O Behave! Issue 16
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The document discusses various topics including the psychological aspects of arguments, the impact of money on happiness, the influence of sensory perceptions on dining experiences, and the implications of a new national living wage in the UK. New research suggests people may moderate extreme views when asked to explain underlying mechanisms and that shared experiences enhance perceived VIP status. Additionally, it highlights the role of sensory factors in meal enjoyment and presents differing opinions on the potential effects of raising the minimum wage.
O Behave! Issue 16
- 1. O BEHAVE! Issue 16 • July 2015
- 2. How to Win an Argument 3 Bias of the Month 4 Does Money Really Make You Happy? 5 What Makes a Good Meal? 6 The New Living Wage 7 Real Life Nudge of the Month 8 Upcoming Events 8 CONTENTS
- 3. HOW TO WIN AN ARGUMENT We often feel people we disagree with on key issues must have misunderstood them somehow; how else could their opinion be so – well – wrong? New research suggests that there may in fact be a some truth in this: extreme views on an issue tend to be bolstered by a false confidence in one’s level of understanding of it, and people become more moderate when they are asked to provide an explanation of the mechanisms behind it, therefore revealing their ignorance and reducing their overconfidence. Fernbach, P.M., Rogers, T., Fox, C.R., & Sloman, S.A. (2013). Political Extremism Is Supported by an Illusion of Understanding. Psychological Science, 24 (6) 939–946. In a series of experiments, Fernbach, Rogers, Fox & Sloman (2013) tested people’s position and confidence in understanding six different American policy issues – unilateral sanctions on Iran for their nuclear programme, revising retirement age for Social Security, transitioning to a single-payer healthcare system, establishing and cap-and-trade system for carbon emissions, instituting a national flat tax and implementing merit-based pay for teachers – before and after asking them to explain the mechanisms of the policies. As hypothesised, participants were much more confident in their understanding of the issues before they were asked to explain them; similarly, those who had initially reported extreme views on the matter were more likely to moderate these views when their confidence in understanding them dropped. This was reflected in behavioural data when participants were given the opportunity to donate to either a group campaigning for the policy or against, and those who initially reported extreme views were much less likely to choose to donate after giving their explanation. This isn’t inconsistent with previous research that shows people report more extreme opinions after deliberating an issue or justifying their views; the authors suggest that the nature of the elaboration of an issue determines the effect this will have on their views. Another group of participants were asked to give reasons for their position, which does not necessarily involve an explanation of the mechanisms; reasons often involve value or morality judgements, or emotional responses. This group reported the same level of understanding and didn’t change their position after giving reasons, and were also much more likely to donate to the campaigning group that shared their opinion. Given this response, it is easy to see how groups of people sharing the same opinion can quickly become more extreme in their views as they discuss the reasons behind it. Therefore, if you want to persuade someone that you’re right, ask how a policy works rather than why they support it – and maybe do a bit more research on it yourself, to check it’s not in fact you with the erroneous opinions.
- 4. BIAS OF THE MONTH The Entourage Effect As a species, particularly in the Western world, we’re a strange dichotomy of individuality and collectivism; we seek to fit in with and win the approval of those around us, but we also demand to be seen as the special snowflakes we are. When it comes to VIP treatment, it seems obvious that just receiving preferential treatment ourselves would benefit our egos the most, but new research shows that our status is raised more when we can bring our friends and family with us. Using diverse scenarios, ranging from a offering football fans a place in a luxury suite to watch the game to imagining a chance to have dinner with an admired political figure, McFerran and Argo (2014) demonstrated that VIPs feel their status is more enhanced when they can share their experience with others (their ‘entourage’), even when this compromises the exclusivity of the experience itself. This effect appears to be due to the heightened feeling of social connection, as the authors ruled out an aversion to being alone or enhanced public visibility as the reason the experience is better shared, as well as simply the joy of doing a good deed for others. The entourage effect This has interesting implications for brands who offer VIP experiences to their customers, particularly through membership schemes. It may be best to allow these customers to bring several guests along with them to enhance their experience, and intensify their brand loyalty. McFerran, B., & Argo, J.J. (2014). The Entourage Effect. Journal of Consumer Research, 40 (5), 871-884.
- 5. DOES MONEY REALLY MAKE YOU HAPPY? We’re all in pursuit of happiness and the eternal question is whether or not money can buy this happiness. A plethora of research has been done to explore this question, and has uncovered a range of interesting findings. The first worth mentioning is that, once a person’s basic needs have been met (food, shelter, etc), the relationship between income and happiness is quite small (Howell & Howell, 2008). This would make you think than that no, money can’t buy happiness, but many argue that this is not the case as it may be that what you buy with your money determines your happiness level. It has been over a decade since American psychologists Leaf Van Boven and Thomas Gilovich (2003) concluded that doing things (experiential purchases) makes people happier than having things (material purchases) in their paper “To Do or to Have? That Is the Question”. The authors of this paper state that the reasons spending money on experiential purchases makes us happier than spending money on material purchases is due to adaptation, social identity and social relationships. They suggest that we purchase goods to make us happy, and while new things make us happy at first, we then adapt to them and look for the next item that will make us happy. In terms of social identity, they state that “our experiences are a bigger part of ourselves than our material goods”. We can really love our material stuff and think that part of our identity is connected to these things, but nonetheless they remain separate to us. On the other hand, our experiences really are a part of us We are the sum total of our experiences. We also consume experiences directly with other people which can heighten the level of happiness we feel. Most of the research in this area has looked at happiness levels post- purchase, but Gilovich’s latest research has examined happiness levels leading up to moment of purchase. Over a series of four studies, he found that people derive more happiness from the anticipation of experiential purchases and that waiting for an experience tends to be more pleasurable and exciting than waiting to receive a material good, which was more likely to be associated with edginess and impatience. So not only does the research now suggest that experiential purchases make us happy after the moment of purchase, but in fact makes us happier right throughout the purchasing journey when compared to material purchases. Kumar, A., Killingsworth, M. A., & Gilovich, T. (2014). Waiting for Merlot: anticipatory consumption of experiential and material purchases. Psychological Science, 25 (10), 1924-1931.
