In your judgment
Waste Management: How Reducing Partiality Can Promote Efficient Resource Allocation
Shoham Choshen-Hillel, Alex Shaw & Eugene Caruso
Journal of Personality and Social Psychology, forthcoming
Abstract:
Two central principles that guide resource-allocation decisions are equity (providing equal pay for equal work) and efficiency (not wasting resources). When these two principles conflict with one another, people will often waste resources to avoid inequity. We suggest that people wish to avoid inequity not because they find it inherently unfair, but because they want to avoid the appearance of partiality associated with it. We explore one way to reduce waste by reducing the perceived partiality of inequitable allocations. Specifically, we hypothesize that people will be more likely to favor an efficient (albeit inequitable) allocation if it puts them in a disadvantaged position than if it puts others in a disadvantaged position. To test this hypothesis, we asked participants to choose between giving some extra resource to one person (thereby creating inequity between this person and equally deserving others) and not giving the resource to anyone (thereby wasting the resource). Six studies, using realistic scenarios and behavioral paradigms, provide robust evidence for a self-disadvantaging effect: Allocators were consistently more likely to create inequity to avoid wasting resources when the resulting inequity would put them at a relative disadvantage than when it would put others at a relative disadvantage. We further find that this self-disadvantaging effect is a direct result of people’s concern about appearing partial. Our findings suggest the importance of impartiality even in distributive justice, thereby bridging a gap between the distributive and procedural justice literatures.
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Helen Colby, Jeff DeWitt & Gretchen Chapman
Psychological Science, forthcoming
Abstract:
Decisions about allocation of scarce resources, such as transplant organs, often entail a trade-off between efficiency (i.e., maximizing the total benefit) and fairness (i.e., dividing resources equally). In three studies, we used a hypothetical scenario for transplant-organ allocation to examine allocation to groups versus individuals. Study 1 demonstrated that allocation to individuals is more efficient than allocation to groups. Study 2 identified a factor that triggers the use of fairness over efficiency: presenting the beneficiaries as one arbitrary group rather than two. Specifically, when beneficiaries were presented as one group, policymakers tended to allocate resources efficiently, maximizing total benefit. However, when beneficiaries were divided into two arbitrary groups (by hospital name), policymakers divided resources more equally across the groups, sacrificing efficiency. Study 3 replicated this effect using a redundant attribute (prognosis) to create groups and found evidence for a mediator of the grouping effect — the use of individualizing information to rationalize a more equitable allocation decision.
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Interviewing to Elicit Information: Using Priming to Promote Disclosure
Evan Dawson, Maria Hartwig & Laure Brimbal
Law and Human Behavior, forthcoming
Abstract:
Research on implicit cognition has found that activating mental concepts can lead people to behave in ways that are consistent with the primed concept. In a pilot study we tested the effects of priming attachment security on the accessibility of disclosure-related concepts. Subsequently, we tested whether activating disclosure concepts by priming attachment security would influence people’s forthcomingness. Participants (N = 102) delivered a flash drive to a confederate who exposed them to details of a mock eco terrorism conspiracy, which they were subsequently interviewed about. Before being interviewed, half of the participants were primed; the other half were not. Results showed that primed participants disclosed significantly more information than those who were not primed. Our findings highlight the need for further research on basic nonconscious processes in investigative interviews, as such influences can affect the outcome of the interview. The operation of nonconscious influences in such contexts has implications for practitioners, who may be able to utilize priming to facilitate disclosure.
