Take my advice
When overconfidence is revealed to others: Testing the status-enhancement theory of overconfidence
Jessica Kennedy, Cameron Anderson & Don Moore
Organizational Behavior and Human Decision Processes, November 2013, Pages 266–279
Abstract:
The status-enhancement theory of overconfidence proposes that overconfidence pervades self-judgment because it helps people attain higher social status. Prior work has found that highly confident individuals attained higher status regardless of whether their confidence was justified by actual ability (Anderson, Brion, Moore, & Kennedy, 2012). However, those initial findings were observed in contexts where individuals’ actual abilities were unlikely to be discovered by others. What happens to overconfident individuals when others learn how good they truly are at the task? If those individuals are penalized with status demotions, then the status costs might outweigh the status benefits of overconfidence – thereby casting doubt on the benefits of overconfidence. In three studies, we found that group members did not react negatively to individuals revealed as overconfident, and in fact still viewed them positively. Therefore, the status benefits of overconfidence outweighed any possible status costs, lending further support to the status-enhancement theory.
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Warnings of Adverse Side Effects Can Backfire Over Time
Yael Steinhart, Ziv Carmon & Yaacov Trope
Psychological Science, September 2013, Pages 1842-1847
Abstract:
Warnings that a promoted product can have adverse side effects (e.g., smoking cigarettes can cause cancer) should dampen the product’s allure. We predicted that with temporal distance (e.g., when an ad relates to future consumption or was viewed some time earlier), this common type of warning can have a worrisome alternative consequence: It can ironically boost the product’s appeal. Building on construal-level theory, we argue that this is because temporal distance evokes high-level construal, which deemphasizes side effects and emphasizes message trustworthiness. In four studies, we demonstrated this phenomenon. For example, participants could buy cigarettes or artificial sweeteners after viewing an ad promoting the product. Immediately afterward, the quantity that participants bought predictably decreased if the ad they saw included a warning about adverse side effects. With temporal distance (product to be delivered 3 months later, or 2 weeks after the ad was viewed), however, participants who had seen an ad noting the benefits of the product but warning of risky side effects bought more than those who had seen an ad noting only benefits.
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Reading Literary Fiction Improves Theory of Mind
David Comer Kidd & Emanuele Castano
Science, 18 October 2013, Pages 377-380
Abstract:
Understanding others’ mental states is a crucial skill that enables the complex social relationships that characterize human societies. Yet little research has investigated what fosters this skill, which is known as Theory of Mind (ToM), in adults. We present five experiments showing that reading literary fiction led to better performance on tests of affective ToM (experiments 1 to 5) and cognitive ToM (experiments 4 and 5) compared with reading nonfiction (experiments 1), popular fiction (experiments 2 to 5), or nothing at all (experiments 2 and 5). Specifically, these results show that reading literary fiction temporarily enhances ToM. More broadly, they suggest that ToM may be influenced by engagement with works of art.
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Xun (Irene) Huang et al.
Journal of Consumer Psychology, forthcoming
Abstract:
Comfortable ambient temperatures can influence consumer preferences for conformity. The results of three laboratory experiments suggest that warm (vs. cool) temperatures dispose consumers toward using others’ opinions as the basis for product preferences, stock price forecasts, and betting. Warm temperatures increased the participants’ perceptions of social closeness to other decision-makers, thus leading them to consider the opinions of those decision-makers to have greater validity. This enhanced validity, in turn, rendered them more likely to conform to the crowd. This effect was confirmed in an analysis of betting behavior at the racetrack over a three-year period. Bets were more likely to converge on the “favorite” (i.e., the majority-endorsed option) when the temperature at the track was warm.
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In the Eye of the Beholder: Eye Contact Increases Resistance to Persuasion
Frances Chen et al.
Psychological Science, forthcoming
Abstract:
Popular belief holds that eye contact increases the success of persuasive communication, and prior research suggests that speakers who direct their gaze more toward their listeners are perceived as more persuasive. In contrast, we demonstrate that more eye contact between the listener and speaker during persuasive communication predicts less attitude change in the direction advocated. In Study 1, participants freely watched videos of speakers expressing various views on controversial sociopolitical issues. Greater direct gaze at the speaker’s eyes was associated with less attitude change in the direction advocated by the speaker. In Study 2, we instructed participants to look at either the eyes or the mouths of speakers presenting arguments counter to participants’ own attitudes. Intentionally maintaining direct eye contact led to less persuasion than did gazing at the mouth. These findings suggest that efforts at increasing eye contact may be counterproductive across a variety of persuasion contexts.