- 6. WHAT MAKES A GOOD MEAL? If chefs didn’t have enough to think about in order to make their food as delicious as possible (picking the best ingredients, being creative in terms of how these ingredients fit together to make the most flavoursome meal), new research shows that instead of catering solely to their customers palate, they must also cater to their mind. According to Dr Charles Spence, an Oxford University professor who is championing a new science called gastrophysics, all manner of multi-sensory influences come into play when we eat, to such an extent that the food actually tastes different. He proposes that almost 50% of the pleasure we derive from eating comes from these multi-sensory influences rather than the food itself. These multi-sensory influences include the sounds, smell, colours, and shapes in our environment, among others. To illustrate the effect of two of these influences (colour and taste) on our perception of taste, Dr Spence invited 3,000 people to his “colour lab” at London’s South Bank during the Streets of Spain Festival. He offered participants a glass of wine and asked them to rate how good it was under white, green and red light, and in some conditions combined the lighting with various snippets of music. They were also given various tasks to ensure they were not aware what conditions were being tested. Although the participants were drinking the same glass of wine throughout the entire experience, their rating of it changed by 20% with the changing context. This finding explains how the wine we are drinking when sitting on a Spanish beach does not taste like the same wine when we are at home watching TV, even if we bought the two bottles from the same place! The latest study from this field has found a direct link between the type of cutlery people use and how they perceive the food to taste. An experiment with more than 130 diners at a restaurant in Edinburgh showed that simply using heavier, high-quality cutlery resulted in customers willing to pay 15% more for their food compared to people eating the same meal with lower- quality utensils. Those who used the high-quality cutlery also thought the food was more artistically-plated and better tasting. The authors noted that this effect happened because the brain associates weight with value. So before you throw your next dinner party ensure you put just as much effort in selecting the cutlery, lightening and music as you do selecting the ingredients. Michel, C., Velasco, C., & Spence, C. (2015). Cutlery matters: heavy cutlery enhances diners’ enjoyment of the food served in a realistic dining environment. Flavour, 4 (26), 1-8.
- 7. THE NEW LIVING WAGE In his Budget earlier this month, the Chancellor George Osborne surprised the nation by announcing the introduction of a compulsory National Living Wage (NLW), effectively raising the minimum wage to £9 per hour throughout the country by 2020. This has left many prominent economists divided between those who think forcing employers to pay higher wages will reduce employment, and those who think past evidence shows little risk of this happening. The law of supply and demand states that when the price rises, demand will fall; as employees become more expensive, employers will hire less. Steve Machin, Professor of Economics at UCL, emphasises the importance of the Low Pay Commission (LPC), who are responsible for setting the minimum wage at a level that takes into account the available evidence on issues like risks to employment. By ignoring their recommendation and setting the minimum wage based on political agenda, negative repercussions could be seen. Even if there are no negative effects on employment, it is possible that companies will pass this increased cost onto their customers. In this case, the poorest people in society are likely to be the most affected. There are also arguments in favour of the NLW. Alan Manning, Professor of Economics at LSE, is in favour of the living wage, however; his position is that the LPC usually makes modest changes to the minimum wage, the effects of which are hard to disentangle from other factors in the labour market. He argues that trying new policies is important for evidence-based policymaking, so that their effects can be measured and inform future policy. The introduction of the national minimum wage in 1998 under Labour faced similar controversy, strongly opposed by the Conservatives who claimed it would have disastrous consequences on employment. A series of meta-analyses have demonstrated that these fears were unfounded (de Linde Leonard, Stanley & Doucouliagos, 2014; Stewart, 2004), but it remains to be seen what the impact of such a dramatic increase will be. With Germany and the USA also introducing increased minimum wages, in the coming years we will be able to discover whether these interventions have the desired effect.
- 8. Spotted: Defaults at the Tower of London The Tower of London has cleverly used the principle of defaults – where we tend to go with the flow of pre-set options to make life easier – to encourage visitors to give a voluntary donation when paying for their admission. Instead of using an opt-in approach and asking visitors to donate, they used an opt-out approach which saw the donation included in the admission price. If visitors didn’t want to pay, they would have to specially ask to opt-out of the voluntary donation and to only pay the normal price. As we are all inherently lazy and tend to follow the path of least resistance, it’s likely that this tactic has been extremely successful in boosting donations for the Tower of London. REAL LIFE NUDGE OF THE MONTH UPCOMING EVENTS Annual International Conference on Cognitive- Social, and Behavioural Sciences Monday 3rd August – Wednesday 6th August Nicosia, Cyprus Behavioural Boozeonomics with the London Behavioural Economics Network Monday 10th August, 6.30-11.00pm The Comedy Pub, Piccadilly Behavioural Exchange 2014 Wednesday 2nd – Thursday 3rd September Park Plaza Westminster Bridge
- 9. Cíosa Garrahan @CiosaGarrahan ciosa.garrahan@ogilvy.com BROUGHT TO YOU BY Juliet Hodges @hulietjodges juliet.hodges@ogilvy.com