Posted by Alok Gangaramany » Add Comment »
It’s a question my wife & I have been debating since we moved to Chicago in January.
Of course, the weather is the primary trigger. Talking to our friends doesn’t help either. Folks living in bay area continue to boast about the near 70 F temperatures. Each call typically starts with a mention of the cold temperatures in Chicago. And at the end of each call, we dream of living in a warmer place.
But when we start talking about happiness, there is an interesting pattern to most conversations. Whether it is the high cost of living or the lack of public transport, it seems the favorable weather conditions in California are balanced out by other factors. So in terms of overall life satisfaction, we are not very far off from our friends. In fact, we are probably as satisfied.
This raises the question: will we be more satisfied if we move?
Turns out, the question has been researched already. In this paper, Kahneman and Schkade refer to a research they conducted with students in Midwestern and Southern California universities. Students were asked to give a satisfaction rating to life overall as well as to certain aspects of life. Each student provided a satisfaction score for themselves or someone similar to themselves in both the regions. The data was analyzed for both self and other conditions.
Both groups of students rated that the Californians are likely to be more satisfied than Midwesterners. Satisfaction with climate tend to account for this high score. However, their own overall life satisfaction score was almost the same. And it gets even more interesting. Climate-related aspects were rated as more important for someone living in another region than for someone in one’s own region. In essence, a midwesterner believed that climate has a small part to play for her own life satisfaction but a larger part for someone living in California. Similarly, a Californian believed that the relatively warmer climate has a smaller significance for her life satisfaction but much higher significance (likely negative) for someone living in the midwest area.
How do we explain this discrepancy? The scientists believe that this is largely due to the effect of Focusing Illusion. When a judgement of a category (life satisfaction in Midwest vs California) is made by focusing on a subset of that category (life satisfaction due to climate conditions), we tend to overweigh the subset’s relative value to any other subset. In other words, we tend to ignore other aspects of life satisfaction such as job, travel, housing etc and end up deciding based on one single parameter. This is exactly what the students did and this is probably what my wife and I are doing.
In our case, we are conveniently ignoring the geographic location of Chicago that makes it far easier to travel within United States as compared to California. Something that can be very important for our consulting jobs.
Clearly, we should do a better job in evaluating this decision. Will this awareness of Focusing illusion help us do that? I don’t think so. I will probably rationalize my preference for California to the fact that I grew up in a tropical climate and still pursue the ambition to move. After all, this susceptibility to our evolutionary biases is what makes us human.
Posted by Divya Balakrishnan » Add Comment »
The World Bank has recently published its flagship World Development Report 2015 titled Mind, Society and Behaviour, its main message being, when it comes to understanding and changing human behavior, we can do better. The report brings together great content from the various disciplines including Neuroscience, Cognitive Science, Psychology, Behavioral Economics, Sociology, Anthropology and Design.
Research has advanced our understanding of the psychological, social, and cultural influences on decision making and human behavior and has demonstrated that they have a significant impact on development outcomes. This report showcases an impressive set of results. It shows that insights into how people make decisions can lead to new interventions that help households to save more, firms to increase productivity, communities to reduce the prevalence of diseases, parents to improve cognitive development in children, and consumers to save energy. The promise of this approach to decision making and behavior is enormous, and its scope of application is extremely wide.
You can download the report here
As part of the run-up leading to the report, the World Bank blog featured FinalMile (here), in a series discussing ‘Mind and Mindsets’.
Image Source: WorldBank
Posted by Alok Gangaramany » Add Comment »
Growing up in a socialist economy comes with its unique set of experiences. One particular experience that stands out in my memory is the struggle to get through the engineering school admission after Grade 12th. Like any struggle, this too is filled with mixed emotions – anxiety due to the uncertainty of the future and frustration due to not always getting the top choice.
But there was one more emotion that I experienced that day. As I look back, it seems extremely unreasonable today, however, it was totally justifiable at that time. It was the feeling of anger, a feeling mainly directed towards the groups that were given special reservations at most colleges under the Affirmative Action policy in the Constitution. Scheduled Castes (SC), Scheduled Tribes (ST) and Other Backward Classes (OBC) are the primary beneficiaries of this policy and they qualify since they were traditionally marginalised and underrepresented in most professional communities.
