“It’s the biology, stupid! Proxy failures in economic decision making” is a commentary by Pier Luigi Sacco (available here), on a work by Yohan J. John et.al.: “Dead rats, dopamine, performance metrics, and peacock tails: Proxy failure is an inherent risk in goal-oriented systems” (also available on ResearchGate)
Where the “Dead rats, … peacock tails” article is dealing with
When a measure becomes a target, it ceases to be a good measure. For example, when standardized test scores in education become targets, teachers may start “teaching to the test,” leading to breakdown of the relationship between the measure – test performance – and the underlying goal – quality education. Similar phenomena have been named and described across a broad range of contexts, such as economics, academia, machine learning, and ecology. Yet it remains unclear whether these phenomena bear only superficial similarities, or if they derive from some fundamental unifying mechanism.
Here, we propose such a unifying mechanism, which we label proxy failure.
We first review illustrative examples and their labels, such as the “cobra effect,” “Goodhart’s law,” and “Campbell’s law.”
Second, we identify central prerequisites and constraints of proxy failure, noting that it is often only a partial failure or divergence. We argue that whenever incentivization or selection is based on an imperfect proxy measure of the underlying goal, a pressure arises that tends to make the proxy a worse approximation of the goal.
Third, we develop this perspective for three concrete contexts, namely neuroscience, economics, and ecology, highlighting similarities and differences.
Fourth, we outline consequences of proxy failure, suggesting it is key to understanding the structure and evolution of goal-oriented systems. Our account draws on a broad range of disciplines, but we can only scratch the surface within each. We thus hope the present account elicits a collaborative enterprise, entailing both critical discussion as well as extensions in contexts we have missed
The commentary from “It’s the Biology, Stupid!” Pier Lugi Sacco has a nice set of ideas to ponder.
“My contribution to the debate is specifically stressing how a key source of proxy failures in economics stems from a mismatch between the evolutionary function of biological reward systems and traditional conceptions of utility maximization.“
“ … pleasure-seeking as the implicit goal guiding human behavior is deeply embedded in classical utilitarian foundations of economics. However, … the dopaminergic system does not simply encode the hedonic value of pleasure. Rather, phasic dopamine provides a reward prediction error signal that enables reinforcement learning about stimuli and actions.
Products engineered to artificially amplify dopamine release, through ingredients targeting vulnerable nodes in mesolimbic reward circuitry, lead to maladaptive over-valuation of associated representations.”
“This evolutionary mismatch, … might underlie the pursuit and supply of
unprecedented varieties of super-addictive synthetic products in the modern economy“
Utilitarian characterizations of economic decision making fail to capture the complex, conditional, and heterogeneous motivations underlying human behavior as shaped by the predictive, multicriterial drivers of biological regulation.
“A biologically grounded approach to economic decision-making may then move from the following building blocks.”
- Predictive regulation and allostasis
- Reward prediction errors, not pleasure
- Multicriterion optimization
- Motivational heterogeneity
Unless economic models start to acknowledge that humans have bodies and a biology with its own adaptive logic and tradeoffs, economic policies will be systematically exposed to, and systematic generators of, proxy failures.
Surtil : 