How important is luck in economic success? No question more reliably divides conservatives from liberals. As conservatives correctly observe, people who amass great fortunes are almost always talented and hardworking. But liberals are also correct to note that countless others have those same qualities yet never earn much. In recent years, social scientists have discovered that chance plays a much larger role in important life outcomes than most people imagine. In Success and Luck, bestselling author and New York Times economics (...) columnist Robert Frank explores the surprising implications of those findings to show why the rich underestimate the importance of luck in success--and why that hurts everyone, even the wealthy. Frank describes how, in a world increasingly dominated by winner-take-all markets, chance opportunities and trivial initial advantages often translate into much larger ones--and enormous income differences--over time; how false beliefs about luck persist, despite compelling evidence against them; and how myths about personal success and luck shape individual and political choices in harmful ways. But, Frank argues, we could decrease the inequality driven by sheer luck by adopting simple, unintrusive policies that would free up trillions of dollars each year--more than enough to fix our crumbling infrastructure, expand healthcare coverage, fight global warming, and reduce poverty, all without requiring painful sacrifices from anyone. If this sounds implausible, you'll be surprised to discover that the solution requires only a few, uncontroversial steps. Compellingly readable, Success and Luck shows how a more accurate understanding of the role of chance in life could lead to better, richer, and fairer economies and societies. (shrink)

In this book, I make use of an idea from economics to suggest how noble human tendencies might not only have survived the ruthless pressures of the material world, but actually have been nurtured by them.

In earlier work, I proposed the ‘adaptive standard of rationality’, according to which narrow self-interest models can be broadened by positing additional tastes, but only upon a plausible showing that those tastes do not hamper resource acquisition in competitive environments. This proposal is related to the green beard hypothesis from biology, according to which altruism might be adaptive if its presence could be reliably signaled by some observable feature, such as a green beard. In their contribution to this issue Ernst (...) Fehr and Urs Fischbacher offer theoretical arguments and describe laboratory experiments whose results they interpret as refuting my version of the green beard hypothesis. In this response, I argue that their theoretical arguments and experimental evidence pose no threat to the green beard hypothesis. (shrink)

Is it better to be a big frog in a small pond or a small frog in a big pond? Here, economist Robert H. Frank argues that concerns about status permeate and profoundly alter a broad range of human behavior. He shows how status considerations affect the salaries people earn, the way they spend them, and even many of the laws, regulations, and cultural norms they adopt. Provocative and insightful, this book is sure to spark widespread and lively (...) debate in classrooms and boardrooms alike. (shrink)

Sympathy and other moral emotions described by David Hume (1740/1978) and Adam Smith (1759/1966) motivate people to incur a host of costs they could easily avoid. Such emotions pose a challenge to evolutionary biologists, who have long stressed the primacy of narrow self-interest in Darwinian selection. In earlier work, I argued (Frank, 1987, 1988) that natural selection might have favored moral sentiments because of their capacity to facilitate solutions to one-shot social dilemmas. Here, I present a capsule summary of (...) the basic argument. (shrink)

Recent decades have seen a resurgence of contractarian thinking about the nature and origins of the state. Scholars in this tradition ask what constraints rational, self-interested actors might deliberately impose upon themselves. In response, Hobbes, Rousseau, Locke, and other early contractarians answered that laws of property were an attractive alternative to “the war of all against all.” More recently, James Buchanan, Russell Hardin, Mancur Olson, Gordon Tullock, and others have used contractarian principles to justify laws that solve a variety of (...) Prisoner's Dilemmas and other collective-action problems. And in the distributional realm, John Rawls and others have applied contractarian analysis to investigate how material wealth ought to be allocated among people. (shrink)

Rachlin's attack on the internal commitment model rests on the demonstrably false claim that self-punishment does not exist. He is correct that habits are an effective device for solving self-control problems, but his additional claim that they are the only such device makes it hard to explain how good habits develop in the first place. Someone with a self-control problem would always choose the spuriously attractive reward, which, over time, would create bad habits.

