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Archive for the ‘Choice Myth’ Category

Eldar Shafir – Living Under Scarcity

Posted by The Situationist Staff on November 8, 2013

From TEDxMidAtlantic, 2011.  Eldar Shafir is the William Stewart Tod Professor of Psychology and Public Affairs in the Department of Psychology and the Woodrow Wilson School of Public and International Affairs at Princeton University. His research focuses on decision-making, and on issues related to behavioral economics, with an emphasis on empirical studies of how people make decisions in situations of conflict and uncertainty.

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Posted in Book, Choice Myth, Distribution, Education, Video | 1 Comment »

Francesca Gino on the Situation of Being Sidetracked

Posted by The Situationist Staff on June 3, 2013

Excerpts from an interview of Situationist friend Francesca Gino by Gareth Cook from Scientific American:

There is an area of self-help devoted to advice on completing tasks, and the focus is generally on the positive: How to get organized, how to choose good goals, how to stay motivated, etc. Francesca Gino, an associate professor at Harvard Business School, also wants to help you achieve your goals, but she begins with the negative. What are the psychological forces that send people off the rails? In Sidetracked, she argues that to succeed we first need to know our enemy, the often-unconscious factors that stop us from getting things done. Then we can fight back. She answered questions from Mind Matters editor Gareth Cook.

Why did you write this book?

Many of the ideas I study and write about are motivated by my personal experience and by what surrounds me –interesting patterns of behavior that often, at first glance, make little sense. Sidetracked focuses on situations where we set out to accomplish specific goals but ended up reaching different outcomes –outcomes we often regret. Think of a time when you had a clear plan of action—a new career path, a diet you intended to follow, an exciting regular workout plan, a new saving plan for retirement, a new hire in your team, or a new car you were planning to buy after much research and deliberation. What happened when it came time to make decisions in pursuit of your goal? You may have found yourself following a course of action that took you completely off track. I certainly found myself in this type of situations many times in the past. And when talking to friends and colleagues, I discovered that they shared similar experiences where they got sidetracked as they were implementing their well thought-out plans.

In Sidetracked, I explain how even simple and seemingly irrelevant factors have profound consequences on our decisions and behavior, diverting us from our original plans. Most of us care a good deal about being consistent—we care about following through on our goals and wishes. And we also aim to behave in ways that are consistent with our self-image as capable, competent, and honest individuals. But often, without our knowledge, subtle influences—often unexpected—steer us away from what we initially planned or wanted. As a result, our decisions fail to align with our best intentions.

I wrote Sidetracked to discuss the main set of forces that prevent us from following through on our plans, and to identify a set of principles we can apply to stay on track going forward. My book describes theses forces using examples and case studies from personal and professional domains, as well as research that I conducted with amazing colleagues over the last ten years.

You say that very small things can throw people off their plans. Can you give some examples of what you mean by this?

* * *

Some of my research examines the role of forces that sidetrack us in the context of morality. In general, once we identify a goal we want to reach, we develop plans that can help us reach that goal. For instance, in the case of our moral goals, we may decide to volunteer regularly or spend some time each week helping others. Yet, even if our moral goals and plans are clear, subtle forces can lead us astray. Here’s an example of how this may happen. Have you or a friend ever bought a knock-off product like pair of faux “designer” sunglasses or a fake watch? If so, would you believe they may have colored the way you viewed the world—not just literally, but more fundamentally? In fact, those cheap sunglasses might have degraded your moral behavior. In a series of experiments, my colleagues Mike Norton, Dan Ariely, and I found that people were more likely to act dishonestly when they were wearing fake products, such as designer copycats. In our studies, participants who thought they were wearing knock-off sunglasses (in fact, the $300 sunglasses were quite real) were more likely to cheat on various problem-solving tasks than participants who were told they were wearing designer lenses. It seems that what we wear influences how we feel (inauthentic) and behave (dishonestly), whether we realize it or not, even when our goal is to act honestly and follow our moral compass.

But getting things done is also a matter of motivation, right? You have to really want to finish what you started.

Yes, motivation is clearly an important ingredient in following through on our plans. But, as it turns out, the same set of forces that derail our decisions can also influence our motivation to get things done. Here’s how. My colleague Scott Wiltermuth and I conducted a series of studies to examine how we could boost individuals’ motivation and effort. In our research, Scott and I varied how we framed potential rewards to study participants so that they would perceive them as belonging to two categories or only one. The categories were pure fiction: in fact, in some of our studies we put potential rewards (which consisted in a variety of useful objects, such as pens or notebooks) in two separate containers rather than in just one. And yet, the completely arbitrary categories we created affected participants’ motivation. In one study, participants were over three times as likely to work on a task for the full amount of time they were given when the potential rewards were divided into two categories.

By creating meaningless categories, we triggered a feeling in participants that they would be missing out if they did not get a reward from the second category available to them. This type of fear seems to drive many of the decisions we make in our personal and professional lives. In the case of my research with Scott, participants felt a sense of fear that they would miss out on some of the available rewards (those belonging to a different category). But this fear can be more general –from the feeling of missing out on special deals to the fear of missing out on an event our friends are attending. It explains why I often spend endless hours waiting in line so that I can be the first to see a highly rated movie or to buy the latest iPhone. And have you ever signed up for store email lists so that you won’t miss out on the latest deals? I certainly have.

What are some of the concrete techniques that you’d suggest people use to not get sidetracked?

* * *

You can read Professor Gino’s answer  to that question (and the entire interview) here.

Posted in Choice Myth, Emotions, Marketing, Positive Psychology, Public Policy | Leave a Comment »

Unconscious Processing Can Improve Decision-Making

Posted by The Situationist Staff on February 18, 2013

From Carnegie Mellon:

When faced with a difficult decision, it is often suggested to “sleep on it” or take a break from thinking about the decision in order to gain clarity.