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The Effect of Giving It All Up on Valuation: A New Look at the Endowment Effect
Amos Schurr & Ilana Ritov
Management Science, forthcoming
Abstract:
In three experiments we show that the endowment effect — the tendency to demand more money for relinquishing owned goods than one is willing to pay for the same goods — fails to emerge when sellers are not fully depleted of their endowment. This finding is incompatible with prospect theory's account of the effect as stemming primarily from aversion to loss relative to the individual's current state. We suggest a new account of the endowment effect as reflecting the human aversion to '‘giving it all up” rather than simply an aversion to incurring any loss relative to the status quo. Experiments 1 and 2 show the effect employing a pricing paradigm. Experiment 3 examines what constitutes “all” in the giving-it-all-up effect.
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Detaching the Ties of Ownership: The Effects of Hand Washing on the Exchange of Endowed Products
Arnd Florack et al.
Journal of Consumer Psychology, forthcoming
Abstract:
Recent studies have demonstrated that the ownership of a product leads to a biased perception of its aspects. Based on research on embodied cognition, we argue that the physical action of hand washing can reset the cognitive system to a more neutral state by reducing the asymmetrical perception of owned and not owned products. In three studies, we examined the effects of hand washing on the endowment effect by asking owners of a product to exchange it for a similar one. As expected, in Experiment 1, we showed that hand washing doubled the percentage of participants who exchanged an owned product for an alternative product. In Experiment 2, we replicated this finding and showed that only the action of hand washing and not a prime of physical cleaning elicited this effect. In Experiment 3, we again replicated the hand washing effect on exchange rates and examined the effect of hand washing on product evaluations. The results of all experiments suggest that hand washing reduces decision preferences that are biased by ownership.
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Petter Johansson et al.
Journal of Behavioral Decision Making, forthcoming
Abstract:
Choice blindness is the finding that participants both often fail to notice mismatches between their decisions and the outcome of their choice and, in addition, endorse the opposite of their chosen alternative. But do these preference reversals also carry over to future choices and ratings? To investigate this question, we gave participants the task of choosing which of a pair of faces they found most attractive. Unknown to them, we sometimes used a card trick to exchange one face for the other. Both decision theory and common sense strongly suggest that most people would easily notice such a radical change in the outcome of a choice. But that was not the case: no more than a third of the exchanges were detected by the participants. We also included a second round of choices using the same face pairs, and two stages of post-choice attractiveness ratings of the faces. This way we were able to measure preference strength both as choice consistency and by looking at measures of rating differences between chosen and rejected options. We found that the initially rejected faces were chosen more frequently in the second choice, and the perceived attractiveness of these faces was increased even in uncoupled individual ratings at the end of the experiment. This result is discussed in relation to Chen and Risen's recent criticism of the Free Choice Paradigm, as it shows that choices can affect future preferences.
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Human development of the ability to learn from bad news
Christina Moutsiana et al.
Proceedings of the National Academy of Sciences, 8 October 2013, Pages 16396-16401
Abstract:
Humans show a natural tendency to discount bad news while incorporating good news into beliefs (the “good news–bad news effect”), an effect that may help explain seemingly irrational risk taking. Understanding how this bias develops with age is important because adolescents are prone to engage in risky behavior; thus, educating them about danger is crucial. We reveal a striking valence-dependent asymmetry in how belief updating develops with age. In the ages tested (9–26 y), younger age was associated with inaccurate updating of beliefs in response to undesirable information regarding vulnerability. In contrast, the ability to update beliefs accurately in response to desirable information remained relatively stable with age. This asymmetry was mediated by adequate computational use of positive but not negative estimation errors to alter beliefs. The results are important for understanding how belief formation develops and might help explain why adolescents do not respond adequately to warnings.
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Changing Social Norm Compliance With Noninvasive Brain Stimulation
C. Ruff, G. Ugazio & E. Fehr
Science, 25 October 2013, Pages 482-484
Abstract:
All known human societies have maintained social order by enforcing compliance with social norms. The biological mechanisms underlying norm compliance are, however, hardly understood. We show that the right lateral prefrontal cortex (rLPFC) is involved in both voluntary and sanction-induced norm compliance. Both types of compliance could be changed by varying neural excitability of this brain region with transcranial direct current stimulation, but they were affected in opposite ways, suggesting that the stimulated region plays a fundamentally different role in voluntary and sanction-based compliance. Brain stimulation had a particularly strong effect for compliance based on socially constituted sanctions, while it left beliefs about what the norm prescribes and about subjectively expected sanctions unaffected. Our findings suggest that rLPFC activity is a key biological prerequisite for an evolutionarily and socially important aspect of human behavior.