These reservations are also extended in certain jobs particularly ones that are part of the State and Central government machinery. While this policy has been criticised due to multiple problems, it has helped a large number of people by giving them opportunities that otherwise would not have been within their reach. But the feeling of anger amongst those who are not eligible seems to be present in both the education as well as the professional communities.
This feeling has an interesting parallel to one experienced in western countries in their dealings with racism. In the book Appraisal Processes in Emotion Ira Roseman, a social psychologist at Rutgers University, explains the change in the form of racism from the traditional “old fashioned racism” to a more “modern” form of racism. Most surveys indicate that in the United States, white racism towards blacks has come down significantly. Usually, this refers to the traditional form of racism where white racists would look down on blacks, consider them unworthy of respect and intellectually inadequate and would exclude them from their groups. These behaviours are usually associated with the emotion of Contempt, a feeling for someone we consider lower in status. However, the modern form of racism is has moved from Contempt to Anger. This feeling comes from the attribution of negative acts such as those related to safety (burglary, shooting, etc.), exploitation of public resources by relying on welfare payments, etc. The behaviours associated with this kind of racism are usually around being hostile towards the other group, criticising their actions and believing that they deserve more severe punishment as compared to the rest of the society – essentially justifying lack of fairness towards the black community.
Now, if one looks at the history of the marginalised groups in India, one can see a similar pattern. Untouchability, which is now banned in the country, was openly practised in the society. The underlying emotions here are probably a mix of disgust and contempt. And these usually arise due to the same attributions as what we observed in the traditional form of racism – this group is low and unworthy of sharing our physical space and hence, excluded from most public forums. Over the past few decades this discrimination has gradually subsided, especially in the urban parts of the country. The differences in the stature of the so called upper and lower castes have come down. However, the special treatment in the education and professional forums has given rise to anger. The Indian society is still scarce on opportunities due to its significantly large population. So, the special allocation of resources takes away what is already insufficient. This gives rise to the discontent against the minority groups.
Is there any value in understanding these nuances of discrimination?
There are probably still enough parts of the country where untouchability exists. We are currently living in a society where we need to deal with both the old form and the new form of discrimination. The usual approach to handle discrimination is to develop interventions that embed equality in society. While this works when there is contempt, this may not be a good idea while dealing with anger. In fact the more equal we believe all groups are, the more hostility we will feel against the group that is blocking our resources.
We need a different kind of intervention here. The book referred earlier offers an interesting example. Two different groups of boys had frequent altercations and felt both contempt and anger against each other. These two groups were then placed in a situation where they had to cooperate in order to achieve a common goal. By the end of the exercise, new friendships were formed decreasing the intergroup hostility.
The key idea is to move from a situation where we believe that the goal of the other group is inconsistent to our own goals. This is what the army does where group learning is a significant part of training. By creating more avenues where citizens can come together to target a common goal can help us manage these negative feelings that are held amongst the different societal groups.
Image Source: Here
Posted by Saransh Sharma » Add Comment »
The natural world is abound with asymmetries – from asymmetries in the fundamental physical forces to the left-right asymmetry ubiquitous in biological lifeforms. One such asymmetry that is found in all intelligent lifeforms on this planet and plays a central role in the evolutionary fitness and success of an organism is negativity dominance i.e. the asymmetrical wiring of the brains of humans and animals are such that negative stimuli and expectations are prioritized over positive ones. Negativity dominance grants crucial survival advantage to the organism by shaving off a few hundredths of a second from the time needed to detect a predator or threat. For example, in the visual processing circuitry of the brain, a superfast neural channel exists that feeds directly into amygdala (the part of the brain that processes emotions) bypassing the visual cortex that supports the conscious experience of “seeing”. Studies indicate that the threat and danger alarms of the brain are activated via this mechanism even before we consciously recognize the threat. But no comparably rapid mechanism for detecting positive stimuli has been detected.