But new brain imaging research from Carnegie Mellon University, published in the journal “Social Cognitive and Affective Neuroscience,” finds that the brain regions responsible for making decisions continue to be active even when the conscious brain is distracted with a different task. The research provides some of the first evidence showing how the brain unconsciously processes decision information in ways that lead to improved decision-making.

“This research begins to chip away at the mystery of our unconscious brains and decision-making,” said J. David Creswell, assistant professor of psychology in CMU’s Dietrich College of Humanities and Social Sciences and director of the Health and Human Performance Laboratory. “It shows that brain regions important for decision-making remain active even while our brains may be simultaneously engaged in unrelated tasks, such as thinking about a math problem. What’s most intriguing about this finding is that participants did not have any awareness that their brains were still working on the decision problem while they were engaged in an unrelated task.”

Unconsious ThoughtFor the study, Creswell, recent CMU graduate James K. Bursley and Northeastern University’s Ajay B. Satpute presented 27 healthy adults with information about cars and other items while undergoing neuroimaging. Then, before being asked to make decisions about the items, the participants had to complete a difficult distractor task — memorizing sequences of numbers — to prevent them from consciously thinking about the decision information.

The results included three main findings. First, the team confirmed previous research demonstrating that a brief period of distraction — in this case two minutes — produced higher quality decisions about the cars and other items. But did this effect occur because the distraction period provided an opportunity for the brain to take a break from decision-making and then return to the problem with a fresh look? Or alternatively, does the brain continue to unconsciously process decision information during this distraction period? This research supports the latter unconscious processing explanation.

When the participants were initially learning information about the cars and other items, the neuroimaging results showed activation in the visual and prefrontal cortices, regions that are known to be responsible for learning and decision-making. Additionally, during the distractor task, both the visual and prefrontal cortices continued to be active — or reactivated — even though the brain was consciously focused on number memorization.

Third, the results showed that the amount of reactivation within the visual and prefrontal cortices during the distractor task predicted the degree to which participants made better decisions, such as picking the best car in the set.

“We all face difficult problems we need to solve on a regular basis,” Creswell said. “Whether it’s buying a new car, finding a new apartment to rent, or seeking out a new dating partner on social networking sites. This study provides some of the first clues for how our brains process this information for effective problem-solving and decision-making.”

Bursley (DC’12), who joined CMU’s Health and Human Performance Laboratory as a freshman, spent his undergraduate career working on this research and related studies. To support his work, he received a Small Undergraduate Research Grant (SURG) and Summer Undergraduate Research Fellowship (SURF). Bursley also received a Rothberg Research Award in Human Brain Imaging, made possible by Carnegie Mellon alumnus and trustee Jonathan M. Rothberg (E’85), founder of four genetics companies aimed at improving human health.

“Carnegie Mellon was the perfect place to carry out this work because there’s a significant focus here on pursuing new directions in mind-brain research,” Bursley said. “This study is really a starting point. We also are using brain imaging to see if we find the same reactivation patterns in learning tasks that we saw here in decision-making.”

CMU’s Department of Psychology has helped to establish Carnegie Mellon as a world leader in brain sciences. The university recently launched a Brain, Mind and Learning initiative to build from its research excellence in psychology, computer science and computation to continue to solve real-world problems.

Related Situationist posts:

Posted in Choice Myth, Neuroscience, Video | 2 Comments »

Max Bazerman Speaks at HLS – Thursday!

Posted by The Situationist Staff on February 7, 2013

Bazerman Books

Thursday, February 7, 12-1 p.m.
Wasserstein 1015
Professor Max Bazerman (HBS)
“Bounded Ethicality”
Sponsor: Student Association for Law & Mind Sciences

Professor Bazerman will present his recent research on ethical behavior. He argues that, in contrast to the search for the few “bad apples,” the majority of unethical events occur as the result of ordinary and predictable psychological processes. As a result, even good people engage in unethical behavior, without their own awareness, on a regular basis.

Free Thai food!

Learn more about Professor Bazerman’s work here.

Related Situationist posts:

Posted in Choice Myth, Events, Morality, SALMS, Social Psychology | Leave a Comment »

Trust and Reciprocity Situations Promote Social Common Goods

Posted by The Situationist Staff on January 2, 2013

we trust

In the emerging field of tax psychology, the focus on regulation and overcoming tax evasion recently shifted towards searching for situational cues that elicit common goals compliance. Following this innovative behavioral economics quest, Situationist Contributor Julia M. Puaschunder found evidence (download paper here) for trust and reciprocity steering social common goods contributions.

In experiments at the Harvard Decision Science Laboratory, the same participants played an economic trust game followed by a common goods game. The more trust and reciprocity were practiced and experienced by player duos, the stronger they supported common goals together.

The findings portray trust and reciprocity as interesting tax ethics antecedents and hold widespread implications for governmental-citizen relations. Shifting attention from prevailing ‘cops-and-robbers’ attempts to fight tax fraud, new public policy managers are advised to establish a service-oriented client atmosphere. In a socially-favorable societal climate breeding trust and reciprocity, common goals are likely to be reached.

Download the full paper ‘Trust and Reciprocity Drive Social Common Goods Contribution Norms’ for free here.

Related Situationist posts:

Image from Flickr.

Posted in Abstracts, Altruism, Choice Myth, Environment, Situationist Contributors | Leave a Comment »

The Situation of Intergenerational Equity

Posted by The Situationist Staff on December 17, 2012

Four Generations

In another outstanding study, Situationist Contributor Julia M. Puaschunder (with her collaborator Gary Schwarz at the University of Nottingham) suggests ways to implement intergenerational equity on a global scale. 

An international survey presented respondents with public policy choices and asked to allocate tax units to different policies in the domains of culture, economics, education, foreign aid, infrastructure and environment.

Evaluating two policies with different outcome times – one more imminently and one that would benefit future generations – at once elicited more intergenerationally equitable outcomes than when deciding over bills with different impact times one at a time. When individuals judge alternative choices, presenting the viewpoints of two generations concurrently balanced intergenerational contributions.