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Other-serving bias in advice-taking: When advisors receive more credit than blame
Mauricio Palmeira, Gerri Spassova & Hean Tat Keh
Organizational Behavior and Human Decision Processes, September 2015, Pages 13–25
Abstract:
We examine attributions of responsibility in advice-taking. In contrast to the well-documented self-serving bias, we find the opposite phenomenon, whereby decision-makers view an advisor as more responsible for a positive rather than a negative outcome, while they view themselves as more responsible for a negative rather than a positive outcome. We propose that this other-serving pattern of attributions is driven by a hindsight bias in the positive-outcome condition. Namely, knowledge that the outcome is positive and consistent with the advisor’s recommendation makes the outcome appear to be under the control of the advisor, which increases the perceived responsibility of the advisor relative to that of the decision-maker. No such bias is observed in the negative-outcome condition. We conduct five studies that show the robustness of this bias, provide evidence for the mechanism, and rule out several alternative explanations.
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Behavioral bias and the demand for bicycle and flood insurance
Mark Browne, Christian Knoller & Andreas Richter
Journal of Risk and Uncertainty, April 2015, Pages 141-160
Abstract:
With data from an insurer that provides coverage for both a low probability, high consequence (LPHC) risk (the flood peril) and a high probability, low consequence (HPLC) risk (bicycle theft), we investigate behavioral bias in the demand for insurance. Our analysis provides evidence which is consistent with a preference for insurance for HPLC risks over LPHC risks: we find that many more policyholders purchase add-on coverage to their homeowner’s insurance to cover the risk of bicycle theft than to cover the risk of loss due to flooding. In addition, we find mixed evidence on whether policyholders’ insurance coverage decisions are responsive to changes in their risk exposure. We find a strong relationship between wealth and the demand for both types of coverage.
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Kimberlee Weaver et al.
Journal of Consumer Psychology, July 2015, Pages 372–388
Abstract:
Consumers chose between options that paired either an objectively inferior good with high relative standing (Your laptop is rated 60/100 in quality; others' laptops are rated 50/100) or an objectively superior good with low relative standing (Your laptop is rated 80/100 in quality; others' laptops are rated 95/100). Decision makers who try to make the “best” decision, known as maximizers (Schwartz et al., 2002), pursued relative standing more than decision makers who are satisfied with outcomes that are “good enough” (known as satisficers). That is, maximizers were more likely than satisficers to choose objectively inferior products when they were associated with higher relative standing. Subsequent analyses investigating decisions across time showed that maximizers' interest in relative standing persisted even when the nature of the tradeoff was made overt, suggesting it is a conscious aspect of the maximizer identity. Overall, results suggest that the maximizer self concept is more complex than has been previously assumed — they are focused on relative outcomes in addition to absolute outcomes.
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A Model of Nonbelief in the Law of Large Numbers
Daniel Benjamin, Matthew Rabin & Collin Raymond
Journal of the European Economic Association, forthcoming
Abstract:
People believe that, even in very large samples, proportions of binary signals might depart significantly from the population mean. We model this “nonbelief in the Law of Large Numbers” by assuming that a person believes that proportions in any given sample might be determined by a rate different than the true rate. In prediction, a nonbeliever expects the distribution of signals will have fat tails. In inference, a nonbeliever remains uncertain and influenced by priors even after observing an arbitrarily large sample. We explore implications for beliefs and behavior in a variety of economic settings.
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The Making of Homo Honoratus: From Omission to Commission
Michael Hallsworth et al.
NBER Working Paper, May 2015
Abstract:
Framing remains one of the pillars of behavioral economics. While framing effects have been found to be quite important in the lab, what is less clear is how well evidence drawn from naturally-occurring settings conforms to received laboratory insights. We use debt obligation to the UK government as a case study to explore the ‘omission bias’ present in decision making with large stakes. Using a natural field experiment that generates nearly 40,000 observations, we find that repayment rates are roughly doubled when the act is reframed as one of commission rather than omission. We estimate that this reframing of the perceived nature of the action generated over $1.3 million of new yield. We find evidence that this behavior may result from a deliberate ‘omission strategy’, rather than a behavioral bias, as is often assumed in the literature. Our natural field experiment highlights that behavioral economics is much more than a series of empirical exercises to quench the intellectual curiosity of academics.
