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Preference Falsification

Updated: Aug 21

Timur Kuran published the book "Private Truths, Public Lies" in 1995, I discovered the book in 2018 and it has since drastically shifted my worldview. Once in a while, you discover a framework that is so powerful that once you understand it, you start seeing it in every aspect of daily life and it changes the lens through which you interpret the world. Preference falsification theory did that to me and in this post, I'll introduce you to the concept and hope it can help you do the same.


The idea behind this concept is simple: people will lie about their true preferences, therefore they have a set of public preferences and a set of private preferences.

  • Public preferences: the preference you communicate to others

  • Private preferences: your true preference

This idea while simple on the surface penetrates several aspects of society and when it was first introduced to me, it invalidated a lot of classical economic theory that I had spent years studying (economic models assume that your private and public preferences are the same).


You might be thinking that yes people lie, I know that, but there are two important distinctions between preference falsification and lying that are important to highlight. First, preference falsification brings disutility to the falsifier which isn't necessarily the case with lying (some people just love to lie). Second and more importantly, preference falsification transpires because of an individual's wish to conform to the perceived preferences of the majority. The second part here is important perceived preferences of the majority, in reality, it is difficult to determine the true preferences of the majority, what if everyone is falsifying their preferences? How do we truly know what the majority wants? The desire to conform to the real or imagined preference of the majority here becomes problematic in a society where people don't voice their true preferences. Since there is imperfect information the perceived preferences of the majority may be incorrect which leads to an inefficient equilibrium, this is known as pluralistic ignorance.


A common example of this phenomenon is seen throughout history in our political structures. Kuran gives an example of the communist regime in Eastern Europe, specifically in the Czech Republic.

  • Narrative Mirage: violence against the people kept the communist regime in place

  • Narrative Violation: preference falsification sustained the system

Kuran argues that what sustained the system was people falsifying their preferences and pretending to approve the system. They had a set of private preferences that differed from their public preferences they were voicing. As a result, when demonstrations started to take place, the regime in charge didn't take it seriously. The protests had started just before winter, so the regime thought people would stop as it got cold and go back inside. They underestimated the strength and the preferences of the people as they were unable to distinguish between their private and public preferences (similar to why so many people were shocked with the most recent election results).


So let's dig a little deeper into the root causes of this phenomenon. In his book, Kuran states that individuals evaluate their choices based on three utilitarian factors:

  • Reputational utility: the amount a certain preference will raise or lower an individual's standing in the community

  • Expressive utility: value in letting others know how one truly feels

  • Intrinsic utility: the degree to which an option fulfills the individual's greatest good

While in theory, this makes sense, we know humans aren't rational beings who weigh each of the respective utilities every time they make a decision. In reality, there are three much simpler explanations as to why people falsify their preferences. First, humans are fundamentally social creatures and are driven by their need for social approval. In most societies throughout the history of our existence, going against the group meant death. We have this baked into our DNA so the need for social approval is a powerful motivating factor. Second, humans rely on each other for information. Rene Girard's mimetic theory has been widely discussed in Silicon Valley so I won't dig into that here, and we don't need that to know that a lot of our information comes from those around us. Finally, violence can also be applied to induce preference falsification. For example, in North Korea or other dictator regimes, dissent against those in power can still mean death. In his podcast with Timur Kuran, Eric Weinstein argues that violence can shift from the physical sphere to other spheres. He introduces this idea of reputational violence that can have very real consequences on an individual's job, their friends, and even their marriage. This relates directly to society today where the vocal opinions of the minority, can lead to the preference falsification of the majority, resulting in the cancel culture we see.


The consequences of this phenomenon are also widespread across both the individual and societal level. On the individual level, psychological studies have shown that humans have a need, to be honest about themselves. Consistently falsifying your preferences can lead to negative psychological effects that will slowly build up over time. On the societal level, such as what was seen in the Communist regime, people falsifying their preferences can preserve structures that are widely disliked, and can also cause structures that were held in place through public falsification attain genuine acceptance in society (narratives we tell each other can lead to a truth). Similar to what we saw happen in the Czech Republic, preference falsification can also project the illusion of stability on structures that are vulnerable to sudden collapse. However, above all else, it slows human knowledge by corrupting public discourse and limiting the discussions we can openly have. Critical thinking and open-mindedness are key to a well-functioning society and we can't even get to that starting point when people are afraid to say what they really think.



Sources and Further Reading

Eric Weinstein and Timur Kuran (https://www.youtube.com/watch?v=xzjqjU2FOwA)

LivingLie(Duffy et al)2019.pdf

private_truths_public_lies.pdf

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