Finding this intergenerational equilibrium pattern in Asia and the U.S. leverages the joint decision making advantage into a human-imbued nudge to overcome global common goods dilemmas. Based on the results, policy makers are advised to consider a multi-faceted decision schema and set up age-differentiated global governance consortia.

Download the full paper ‘The Future is Now: How Joint Decision Making Curbs Hyperbolic Discounting but Blurs Social Responsibility in The Intergenerational Equity Public Policy Domain” for free here.

Situationist Contributor Julia M. Puaschunder  is an Associate of the Harvard University Faculty of Arts and Sciences Center for the Environment working on intergenerational equity constraints in the domains of environmental sustainability, overindebtedness and social welfare reform of an aging Western world population.

Related Situationist posts:

Image from Flickr (by Will Barnet – Four Generations – Modern Art Galley of Vatican Museums)

Posted in Abstracts, Altruism, Choice Myth, Environment, Situationist Contributors | Leave a Comment »

The Situation of How We Became Fat – Part 3

Posted by The Situationist Staff on December 15, 2012

Part 3 of the BBC’s Remarkable Three-Part Series “The Men Who Made Us Fat”:

Jacques Peretti examines assumptions about what is and is not healthy. He also looks at how product marketing can seduce consumers into buying supposed ‘healthy foods’ such as muesli and juices, both of which can be high in sugar.

He speaks with Simon Wright, an ‘organic consultant’ for Sainsbury’s in the 1990s, who explains how the food industry cashed in on the public’s concerns around salmonella, BSE and GM crops. By 1999 the organic industry was worth over £605M, a rise of 232% within two years.

How did the mainstream food producers compete? Peretti speaks with Kath Dalmeny, former policy director at the Food Commission, who explains some of the marketing strategies used by mainstream food producers to keep our custom.

The programme also explores the impact of successive government initiatives and health campaigns, such as the proposal of ‘traffic light labelling’, the introduction of which the food industry lobbied hard against.

But in 2012, when we have an Olympic Games sponsored by McDonalds and Coca Cola, has anything changed?

Related Situationist posts:

For more on the situation of eating, see Situationist contributors Adam Benforado, Jon Hanson, and David Yosfion’s law review article Broken Scales: Obesity and Justice in America.  For a listing of numerous Situaitonist posts on the situational sources of obesity, click here.

Posted in Choice Myth, Deep Capture, Distribution, Evolutionary Psychology, Food and Drug Law, Marketing, Public Policy, Public Relations, Social Psychology, Video | Leave a Comment »

The Situation of How We Became Fat – Part 2

Posted by The Situationist Staff on December 14, 2012

Part 2 of the BBC’s Remarkable Three-Part Series “The Men Who Made Us Fat”:

Jacques Peretti investigates how the concept of ‘supersizing’ changed our eating habits forever. How did we – once a nation of moderate eaters – start to want more?

Speaking to Mike Donahue, former McDonalds Vice President, Peretti explores the history behind the idea of supersizing. 40 years ago, McDonalds hired David Wallerstein, a former cinema manager who had introduced the idea of selling larger popcorn servings in his Chicago cinema. Wallerstein realised that people would eat more but they didn’t like the idea of appearing gluttonous by going back for seconds. By increasing the portion sizes and the cost, he could sell more food. In 1972, he introduced the idea to McDonalds and their first large fries went on sale.

By the 1980s, we were eating more – and eating more often. Perretti speaks with industry professionals to examine the story behind the introduction of value meals, king-size snacks and multi-buy promotions. How did the advertising industry encourage us to eat more often?

The programme also explores the developments in dietary advice – by 2003, the Chief Medical Officer was warning of an ‘obesity time bomb.’ Peretti speaks to obesity expert Professor Philip James, who made recommendations in his 1996 report that the food industry should cease targeting children in their advertisements. He also speaks with Professor Terry Wilkin, who led a pioneering study into childhood weight gain; and former Labour MP David Hinchliffe, who chaired the 2003 Parliamentary Select Committee on Health.

Related Situationist posts:

For more on the situation of eating, see Situationist contributors Adam Benforado, Jon Hanson, and David Yosfion’s law review article Broken Scales: Obesity and Justice in America.  For a listing of numerous Situaitonist posts on the situational sources of obesity, click here.

Posted in Choice Myth, Deep Capture, Distribution, Evolutionary Psychology, Food and Drug Law, Marketing, Public Policy, Public Relations, Social Psychology, Video | Leave a Comment »

The Situation of How We Became Fat – Part 1

Posted by The Situationist Staff on December 12, 2012

From Introduction of BBC’s Remarkable Three-Part Series “The Men Who Made Us Fat”:

Around the world, obesity levels are rising. More people are now overweight than undernourished. Two thirds of British adults are overweight and one in four of us is classified as obese. In the first of this three-part series, Jacques Peretti traces those responsible for revolutionising our eating habits, to find out how decisions made in America 40 years ago influence the way we eat now.

Peretti travels to America to investigate the story of high-fructose corn syrup. The sweetener was championed in the US in the 1970s by Richard Nixon’s agriculture secretary Earl Butz to make use of the excess corn grown by farmers. Cheaper and sweeter than sugar, it soon found its way into almost all processed foods and soft drinks. HFCS is not only sweeter than sugar, it also interferes with leptin, the hormone that controls appetite, so once you start eating or drinking it, you don’t know when to stop.

Endocrinologist Robert Lustig was one of the first to recognise the dangers of HFCS but his findings were discredited at the time. Meanwhile a US Congress report blamed fat, not sugar, for the disturbing rise in cardio-vascular disease and the food industry responded with ranges of ‘low fat’, ‘heart healthy’ products in which the fat was removed – but the substitute was yet more sugar.

Meanwhile, in 1970s Britain, food manufacturers used advertising campaigns to promote the idea of snacking between meals. Outside the home, fast food chains offered clean, bright premises with tempting burgers cooked and served with a very un-British zeal and efficiency. Twenty years after the arrival of McDonalds, the number of fast food outlets in Britain had quadrupled.

