1 Preferences, perceptions, choices, and the unconscious, but not Freud Edward Morey , Edward.Morey@Colorado.edu Working draft June, 2006 – comments please, but do not quote Links appear in blue Economists, in the context of economics, do not distinguish between conscious and unconscious thought - I have heard some discuss the distinction in the context of their psychotherapy sessions. 1 But, psychologists find the distinction central to explaining choices, perceptions, and how we manage to make our ways through the world. 2 The unconscious, once limited to harboring our infantile Freudian traumas, now plays many roles. Much recent research in psychology and neurobiology suggests that our brain consists of many separate processing centers: one for conscious thought (“should I or shouldn’t I buy the Lexus and marry Shirley”) and many for unconscious tasks. Unconscious activities were once thought limited to such mundane activities as processing language, not falling over, and seeing what we see when we open our eyes – the stuff the conscious mind did not need to be bothered with. Now it is thought that our unconscious also plays a major role in many of the choices we make – my perception that a Lexus is better than a Ford, and my decision to drop Lois and get the new Lexus. 3 And, these different centers don’t always agree on the course of action. We are “not of one mind.” Many questions arise. Who is in charge? It depends on what is being determined and the context in which it is being determined. Are we conscious that a decision was made? Often not. Are we aware/conscious of why we do what we do? Probably not, but often our conscious brain makes up a good story to explain what was determined by our unconscious, or so says some psychologists. And, what happens when our conscious and unconscious disagree? These psychological theories and conjectures as to how our brains/minds work, even if only slightly correct, should be of great interest to economists, particularly those of us who have spent our lives estimating preferences and choice. 1 Synonyms for unconscious include aconscious and nonconscious. 2 Here, I am defining perceptions as one’s beliefs about the world, what things are like, how things work, and the results of different actions. Perceptions and preferences are different things: some perceive that our President is not terribly intelligent (that perception might or might not be correct); whether one prefers our country with an intelligent or dumb leader is a matter of preference. 3 For a persuasive and accessible presentation of these views see Wilson (2002). Timothy Wilson is a prominent social psychologist at the University of Virginia.