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Threat-Related Information Suggests Competence: A Possible Factor in the Spread of Rumors
Pascal Boyer & Nora Parren
PLoS ONE, June 2015
Abstract:
Information about potential danger is a central component of many rumors, urban legends, ritual prescriptions, religious prohibitions and witchcraft crazes. We investigate a potential factor in the cultural success of such material, namely that a source of threat-related information may be intuitively judged as more competent than a source that does not convey such information. In five studies, we asked participants to judge which of two sources of information, only one of which conveyed threat-related information, was more knowledgeable. Results suggest that mention of potential danger makes a source appear more competent than others, that the effect is not due to a general negativity bias, and that it concerns competence rather than a more generally positive evaluation of the source.
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Paul Benjamin Lowry et al.
Group Decision and Negotiation, July 2015, Pages 723-752
Abstract:
The debate on the benefits of trust or distrust in groups has generated a substantial amount of research that points to the positive aspects of trust in groups, and generally characterizes distrust as a negative group phenomenon. Therefore, many researchers and practitioners assume that trust is inherently good and distrust is inherently bad. However, recent counterintuitive evidence obtained from face-to-face (FtF) groups indicates that the opposite might be true; trust can prove detrimental, and distrust instrumental, to decision-making in groups. By extending this argument to virtual teams (VTs), we examined the value of distrust for VTs completing routine and non-routine decision tasks, and showed that the benefits of distrust can extend to short-term VTs. Specifically, VTs seeded with distrust significantly outperformed all control groups in a non-routine decision-making task. In addition, we present quantitative evidence to show that the decision task itself can significantly affect the overall levels of trust/distrust within VTs. In addition to its practical and research implications, the theoretical contribution of our study is that it extends to a group level, and then to a VT setting, a theory of distrust previously tested in the psychology literature in the context of completing non-routine and routine decision tasks at an individual level.
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Kathleen Smith et al.
Frontiers in Human Neuroscience, May 2015
Abstract:
Despite the fact that most real-world reasoning occurs in some emotional context, very little is known about the underlying behavioral and neural implications of such context. To further understand the role of emotional context in logical reasoning we scanned 15 participants with fMRI while they engaged in logical reasoning about neutral syllogisms presented through the auditory channel in a sad, angry, or neutral tone of voice. Exposure to angry voice led to improved reasoning performance compared to exposure to sad and neutral voice. A likely explanation for this effect is that exposure to expressions of anger increases selective attention toward the relevant features of target stimuli, in this case the reasoning task. Supporting this interpretation, reasoning in the context of angry voice was accompanied by activation in the superior frontal gyrus — a region known to be associated with selective attention. Our findings contribute to a greater understanding of the neural processes that underlie reasoning in an emotional context by demonstrating that two emotional contexts, despite being of the same (negative) valence, have different effects on reasoning.
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Pushing away from representative advice: Advice taking, anchoring, and adjustment
Christina Rader, Jack Soll & Richard Larrick
Organizational Behavior and Human Decision Processes, September 2015, Pages 26–43
Abstract:
Five studies compare the effects of forming an independent judgment prior to receiving advice with the effects of receiving advice before forming one’s own opinion. We call these the independent-then-revise sequence and the dependent sequence, respectively. We found that dependent participants adjusted away from advice, leading to fewer estimates close to the advice compared to independent-then-revise participants (Studies 1–5). This “push-away” effect was mediated by confidence in the advice (Study 2), with dependent participants more likely to evaluate advice unfavorably and to search for additional cues than independent-then-revise participants (Study 3). Study 4 tested accuracy under different advice sequences. Study 5 found that classic anchoring paradigms also show the push-away effect for median advice. Overall, the research shows that people adjust from representative (median) advice. The paper concludes by discussing when push-away effects occur in advice taking and anchoring studies and the value of independent distributions for observing these effects.