Related Situationist posts:

For more on the situation of eating, see Situationist contributors Adam Benforado, Jon Hanson, and David Yosfion’s law review article Broken Scales: Obesity and Justice in America.  For a listing of numerous Situaitonist posts on the situational sources of obesity, click here.

Posted in Choice Myth, Deep Capture, Distribution, Evolutionary Psychology, Food and Drug Law, Marketing, Public Policy, Public Relations, Social Psychology, Video | Leave a Comment »

Social Status Loss Situations Drive Ethicality

Posted by The Situationist Staff on December 10, 2012

green crimson

In two recent, fascinating field experiments, Situationist Contributor Julia M. Puaschunder demonstrated how social conscientiousness can be “nudged” by social forces: Social status drops trigger social responsibility. 

In a field experiment in Harvard dormitories, social identity insignia (in the form of Harvard logo posters) connected to social norm cues (Sustainability at Harvard posters) promoting environmentalism fostered recycling compliance – once prior social status endowments were taken away.  Building on prospect theory, the paper argues looming social status losses are compensated with socially-favored ethicality.  Social status downs combined with social norm cues steer social responsibility.

A second study on energy conservation in Harvard libraries found a similar effect.  Tent card signage, featuring the Harvard logo, was placed in Harvard Law School’s Langdell Library in combination with social norm instructions asking students to turn off their task-light when finished studying.  When the social status endowing cards were removed, energy light consumption conscientiousness improved.  Situational social status losses related to social norm reminders nudged library visitors towards pro-social environmentalism.green harvard logo

Based on these findings, the Harvard Law School installed similar tent cards in Langdell Library study areas.  The results have attracted attention of British Prime Minister David Cameron’s Cabinet Team on Behavioral Insights.  The U.S. Association for the Advancement of Sustainability in Higher Education distributed the learning.  Follow-up studies in the organizational context have been inspired by the unprecedented idea to use social status endowments to gain social responsibility.

Here’s the abstract to the paper titled ‘Ethical Decision Making under Social Uncertainty’:

Decision making research has been revolutionized by prospect theory. In laboratory experiments, prospect theory captures human to code outcome perspectives as gains or losses relative to an individual reference point, by which decisions are anchored. Prospect theory’s core finding that monetary losses loom larger than gains has been generalized in many domains; yet not been tested for social status changes. Social status striving has been subject to social sciences’ research for a long time but until today we have no clear picture of how social status prospects relative to an individual reference point may influence our decision making and action. Understanding human cognition in the light of social status perspectives, however, could allow turning social status experiences into ethicality nudges. The perceived endowment through social status may drive social responsibility. Ethicality as a socially-appreciated, noble societal contribution offers the prospect of social status gains given the societal respect for altruism and pro-social acts. An Überethical filling of current legal gaps or outperforming legal regulations grant additional social status elevation opportunities. Building on prospect theory, two field observations of environmentally conscientious recycling behavior and sustainable energy consumption tested if social status losses are more likely to be answered with ethicality than social status gains. Social status losses are found as significant drivers of socially responsible environmental conscientiousness. Testing prospect theory for social status striving advances socio-economics and helps understanding the underlying mechanisms of social identity theories. Pegging social status to ethicality is an unprecedented approach to use social forces as a means for accomplishing positive societal change. Future studies may target at elucidating if ethicality in the wake of social status losses is more a cognitive, rational strategy or emotional compensation for feelings of unworthiness after social status drops.

Download the full paper, ‘Ethical Decision Making under Social Uncertainty,’ for free here.

Situationist Contributor Julia M. Puaschunder  is an Associate of the Harvard University Faculty of Arts and Sciences Center for the Environment working on intergenerational equity constraints in the domains of environmental sustainability, overindebtedness and social welfare reform of an aging Western world population.

Related Situationist posts:

Posted in Abstracts, Altruism, Choice Myth, Environment, Situationist Contributors | Leave a Comment »

The Situation of Poor Choices

Posted by The Situationist Staff on December 5, 2012

Social psychologist and Situationist friend Dave Nussbaum has another outstanding situationist post over on Random Assignments.  Here’s how it starts.

One of the obstacles that keeps the poor from rising out of poverty is the tendency to make costly financial decisions – like buying lottery tickets, taking out high interest loans (PDF), and failing to enroll in assistance programs – that only make their situation worse. In the past, these poor decisions have been attributed either to low income individuals’ personalities or issues in their environment, such as poor education or substandard living conditions. New research published this month in Science by Booth Assistant Professor of Behavioral Science Anuj Shah points to a new answer: living with scarcity changes people’s psychology.

The basic idea is that when resources are scarce – when people are short on time, or money, or food – each decision about how best to use those resources takes on greater urgency than when resources are abundant. This focus can have positive effects in the short term, but it comes at the expense of neglecting other, less urgent demands. For example, when they are under the press of urgent expenses like rent and groceries, people may neglect to do routine maintenance on their car and end up with costly (and avoidable) repairs down the road.

Shah, along with colleagues Sendhil Mullainathan of Harvard and Eldar Shafir of Princeton, published five studies in which he studied the effects of scarcity on decision making in various games in which people were paid according to their performance. In each of the studies some people received ample resources with which to play, while others received very few. Moreover, in some studies the players had the opportunity to borrow additional resources with interest. The researchers then observed how scarcity affected the players’ borrowing behavior, their performance, and the psychological processes at play.

Across the studies Shah found that for people who had very few resources, the games took on more urgency. They became more focused on the task at hand in order to make the best use of their scarce resources, but that this added focus came at a price, including mental fatigue, costly borrowing decisions, and poor overall performance.

For example, in an Angry Birds-type of game, in which the object was to knock down as many targets as possible, players who could take only three shots per round spent more time aiming each shot than players who had fifteen shots. This added focus improved performance, but it had downsides. When players were given the opportunity to “borrow” a shot, by giving up two shots in a later round of the game, players who had fewer in shots made counterproductive borrowing decisions that hurt their overall performance.

