What We Know
Loss Aversion in Professional Golf
Ryan Elmore & Andrew Urbaczewski
Journal of Sports Economics, forthcoming
Abstract:
We examine loss aversion in the context of professional golf at US Open tournaments. In particular, we analyze data from two courses, Pebble Beach Golf Links and Oakmont Country Club, where they have hosted six and five US Opens, respectively. The United States Golf Association changed the par rating of a hole on each course from a par 5 to a par 4, without fundamentally altering the hole, in each US Open hosted by these courses since 2000. In this natural experimental setting, we find evidence of significant loss-aversive behavior in the world's best golfers based solely on par rating.
Does social psychology persist over half a century? A direct replication of Cialdini et al.'s (1975) classic door-in-the-face technique
Oliver Genschow et al.
Journal of Personality and Social Psychology, forthcoming
Abstract:
Many failed replications in social psychology have cast doubt on the validity of the field. Most of these replication attempts have focused on findings published from the 1990s on, ignoring a large body of older literature. As some scholars suggest that social psychological findings and theories are limited to a particular time, place, and population, we sought to test whether a classical social psychological finding that was published nearly half a century ago can be successfully replicated in another country on another continent. To this end, we directly replicated Cialdini et al.'s (1975) door-in-the-face (DITF) technique according to which people's likelihood to comply with a target request increases after having turned down a larger request. Thereby, we put the reciprocal concessions theory - the original process explanation of the DITF technique - to a critical test. Overall, compliance rates in our replication were similarly high as those Cialdini et al. (1975) found 45 years ago. That is, participants were more likely to comply with a target request after turning down an extreme request than participants who were exposed to the target request only or to a similarly small request before being exposed to the target request. These findings support the idea that reciprocity norms play a crucial role in DITF strategies. Moreover, the results suggest that at least some social psychological findings can transcend a particular time, place, and population. Further theoretical implications are discussed.
Life cycle patterns of cognitive performance over the long run
Anthony Strittmatter, Uwe Sunde & Dainis Zegners
Proceedings of the National Academy of Sciences, 3 November 2020, Pages 27255-27261
Abstract:
Little is known about how the age pattern in individual performance in cognitively demanding tasks changed over the past century. The main difficulty for measuring such life cycle performance patterns and their dynamics over time is related to the construction of a reliable measure that is comparable across individuals and over time and not affected by changes in technology or other environmental factors. This study presents evidence for the dynamics of life cycle patterns of cognitive performance over the past 125 y based on an analysis of data from professional chess tournaments. Individual move-by-move performance in more than 24,000 games is evaluated relative to an objective benchmark that is based on the respective optimal move suggested by a chess engine. This provides a precise and comparable measurement of individual performance for the same individual at different ages over long periods of time, exploiting the advantage of a strictly comparable task and a comparison with an identical performance benchmark. Repeated observations for the same individuals allow disentangling age patterns from idiosyncratic variation and analyzing how age patterns change over time and across birth cohorts. The findings document a hump-shaped performance profile over the life cycle and a long-run shift in the profile toward younger ages that is associated with cohort effects rather than period effects. This shift can be rationalized by greater experience, which is potentially a consequence of changes in education and training facilities related to digitization.
Social Influence Undermines the Wisdom of the Crowd in Sequential Decision Making
Vincenz Frey & Arnout van de Rijt
Management Science, forthcoming
Abstract:
Teams, juries, electorates, and committees must often select from various alternative courses of action what they judge to be the best option. The phenomenon that the central tendency of many independent estimates is often quite accurate-"the wisdom of the crowd"-suggests that group decisions based on plurality voting can be surprisingly wise. Recent experimental studies demonstrate that the wisdom of the crowd is further enhanced if individuals have the opportunity to revise their votes in response to the independent votes of others. We argue that this positive effect of social information turns negative if group members do not first contribute an independent vote but instead cast their votes sequentially such that early mistakes can cascade across strings of decision makers. Results from a laboratory experiment confirm that when subjects sequentially state which of two answers they deem correct, majorities are more often wrong when subjects can see how often the two answers have been chosen by previous subjects than when they cannot. As predicted by our theoretical model, this happens even though subjects' use of social information improves the accuracy of their individual votes. A second experiment conducted over the internet involving larger groups indicates that although early mistakes on easy tasks are eventually corrected in long enough choice sequences, for difficult tasks wrong majorities perpetuate themselves, showing no tendency to self-correct.
Budget Depreciation: When Budgeting Early Increases Spending
Yuna Choe & Christina Kan
Journal of Consumer Research, forthcoming
Abstract:
While budgeting in advance is seen as a good practice to control spending, this research shows that budgeting too early for a specific purchase may increase spending. We argue that as the temporal separation between budget setting and actual purchase increases, consumers become more willing to overspend because of what we term "budget depreciation." Consumers adapt to the reference point set by the budget such that, over time, the budgeted level becomes the status-quo spending. Thus, as more time passes, pain-of-payment from the budgeted amount decreases, and the willingness-to-spend increases. Across a secondary dataset of real estate purchases, one field study, and three experiments, we find evidence that consumers who set a budget in the distant (versus near) past are more likely to overspend relative to their budget. The effect emerges for single purchase occasions rather than a category of purchases over multiple occasions. It emerges because of the hypothesized pain-of-payment process (e.g., effect is stronger among tightwads, who feel greater pain from spending; effect is mitigated under budget reassessment, which prevents pain adaptation). Our work contributes to the mental budgeting literature by invoking a role for temporal separation, and draws a novel connection to prior work on payment depreciation.
