Art of the deal

Kevin Lewis

December 13, 2015

Money Affects Theory of Mind Differently by Gender

Garret Ridinger & Michael McBride
PLoS ONE, December 2015

Theory of Mind (ToM) - the ability to understand other's thoughts, intentions, and emotions - is important for navigating interpersonal relationships, avoiding conflict, and empathizing. Prior research has identified many factors that affect one's ToM ability, but little work has examined how different kinds of monetary incentives affect ToM ability. We ask: Does money affect ToM ability? If so, how does the effect depend on the structure of monetary incentives? How do the differences depend on gender? We hypothesize that money will affect ToM ability differently by gender: monetary rewards increase males' motivation to express ToM ability while simultaneously crowding out females' motivation. This prediction is confirmed in an experiment that varies the structure of monetary rewards for correct answers in the Reading the Mind in the Eyes Test (RMET). RMET scores decrease for females and increase for males with individual payments, and this effect is stronger with competitively-structured payments. RMET scores do not significantly change when monetary earnings go to a charity. Whether money improves or hinders ToM ability, and, hence, success in social interactions, thus depends on the interaction of gender and monetary incentive structure.


Love Thy Neighbor? Ethnoracial Diversity and Trust Reexamined

Maria Abascal & Delia Baldassarri
American Journal of Sociology, November 2015, Pages 722-782

According to recent research, ethnoracial diversity negatively affects trust and social capital. This article challenges the current conception and measurement of "diversity" and invites scholars to rethink "social capital" in complex societies. It reproduces the analysis of Putnam and shows that the association between diversity and self-reported trust is a compositional artifact attributable to residential sorting: nonwhites report lower trust and are overrepresented in heterogeneous communities. The association between diversity and trust is better explained by differences between communities and their residents in terms of race/ethnicity, residential stability, and economic conditions; these classic indicators of inequality, not diversity, strongly and consistently predict self-reported trust. Diversity indexes also obscure the distinction between in-group and out-group contact. For whites, heterogeneity means more out-group neighbors; for nonwhites, heterogeneity means more in-group neighbors. Therefore, separate analyses were conducted by ethnoracial groups. Only for whites does living among out-group members - not in diverse communities per se - negatively predict trust.


The Effects of Neighborhood Democracy on Cooperation: A Laboratory Study

Daniel Scheller
Journal of Urban Affairs, December 2015, Pages 568-583

What effect does participation in neighborhood governments have on residents' willingness to contribute to the provision of public goods? This is an important question to ask given the growth of homeowners associations (HOAs) in the United States. HOAs provide a medium through which citizens can practice democratic skills. The social capital and efficacy built through this participation may increase an individual's willingness to use his or her own resources to help provide for a community public good. In this article the author hypothesizes that such participation increases the probability that individuals donate to public goods provision. Using an experimental design where subjects in treatment groups participate in a mock HOA meeting and then play an iterated public goods game, the study finds evidence that participation in HOA meetings improves cooperative behavior. This finding suggests that HOA participation has some effect on an individual's propensity to contribute to the provision of a public good.


The dark side of negotiation: Examining the outcomes of face-to-face and computer-mediated negotiations among dark personalities

Lisa Crossley et al.
Personality and Individual Differences, March 2016, Pages 47-51

This study examined the influence of the Dark Triad (DT; psychopathy, Machiavellianism, and narcissism) and communication condition (face-to-face [FtF] versus computer-mediated communication [CMC]) on success in negotiations. This is relevant considering the increased use of CMC and the potentially differing nature of how individuals communicate online compared to FtF. For example, while individuals with dark personalities are known to exploit others in person, relatively little is known about their propensity to manipulate in online environments. Participant dyads (N = 206) negotiated the details of a pair of concert tickets either FtF or online in real time for 20 min before having to come to a decision. The results (based on overall success in the negotiation) indicate that individuals scoring higher on self-report measures of the DT perform best when they are able to negotiate FtF with their counterpart, whereas those with lower DT scores appear better suited to succeed in negotiations online.