Read the rest of Dave’s post, discussing possible implications of the research, here.

Related Situationist posts:

Posted in Blogroll, Choice Myth, Distribution, Marketing, Social Psychology | Tagged: , , | 1 Comment »

Michael Pollan on the Political Situation of Food

Posted by The Situationist Staff on November 29, 2012

Host Harry Kreisler welcomes writer Michael Pollan for a discussion of the agricultural industrial complex that dominates consumer choices about what to eat. He explores the origins, evolution and consequences of this system for the nations health and environment. He highlights the role of science, journalism, and politics in the development of a diet that emphasizes nutrition over food. Pollan also sketches a reform agenda and speculates on how a movement might change Americas eating habits. He also talks about science writing, the rewards of gardening, and how students might prepare for the future.

Related Situationist posts:

For more on the situation of eating, see Situationist contributors Adam Benforado, Jon Hanson, and David Yosfion’s law review article Broken Scales: Obesity and Justice in America.  For a listing of numerous Situaitonist posts on the situational sources of obesity, click here.

Posted in Choice Myth, Deep Capture, Distribution, Education, Food and Drug Law, Ideology, Marketing, Politics, Video | 2 Comments »

Marion Nestle on The Situation of Our Food

Posted by The Situationist Staff on November 28, 2012

Related Situationist posts:

For more on the situation of eating, see Situationist contributors Adam Benforado, Jon Hanson, and David Yosfion’s law review article Broken Scales: Obesity and Justice in America.  For a listing of numerous Situaitonist posts on the situational sources of obesity, click here.

Posted in Choice Myth, Deep Capture, Environment, Food and Drug Law, History, Marketing, Video | Leave a Comment »

The Social Situation of the Citizen – Today!

Posted by The Situationist Staff on October 25, 2012

When: Thursday, October 25, 2012, 12 – 1pm
Where: Austin North
Event type: Lectures
Sponsor: Student Association for Law & Mind Sciences, HLS Republicans, HLS Democrats, HLS American Constitution Society, PLMS

Do social networks really influence individuals’ politics? If social networks matter, how do they work? Utilizing a variety of experimental and survey data from settings as diverse as the wealthy suburbs of Illinois and the streets of South Los Angeles, Dr. Besty Sinclair will identify the social influences that underlie political activities ranging from voter turnout to political contributions. Rather than being merely a source of information, our social networks have a direct and immediate influence on members’ political behavior.

Learn more about Professor Sinclair’s book here.

Related Situationist posts:

Posted in Choice Myth, Events, Ideology, Politics, SALMS | Leave a Comment »

Seduction by Contract

Posted by The Situationist Staff on October 20, 2012

Oren Bar-Gill recently posted his introductory chapter for his intriguing new book, “Seduction by Contract: Law, Economics and Psychology in Consumer Markets” on SSRN.   Here’s the abstract.

Consumers routinely enter into contracts with providers of goods and services. These contracts are designed by sophisticated sellers to exploit the psychological biases of consumers. They provide short-term benefits, while imposing long-term costs – because consumers are myopic and optimistic. They are excessively complex – because complexity allows sellers to hide the true cost of the product or service from the imperfectly rational consumer. Using both general theory and detailed case studies, this book explains the costs – to consumers and society at large – imposed by seductive contracts, and outlines a promising legal policy solution: Disclosure mandates. Simple, aggregate disclosures can help consumers make better choice. Comprehensive disclosures can facilitate the work of intermediaries, enabling them to better advise consumers. Effective disclosure would expose the seductive nature of consumer contracts and, as a result, reduce sellers’ incentives to write inefficient contracts.

Download the introduction for free here.

Related Situationist posts:

One of the very first legal-academic articles (part of  a trilogy) devoted to the way sellers manipulate consumers is Taking Behavioralism Seriously: The Problem of Market Manipulation (74 N.Y.U.L. Rev. 363 (1999)) available for free download on SSRN.

Posted in Abstracts, Book, Choice Myth, Marketing, Public Policy | 3 Comments »

Firstiness

Posted by The Situationist Staff on August 25, 2012

From Haas Newswroom (UC Berkeley) (a press release regarding an article co-authored by Situationist Contributor Mahzarin Banaji and Situationist friend Dana Carney):

How people make choices depends on many factors, but a new study finds people consistently prefer the options that come first: first in line, first college to offer acceptance, first salad on the menu – first is considered best.

The paper, “First is Best,” recently published in PLoS ONE by Dana R. Carney, assistant professor of management, University of California, Berkeley’s Haas School of Business, and co-author Mahzarin R. Banaji, professor of psychology, Harvard University.

In three experiments, when making quick choices, participants consistently preferred people (salespersons, teams, criminals on parole) or consumer goods presented first as opposed to similar offerings in second and sequential positions. The authors say their findings may have practical applications in a variety of settings including in consumer marketing.

“The order of individuals performing on talent shows like American Idol. The order of potential companies recommended by a stockbroker. The order of college acceptance letters received by an applicant. All of these firsts have privileged status,” says Carney. “Our research shows that managers, for example in management or marketing, may want to develop their business strategies knowing that first encounters are preferable to their clients or consumers.”

The study found that especially in circumstances under which decisions must be made quickly or without much deliberation, preferences are unconsciously and immediately guided to those options presented first. While there are sometimes rational reasons to prefer firsts, e.g. the first resume is designated on the top of the pile because that person wanted the job the most, Carney says the “first is best” effect suggests that firsts are preferred even when completely unwarranted and irrational.

The study’s first experiment asked 123 participants to evaluate three groups: (a) two teams, (b) two male salespersons, and (c) two female salespersons. First, participants were asked to join one of the two teams and were introduced to the Hadleys and the Rodsons. Immediately following the introduction, they decided which team to join. Next, participants were told they were buying a car and introduced to two male salespersons: Jim and Jon. Immediately following the introduction, they selected the salesperson from whom they preferred to buy a car. Finally, participants were told they needed to re-make their car-buying decision and that they would be introduced to two new salespersons; this time, female: Lisa and Lori. After sequential introduction they, again, decided which person they’d like to buy a car from.