The paper reports the findings of a study of CPAs designed to determine whether they tend to find factors related to their professional environment (especially the guides to professional conduct of the American Institute of Certified Public Accountants) to be more helpful than factors related to their business environment when faced with ethics problems. Like internal auditors surveyed earlier, the CPAs tend to view a number of factors in their business environment to be even more helpful than factors related to (...) their professional environment in dealing with ethical dilemmas. Implications for CPAs as individuals and for their professional associations are discussed. (shrink)

Bioethicists have long been concerned that seriously ill patients entering early phase (‘phase I’) treatment trials are motivated by therapeutic benefit even though the likelihood of benefit is low. In spite of these concerns, consent forms for phase I studies involving seriously ill patients generally employ indeterminate benefit statements rather than unambiguous statements of unlikely benefit. This seeming mismatch between attitudes and actions suggests a need to better understand research ethics committee members’ attitudes toward communication of potential benefits and risks (...) of early phase studies to potential subjects. We surveyed the members of two U.S. research ethics committees using a phase I gene transfer study scenario, and compared the results to a previous survey of potential subjects’ perceptions and attitudes toward benefit and risk for the same protocol. The results show that there is indeed a gap between the subjects’ perceptions and the committee members’ views on what is appropriate to be communicated to research subjects. This discrepancy is the product of both the commonly assumed optimism of the subjects and to a “protective pessimism” of the research ethics committee members. We discuss this discrepancy using “frameworks of trust” and demonstrate the need to incorporate these frameworks into the existing model of informed consent. (shrink)

The health co-benefits of CO2 mitigation can provide a strong incentive for climate policy through reductions in air pollutant emissions that occur when targeting shared sources. However, reducing air pollutant emissions may also have an important co-harm, as the aerosols they form produce net cooling overall. Nevertheless, aerosol impacts have not been fully incorporated into cost-benefit modeling that estimates how much the world should optimally mitigate. Here we find that when both co-benefits and co-harms are taken fully into account, optimal (...) climate policy results in immediate net benefits globally, overturning previous findings from cost-benefit models that omit these effects. The global health benefits from climate policy could reach trillions of dollars annually, but will importantly depend on the air quality policies that nations adopt independently of climate change. Depending on how society values better health, economically optimal levels of mitigation may be consistent with a target of 2 °C or lower. (shrink)

Subjects enrolled in studies testing high risk interventions for incurable or progressive brain diseases may be vulnerable to deficiencies in informed consent, such as the therapeutic misconception. However, the definition and measurement of the therapeutic misconception is a subject of continuing debate. Our qualitative pilot study of persons enrolled in a phase I trial of gene transfer for Parkinson disease suggests potential avenues for both measuring and preventing the therapeutic misconception. Building on earlier literature on the topic, we developed and (...) tested an interview guide that focuses on how the subjects decided to participate, emphasizing the integration of subjects’ various statements that are relevant to assessing the therapeutic misconception, rather than evaluating them as isolated statements. The results indicate that a subject’s understanding of the purpose of research is best explored in juxtaposition to the subject’s motivation for participating. (shrink)

Daniel H. Frank - The Book of Job in Medieval Jewish Philosophy - Journal of the History of Philosophy 44:2 Journal of the History of Philosophy 44.2 318-319 Robert Eisen. The Book of Job in Medieval Jewish Philosophy. New York: Oxford University Press, 2004. Pp. xii + 324. Cloth, $55.00 Robert Eisen has written a very good book on medieval philosophical interpretations of the Book of Job. In it he discusses the varying interpretations of Saadia Gaon, Maimonides, (...) Samuel Ibn Tibbon, Zerahiah Hen, Gersonides, and Simon ben Zemah Duran. For readers of this journal, the aforementioned, with the exception of Maimonides and possibly Gersonides, may be just names, but in the context of medieval Jewish philosophy they together present a wonderful discussion.. (shrink)