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Domain Knowledge and Hindsight Bias among Poker Players
Dustin Calvillo & Abraham Rutchick
Journal of Behavioral Decision Making, forthcoming
Abstract:
Hindsight bias occurs when individuals believe that events were more predictable after they have occurred than they actually were before they occurred. Although hindsight bias is a well-studied phenomenon, few studies have examined the role of expertise in this bias. Two experiments investigated the relation between the magnitude of hindsight bias and self-reported poker expertise (Experiment 1) and assessed poker knowledge (Experiment 2). In Experiment 1, self-rated poker expertise was negatively correlated with hindsight bias. Experiment 2 employed memory and hypothetical hindsight conditions and found that poker knowledge was negatively correlated with hindsight bias in the memory condition, but unrelated to hindsight bias in the hypothetical condition. These results help elucidate the role of expertise in hindsight bias and provide additional support for the separate components view, which claims there are different forms of hindsight bias that are differentially affected by certain factors. Domain knowledge appears to be one of such factors.
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The Effect of Exchange Rates on Statistical Decisions
Mark Schervish, Teddy Seidenfeld & Joseph Kadane
Philosophy of Science, October 2013, Pages 504-532
Abstract:
Statistical decision theory, whether based on Bayesian principles or other concepts such as minimax or admissibility, relies on minimizing expected loss or maximizing expected utility. Loss and utility functions are generally treated as unit-less numerical measures of value for consequences. Here, we address the issue of the units in which loss and utility are settled and the implications that those units have on the rankings of potential decisions. When multiple currencies are available for paying the loss, one must take explicit account of which currency is used as well as the exchange rates between the various available currencies.
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Beating the Market: The Allure of Unintended Value
Aner Sela, Itamar Simonson & Ran Kivetz
Journal of Marketing Research, forthcoming
Abstract:
Consumers face many options that are presented to them as bargains, but in reality, they only subjectively construe a fraction of them as valuable. The authors propose that consumers are particularly attracted to offers they perceive as more valuable than the marketer presumably intended. Consistent with this analysis, six experiments indicate that consumers may perceive customized offers that are presented as tailored to their individual preferences or circumstances as less valuable than offers that seem to fit their preferences and provide value without the marketer's explicit intent. The experiments also suggest that the urge to exploit unintended value reflects a competitive desire to outsmart the market. The findings have theoretical implications for understanding consumers' subjective perceptions of value as well as important practical implications for designing customized offers and targeted promotions.
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Thought Calibration: How Thinking Just the Right Amount Increases One’s Influence and Appeal
Daniella Kupor et al.
Social Psychological and Personality Science, forthcoming
Abstract:
Previous research suggests that people draw inferences about their attitudes and preferences based on their own thoughtfulness. The current research explores how observing other individuals make decisions more or less thoughtfully can shape perceptions of those individuals and their decisions and ultimately impact observers’ willingness to be influenced by them. Three studies suggest that observing others make more (vs. less) thoughtful decisions generates more positive reactions when a choice is difficult but more negative reactions when a choice is easy. In essence, people perceive the quality of others’ decisions to be greater when other individuals engage in the right amount of thinking for the situation. These assessments then affect observers’ own decisions and openness to influence.
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Unexpected benefits of deciding by mind wandering
Colleen Giblin, Carey Morewedge & Michael Norton
Frontiers in Psychology, September 2013
Abstract:
The mind wanders, even when people are attempting to make complex decisions. We suggest that mind wandering — allowing one's thoughts to wander until the “correct” choice comes to mind — can positively impact people's feelings about their decisions. We compare post-choice satisfaction from choices made by mind wandering to reason-based choices and randomly assigned outcomes. Participants chose a poster by mind wandering or deliberating, or were randomly assigned a poster. Whereas forecasters predicted that participants who chose by mind wandering would evaluate their outcome as inferior to participants who deliberated (Experiment 1), participants who used mind wandering as a decision strategy evaluated their choice just as positively as did participants who used deliberation (Experiment 2). In some cases, it appears that people can spare themselves the effort of deliberation and instead “decide by wind wandering,” yet experience no decrease in satisfaction.