When asking participants about their choices, the researchers asked about choice in two ways: conscious/deliberate choice, which was self-reported (i.e.., “I prefer Lisa to Lori”), or they completed a reaction-time task adapted from cognitive psychology in which participants’ automatic, unconscious preference for each option was assessed (i.e. “good,” “better,” “superior”).  Regardless of whom people said they preferred, on the unconscious, cognitive measure of preference, participants always preferred the first team or person to whom they were introduced.

To test the choice preferences of consumer goods, the researchers asked 207 passengers at a train station to select one of two pieces of similar bubble gum in a “rapid decision task” or choosing within a second of seeing the choices (using psychologist Daniel Kahneman’s theory on ‘thinking, fast and slow’). Once again, the result was the same: when thinking fast, the bubble gum presented first was the preferable choice in most cases.

Researchers considered the salespeople and the gum relatively positive stimuli, without controversy. In order to test their theory with negatively charged options, Carney and Banaji asked another group of 31 participants to choose between pairs of convicted criminals and decide which one was more worthy of parole instead of prison. After viewing mug shots of two 29 year-old criminals known to have committed the same violent crimes with similar features and facial expressions, again, when “thinking fast,” participants judged the first criminal presented as more worthy of parole.

If order matters, why? Carney contends the proven “primacy has power” theory may provide the best answers. The paper cites, “a preference for firsts has its origins in an evolutionary adaptation favoring firsts …” For example, in most cases, humans tend to innately prefer the first people they meet: a mother, family members. In addition, those preferences are associated with what’s safe. Carney says the historic concept of the established “pecking order” also supports their findings that people find “first is best.”

From The Economist(some discussion of the marketing implications of these findings):

The order in which people experience things affects their opinion of them: they tend to like the first option best.

This is the result of a new study by Dana Carney of Berkeley’s Haas School of Business and Mahzarin Banaji of Harvard University. To test their hypothesis, the researchers conducted a series of experiments. In one volunteers were shown pictures of two violent criminals and then asked which one deserved parole. Most felt more merciful towards the first mugshot they were shown (different volunteers saw different villains first).

This bias affects commercial decisions, too. Asked which type of chewing gum they preferred, 68% of respondents at a railway station in Boston picked the first stick they were offered. In another experiment, volunteers more often wanted to buy a car from the first salesperson they met rather than the second.

In their paper, entitled “First is Best”, the authors contend that the first option in a series will be “consistently preferred” if the chooser is under time pressure or slightly distracted. Thanks to mobiles, meetings and toddlers that pretty much describes modern life for many people.

Clever companies have noticed, and compete to bump whatever they are selling to the front of the queue. That is why the first slot in an advertisement break on television costs more than the second; it’s roughly 10-15% pricier, according to Jonathan Allan, sales director at Channel 4, a British broadcaster. It is also why an ad that introduces a rival’s product first, even in order to disparage it, may well backfire. Advertising firms themselves like to go first when pitching for an account. “It sets the benchmark for everybody else,” says Bridget Angear of AMV BBDO, an advertising agency.

Read the entire Economist article here.

See the full paper.

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Image from Flickr.

Posted in Choice Myth, Marketing, Situationist Contributors | 1 Comment »

Compliance – The Movie

Posted by The Situationist Staff on August 20, 2012

From :

When a police officer tells you to do something, you do it. Right?

Inspired by true events, COMPLIANCE tells the chilling story of just how far one might go to obey a figure of authority. On a particularly busy day at a suburban Ohio fast food joint, high-strung manager Sandra (Ann Dowd (Garden State) receives a phone call from a police officer saying that an employee, a pretty young blonde named Becky (newcomer Dreama Walker) has stolen money from a customer. Convinced she’s only doing what’s right, Sandra commences the investigation, following step-by-step instructions from the officer at the other end of the line, no matter how invasive they become. As we watch, we ask ourselves two questions: “Why don’t they just say no?” and the more troubling, “Am I certain I wouldn’t do the same?”

The second feature from director Craig Zobel (the man behind the 2007 Sundance hit Great World of Sound), COMPLIANCE recounts this riveting nightmare in which the line between legality and reason is hauntingly blurred. The cast delivers startlingly authentic performances that make the appalling events unfolding onscreen all the more difficult to watch — but impossible to turn away from. Delving into the complex psychology of this real-life story, COMPLIANCE proves that sometimes truth really is stranger than fiction.

Why isn’t it easy to “just say no….”

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Posted in Choice Myth, Morality, Social Psychology, Video | 2 Comments »

The Situation of Chicago School “Law and Economics”

Posted by The Situationist Staff on June 10, 2012

From Business Week (an article, by Peter Coy, including several quotations from Situationist Editor, Jon Hanson):

Q: How many Chicago School economists does it take to change a light bulb?
A: None. If the light bulb needed changing, the market would have done it by now.

Chicago-style free-market economics is an easy target for satire, but the movement that flourished at the University of Chicago’s economics department in the 1960s, ’70s, and ’80s really did change the world. Giants such as Milton Friedman, Gary Becker, Robert Lucas, and Eugene Fama provided the intellectual foundation for the political philosophy of President Ronald Reagan and British Prime Minister Margaret Thatcher. In his approach to tax cuts and deregulation, Republican presidential candidate Mitt Romney is an heir to that tradition.

It wasn’t just economics that Chicago revolutionized. Across campus at the University of Chicago Law School, scholars such as Ronald Coase, George Stigler, and Richard Posner were inspired to apply economic analysis to laws and regulations, developing a field that came to be called “law and economics.” It was law and economics types who promoted the now-conventional idea that the benefits of a regulation must be weighed against its costs. Placing a dollar figure on society’s valuation of a human life went from appalling to standard.