Broken Physics: A Conjunction-Fallacy Effect in Intuitive Physical Reasoning
Ethan Ludwin-Peery et al.
Psychological Science, forthcoming
Abstract:
One remarkable aspect of human cognition is our ability to reason about physical events. This article provides novel evidence that intuitive physics is subject to a peculiar error, the classic conjunction fallacy, in which people rate the probability of a conjunction of two events as more likely than one constituent (a logical impossibility). Participants viewed videos of physical scenarios and judged the probability that either a single event or a conjunction of two events would occur. In Experiment 1 (n = 60), participants consistently rated conjunction events as more likely than single events for the same scenes. Experiment 2 (n = 180) extended these results to rule out several alternative explanations. Experiment 3 (n = 100) generalized the finding to different scenes. This demonstration of conjunction errors contradicts claims that such errors should not appear in intuitive physics and presents a serious challenge to current theories of mental simulation in physical reasoning.
When Sharing Isn't Caring: The Influence of Seeking the Best on Sharing Favorable Word of Mouth about Unsatisfactory Purchases
Nicholas Olson & Rohini Ahluwalia
Journal of Consumer Research, forthcoming
Abstract:
Past research generally finds that if consumers share word of mouth about past purchases with others, the valence of the information tends to be congruent with actual perceptions. Thus, a negative purchase experience should elicit negative (vs. positive) word of mouth. We examine how a goal of attaining the best possible outcome, or maximizing, may alter this tendency. Drawing on prior work demonstrating that consumers may view their own personal failures more favorably through relative comparisons with others faring similarly or worse, we show that maximizing increases consumers' propensity to share favorable word of mouth about unsatisfactory purchases, in an effort to encourage others to make the same poor choices, as they seek to enhance the perceived relative standing of and post-purchase feelings toward their own unsatisfying outcomes. We further show that consumers particularly exhibit this behavior when sharing with psychologically close (vs. distant) others, as comparisons with close others are especially relevant to relative standing. Finally, we consider the downstream consequences of such behavior, finding that when consumers successfully persuade close others to make the same bad decisions, they feel better about their own outcomes, but are also burdened with feelings of guilt that erode their overall wellbeing.
The effect of prosody on decision making: Speech rate influences speed and quality of decisions
Melissa Buelow et al.
Current Psychology, December 2020, Pages 2129-2139
Abstract:
This study examined the effects of speech rate on decision making across two age groups. Prior research has found that listening to fast speech can lead to subsequent rate changes on other tasks. The present study sought to examine if different speech rates (slow and fast) could alter decision making speed and performance accuracy in college students (ages 18-20) and preschool-aged children (ages 3-5). Participants listened to a recording (fast or slow) and then completed the Hungry Donkey Task to assess risky decision making. The results suggest that speech rate priming relates to response latencies and performance on a subsequent task. Participants in the slow condition had longer response times and made more advantageous decisions than those in the fast condition. College student participants' performance was more accurate than the children's performance following the slow prime, but there was no difference following the fast prime. These findings suggest that there is a shared timing mechanism across domains, and we may be able to capitalize on this to improve decision making.
Do children have Bayesian intuitions?
Gerd Gigerenzer et al.
Journal of Experimental Psychology: General, forthcoming
Abstract:
Can children solve Bayesian problems, given that these pose great difficulties even for most adults? We present an ecological framework in which Bayesian intuitions emerge from a match between children's numerical competencies and external representations of numerosity. Bayesian intuition is defined here as the ability to determine the exact Bayesian posterior probability by minds untutored in probability theory or in Bayes' rule. As we show, Bayesian intuitions do not require processing of probabilities or Arabic numbers, but basically the ability to count tokens in icon arrays and to understand what to count. A series of experiments demonstrates for the first time that icon arrays elicited Bayesian intuitions in children as young as second-graders for 22% to 32% of all problems; fourth-graders achieved 50% to 60%. Most surprisingly, icon arrays elicited Bayesian intuitions in children with dyscalculia, a specific learning disorder that has been attributed to genetic causes. These children could solve an impressive 50% of Bayesian problems, a level similar to that of children without dyscalculia. By seventh grade, children solved about two thirds of Bayesian problems with natural frequencies alone, without the additional help of icon arrays. We identify four non-Bayesian rules. On the basis of these results, we propose a common solution for the phylogenetic, the ontogenetic, and the 1970s puzzles in the Bayesian literature and argue for a revision of how to teach statistical thinking. In accordance with recent work on infants' numerical abilities, these findings indicate that children have more numerical ability than previously assumed.