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Downsizing and Supersizing: How Changes in Product Attributes Influence Consumer Preferences
Ata Jami & Himanshu Mishra
Journal of Behavioral Decision Making, forthcoming
Abstract:
This paper investigates how changing the value of one attribute while keeping other attributes constant influences consumers' judgments and behaviors. We find that in two options, a proportionally equal change in one attribute tilts people's preference toward the option with higher (or lower) absolute magnitude of change when the change is desirable (or undesirable). We propose that when individuals face an attribute change, they use a deliberative and effortful response, known as System 2, to detect the change. However, they rely less on this system to evaluate the changed options. Instead, a more automatic System 1 processing influences their decision by making them apply the bigger-is-better heuristic (bigger-is-worse for an undesirable change) to prefer the option with the highest (lowest) absolute magnitude of change. Six studies demonstrate this phenomenon in both lab and real settings and support our hypothesis.
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Risk-Taking Behavior in the Wake of Natural Disasters
Lisa Cameron & Manisha Shah
NBER Working Paper, October 2013
Abstract:
We investigate whether experiencing a natural disaster affects risk-taking behavior. We conduct standard risk games (using real money) with randomly selected individuals in rural Indonesia. We find that individuals who recently suffered a flood or earthquake exhibit more risk aversion. Experiencing a natural disaster causes people to perceive that they now face a greater risk of a future disaster. We conclude that this change in perception of background risk causes people to take fewer risks. We provide evidence that experimental risk behavior is correlated with real life risk behavior, highlighting the importance of our results.
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Why the Door-in-the-Face Technique Can Sometimes Backfire: A Construal-Level Account
Marlone Henderson & Erin Burgoon
Social Psychological and Personality Science, forthcoming
Abstract:
We put forward a construal-level account to explain why the door-in-the-face (DITF) technique can sometimes backfire in the prosocial domain. We argue that after rejecting an initial prosocial request, more abstract construals promote a more coherent selfish version of the self in people’s minds, which then fosters less compliance with subsequent requests. Across three experiments, results indicated that relative to an outright request, the DITF technique was less likely to get participants to comply with various prosocial requests (e.g., writing to sick children) when participants adopted more abstract construals. Theoretical and practical implications are discussed.
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Perceptuo-motor, cognitive, and description-based decision-making seem equally good
Andreas Jarvstad et al.
Proceedings of the National Academy of Sciences, 1 October 2013, Pages 16271-16276
Abstract:
Classical studies suggest that high-level cognitive decisions (e.g., choosing between financial options) are suboptimal. In contrast, low-level decisions (e.g., choosing where to put your feet on a rocky ridge) appear near-optimal: the perception–cognition gap. Moreover, in classical tasks, people appear to put too much weight on unlikely events. In contrast, when people can learn through experience, they appear to put too little weight on unlikely events: the description–experience gap. We eliminated confounding factors and, contrary to what is commonly believed, found results suggesting that (i) the perception–cognition gap is illusory and due to differences in the way performance is assessed; (ii) the description–experience gap arises from the assumption that objective probabilities match subjective ones; (iii) people’s ability to make decisions is better than the classical literature suggests; and (iv) differences between decision-makers are more important for predicting peoples’ choices than differences between choice tasks.
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Romain Clément et al.
PLoS ONE, October 2013
Abstract:
Group-living is widespread among animals and one of the major advantages of group-living is the ability of groups to solve cognitive problems that exceed individual ability. Humans also make use of collective cognition and have simultaneously developed a highly complex language to exchange information. Here we investigated collective cognition of human groups regarding language use in a realistic situation. Individuals listened to a public announcement and had to reconstruct the sentence alone or in groups. This situation is often encountered by humans, for instance at train stations or airports. Using recent developments in machine speech recognition, we analysed how well individuals and groups reconstructed the sentences from a syntactic (i.e., the number of errors) and semantic (i.e., the quality of the retrieved information) perspective. We show that groups perform better both on a syntactic and semantic level than even their best members. Groups made fewer errors and were able to retrieve more information when reconstructing the sentences, outcompeting even their best group members. Our study takes collective cognition studies to the more complex level of language use in humans.
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Emotional disrupt-then-reframe technique of social influence
Dariusz Dolinski & Katarzyna Szczucka
Journal of Applied Social Psychology, October 2013, Pages 2031–2041
Abstract:
Davis and Knowles proposed a social influence technique, which they named disrupt-then-reframe (DTR). In a series of four experiments, they demonstrated that compliance could be increased by a subtle disruption to the sales request, followed immediately by a reframing that provided additional reasons for purchasing the goods. The DTR technique is strictly cognitive in nature: The person, hearing simple argumentation during the short state of her or his cognitive disorganization, becomes more inclined to fulfill the requests made of her or him. In three experiments presented in this article, it is shown that a similar effect can be obtained when the fear-then-relief state, which could be seen as an emotional disruption, is followed by an argument.