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Authors: William Poundstone

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Psychologists Melissa Bateson, Daniel Nettle, and Gilbert Roberts replaced the poster listing beverage prices with their own posters, identical except for an image banner at the top. Some posters featured a pair of eyes looking directly at the viewer. Others showed an image of flowers. Bateson’s group alternated the posters weekly and counted each week’s money to detect any differences in payment behavior. (They used milk consumption as a check on how much coffee and tea was actually dispensed.) On the average, they found, people contributed 2.76 times as much money when the eyes posters were up, compared to the flowers posters. “I was surprised how big the effect was as we were expecting it to be subtle,” Bateson said. Workplace honesty switched on and off like a lamp.

Dictator game players are apparently conscious of not wanting to appear selfish. No such explanation is possible with a mere poster. “Our brains are programmed to respond to eyes and faces whether we are consciously aware of it or not,” Bateson proposed. Another experiment found a similar effect with mirrors. While it’s not news that mirrors can change behavior (think of all the ceiling mirrors in honeymoon suites), the effect may be more encompassing than imagined. C. Neil Macrae, Galen V. Bodenhausen, and Alan B. Milne found that people in a room with a mirror were less likely to cheat or display gender or race prejudice, more likely to be helpful and work harder. “When people are made to be self-aware,” Bodenhausen said, “they are likelier to stop and think about what they are doing.” That in turn can lead to “more desirable ways of behaving.”

Fifty-seven
Money, Chocolate, Happiness

Charles Darrow patented the game of Monopoly in the Depression year of 1935. He did not actually invent the game but appropriated someone else’s idea. Monopoly is an allegory of free-market capitalism, and whether it’s for it or against it is never made clear. Though it glorifies profit, the word “monopoly” has always been pejorative. One of the game’s precursors, “The Landlord’s Game,” had an overtly socialist theme.

Monopoly has succeeded because it is so effective at creating an immersive, internally self-consistent world. Players forget whatever is in their wallets and use “Monopoly money,” a term that has come to be a metaphor for the unreality of price decisions. The prices in Monopoly make no sense ($100 houses), but the ratios of prices tell the player all he needs to know. The Monopoly universe makes sense on its own terms—as does the planet you and I live on and try to make sense of.

Monopoly figures in a 2006 experiment by Kathleen Vohs, Nicole Mead, and Miranda Goode. It was one of a number of manipulations they used to prime their subjects to think of money. One group played Monopoly; another sat next to a computer monitor with a screen saver of floating dollar bills; another was exposed to a poster of foreign currency; another was asked to imagine being poor or being rich. Vohs’s team found that all these kinds of money priming had similar effects. They made people less social and less cooperative. Those subjects who were primed with money:


Wanted more “personal space.”
The experimenter told each participant she would have a getting-acquainted conversation with
another subject. She was instructed to grab a chair from the corner of the room and position it next to her own. Then the experimenter left to fetch the other person. The object of this was to see how closely the subject would position the chair to her own. Those who had been exposed to money primes put more distance between the chairs.

Wanted to work alone
. Volunteers were assigned a minor chore and given the option of working alone or with someone else. The vast majority of those exposed to the money screen saver opted to work solo. A majority of the people with a fish screen saver or blank screen wanted to work as a team. There was really no reason
not
to work as a group. The amount of work was the same, whether one person did it or two.

Wanted to play alone
. Subjects filled out a questionnaire in which they had to pick their favorite out of pairs of activities. Each choice posed a solitary pastime (reading a novel) against a social one involving family or friends (going to a café with a friend). The participants exposed to money were more likely to choose the solitary activities.

Were less helpful to a stranger
. Participants walking from one room to another witnessed a manufactured accident in which a confederate dropped twenty-seven pencils. The people exposed to money primes were less likely to help pick up the pencils, and they picked up fewer pencils on average.

Didn’t ask for help themselves
. Subjects were given a task that turned out to be impossible. The point was to see how long it would take them to ask someone for help. The people exposed to money primes struggled 48 percent longer before asking.

Gave less to charity
. The experimenter gave subjects a private opportunity to donate to the University Student Fund. The participants had no reason to think this was part of the experiment. The money-primed group donated only 58 percent as much as the control group did.

 

“Others have interpreted our findings as demonstrating that money makes people selfish,” Vohs and colleagues wrote. “The idea that money leads to greed or selfishness seems to be part of modern Western cultural
lore.” They go on to argue that their findings resist quite such a simplistic interpretation.

They asked their participants to describe their emotional states. There was no meaningful difference between those who had and hadn’t been exposed to money primes. Thinking about money
didn’t
make people “distrusting of others, anxious, or prideful,” which might have accounted for some of the findings.

A selfish individual might have immediately demanded help with a difficult task, or might have shared work with a partner to get out of doing it himself. Instead, the money priming made people want to act as individualists. They were like stereotypical male drivers, unwilling to ask anyone else for directions.

Vohs’s group adopted
self-sufficiency
as a better term for the behavior triggered by money primes. Like Monopoly, self-sufficiency is a “game” loosely deriving from features of the market economy. The rules of the game say you play as an individual and that money is the way you keep score. Interactions with other players follow rules of fairness and reciprocity. (You don’t steal someone’s Monopoly money, even though everyone knows it’s fake.) To play the game is not to believe that money is everything and personal relationships don’t matter, but it is to adopt this as a temporary shared fiction.