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Language Switching — But Not Foreign Language Use Per Se — Reduces the Framing Effect
Y. Oganian, C.W. Korn & H.R. Heekeren
Journal of Experimental Psychology: Learning, Memory, and Cognition, forthcoming
Abstract:
Recent studies reported reductions of well-established biases in decision making under risk, such as the framing effect, during foreign language (FL) use. These modulations were attributed to the use of FL itself, which putatively entails an increase in emotional distance. A reduced framing effect in this setting, however, might also result from enhanced cognitive control associated with language-switching in mixed-language contexts, an account that has not been tested yet. Here we assess predictions of the 2 accounts in 2 experiments with over 1,500 participants. In Experiment 1, we tested a central prediction of the emotional distance account, namely that the framing effect would be reduced at low, but not high, FL proficiency levels. We found a strong framing effect in the native language, and surprisingly also in the foreign language, independent of proficiency. In Experiment 2, we orthogonally manipulated foreign language use and language switching to concurrently test the validity of both accounts. As in Experiment 1, foreign language use per se had no effect on framing. Crucially, the framing effect was reduced following a language switch, both when switching into the foreign and the native language. Thus, our results suggest that reduced framing effects are not mediated by increased emotional distance in a foreign language, but by transient enhancement of cognitive control, putting the interplay of bilingualism and decision making in a new light.
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Counter-Regulating on the Internet: Threat Elicits Preferential Processing of Positive Information
Hannah Greving, Kai Sassenberg & Adam Fetterman
Journal of Experimental Psychology: Applied, forthcoming
Abstract:
The Internet is a central source of information. It is increasingly used for information search in self-relevant domains (e.g., health). Self-relevant topics are also associated with specific emotions and motivational states. For example, individuals may fear serious illness and feel threatened. Thus far, the impact of threat has received little attention in Internet-based research. The current studies investigated how threat influences Internet search. Threat is known to elicit the preferential processing of positive information. The self-directed nature of Internet search should particularly provide opportunities for such processing behavior. We predicted that during Internet search, more positive information would be processed (i.e., allocated more attention to) and more positive knowledge would be acquired under threat than in a control condition. Three experiments supported this prediction: Under threat, attention is directed more to positive web pages (Study 1) and positive links (Study 2), and more positive information is acquired (Studies 1 and 3) than in a control condition. Notably, the effect on knowledge acquisition was mediated by the effect on attention allocation during an actual Internet search (Study 1). Thus, Internet search under threat leads to selective processing of positive information and dampens threatened individuals’ negative affect.
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Conflicted advice and second opinions: Benefits, but unintended consequences
Sunita Sah & George Loewenstein
Organizational Behavior and Human Decision Processes, September 2015, Pages 89–107
Abstract:
Second opinions have been advocated as an antidote to bias in advice when primary advisors have conflicts of interest. In four experiments, we demonstrate how primary advisors alter their advice due to knowledge of the presence of a second advisor. We show that advisors give more biased advice and adopt a profit-maximizing frame when they are aware of the mere availability of a second opinion. The bias increases when primary advisors are aware that the second opinion is of low quality, and decreases when they know the second opinion is of high quality and easy to access. Both economic concerns (e.g., losing future business) and noneconomic concerns (e.g., concern that a second advisor will expose the poor quality advice) decrease bias in primary advisors’ advice. Based on these findings, we discuss circumstances in which second opinions are likely to be beneficial or detrimental to advice-recipients.
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Not looking yourself: The cost of self-selecting photographs for identity verification
David White, Amy Burton & Richard Kemp
British Journal of Psychology, forthcoming
Abstract:
Photo-identification is based on the premise that photographs are representative of facial appearance. However, previous studies show that ratings of likeness vary across different photographs of the same face, suggesting that some images capture identity better than others. Two experiments were designed to examine the relationship between likeness judgments and face matching accuracy. In Experiment 1, we compared unfamiliar face matching accuracy for self-selected and other-selected high-likeness images. Surprisingly, images selected by previously unfamiliar viewers – after very limited exposure to a target face – were more accurately matched than self-selected images chosen by the target identity themselves. Results also revealed extremely low inter-rater agreement in ratings of likeness across participants, suggesting that perceptions of image resemblance are inherently unstable. In Experiment 2, we test whether the cost of self-selection can be explained by this general disagreement in likeness judgments between individual raters. We find that averaging across rankings by multiple raters produces image selections that provide superior identification accuracy. However, benefit of other-selection persisted for single raters, suggesting that inaccurate representations of self interfere with our ability to judge which images faithfully represent our current appearance.