They rethought antitrust law, junking simplistic big-is-bad formulations to focus on whether a giant like IBM (IBM) or Microsoft (MSFT) could actually raise prices with impunity. In tort law, they questioned punitive damages that seemed to them motivated by righteous indignation rather than a cool calibration of how to discourage future wrongs. At the apogee of the Reagan-Thatcher era, Chicago Law drew enthusiastic support from businesses and foundations that embraced its small-government message. “Chicago can rightly claim to have been extraordinarily influential in the growth of the field,” says Jon Hanson, a Harvard Law School professor and specialist in psychology and law.

Now Chicago’s law and economics program is coping with problems born of its success. Its intellectual dominance has triggered a pushback from other social scientists who say it’s bloodless—treating people as if they are, or ought to be, perfectly rational calculators of their own self-interest. Even some true believers complain that the field has become too technical. Posner, a federal appellate judge in Chicago, wrote last year in the alumni magazine of the risk that “economic analysis of the law may lose influence by becoming too esoteric, too narrow, too hermetic, too out of touch with the practices and institutions that it studies.” Finally, so many other law schools have launched law and economics programs, and so many judges have learned the lingo, that today law and economics “is like the air you breathe. It’s just pervasive,” says David Weisbach, a Chicago Law professor. That ubiquity has made Chicago less distinctive.

Chicago Law doesn’t take such matters lightly. Last October, Dean Michael Schill announced a major initiative to deal with the challenges, to capitalize on the school’s place in history, and to keep law and economics relevant for the 21st century. He called it, predictably, Law and Economics 2.0. “Just as Chicago was at the forefront of the first wave of law and economics, so it shall be in the future,” he wrote to alumni.

Schill’s big idea is to open new frontiers, both intellectual and geographic. This summer the school will play host to 75 Chinese legal scholars, who will get to meet stars like professor emeritus Ronald Coase—still writing in the field at the age of 101. “Coase is a god in China,” says Omri Ben-Shahar, who is directing a newly created University of Chicago Institute for Law and Economics.

Meanwhile, Chicago Law professors are lobbing new bombs into the arena—fresh ideas for injecting economic thinking into law and regulation. Chicago Law professor Todd Henderson proposes paying bank examiners in part with “phantom” securities linked to the banking companies they regulate. The phantom bonds, essentially derivatives, would rise and fall in concert with a bank’s debt. If banks took too much risk, regulators would feel a hit to their own wealth. To keep regulators from getting so cautious that they ban legitimate transactions, Henderson would throw some phantom stock into their pay packages as well. “There is no reason we can think of why bank regulators should not be paid for performance,” he wrote in the spring 2012 issue of Regulation, a magazine published by the libertarian Cato Institute.

Chicago Law isn’t all about law and economics. President Barack Obama, after all, taught there from 1992 to 2004. So did Supreme Court Justice Antonin Scalia, from 1977 to 1982. (If only they’d overlapped!) Scalia’s brand of constitutional “originalism,” which deeply respects the intent of the Founding Fathers, is an alien idea to the law and economics crowd, who view law as something more useful than sacred.

Even within law and economics there’s ideological diversity. “I don’t think it lines up to any political agenda,” says Lee Ann Fennell, a specialist in property law. Fennell, daring to challenge a central tenet of law and economics, has written that sometimes property rights can be too strong—say, allowing irrational homeowners to block worthy projects even when accommodating them somehow would be better for all. Her solution: Create an exchange where property owners could surrender certain veto powers over land use for a price before conflicts ever arose. That would help new projects sail through.

Still, there is something to the critique that economics can blind legal scholars to other perspectives. The first generation of law and economics scholars reduced people to stick-figure profit-maximizers who would make rational choices every time. “They came into law schools saying, ‘We are social scientists and you are not,’” says Harvard Law’s Hanson. Their authority was undermined when a new wave of social scientists, including Daniel Kahneman, Amos Tversky, and Chicago’s Richard Thaler, presented evidence that people can be irrational, lack willpower, and have shifting, inconsistent senses of what’s in their own best interest.

The human actor in some of the newest law and economics writing is truer to life. Henderson, for example, acknowledges that for some people money isn’t the motivation: “Once diligence has been priced, perhaps some regulators will slack,” he wrote in Regulation.

But Hanson wonders whether law and economics scholars on the whole have gone far enough in incorporating humanity. A case in point: Should the question of motivation matter in assessing damages? A dispassionate law and economics analysis still might say no, while an ordinary juror would say unequivocally yes. As the great jurist Oliver Wendell Holmes Jr. once wrote, “Even a dog distinguishes between being stumbled over and being kicked.”

Defenders of Chicago-style law and economics want to be seen not as ideologues, but as realists. Posner again: “We ask not whether the economic approach to law is adequately grounded” in any particular ethical system, “but whether it is the best approach for the contemporary American legal system to follow.” That’s an appeal to an older Chicago intellectual tradition—pragmatism.

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Posted in Behavioral Economics, Choice Myth, Deep Capture, Ideology, Legal Theory | Tagged: , , | Leave a Comment »

The Situation of “Who We Help”

Posted by The Situationist Staff on May 19, 2012

Michaela Huber, Leaf  Van Boven, Peter McGraw, and Laura Johnson-Graham recently posted their intriguing article “Whom to Help? Immediacy Bias in Judgments and Decisions About Humanitarian Aid” (Organizational Behavior and Human Decision Processes, Vol. 115, pp. 283-293, 2011) on SSRN.

People exhibit an immediacy bias when making judgments and decisions about humanitarian aid, perceiving as more deserving and donating disproportionately to humanitarian crises that happen to arouse immediate emotion. The immediacy bias produced different serial position effects, contingent on decision timing (Experiment 1). When making allocation decisions directly after viewing to four emotionally evocative films about four different humanitarian crises, participants donated disproportionately more to the final, immediate crisis, in contrast, when making donation decisions sequentially, after viewing each of the four crises, participants donated disproportionately to the immediate crisis. The immediacy bias was associated with “scope neglect.” causing people to take action against relatively less deadly crises (Experiments 2 and 3). The immediacy bias emerged even when participants were warned about emotional manipulation (Experiment 3). The immediacy bias diminished over time, as immediate emotions presumably subsided (Experiment 2). Implications for charitable giving, serial position effects, and the influence of emotion on choice are discussed.

