is true that if you want to be a good economist, you need to learn to think through these sorts of problems.

But, does that make it an economics book? Does this book merit a title asking if you can outsmart an economist? Hardly.

Consider an algebra book or a calculus book or a graduate level mathematics textbook. If you read a book about how to solve mathematical problems, you will be a better economist. The same is true with reading books on statistics. So, can we take a book on probability and retitle it Can You Outsmart an Economist?

No need to stop there. An economist would benefit from reading philosophy or history or political science or literature. Should we retitle Pride and Prejudice while we are at it? Lots of economic insights in that novel (really, this is true).

So, if the book were more correctly entitled: Some Fun Problems to Help You Learn About Deductive Reasoning, Probability, and Game Theory, then I would not have been nearly as disappointed in the contents. Obviously the book would not sell as well. Which is an economic problem: if the point of a title is to help sell the book, then Landsburg and his publisher chose wisely.

That raises an interesting another economic problem: how far can a title deviate from the content of the book and still have the benefit of more sales from the better title outweigh the cost of risking future sales if people are disappointed in the content of the book?

A book about thinking like an economist should be hyper-focused on thinking about tradeoffs like that. If there is one thing that economists do and do very well it is always applying this principle:

People act in a way that the perceived marginal benefit of their choice is greater than the perceived marginal cost of their choice.

Enough on my disappointment about the misleading title. How does the book do on the terms of being a book of problems? OK.

Landsburg writes well and tells stories nicely with a humorous air. That is, after all, how he made his name. The puzzles are always told with an amusing story. There are tales about a guy trying not to be eaten by dinosaurs, ferocious pirates, and the Slobbovian czar of agriculture.

For the most part, the problems are interesting. The trick in a book like this is to quickly form an initial instinct, and then take the time to work the problem out to see when your initial instinct is wrong. It often is—well, unless you have seen a problem of type X before and know that your initial instinct is wrong and so you have the opposite initial instinct.

So, if you like puzzles, particularly probability puzzles, there is a fair amount of good material herein told by a skilled raconteur. Enjoy.

However, some of the problems are downright annoying. In the quest to show that your initial instinct is wrong, Landsburg is perfectly willing to engage is sly little word games where the question is written ever so slightly differently than the question you thought was being asked. This can lead to pages and pages of explanation about why if you were answering the question you are thinking he is asking, your instinct is right, but because of this seemingly irrelevant change in the wording right here, you get some crazy answer which is mathematically correct.

This sort of exercise in minutia is all fine if you just want to argue about trivialities. And if the title of the book was different, it would not bother me at all. But, remember the title: it is about outsmarting an economist.

Economists, as noted above are really good at one thing: they ignore trivialities. If you have a question, and you figure out the answer to the question you actually have, then you did what you wanted to do. Then along comes someone who says, well, if you alter the question in this seemingly trivial way, then you get a different answer. You then have a choice: you can spend hours and hours arguing about this matter, or you can say, I have already answered the question I set out to answer, you agree with me that I have answered the question I was actually asking, so why do I need to spend hours debating this?

The example which was the most egregious case is about the expected numbers of boys and girls in a population in which every couple wants to have a son. As Landsburg notes it is completely true that in expectation the number of boys will equal the number of girls. However, it is not true, Landsburg notes, that in expectation half of all children are girls.

If you look at those two statements, it is obvious they are in fact identical statements, so one cannot be true while the other is false. So, in this case, Landsburg is obviously engaged in some subtle changing of the question.

If you want to spend your time figuring out the verbal sleight of hand that Landsburg is playing there, then you are going to love every part of this book.

But, don’t think that you are committing some crime against economics if you think the marginal cost of figuring out what Landsburg is doing exceeds the marginal benefit of doing so.