Posted Jul 11, 2012 10:30 am CDT
There is value in waiting, according to a law professor who is an expert in financial market regulation.
Speedy reactions produce errors, University of San Diego law professor Frank Partnoy writes in the New York Times. He cites as an example the rush to report on the health law decision. Two networks initially reported incorrectly that the U.S. Supreme Court struck down the health care law.
“The blink response to this case is only the latest example of a troubling increase in the speed of our reactions,” Partnoy writes. “Email, social media and the 24-hour news cycle are informational amphetamines, a cocktail of pills that we pop at an increasingly fast pace—and that lead us to make mistaken split-second decisions. Economists label the problem ‘present bias’: We are vulnerable to fast, salient stimulation.”
The solution, Partnoy says, is the conscious pause. “If we know we will overreact to consumer products or housing options when we see a happy face (one reason good sales representatives and real estate agents are always smiling), we can take a moment before buying,” he writes. “If we know female job screeners are more likely to reject attractive female applicants, as a study by the economists Bradley Ruffle and Ze’ev Shtudiner shows, we can help screeners understand their biases—or hire outside screeners.”
Partnoy’s theories extend to the billable hour. Writing last month in the Wall Street Journal (sub. req.), he said flat fees are more efficient and they take less of a toll on workers. “But even beyond the personal impact, there are reasons to reconsider hourly work,” he wrote. “The most important engines of economic growth run at a much slower pace than modern life. Innovation doesn’t occur in a year or a quarter—and certainly not in an hour.”