Negativity dominance is so salient in our perception and cognition, that its manifestations can be observed over a wide and diverse range of behaviour. Perhaps the most well-known manifestation comes from the economic domain, in the form of ‘loss aversion’ i.e. the drive to more strongly avoid losses than achieve gains. For instance, in a bet with equal chances of winning and losing, the winning amount must at least be around twice the losing amount, otherwise most people find the bet too risky. In the social domain, bad impressions and bad stereotypes are quicker to form and more resistant to disconfirmation than good ones. John Gottman, a well-known marital relations expert, estimated that a stable relationship requires that good interactions outnumber bad interactions by at least 5 to 1. Even more striking, yet intuitively consistent, is the fact that a friendship that may take years to develop can be ruined by a single action.
Negativity dominance manifests in our sense of justice and fairness as well. For example, in legal decisions, restoring losses is given far more weightage than compensating for foregone gains. Moreover, we tend to punish meanness more strongly than reward generosity. Indeed, negativity dominance in our sense of justice may be so strong that it might actually hurt victims’ interests. A study recently published in Social Psychological and Personality Science suggests that punishment restores people’s sense of justice to such a degree that it leads individuals to neglect the victims’ needs. The researchers presented around 400 individuals with varying scenarios regarding crime perpetrators and victims, and surveyed them to examine the correlation between the intensity or quantum of punishment and their desire to compensate the victim, and vice versa. For example, in one of the studies, participants were presented with a case of stabbing and robbing a stranger. The offender was apprehended eventually, but he had already spent the $100 he had stolen from the victim. The participants of the study were randomly presented four scenarios of the punishment that the offender received, varying from probation to 25 years in prison. The researchers observed that the more punishment the perpetrator received, the less likely the participants were to recommend that the victim be compensated. However, varying the victim’s compensation amounts did not significantly affect participants’ punishment recommendations. Furthermore, participants more strongly believed that justice had been restored when the perpetrator had been punished, rather than when the victim had been compensated.
The asymmetry between punishment and victim compensation in restoring justice leads to justice being seen in a very narrow sense – merely as retribution. This can be seen most starkly in cases of sexual violence, wherein victim mistreatment is rampant across sections of society and the criminal justice system, and even when sympathies lie strongly with the victim, public attention and outcry is usually limited to punishment to the perpetrator. Indeed, rape shield laws and rape victim identity protection statutes in most countries around the world stand testimony to the fact that the law often has to step in to protect the victim’s interests, not just from the perpetrator, but also from the society and the system itself. Rape victims are often accused of “asking for it” by “wearing revealing clothes” or “being too friendly with guys”, and are even stigmatized in some cultures. In face of such mistreatment, victims often require psychological counseling, social support, and so on, for rehabilitation and relief, which the justice system so often fails to deliver. On the other hand, the recent shocking case of public castration of a man caught attacking a girl in an alleyway in Ganganagar, Rajasthan, by a vigilante lynch mob, demonstrates the extraordinary motivation of people to punish the perpetrators of crime, not hesitating even to take law into their own hands. Public standards of morality are often suspended in this zeal to restore justice, and it is not uncommon to hear ludicrous demands such as public hanging and public castration for perpetrators of violent crimes.
Adequate mechanisms for rehabilitation of victims are lacking in our criminal justice system, and this aspect continues to be neglected in public imagination, while demands for stricter laws and punishments for perpetrators gain momentum after every public outrage over a crime. This asymmetry needs to be deliberately countered by sensitizing the stakeholders of our justice system to the plight of victims as well as to their own biases that lead them to neglect victims’ interests. Empathy-promoting nudges are required to be incorporated in our legal processes, so that victim compensation receives appropriate weightage in pronouncement of justice.
Posted by Ram Prasad » Add Comment »
WSJ Mint recently came out with an issue fully dedicated to Philanthropy. One of the subjects the issue touched upon was the increasing trend of giving in India. What is leading to this societal change and what is the science and psychology behind giving? Here’s our CEO Biju Dominic, in conversation with Dhaval Udani, chief executive officer of GiveIndia, an online donation platform,. They discuss how altruism has evolved over time and why people give.