Solving the Volunteer's Dilemma: The Efficiency of Rewards Versus Punishments

Shmuel Leshem & Avraham Tabbach
American Law and Economics Review, forthcoming

This paper studies a class of second-best solutions to the Volunteer's Dilemma. We consider a game in which each one of n players must simultaneously choose whether to incur a cost and thereby prevent a social harm. Players could be rewarded for helping, be punished for not helping, or be subject to any combination of rewards and punishments. We show that because of the substitutability of players' efforts, the use of rewards rather than punishments minimizes social costs (expected costs of helping, expected harm, and expected transfer costs) for nearly any number of players and ratio of cost-of-helping to social harm. This helps to explain the paucity of affirmative legal duties and the prevalence of whistle-blower and most-wanted rewards.


Being Sherlock Holmes: Can we sense empathy from a brief sample of behaviour?

Wenjie Wu, Elizabeth Sheppard & Peter Mitchell
British Journal of Psychology, forthcoming

Mentalizing (otherwise known as 'theory of mind') involves a special process that is adapted for predicting and explaining the behaviour of others (targets) based on inferences about targets' beliefs and character. This research investigated how well participants made inferences about an especially apposite aspect of character, empathy. Participants were invited to make inferences of self-rated empathy after watching or listening to an unfamiliar target for a few seconds telling a scripted joke (or answering questions about him/herself or reading aloud a paragraph of promotional material). Across three studies, participants were good at identifying targets with low and high self-rated empathy but not good at identifying those who are average. Such inferences, especially of high self-rated empathy, seemed to be based mainly on clues in the target's behaviour, presented either in a video, a still photograph or in an audio track. However, participants were not as effective in guessing which targets had low or average self-rated empathy from a still photograph showing a neutral pose or from an audio track. We conclude with discussion of the scope and the adaptive value of this inferential ability.


We can see inside: Accurate prediction of Prisoner's Dilemma decisions in announced games following a face-to-face interaction

Adam Sparks, Tyler Burleigh & Pat Barclay
Evolution and Human Behavior, forthcoming

Humans form impressions and make social judgments about others based on information that is quickly and easily available, such as facial and vocal traits. The evolutionary function of impression formation and social judgment mechanisms have received limited attention in psychology research; we argue their function is to accurately forecast the behavior of others. There is some evidence for the predictive accuracy of social judgments, but much of it comes from situations where there is little incentive to deceive, which limits applicability to questions of the function of such mechanisms. A classic experiment that avoids this problem was conducted by Frank, Gilovich & Regan [1993]; their participants predicted each other's Prisoner's Dilemma Game decisions with above-chance accuracy after a short interaction period, knowing the game would follow. We report three original studies that replicate these aspects of the methods of Frank et al. [1993] and reanalyze data from all known replications. Our meta-analysis of these studies confirms the original report: Humans can predict each other's Prisoner's Dilemma decisions after a brief interaction with people who have incentive to deceive.


When a service request precedes the target request: Another compliance without pressure technique?

Sebastien Meineri et al.
Social Influence, forthcoming

Empirical observation led us to identify a particular and widespread form of solicitation involving requesting a service before making the target request. Relating this form of solicitation to compliance paradigms based on consistency, we hypothesized that the technique would increase the compliance rates of individuals. 167 passersby were approached in the street for a money donation according to two conditions: the appeal for money was preceded by a service request or not. We found that those passersby receiving the service request and the monetary appeal were significantly more compliant than those receiving the monetary appeal only. The discussion focuses on the psychological mechanisms at work in the acceptance of the requests, and avenues for future research are suggested.


The Effect of Listing Price Strategy on Real Estate Negotiations: An Experimental Study

Eric Cardella & Michael Seiler
Journal of Economic Psychology, forthcoming

When selling a home, an important decision facing the homeowner is choosing an optimal listing price. This decision will depend in large part on how the chosen list price impacts the post negotiation final sale price of the home. In this study, we design an experiment that enables us to identify how different types of common list price strategies affect housing negotiations. Specifically, we examine how rounded, just below, and precise list prices impact the negotiation behavior of the buyer and seller and, ultimately, the final sale price of the home. Our results indicate that the initial list price strategy does play an important role in the negotiation process. Most notably, a high precise price generates the highest final sale price, smallest percentage discount off the list price, and the largest fraction of the surplus to the seller, while just below pricing leads to the lowest final price, largest percentage discount, and smallest fraction of the surplus to the seller. This pattern seems to be largely driven by sellers making persistently higher and more precise counter-offers throughout the negotiation process when the initial list price is high precise. Interestingly, these effects generally attenuate with negotiating experience. Importantly, our experimental results are generally consistent, both in direction and magnitude, with the limited transactions-based empirical studies relating to real estate listing prices.


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