Self-sufficiency is just one of the many games humans can play. It plays a big role in American culture and in cultures around the globe with strong market economies. “Priming effects may provide one of the mechanisms by which culture works,” Daniel Kahneman has suggested. “Some cultures provide the equivalent of constant reminders of money. Other cultures remind you that there are eyes looking at you. Some make you think in terms of ‘we,’ others in terms of ‘I.’ ”

 

Chocolate may be the second most popular motivator in behavioral decision experiments. The way people react to chocolate is much like the way they react to money. They try to be rational chocolate maximizers, constructing magnitude scales of truffles. Sometimes chocoholic avarice makes people do strange things. It is instructive to watch these “economics” experiments in chocolate. There is an uncanny sense of recognition, like watching chimpanzees “ape” too-familiar human foibles.

Christopher Hsee and Jiao Zhang did an experiment in which Chinese university students had to choose between these two options:

(a) to recall and write down a failure in their lives, while eating a large (15-gram) Dove chocolate.
(b) to recall and write down a success in their lives, while eating a small (5-gram) Dove chocolate.

 

The students had to eat as they wrote and couldn’t save the chocolate to take home. As you’ve probably guessed, most (65 percent) chose the bigger chocolate. The mental commandment appears to be
Never choose less chocolate when you can have more
.

Hsee and Zhang did not give all their participants a choice. Another group was simply told that they had to write about a personal failure while eating a 15-gram chocolate. Afterward, they rated the experience (of writing while eating chocolate) on a 9-point scale of
extremely unhappy
to
extremely happy
. Still another group was instructed to perform option (b) and to rate it on the same 9-point scale. The people assigned (b) were overwhelmingly happier than those assigned (a). The (b) people had a pleasant task
and
got to eat chocolate while doing it. They didn’t know their chocolate was smaller than it might have been.

That knowledge—that there was more chocolate to be had—was a spoiler. People couldn’t bring themselves to accept less chocolate. Hsee and Zhang see their experiment as “a microcosm of life.” Money is the bittersweet chocolate of contemporary existence. We spend our lives searching for the lowest price, the highest salary, the most money—numbers by which to validate our happiness. In the familiar and facile analysis, money doesn’t buy happiness, and you can’t put a price on human relationships. Hsee and Zhang are adding a radically new gloss on these homilies. It is not so much money as magnitude scales that are the root of all evil. Because money is a number, and numbers are easily compared, it gets too much decision weight compared to everything else. Prices make us a little more thrifty, greedy, and materialistic than we would be in a world without prices.

The most unanswerable question in behavioral decision theory is
What do people really want?
You can’t assume that prices
or
choices reflect true values. The problem seems to lie in the question itself. It
assumes a fictitious mental exactitude in which there are sharply defined and context-free “true values.” There is more evidence than ever that this is not so. Preference reversals (in the broadest sense) are the human condition.

Over the years, behavioral decision theorists have made an art form of devising clever preference reversals. I will close with one of Hsee’s. You have your choice of two equally fine chocolates. One is small and shaped like a heart. The other is big and shaped like a cockroach. Which do you prefer?

Hsee has posed this dilemma to students and friends, finding that most choose the cockroach chocolate. The kicker is that when Hsee asks people which chocolate they would
enjoy
more, most admit it’s the smaller one, shaped like a heart.

Notes
Sources
Index
Notes

1. The $2.9 Million Cup of Coffee

  
3
“Stella Awards”: See
www.stellaawards.com
.
  
3
“defective”: Gerlin 1994.
  
4
180 to 190 degrees: Marinello 1995.
  
4
Settled for less than $600,000: Robbennolt and Studebaker 1999, 354.
  
4
Negotiations with McDonald’s, settlement amounts: Gerlin 1994.
  
4
“The jar used to have”:
Marketplace
radio show, American Public Media, Jan. 8, 2009. Available at marketplace.publicradio.org/display/web/2009/01/08/pm_deceptive_packaging/?refid=0.
  
4
New Skippy jar has 16.3 ounces:
Consumer Reports
, Jan. 2009, 63.
  
5
physics degree from the University of Chicago:
www2.simon-kucher.com/partners/frank-luby.html
.
  
5
Kellogg’s phased in thinner boxes: Hirsch 2008.
  
5
Zest shrinkage:
Consumer Reports
, Oct. 2008, 63.
  
5
Puffs shrinkage:
Consumer Reports
, Aug. 2008, 67.
  
6
sixty Ph.D.s: Frank Luby, e-mail, Jan. 29, 2009.
  
6
SKP history, party at castle:
www2.simon-kucher.com/SimonKucher_2008.pdf
.
  
6
SKP clients:
www2.simon-kucher.com/clients/
.

2. Price Cluelessness

  
9
Coherent arbitrariness: See Ariely, Loewenstein, and Prelec 2003.
 
10
FREE $ HERE: Southern 1960, 25.
 
11
“At the time, it was not considered”: Kahneman, interview August 30, 2008.
 
11
Wheel-of-fortune study: Tversky and Kahneman 1974, 1128.
 
12
23 percent: About 45 of the 192 U.N. member nations are African, counting Madagascar and Cape Verde. See
www.un.org/members/list.shtml
.
 
12
“The default reaction”: Kahneman, interview August 30, 2008.
 
13
San Francisco, Beatles questions: See Orr and Guthrie 2006, 597, quoting an unpublished study by George Quattrone et al., cited in Plous 1993.
BOOK: Priceless: The Myth of Fair Value (and How to Take Advantage of It)
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