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Does the presence of a mannequin head change shopping behavior?
Annika Lindström et al.
Journal of Business Research, forthcoming
Abstract:
Mannequins are ubiquitous; this research investigates a specific element of mannequin style, namely, the presence or absence of a humanized head. Study 1 demonstrates that in physical stores, the presence of a humanized head enhances purchase intentions for the merchandise displayed on that mannequin. However, in online stores, mannequin styles with and without humanized heads are equally effective. Study 2 confirms the physical store results among customers with less fashion knowledge (novices), but among customers with more fashion knowledge (experts), the results reverse, such that mannequins without humanized heads enhance purchase intentions. Further, accessories are more likely to be viewed by experts when the mannequin is headless. These results are based on experiments whose dependent measures included both survey and eye-tracking data.
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Oxytocin enhances implicit social conformity to both in-group and out-group opinions
Yi Huang et al.
Psychoneuroendocrinology, October 2015, Pages 114–119
Abstract:
People often alter their own preferences when facing conflicting opinions expressed by others. This is known as the social conformity effect and tends to be stronger in response to opinions expressed by in-group relative to out-group members. The hypothalamic neuropeptide oxytocin promotes in-group favoritism, elicits parochial altruism, and stimulates in-group conformity under explicit social pressure. In a double-blind, placebo-controlled design experiment using a facial attractiveness judgment task, we therefore investigated whether social conformity to either in-group or out-group opinions is influenced by intranasal oxytocin treatment when social pressure is implicit. After oxytocin or placebo treatment, male participants were asked to rate the attractiveness of unfamiliar Chinese female faces, and then they were informed of ratings given by peers from an in-group (Chinese) and out-group (Japanese) simultaneously. They were subsequently asked unexpectedly to re-rate the same faces. Results showed that oxytocin increased conformity to both in- and out-group opinions. Thus oxytocin promotes conformity to opinions of both in- and out-group members when social pressure is implicit, suggesting that it facilitates ‘tend and befriend’ behaviors by increasing the general level of social conformity.
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Ostracism Reduces Reliance on Poor Advice from Others during Decision Making
Kaileigh Byrne et al.
Journal of Behavioral Decision Making, forthcoming
Abstract:
Decision making is rarely context-free, and often, both social information and non-social information are weighed into one's decisions. Incorporating information into a decision can be influenced by previous experiences. Ostracism has extensive effects, including taxing cognitive resources and increasing social monitoring. In decision making situations, individuals are often faced with both objective and social information and must choose which information to include or filter out. How will ostracism affect the reliance on objective and social information during decision making? Participants (N = 245) in Experiment 1 were randomly assigned to be included or ostracized in a standardized, group task. They then performed a dynamic decision making task that involved the presentation of either non-social (i.e. biased reward feedback) or social (i.e., poor advice from a previous participant) misleading information. In Experiment 2, participants (N = 105) completed either the ostracism non-social condition or social misleading information condition with explicit instructions stating that the advice given was from an individual who did not partake in the group task. Ostracized individuals relied more on non-social misleading information and performed worse than included individuals. However, ostracized individuals discounted misleading social information and outperformed included individuals. Results of Experiment 2 replicated the findings of Experiment 1. Across two experiments, ostracized individuals were more critical of advice from others, both individuals who may have ostracized them and unrelated individuals. In other words, compared with included individuals, ostracized individuals underweighted advice from another individual but overweighed non-social information during decision making. We conclude that when deceptive objective information is present, ostracism results in disadvantageous decision making.