Dhaval Udani & Biju Dominic
Read more here http://www.livemint.com/Specials/7qlNCN82LSdzZV6b51xrpI/The-science-of-giving.html?utm_source=copy
Posted by Ram Prasad » Add Comment »
Sanitation is a serious problem that deserved urgent national attention. It is finally getting that attention. One of the problems in the larger Sanitation domain is Open defecation. There is a big push to build new toilets to eradicate open defecation. But, supply alone isn’t going to solve this problem. As such, the quality of supply too is poor. The current thinking seems to be one of ‘Something is better than nothing’. There are millions of toilets getting built, but hundreds of millions still defecate in the open, even if they have a toilet at home. In this piece we wrote for WSJ Mint, we argue that there is a need to address some fundamental design issues. And tap the right motivations to drive usage.
Posted by Alok Gangaramany » Add Comment »
The wife and I have been debating on replacing an expensive mattress that we bought 3 years back. Over the years, we have stopped liking the mattress and it seems to be doing more harm than good. So now we both want to get rid of it. We already have a replacement mattress with us so the replacement cost is zero. The point of debate is – what should be the minimum price at which we should be willing to sell this expensive but useless mattress. In economic terms, what should be the WTA (willingness to accept) price? While I think any price is a good price, my wife is looking for a good deal. When I asked my friends, their responses also varied between 20 – 25% of the original cost.
Is this response rational? As per classic economic theory, only incremental costs should impact decision. All historic costs are irrelevant since they are sunk costs. Considering there is no replacement cost of the mattress, my WTA price should actually be zero. So, why do we value these costs?
The idea of Loss Aversion which is discussed as part of Prospect Theory in Behaviour Economics literature explains this behaviour. We all operate from a reference point and evaluation happens based on the change from that reference point. Further, a negative change feels much larger than a positive change. For example, losing Rs. 1000 is much more painful than gaining the same amount.
The same is applicable when we are replacing or giving up a product. When someone wants to replace a product, they evaluate not only the value of the replacement product (gain) but also the value of the product foregone (loss). If I believe that I have not completely utilised the value of my old product, I feel a sense of loss of giving it up. To cover up that loss, I want to recover at least part of my money. In the case of the mattress which is expected to be utilised for say 10 years, replacing after 3 years means a loss of 7 years of potential use. This paper discusses Product Replacement decisions in detail.
The theory of loss aversion has been used to explain multiple seemingly irrational decisions. In the book Thinking, Fast and Slow, Kahneman has described numerous decisions that people have made which are not in line with decisions predicted by classic economics. But there is also an interesting aberration – in case of poor or people with limited means, loss aversion may lead to rational decisions.
Being poor means living below the minimum level of income needed for adequate living. It means that one is always operating below the reference point that we discussed earlier. So, the individual is evaluating in the domain of losses. In this situation, money given to replace a good will not be interpreted as a gain but as a reduced loss. It will be considered as an aid to move towards the minimum reference point. Not taking money in this case would mean losing out an opportunity. Therefore, a person with limited means operating in the domain of losses is more likely to behave in accordance with the economic theory.
Can I use this learning to convince my wife? My colleague gave me an interesting argument. Instead of arguing based on replacement cost, I should argue based on the cost of not replacing the mattress. This could mean developing back pain and possibly paying for medical costs. In other words, I could use Loss aversion to my advantage. Whether this will be a convincing enough argument remains a matter of debate.
Image Sources: Here and here
Posted by Biju Dominic » Add Comment »
Brazil lost it’s star player in the game against Colombia. Some say they may have lost the world cup as well. But does Brazil still have a upper hand over Germany today? Can playing at home give them the much needed edge? We believe it does.
What constitutes this home advantage? Is it just the extra adrenalin flow when you the hear the roar of thousands supporting you? Or is there something sinister about it? Do referees who are suppose to be impartial tend to contribute to this home team advantage?
Chicago Booth Business School has analysed several studies in this area and have come to some startling revelations. Yes, the referees have a bias towards the home team. The biases were clearly evident when it comes to taking that crucial decision as to how much injury time gets added to the game.
