Our weekly explainer on economics using lessons from popular culture. In Installment 18, Daniel Kokotajlo’s Apostasy shows the importance of Revealed Preferences.
One of the more memorable films I saw at the Mumbai Film Festival last week was Apostasy, one of a new wave of British debuts that has led observers to call this a landmark year for British cinema. In his first feature film, Daniel Kokotajlo tells the story of three Jehovah’s Witnesses: Ivanna and her daughters Luisa and Alex. When the film begins, they are all believers — or so they think. Luisa finds love and becomes pregnant early in the film, and chooses her new relationship over remaining a Johovah’s Witness. She is ‘disfellowshipped’ — their term for excommunication — and her family is forbidden contact with her. But she is pregnant, and needs her mother’s help. What is the mother — a true believer — to do?
The film gets more complex (spoiler alert, sorta) when the anemic Alex dies because blood transfusions are forbidden in the faith. It is a choice she makes, because she truly believes — just as her sister’s choice revealed her lack of belief. The mother, meanwhile, is torn between staying true to her faith, which has anchored her life, or looking after her remaining daughter. Her dilemma is at the heart of this moving film, which, as all good films do, also reveals an economic principle: Revealed Preferences.
The textbook definition of Revealed Preferences says that it is “an economic theory of consumption behavior which asserts that the best way to measure consumer preferences is to observe their purchasing behavior.” I’d simplify that by saying that Revealed Preferences are preferences that are revealed through our actions, and not our words.
I came across an illustration of this in Seth Stephens-Davidowitz’s excellent book, Everybody Lies:
Netflix learned a similar lesson early on in its life cycle: don’t trust what people tell you; trust what they do.
Originally, the company allowed users to create a queue of movies they wanted to watch in the future but didn’t have time for at the moment. This way, when they had more time, Netflix could remind them of those movies.
However, Netflix noticed something odd in the data. Users were filling their queues with plenty of movies. But days later, when they were reminded of the movies on the queue, they rarely clicked.
What was the problem? Ask users what movies they plan to watch in a few days, and they will fill the queue with aspirational, highbrow films, such as black-and-white World War II documentaries or serious foreign films. A few days later, however, they will want to watch the same movies they usually want to watch: lowbrow comedies or romance films. People were consistently lying to themselves.
In other words, those users told themselves (and probably others, if anyone asked) that they wanted to watch one bunch of films, but their true Preferences were Revealed by what they actually ended up watching. In a sense, all of Everybody Lies is about this, using Google searches to examine people’s Revealed Preferences, and noting the stark difference between that and their stated preferences. (It also contains the most excellent aphorism, Never compare your Google searches to everyone else’s social media posts.)
In an everyday context, you might say that you prefer healthy salads to junk food, but spend all evening snacking on oily wafers. Or you might tell others that your spouse and you love each other’s company, while you actually spend most of your time together staring into your respective phones. Your Revealed Preferences, when they can be measured, will always reveal more about you than your stated ones.
What does this have to do with Ivanna’s predicament in Apostasy? Well, in his thought-provoking book The Big Questions, Steven Landsburg argues that most people who claim to believe in God really don’t:
That’s what I think religion is like for most people. They believe that they believe, but their “beliefs” are of the easily disposable kind. Suppose you could take a devoutly religious person, ask him, “Are the tenets of your religion true?” and somehow convince him that the life of his child depends on getting the answer right. I’m guessing that nine times out of ten, you’d find yourself confronting a born-again infidel. The only reason that rarely happens is that there’s rarely an occasion when getting the right answer actually matters.
Apostasy brings us a situation where these choices actually matter, and reveal preferences. Louisa reveals her belief (or the absence of it) by walking away. Alex makes the opposite choice. But it is Ivanna’s choice that is the most poignant and least clear. Till the end, she professes her faith — but her actions indicate that her belief is wavering, however much she rationalises them.
Apostasy is doing the festival circuit, and I believe it will release next year. I couldn’t even find a trailer of the film online. Do watch it whenever you get the chance.