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Willpower Depletion and Framing Effects
Thomas de Haan & Roel van Veldhuizen
Journal of Economic Behavior & Organization, September 2015, Pages 47–61
Abstract:
One of the hallmark findings from behavioral economics is that choices are sensitive to the context they are presented in. However, the strength of such ‘framing effects’ varies between studies, and some studies fail to find any effect at all. A long line of research has argued that the presence and size of framing effects depend to a large extent on whether people use higher or lower-level mental decision making processes (or heuristics). A similarly important line of research in social psychology and economics suggests that higher-level mental processes such as self-control draw upon a limited pool of mental resources that can be exhausted. This study links these two lines of research and investigates whether depleting people's mental resources (or ‘willpower’) affects the degree to which they are susceptible to framing effects. In three separate experiments we depleted participants’ willpower using the commonly used Stroop task method and subsequently made them take part in a series of tasks, including a framed prisoner's dilemma, an attraction effect task and an anchoring effect task. However, though we find strong evidence of a framing effect in all three tasks, the strength of these effects is not affected by induced changes in the level of willpower depletion.
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The effect of cognitive load on economic decision making: A survey and new experiments
Cary Deck & Salar Jahedi
European Economic Review, August 2015, Pages 97–119
Abstract:
Psychologists and economists have examined the effect of cognitive load in a variety of situations from risk taking to snack choice. We review previous experiments that have directly manipulated cognitive load and summarize their findings. We report the results of two new experiments where participants engage in a digit-memorization task while simultaneously performing a variety of economic tasks including: (1) choices involving risk, (2) choices involving intertemporal substitution, (3) choices with anchoring effects, (4) choices over healthy and unhealthy snacks, and (5) math problems. We find that higher cognitive load reduces numeracy as measured by performance in math problems. Moreover, within-subject analysis indicates that cognitive load leads to more risk-averse behavior, more impatience over money, and (nominally) more likelihood to anchor. We do not find any evidence that cognitive load increases impatience over consumption goods or unhealthy snack choices. Exploiting the panel nature of our data set, we find that those individuals who are most sensitive to cognitive load, as measured by a large drop in their own math performance across 1- and 8-digit memorization treatments, are driving much of the effect.
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My Mug Is Valuable, But My Partner's Is Even More So: Economic Decisions for Close Others
Michael Greenstein & Xiaomeng Xu
Basic and Applied Social Psychology, May/June 2015, Pages 174-187
Abstract:
In three experiments, we investigated how people make economic decisions for close others. Participants performed an imaginary valuation task for objects of theirs, a close other, and a stranger. Replicating the endowment effect, people valued their objects more than a stranger's. Of interest, participants valued a close other's objects more than their own. Further experiments showed that the inflated values for a close other's objects were not due to social desirability or task demands. These results convey the importance of considering for whom an economic decision is being made, as people respond differently for themselves, close others, and strangers.
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Lukasz Walasek, William Matthews & Tim Rakow
Journal of Behavioral and Experimental Economics, forthcoming
Abstract:
A growing body of research has demonstrated that feelings of possession influence the valuation of personal possessions. Psychological theories of ownership suggest that a special bond between a person and his/her possession arises in response to the innate motivation for effectance, self-identity and need for home. However, current empirical support is insufficient to make a causal link between these psychological needs and feelings of ownership. In four studies (total N > 800), we manipulated people's basic needs by inducing feelings of ostracism, which threatens the needs for belonging, self-esteem, control, and belief in a meaningful existence. Despite the fact that these social needs are closely related to the putative antecedents of feelings of ownership, the ostracism manipulation did not significantly affect participants’ feelings of ownership, or their valuations of their possessions, whether measured by willingness to accept or willingness to pay. These results suggest that the special bond that people have with their belongings is not readily used to restore basic psychological needs following the experience of social exclusion.