Referees add extra time at the end of a match to make up for the time lost due injuries, substitutions or any other interruptions that could happen in a match. For the players, the coach and more so the fans the importance of the amount of time added to the game depends on the context at the scheduled end of the game. If either of the teams are leading by a large number of goals at the regular 90 minutes of the game, nobody is really bothered about how many extra minutes get added to the game. But if your team is trailing by a goal you will be happier if more injury time is added to the game. But if your team is leading by a slender margin of just one goal you will want the match to end as soon as possible. So the less the injury time gets added to the game the happier you are.
Studies by Canice Prendenergast of Chicago Booth Business School and Luis Garicano and Ignacio Palacios Huerta of London School of Economics are showing that referees add on an average 2.93 minutes of injury time. But the crucial question is whether this average is affected by any bias. The surprising truth this study show is that the referees are biased while deciding the duration of time that gets added to a game. These researchers found that referees add 35% more than average time to a match when the crowd want the match to continue longer and add 29% less than average time when the crowd want the match to end earlier. If either of the teams are leading by a large number of goals, the added injury time is close to the average time.
What causes the referees to make these biased decisions? Blame it on the social pressure exerted by the home fans. The size and noise generated by the home crowd is a key determinant that influences referees decisions. It is also interesting to note that when match has few spectators or when the visiting fans are large in number, the tendency of the referee to take these biased decisions decrease. This was confirmed by a study by Per Pettersson-Lidbom and Mikael Priks of 21 Italian League matches which were played with no spectators. The authorities had asked the teams to play in front of empty stadiums due to the previous unruly behaviours of the spectators of those clubs. The studies confirmed that when there are no fans in the stadium, referees don’t display any bias.
Now, we cannot play the game without fans. There may be less extreme solutions too. Studies in Germany show that when the football field is surrounded by a running track, there by creating larger physical distance between the fans and the referee, the tendency of the referee to take biased decisions decrease.
A soccer referee is assumed to be an epitome of unbiased behaviour. But the above studies are showing that even they are susceptible to behaviour biases. So this soccer world cup is not just a showpiece of human athleticism, but also a stage that displays the frailties of human behaviour, of the fans, players, coaches and surprisingly that of the referees too. Lets see if Brazil is able to exploit these in the next game.
Posted by Ram Prasad » Add Comment »
A recent article in The Economist paints a rather grim picture of Road Safety. Fatalities due to road accidents could surpass HIV related deaths by 2030. Bulk of these fatalities happen in developing and underdeveloped nations.
BBC Future carried a story that features Final Mile’s work in using Behavioral Sciences to improve Road Safety. Human error is the overwhelming cause of accidents and fatalities. Nudging or Behavioral design interventions aimed at reducing driver errors is one effective way to deal with the human errors. There is an urgent need to go beyond plain awareness campaigns. Driving is a highly over-learned and non-conscious activity, one that is very complex involving many senses and skills. Interventions that impact at a non-conscious level, therefore are likely to make a better impact.
The story by BBC Future collates some of the interesting examples of such interventions. Read more here
Posted by Alok Gangaramany » Add Comment »
We are not referring to the grammatical usage here.
Consider a research context where participants are placed in a situation where they are tempted to cheat for personal gain. However, subtle change in instructions impacted their likelihood of cheating. When the instruction was in verb form (Please don’t cheat), participants cheated more than when the instruction was given in a noun form (Please don’t be a cheater).
Our earlier blogpost explains this behaviour. The primary idea is that the noun form invokes group identity while the verb form only refers to the action or the effort. People may downplay the action but that becomes very difficult when it comes a self-relevant noun.
So framing a praise in noun form may have a much more sustainable behaviour impact. A recent New York Times article also corroborated this idea.
But can we apply this rule universally? The book Social gives an interesting counter perspective. In his research on Altruistic behaviour, Dale Miller – a social psychologist at Stanford University, consistently found that people prefer not to accept an altruistic identify of self. So, when someone asks us why we decided to help, more often we tend to ascribe it as a selfish behaviour. Miller explains this as our tendency to conform to the cultural norm that human beings are self-interested.
Thus, sometimes we prefer focusing on the action while in other cases the identity works stronger. And these contradicting studies highlight the most important perspective of human behaviour – Context is critical.