Download the article for free here.

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Posted in Abstracts, Altruism, Choice Myth, Distribution, Emotions | Tagged: , , | Leave a Comment »

How Much Choice Would You Choose?

Posted by The Situationist Staff on April 30, 2012

From Harvard Gazette:

Undergraduates packed Science Center E on Monday to hear two of Harvard’s leading social scientists discuss the way that humans make decisions, and whether having more choices really makes us happier.

The event, “What is Your N? A Personality Test for 4 AM Philosophers,” featured a conversation between social psychologist Dan Gilbert and economist N. Gregory Mankiw, and was sponsored by the Harvard University Initiative on the Foundations of Human Behavior. The discussion was moderated by professors Nicholas Christakis of Harvard Medical School and the Department of Sociology and David Laibson of the Department of Economics.

Laibson began the debate with the following thought experiment:

“We have pre-selected 100 different bottles of alcohol, covering all popular categories — beer, wine, rum, gin, vodka, whiskey, etc. Another person (who remains anonymous) is going to take one (regular-sized) drink, poured from one of the 100 bottles. Call him/her the recipient.

You will pick the number of bottles that the recipient will be able to choose among. To give the recipient complete choice, you would pick N = 100. To simplify the recipient’s decision, you would pick N < 100. You can pick any N value from 1 to 100.

If you pick N < 100, a robot will randomly determine which of the original 100 bottles the recipient will receive (with no repeats). You don’t get to pre-select the specific bottles the robot will choose. The N bottles will be presented to the recipient in categories (like whiskeys or vodkas), so the recipient can easily sort through them.

Your job is to pick N so as to maximize the happiness of the recipient.”

Next, Laibson asked the group to choose the number of bottles that they would send to the recipient under two different scenarios. In the first, the recipient would never know that there were 100 bottles to begin with. In the second scenario, he or she would.

As the students tapped on their laptops to submit their responses to the question online, Mankiw and Gilbert had at it. Mankiw kicked off the discussion by saying that the answer was easy for him and, he hoped, for anyone who had taken his introductory economics class. He would send the anonymous stranger all 100 bottles. Without any knowledge of the recipient’s tastes, it made sense to send as many bottles as possible in order to increase the chance that the stranger would get a drink that they would like.

“My wife and I [recently] went to a bar and had a drink and dinner,” he explained. “The bar had a big selection. I had no trouble at all. I said ‘I want a Tanqueray martini on the rocks with a twist.’ If the bartender had said ‘We randomly reduced the number of selections, so we don’t have Tanqueray tonight. We have Bombay Sapphire,’ I would have been a little disappointed. If they had said ‘We only have Gordon’s gin tonight,’ I would have been really upset. And if they had said ‘All we have is Kahlua, and crème de menthe,’ I would have walked out. So it was very clear to me that more selection is good.”

Gilbert said that Mankiw’s answer was not surprising. Americans like choices; the more the better. We want to choose what we want, even if the options are so great that our decision becomes essentially random. But Gilbert said there is more to choice than simply matching selection with preferences, and that there are costs associated with decision making, particularly when the options are too great. To illustrate his point, Gilbert described a study by Princeton psychologist Eldar Shafir.

Shafir presented doctors with a pink pill that was said to treat osteoarthritis. The physicians learned about the drug, and then were asked whether or not they would be likely to prescribe it. Most said that they would.

Shafir then went to another group of physicians, this time with a pink and blue pill. He told the group that both would treat osteoarthritis and that the drugs were similar in their effects, aside from their color. He asked this group of doctors whether they would prescribe the pink pill, the blue pill, or neither. Fewer doctors said that they would give patients a pill — either pink or blue — than the group that had been presented with only one pill.

“You should get at least the same number prescribing one of the pills,” said Gilbert. “Or even more, because some will only like blue pills. However, the actual number goes down. Why? Because the physicians say ‘Well, I could do nothing, or choose between one of these two similar pills and I really can’t decide between them, so I’ll do nothing, because nothing looks really different than the pill.”

In terms of Laibson’s thought exercise, Gilbert noted that more bottles and more types of liquor could make the decision more difficult for the recipient. If you offer the drinker wine or beer, and the drinker likes wine, the choice is easy. But if the drinker likes wine and gets four different bottles to choose from versus one type of beer, they might actually choose the beer, even though they prefer wine.

“Because I’ve given you extra choices, you have now gone to the thing you like less, because you can’t think of a good reason to pick among the wines that are so similar,” Gilbert said.

After some waffling, Gilbert, half seriously, gave the number of bottles he would send to the stranger: two.

“Then you have only Kahlua and crème de menthe!” laughed Mankiw.

After Gilbert and Mankiw held forth, Laibson revealed the results of the online poll. Under conditions where the recipient would not be informed if their choices were narrowed, there was a barbell-shaped distribution. A large group of the 220 student respondents said that they would send between zero and 30 bottles to the drinker, with another group up at 100 bottles. In the second scenario, however, where the recipient would know if the selection had been pared, undergraduates overwhelmingly voted to send all 100 bottles to the drinker.

The results were fascinating to Laibson, who has studied employee participation in retirement plans and discovered that enrollment increases dramatically when workers are automatically enrolled and must voluntarily opt out. Given that the criticism for making auto enrollment the default in business is often that the policy is paternalistic, the results of the survey shed light on when people are OK with “Big Brother” and when they are not.

“The message here seems to be ‘Be a paternalist, but keep it a secret,’” Laibson said, eliciting laughter from the students. “The minute the recipient knows [his or her choices have been narrowed], this community gives a different answer [to the thought experiment]. Paternalism is bad when the recipient understands that paternalistic motives organize what happens to them.”

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Posted in Behavioral Economics, Choice Myth, Events, Food and Drug Law, Ideology, Social Psychology | Tagged: , , , | Comments Off

 
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