Analytic Self-Management & Attention Portfolio Analysis

Introduction

Attention is scarce while possible demands on attention are innumerable. A fire alarm setting off in a building, allowing most occupants to exit safely, places about the same amount of demand on their attention as would a false alarm triggered due to a problem with the wiring. The two cues differ, however, in the value of return on attention they generate subsequent to elicitation of cued responsive dispositions.

In a burning building, people responding quickly to a well-functioning fire alarm escape with relatively less harm compared to those who don’t, and, who thereby suffer loss in life, limb, or physical quality of life. In a building with a malfunctioning fire alarm producing a false positive, however, people responding promptly to the misleading cue take on non-negligible unrewarded risk of loss of life, limb, or wellbeing [for instance, by getting crushed in a stampede, or, stumbling precipitously down a flight of stairs while making a mad dash to the exit, etc.]. If there really is a fire, then, fortuitously, the risk of injury or death from other hazards is less salient than the risk from fire-which is the better foreseeable, and estimable scenario of the two.

Demands on attention arising from such exogenous sources, and, the risk, return, and feasibility characteristics of the responsive dispositions they subsequently elicit are largely beyond individuals’ control. Accordingly, the practical objective of analytic self-management is to discover, or fabricate, methods for maximizing return on attention available for voluntary activities, and determining acceptable risk thresholds for various classes of voluntary activities when possible. The theoretical objective of analytic self-management is the elaboration of effective, efficient, and easy rationing, valuation, and attention allocation strategies and methods for identifying the best [highest return on attention generating] uses of endogenously available attention.

Agenda Setting
Voluntary activities range from answering nature’s call to commenting on a facebook thread. The difference between these consists in their locus of causality. You piss voluntarily but you couldn’t feasibly do otherwise because of the causal architecture of the world and the plumbing of the human digestive system. You comment on a facebook thread voluntarily but you could do otherwise. Voluntary activities akin to excretion have an external locus of causality while those akin to commenting on a thread have an internal locus of causality. Informed analytic self-management is concerned with attention allocation and budgeting for voluntary activities with an internal locus of causality.

Measuring and Valuating Endogenous Attention

Attention available for voluntary activities with an internal locus of causality is measured as time available per day divided by the activities’ duration. The duration is valued at the hourly wage rate discounted at the risk free rate.

Case Study

Abtidoon is a 21 year old marketing professional, working 40 hrs per week, and making Rs. 60,000 per month. The risk free rate is 4%. Outside of necessary rest, and domestic and leisure activities, he has only 74 hrs {with 90 hrs expensed on work and sleep, and 4 hrs on miscellaneous tasks} left over to attend to voluntary activities with an internal locus of control.

Abtidoon’s hourly wage is Rs. 375. So, his leisure time is worth at least 375 / (1.04) =   > Rs. 360. He has 74 hrs of voluntarily expendable attention, which is worth 74*360 = Rs. 26,640.  If he’s equally interested in learning how to program and in writing a novel, and realises that both tasks are time and effort intensive, though prima facie the second option is cheaper, he’ll face the decision of how to pick between them.

The method recommended here is as follows:

Compare expected completion times, and money value of completion times

Compare present value of returns on task post completion

Assume it’s expected to take 8 hrs every week over a year to become an entry level programmer, who can command Rs. 500 an hour. Also, that it’s expected to take anywhere between 3 to 6 years of writing 10 hrs every week to complete writing and publish a novel. The expected return on publishing the novel is a single lump sum of Rs. 50,000.

Using the recommended method, observe:

Expected completion times for learning to program and writing a novel respectively are 416 hrs and 1560-3120 hrs. The money values of completion time, accordingly, are 416*360 = Rs. 1,49,760 for learning to program, and Rs5,61,600-11,23,200 for becoming a novelist.

The expected return on learning to program is Rs.500*8hrs*52 weeks = Rs2,08,000. That’s 17333.33 per month. The net present value of this monthly return given it’ll be received only after a year is Rs. 10,826.34 = 17333.33 / (1.04)^12.

The expected return on writing the novel is Rs.50,000. The net present value of this return given it’ll be received only after 3-6 year is between Rs. 12183.43 to Rs. 2968.72. Let’s assume it’ll be received in 3, and the discount factor is (1.04)^36.

Comparison of the Net Present Value of Return on Activities

  1. Return / Cost of Learning Programming = 10,826.34 / 1,49,760 = 0.07229
  2. Return / Cost of Writing a Novel = 12183.43 / 5,61,600 = 0.021694

Since 1 > 2 above, Abtidoon must go with learning to program in his free time as this is the preferred activity with highest return on attention expended holding all else equal.

If Abtidoon chooses activity 2 despite being apprised of the above facts then his demand for programming expertise is relatively elastic compared to his relatively inelastic demand for becoming a novelist.

Own-Attention Elasticity of Demand for Voluntary Activities

Measures responsiveness of quantity of attention allocated to a voluntary activity with respect to changes in cost of completing it. It is calculated as the ratio of percentage change in money value of attention allocated for a given task to percentage changes in its expected completion cost-it is a cognate of the arc elasticity of demand measure familiar from microeconomics.

Own-attention demand for an activity is perfectly elastic iff any increase in its expected completion cost reduces quantity of attention allocated to zero. Own-attention demand for an activity is perfectly inelastic iff any increase/decrease leaves the quantity of attention allocated to the activity unchanged.

More on cross attention elasticity of demand in the next installment!

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