Explanation of human decision making will always be incomplete without considering the influence of the contextual elements. The context of Cheating is different to the context of Altruism and as a result our appraisal of the stimulus also varies.
Impact of behaviour change communication will always be impacted by the context – be it using noun or verb.
Image Source: Here
Posted by Ram Prasad » Add Comment »
The recent skiing accident of Michael Schumacher has shook the sporting world. The F1 world and many more people are praying for him. We also heard the impact was so severe that the helmet broke in to two. The doctors were sure that if it weren’t for the helmet, Schumi wouldn’t have even made it to the hospital. In this case, the helmet has played a big part in reducing the impact of the crash.
But, if we look beyond this individual case and examine the overall statistics on skiing accidents, helmet usage, head injuries and fatalities, there is a rather disturbing trend. There are news reports that suggest that while ski helmet usage has improved significantly, the fatalities due to head injuries have remained pretty much the same over the last 10 years. Helmet usage has tripled as compared to 2003. While there is a reduction in head injuries, the fatalities have remained the same. Ten year average fatalities from 2000 has been 41.5 fatalities per year, 54 fatalities having occurred in 2011/12. (NSSA facts). Of these 54, 36 were wearing helmets. (Skiing now might suddenly seem like a dangerous sport, but at 54 fatalities a year, its lot less dangerous than riding bicycles which lead to about 800 fatalities a year.)
Also, most of the fatalities involved Men, especially in the age group of late teens to 30’s. And a majority of these accident victims are above average at skiing, they’re not amateurs.
What would explain this ?
Overconfidence bias / Private optimism could be a credible explanation as far as the demographic of fatalities is concerned. There is research that supports a hypotheses that men tend to be more overconfident than women. An amateur would be cautious and hence ski at low speeds. An above average would be more susceptible to private optimism. Some 90% of motorists think that they are excellent/above average at driving. The believe that they are better than other drivers and that their chance of meeting an accident is lower than that of others. This could lead to people taking more risk.
The most intriguing observation though is this lack of correlation between increase in helmet usage and fatalities. Here’s where John Adams’ take on individual risk management – the ‘Risk Thermostat’ could helpin making sense of this. According to Mr. Adams, each individual has a specific level of risk-taking with which they are comfortable. If their sense of safety is increased, say by protective gear like seatbelts, helmets or systemic changes like ABS, their behaviour becomes riskier – they compensate for this increase in safety till the set-level is reached again. The safer we feel, therefore, the more risky our behaviour. There are studies that indicate that drivers who wear seat belts tend to drive faster. The net impact of ABS on car collisions has been negligible because drivers have driving faster and braking late. We have compensated for the safety feature. This is often referred to as “Offset hypothesis”
So, its likely here that those wearing helmets are skiing faster, taking more risks and becoming more adventurous, simply because there is an increase in overall sense of safety. So, in a strange way, the more safer we feel, the more risky our behaviour.
How can we solve this ?
While we improve the safety features, its important to induce a sense of vulnerability, a feeling of being unsafe. This could be through better design of safety systems and signage or by having interventions at point of action that introduce an element of vulnerability. The idea is not to take regressive steps like reducing safety gear or features. Safety standards should be high, but the place should feel a little unsafe.
For now, lets hope that Schumi pulls through.
Posted by Ram Prasad » Add Comment »
The India Backbone Implementation Network (IbIn) was launched in April 2013 by The Planning Commission of India, with the primary objective of promoting widespread capabilities in the country to systematically convert the manifest confusion to coordination, and rampant contention to collaboration, so that intentions can be converted into implementation. Final Mile is one of the partners in IbIn.
As 2013 draws to a close, Planning Commission has put out a 2013 progress report on the status of the Initiative. IbIn has made remarkable progress in spite of lack of any seed capital or a formal institutional structure.
The report also features 2 projects of Final Mile. One is a project to improve usage of toilets built under the Nirmal Bharat Abhiyaan aimed at making our villages free of open defecation. This project is currently in progress in Karnataka and is sponsored by Arghyam
The other project is involves changing the behaviour of government agencies on ground with a view to ensure better adoption of internet based government services. The report can be downloaded here